Ben and Jerry's Case

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Daniels Fund Ethics Initiative University of New Mexico http://danielsethics.mgt.unm.edu

Managing Social Responsibility and Growth at Ben & Jerry’s INTRODUCTION Ben Cohen and Jerry Greenfield opened their first ice cream shop on May 5, 1978, in a converted gas station in Burlington, Vermont, investing $12,000 in secondhand equipment. Their business credentials consisted of much enthusiasm and a $5 Pennsylvania State University correspondence course in ice cream making. Driven by Cohen and Greenfield’s 1960s ideals, Ben & Jerry’s Homemade, Inc., has grown to be a very successful business, with an enviable level of brand-name recognition for the firm’s internationally distributed frozen dessert products, including ice cream, frozen yogurt, and sorbets. In addition, there are 337 franchise or company-owned “scoop shops” in the United States, United Kingdom, Holland, France, Israel, Spain, and Lebanon. From the beginning, Cohen and Greenfield incorporated into their business a strong sense of social responsibility—to their employees, the community, and the world at large. Unlike most companies, Ben & Jerry’s Homemade has three mission statements—product, economic, and social. According to the company, it is “the belief that all three parts must thrive equally in a manner that commands deep respect for individuals in and outside the company and supports the communities of which they are a part.” Although Ben & Jerry’s has experienced some trying times, it remains firmly grounded in its original, socially responsible corporate vision. THE STORY OF BEN & JERRY’S Cohen and Greenfield’s converted gas station served rich, all-natural ice cream, which quickly became popular with local residents. During the winter months, however, the customers turned to warmer treats, so Cohen and Greenfield had to come up with new ideas to survive their first year. Soon they were packaging their ice cream and hauling it around to local restaurants. Gradually, they began to include grocery stores among their customers, soon gaining shelf space in 150 stores across the state. The first franchise store opened in 1981, and by 1985, the company was selling pints in stores outside of New England. Ben & Jerry’s has always been a bit unorthodox in its business practices, ranging from Greenfield’s executive title of “Big Cheese” to its products. For example, a popular Ben & Jerry’s ice cream flavor is Cherry Garcia, named after (now deceased) guitarist Jerry Garcia of the Grateful Dead. Another flavor, Wavy Gravy, was named after the master of ceremonies at Woodstock and, naturally, was packaged in a tie-dyed container. Another perennial favorite is Phish Food, named in honor of a popular band from Vermont. The company has also employed some unconventional promotional tactics, like the “Cowmobile,” a modified mobile home that Cohen and Greenfield drove cross country distributing free ice cream scoops. This material was developed O.C. Ferrell, John Fraedrich, and Terry Gable and edited and updated by Harper Baird under the direction of O.C. Ferrell and Linda Ferrell. It is provided for the Daniels Fund Ethics Initiative at the University of New Mexico and is intended for classroom discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by management. Users of this material are prohibited from claiming this material as their own, emailing it to others, or placing it on the Internet. Please call O.C. Ferrell at 505-277-3468 for more information. (2011)

2 When the company went public in 1984 as Ben & Jerry’s Homemade, Inc., Cohen initially limited the sale of the company’s stock to Vermont residents. His idea was that if local residents were part owners of the firm, the community would share in the success of the business. In Cohen’s words, “What a strange thing we’re discovering: As our business supports the community, the community supports us back.” A national stock offering followed two...
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