Ben and Jerry's Ethical Issues

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1. Were Ben Cohen and Jerry Greenfield right to accept Unilever’s takeover offer for Ben & Jerry’s in 2000? And what does this case imply about business ethics more generally?

Ben and Jerry’s is an ice cream producing company. The first shop opened in Burlington, Vermont in 1978. With a $12.000 ($4.000 were borrowed) investment, Ben and Jerry opened their first homemade ice-cream scoop shop. Each year the company celebrates its anniversary by having a free cone day. This has been a tradition since the very beginning. In 1981 the expansion begins and the company starts its first franchise. In 1984 sales begin to increase at an extremely high rate. At this time there was a 120% increase compared to the previous year. In 1985, the facility plant is build in Waterbury, Vermont. Together with the facility plant, the foundation is established where it provides 7.5% of the company's annual pre-tax profits. The first environmental actions begins here. Finally, in 1988 the company’s 3-part mission statement is introduced; the product, social and economical mission (History). The social mission statement is “To operate the company in a way that actively recognizes the role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally and internationally”. The product mission is “to make, sell and distribute the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment”. The Economic mission is “to operate the company on a sustainable financial basis of profitable growth, increasing value for our stakeholders and expanding opportunities for development and career growth for our employees”. (Mission 1) From this time on, the company concentrates on its mission, which will be explored more in the following paper. April 12, 2000 Ben and Jerry announce the company’s acquisition by Unilever with an offer of $326 million. However, the two original owners of the company are able to maintain an agreement with Unilever, the new owner of the company. They seem to manage to keep the social, environmental and economical aspect of the company. Unilever will therefore respect and continue to follow the company’s social mission. Ben and Jerry are able to operate independently with a separate board of directors in order to continue to pursue their original mission statement. However, it must be underlined that many things changed within the original mission because Unilever inevitably revolutionized the whole organization. The main one consists in the decrease of social responsibilities. The key question is: Did Ben and Jerry have no other choice but to sell the company? What happens with the coherence to their original mission statement? It seems, at their say, that they had no other opportunity but to make the company go public. Nevertheless, there must have been more alternatives to the sell. What did Unilever do that couldn’t be done by the owners? First of all, the business ethics of the company before the acquisition should be explored. The owners are interested in creating benefits for everything and everyone that surrounds their company. In order to help the environment and the suppliers, the dairy ingredients used in the company’s products are purchased from a cooperative of Vermont family farms. The nuts are bought from the Brazilian rain forest in order to help preserve the rainforest. The brownies are bought from an organization that helps the homeless. By buying their products they assure their jobs and keep them employed. This is done in order to show respect and care for its employees, Ben and Jerry have a policy where the highest paid employee cannot earn more than seven times the lowest paid employee. According to Ben and Jerry’s way of thinking, everyone who works for the company is a contributor to their success...
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