2. Ben and Jerry’s

3. Main Issue:
Balancing Social Responsibility and Profits
Sub-issues:
When does economic responsibility
override social responsibility:
– Relationship with suppliers?
– Management
Relationship with media

4. Timeline
Ben Cohen and Jerry
Greenfield meet in 7th
grade gym class.
1977
1963
Ben and Jerry move to
Vermont and complete a
$5 correspondence course
in ice cream making.

5. Timeline
Ben and Jerry open their
scoop shop in a
renovated gas station.
1980
1978
B and J begin packing
their ice cream in pints to
sell to grocery stores.

6. Timeline
Time magazine hails Ben
and Jerry’s as “The best
ice cream in the world.”
1984
1981
Ben and Jerry offer a
Vermont-only public stock
offering.

7. Timeline
Ben and Jerry’s has sales
exceeding $4 million, a
1984 120% increase from the
previous year.
Ben and Jerry fight back
against Haagen-Dazs with 1984
“What’s the Doughboy
afraid of?” campaign.

8. Timeline
The foundation is provided
with 7.5% of the company’s
pre-tax profits. Ben and
1985 Jerry’s has sales exceeding
$9 million a 143% increase.
The Ben and Jerry’s
Foundation is established 1985
at the end of the year.

9. Timeline
The company posts sales of
just under $20 million a
100% increase over the
1986 previous year.
Dreyers becomes master
distributor for Ben and 1986
Jerry’s.

10. Timeline
The company posts sales of
1987 just under $32 million up
59% from the previous year.
Ben and Jerry are named to the
1987 Esquire Register, the
magazine’s “annual honor roll of 1987
men and women whose
accomplishments , values, and
dreams reflect America at its
best.

11. Timeline
As of the end of the year
there are more than 80 scoop
1988 shops in 18 states. Sales
exceed $47 million, up 49%
from 1987.
Ben and Jerry are named U.S.
Small Business Persons of the
1988
Year by President Reagan in a
White House Rose Garden
Ceremony

12. Timeline
Sales exceed $58 million, up
1989 23% from 1988.
Ben and Jerry receives Columbia
University’s Lawrence A. Wien
1989
Prize for corporate social
responsibility.

13. Timeline
To help Vermont Dairy
farmers the company pays a
1990 dairy premium of $1/2
million to farmers that
supply milk to the company.
The company enjoys sales of
more than 77 million, an increase
1991
of more than 32% over 1989.

14. Timeline
Total sales for 1992 are more
than $131 million, an increase of
1991
36% over 1991.
The company has sales of $97
million, an increase of 26% over
1992
1990.

15. The Hierarchy of Strategy Levels
Enterprise Level Strategy
Corporate-Level Strategy
Business-Level Strategy
Functional-Level Strategy

16. The Hierarchy of Strategy Levels
Enterprise Level Strategy
“To operate the Company in a way that actively recognizes
the central role that business plays in the structure of society
by initiating innovative ways to improve the quality of life of
a broad community - local, national, and international. “
Social Mission Statement

17. The Hierarchy of Strategy Levels
Corporate-Level Strategy
“To make, distribute and sell the finest quality all natural ice
cream and related products in a wide variety of innovative
flavors made from Vermont dairy products. “
Product Mission Statement

18. The Hierarchy of Strategy Levels
Business-Level Strategy
“Underlying the mission of Ben & Jerry's is the determination
to seek new & creative ways of addressing all three parts,
while holding a deep respect for individuals inside and
outside the Company and for the communities of which they
are a part.“

19. The Hierarchy of Strategy Levels
Functional-Level Strategy
“To operate the Company on a sound financial basis of
profitable growth, increasing value for our shareholders, and
creating career opportunities and financial rewards for our
employees.”
Economic Mission Statement

20. The Clash of Ethical Systems Between
Business and Government
Business Ben and Jerry’s Government
Individualistic Ethic Balanced Ethic Collectivistic
Maximize Concession Minimize concession to self- Subordination of
to self-interest interest and maximize interest in individual goals and self
group goals. interest to group goals
interest.
Minimize the load of Balance self-interest and Maximize the
obligations society obligations. obligations assumed by
imposes on the individual the individual and
discouraging self-
interest
Emphasizes Emphasizes uniqueness of Emphasizes equality of
inequalities of individuals and strives for individuals
individuals harmony among them.

21. Social Gap Model
Ben and Jerry’s
Society’s
Expectations
Avg. Industry
Performance
1978 1999

22. Stakeholder Map
Government Gen. Public
Employees
Competitors Retailers
Suppliers Ben &
Customers
Jerry’s
Media “Worthy
Owners/ Causes”
Stockholders Creditors
Community Activists

23. Primary Stakeholders
• Employees
– Interest
• Stable employment & Profit sharing
• Treated and rewarded fairly: Fair Pay for work
• Safe, comfortable, and FUN work environment: Joy Gang
• Affairs affecting women, minorities, gays and lesbians on their
workforce & employee benefits
– Power
• Quitting, striking, unionizing
• Implement new ideas (Recycling)
• Publicity (Community Volunteer Program)

24. Primary Stakeholders
• Owners/Stockholders
– Interest
• Satisfactory return on investment
• Appreciation of stock value over time
• Attendance at two day picnic/festival featuring rock concerts,
postcard writing, video messages to Congress, and plenty of
Cherry Garcia! “Just happy to be a shareholder of Socially
Responsible company!”
• Chance to buy into a company that reminds them of themselves
– Power
• Voting rights based on share ownership
• Rights to inspect company books or records & copy of annual
report, printed on recycled paper signed by the chairperson
• Right to buy more or sell existing

25. Primary Stakeholders
• Customers
– Interest
• Value and quality for dollar spent
• Receive safe & yummy products
• Most have interest in specific causes that Ben &
Jerry’s supports, such as Rainforest Crunch
– Power
• Purchasing goods from competitors
• Boycotting if practices of company are unacceptable
– They buy because they DO approve of Ben & Jerry’s
polices.

26. Some Suppliers
• Cultural Survival-Brazilian Nuts
• La Soul - Apple Pie
• Maine’s Passamaquoddy Indians-Blueberries
• Greystone bakery-Brownies
– OK once quality control overcome
• Aztec Indians-Coffee
• Vermont Dairy Farmers

27. Primary Stakeholders
• Suppliers
– Interest
• Receive regular orders for goods
• Be paid promptly
• Livelihood
– Brownie Bakery-inner city
– Brazilian Nuts-make more profitable than deforestation
– La Soul - recovering addicts
– Coffee-Indian
– Power
• Refusing to meet orders if contract breached
• Supplying to competitors
• Ben & Jerry’s so close with suppliers, not issue

28. Primary Stakeholders
• Competitors: Haagen-Dazs, Dreyer’s, Breyer’s
– Interest
• Be profitable
• Gain market share
• Premium ice cream industry growth
– Power
• Technological innovation
• Charging lower prices
• Blocking new entrants

29. Primary Stakeholders
• Retailers
– Interest
• Receive quality frozen goods in timely fashion at
reasonable cost
• Premium ice cream that consumers value
– Power
• Buying from other suppliers
• Boycotting
• Reducing shelf space

30. Primary Stakeholders
• Creditors
– Interest
• Repayment of loans
• Collect debts and interest
– Power
• Calling in loans
• Repossession

31. Secondary Stakeholders
• Federal, State, & Local Government
– Interest
• Raise revenues through taxes
• Promote economic development
– Power
• Issuing regulations, licenses, and permits
• Allowing industrial activities

32. Secondary Stakeholders
• The General Public
– Interest
• Protect the social values
• Minimize risks
• Achieve prosperity in society
– Power
• Supporting activists
• Pressing government to act
• Condemning or praising Ben & Jerry’s

33. Secondary Stakeholders
• Vermont Communities
– Interest
• Employ local residents
– One of state’s top 10 employers by size
– Vermont’s average per capita income = $17,436
– At B & J’s the Lowest salary plus benefits = $22,000
• Protect local environment
• Develop local area
• A top tourist spot in the state
– Power
• Extending additional credit
• Issuing operating licenses and permits
• Lobbying government

34. Secondary Stakeholders
• Social Activists
– Interest
• Monitor company actions and policies to ensure
they conform
– Legally
– Ethically
– Safety
– Power
• Gaining broad public support by publicizing issues
• Lobbying government for regulations

35. Secondary Stakeholders
• Media
– Interest
• Keep the public informed on all relevant issues
– Health
– Well-being
– Economic status
• Monitor company actions
– Power
• Publicizing events that affect public
• Accentuate the negative or the positive
– Benefited enormously from media exposure at start up
– Now press watching closely for signs of hypocrisy

36. Secondary Stakeholders
• Worthy Causes
– Interest
• 7.5 % pretax profit goes to a worthy cause that
workers help to choose
• Rainforests, Children’s Defense Fund, AIDS
patients, homeless people
• Lids for Kids (B&J’s and Yahoo!)
– Hooking up K-12 to the internet
– Power
• Publicity
• Very little power or control

37. Good Intentions, Bad Outcomes
• Cultural Survival-Brazilian Nuts
– Turned out to be Portuguese settlers
– 95% from agricultural-business giant that
also Clear Cuts the Rain Forest!
• Pigs
– Heart Attacks and High Cholesterol?
• La Soul
– Bankruptcy

38. Stakeholder Issues: Ethics
• Utilitarianism
– Greatest good to the greatest number
• Environmentalism, whole hippie ideals...
• Make the world a better place...
– Focuses on ends, not the means to get there
• T-shirts and jeans still meet economic and social
benefits, for example

39. B&J’s Levels of Moral Development
The Beginning Growth Maturity
Level 3:
Postconventional
Level 2: Conventional Stage 6 Universal ethical
principle
Level 1: Preconventional orientation
Stage 4
Law and order Stage 5 Social-contract
Stage 2 Rewards orientation
Stage 3
Stage 1 Reaction to Good boy/Nice girl
punishment morality

40. Stakeholder Issues: Ethics
• Rights
– Certain groups of individuals
– Childcare
• Running at expense of $90,000/year
– Insurance Coverage
• Married, unmarried, heterosexual, or homosexual partners
covered
– Media Says: “some need not apply?!?”
• Republicans
• Gun owners-CEO worked for Winchester Rifles
• Pro-Lifers
• Meat eaters

41. Stakeholder Issues: Ethics
• Justice
– Fair treatment of each person
• Upward appraisals
– Each given fair chance
– “What’s the Dough Boy afraid of?”
– Now aggressively shutting out competitors from
distribution channels
» Amy’s Ice Cream-Austin, TX

42. Environmental Ethics
• Four fundamental beliefs
– Life on earth should continue
– Human life on earth should continue
– Natural justice should be done
– Nonmaterial qualities of life are worth pursuing
• Environmental Ethics
– Related to natural environment that agree with
society’s norms
• See suppliers and worthy causes!--Values Led

43. Diagnostic Typology
Stakeholder’s Potential for Threat to Ben & Jerry’s
H L
Mixed Blessing:Collaborate Supportive: Involve
Stakeholder
Employees Suppliers
Potential Vermont Communities Stakeholders
Social Activists/Media Worthy Causes
For H
Cooperation
Non-supportive: Defend Marginal: Monitor
With Competitors Creditors
B & J’s L Retailers/ Customers General Public
Government

44. Laws, Government Regulations and
Regulatory Agencies
• Fair labeling (Social)
– Fat Grams listed on package
• Vermont Department of Banking & Insurance
– Law that allowed IN state offering (Economic)
• The IN State Offering
– One in every 100 families
– 1800 households bought stock
– 1/3 with minimum buy

45. Laws, Government Regulations and
Regulatory Agencies
• Vermont Chamber of Commerce
– B&J’s withdrew because lobbying for business
– Incompatible with broad environmental & social issues
– Wanted to remove members of Vermont’s
Environmental Board because too pro-environment!
• SEC (Economic)
• FDA (Social)
– Bovine Growth Hormone

46. Stakeholder Responsibility Matrix
S ta k e h o ld e r s E c o n o m ic L egal E th ic a l P h ila n th r o p ic
S to c k h o ld e rs
C u sto m e rs
E m p lo y e e s
C o m m u n ity
P u b lic a t
L a rg e
S o c ia l
A c tiv ist
BEC A U SE It Is B en & Je rry ’s

47. Porter’s Model Potential Entrants
Internet Sales
Other Stakeholders
Employees Industry Buyers
Distributors Competitors
• Dryer’s Grocers
• Breyer’s Individual Consumer
“Enlightened” • Haagen-Dazs
Suppliers • Others
Vermont Dairy High tech/fat free
Vermont Republic Industries
Cultural Survival Substitutes
La Soul

48. 3. Management
• Success criteria: financial/social performance
Values and • Operate by environmentally sound principles
Aspirations of • Hire the handicapped
Management
2. The Market
1. The Company Strategy Market
Organizational Formulation Opportunities and
Strengths and Decision Threats
Weaknesses
• Flexible • Growing at 15%
• Reputation • Public Relations
• Lack of corporate direction 4. Society • Franchises
• Middle management alienation • Internet
• Poor SOPs Acknowledged
• Increasing Bureaucracy Obligations to
Society
• Devote resources to solve society’s problems

49. Establish Purposes and Principles
Select Economic Select Social Project Economic Project Social
Investment Criteria Investment Criteria Performance Performance
Establish Performance Establish Performance Evaluate Economic Evaluate Social
Standards for Economic Standards for Social Performance Performance
Investment Criteria Investment Criteria
Add or Delete Projects/
Products from Portfolio of
Identify Projects and Identify Social
Capital and Social Investments
Products for Potential Projects for Potential
Investment Investment
Monitor Performance

50. Mission Statement
• Product mission - “To make, distribute, and
sell the finest quality, all-natural ice-cream…
• Economic Mission - “To operate the company
on a sound financial basis of profitable growth,
increasing value for our shareholders, and
creating career opportunities and financial
rewards for our employees.”

51. Mission Statement - cont.
• Social mission - “To operate the company in a
way that actively recognizes the central role
bus. plays in solitude of society by initiating
innovative ways to improve the quality of life
of a broad community - local, national, and
international.”
• Social performance audit

52. Board of Directors
Name Position M/F Age Service Background, misc.
Ben Cohen Chair M 43 17 Product dvlp., marketing
Robert Holland Jr. President, CEO M 54 1 Operational, strategy, marketing
Jerry Greenfield VP Chair M 43 17 Sales, promotion, distribution
Elizabeth Bankowski Dr. Social Mission F 47 3 Worked for gvt.
Merritt Chandler, Outsider M 78 7 Business consulting
Jeffrey Furman M 51 12 Business consulting
Fred Lager M 40 12 Management, consulting
Frederick Miller, Outsider M 48 2 Strategic culture change
Henry Morgan, Outsider M 68 7 Management
Frances Rathke CFO F 34 5 Accounting

53. Committees
• Compensation
• Nominating
• Social mission
• Audit

54. Board of Directors Continuum
Low Degree of Involvement High
Rubber M in im a l N o m in a l A c tiv e
P h a n to m S ta m p R e v ie w P a r tic ip a tio n P a r tic ip a tio n C a ta ly s t
N e ve r kno w s P e rm its o f f ic e rs F o rm a lly re v ie w s I n v o lv e d to a lim ite d A p p ro v e s q u e s tio n s , T a k e s th e le a d in g
w h a t to d o , if to m a k e a ll s e le c te d is s u e s d e g re e in th e a n d m a k e s f in a l ro le in e s ta b lis h in g
a n y th in g ; n o d e c is io n s . I t th a t o f f ic e rs p e rf o rm a n c e o r re v ie w d e c is io n s o n m is s io n , a n d m o d if y in g m is s io n
d e g re e o f v o te s a s th e b rin g to its o f s e le c te d k e y s tra te g y , p o lic ie s , a n d o b je c tiv e s , s tra te g y , a n d
in v o lv e m e n t o f f ic e rs a tte n tio n d e c is io n s , in d ic a to rs , o b je c tiv e s . H a s a c tiv e p o lic ie s . I t h a s v e ry
re c o m m e n d o n o r p ro g ra m s o f m g t. b o a rd c o m m itte e s . a c tiv e s tra te g y
a c tio n is s u e s P e rf o rm s f is c a l a n d c o m m itte e
m a n a g e m e n t a u d its

55. Founders - Ben Cohen
• Chairman of Board
• Dropped out of Colgate College and entered
Skidmore’s University without Walls program, an
unstructured college degree program,
• Quit school again
• Creative driving force

56. Founders - Jerry Greenfield
• Head of Ben and Jerry’s Foundation
• Studied pre-med. at Oberlin College
• Drifted before pairing w/Ben
• Greenfield and Cohen
spend most of time traveling
and doing marketing
promotions for co.

57. CEO History
• Ben Cohen, cofounder, was President from Jan.
1983-Feb. 1995
• Held essay contest to find new CEO
• Robert Holland, Jr. replaced Cohen in Feb. 1989-
1991 in order to introduce a more professional
management culture.
• Holland resigned after he accomplished goals of
stabilizing company’s manufacturing operations
and bringing more professional management.

58. Current CEO
• Odak replaced Holland in 1991, needed
someone with marketing and sales skills
that would put the company in better
competitive position
• 51 years old
• Married and has three grown children

59. CEO continued
• Earned a B.S. and M.S. degree in Applied
Economics from Cornell
• 25 years of management expertise in variety
of consumer product and retailing
businesses

60. Levels of Moral Development
Focus: Self Focus: Others Focus: Humankind
Level 3:
Postconventional
Level 2:
Conventional Stage 6 Universal ethical
principle
Level 1:
Stage 4 Law and order orientation
Preconventional
Stage 2 Rewards Stage 3 Good boy/Nice Stage 5 Social-contract
girl morality orientation
Stage 1 Reaction to
punishment

61. Management Style
• Business has responsibility for welfare of society
as a whole.
• Gain customer loyalty
• Team quality management
• Selective hiring
• if it’s not fun, why do it?

62. Corporation Motivation and
Social Responsiveness
Management Voluntary
values and response
beliefs
Pressure Forced
from response
stakeholders
Legally Involuntary
mandated response
requirements

63. Flow of Authority
Intended Actual
Shareholders Shareholders
Board Board
Management Management

64. Public Affairs
• Doing good = best kind of advertisement
• Try to be environmentally safe
• Employ handicap and youth
• Get everyone involved
– Joy Luck Gang
– Community Action Teams

65. Components of Ethical Climate
Ethical Criteria Individual Company Society
Egoism Self-interest Company Economic
Interest Efficiency
Benevolence Friendship Team Social
Interest Responsibility
Principle Personal Company rules Laws and
Morality and procedures Professional Codes

66. Ben and Jerry’s Ethical Climate
Effective
Communication
Ethics Ethics
Programs Auditing
Top
Management
Leadership
Realistic Ethics
Objectives Ethical Training
Decision-
Making

67. Schein’s Model
• Artifacts • Visible but often not
– Mission Statement decipherable
– Ben and Jerry
• Testable in Physical • Greater level of
Environment awareness
– Annual Social Report
• Basic Assumptions • Taken for granted
– Importance of Social
Performance

68. Annual Social Report
• Workplace
• Operations
• Environment
• Franchise / Retail
• Marketing
• International
• Philanthropy

69. Social Report Example

72. Stock Performance

75. Human Resource Management
• Work-Life Survey
• Livable Wage
• Gender Equity
• Diversity
• Child Care
• Joy Gang

77. Updated Timeline
Robert Holland is selected as the
new CEO and turns around its
1994
performance for a net income of
$6 million.
The company begins a search for
a new CEO. The company also
1995
reports its first loss of just under
$1,900,000

78. Updated Timeline
Perry Odak takes over the vacant
position of CEO. Ben and Jerry
publish their book Double Dip.
1996
The company had net sales of
over 174, million.
Robert Holland steps down as
CEO after greatly improving
1997
manufacturing inefficiencies.

79. Ben and Jerry’s Conclusions
• Establish a formal code of ethics
• More directors from non-profit
organizations
• Establish standard operating procedures and
training for supervisors
• As the company grows, keep the social
mission as a primary focus

80. Ben & Jerry’s: Before
Economic
Legal
Ethical
Philanthropic

81. Socially Responsible: Carroll’s Framework
By Joylynn R. Radtke
Ethical Legal
(Expected)
Philanthropic Economic
(Required)

82. Conclusions, SR Company
• Expect to be a target if you claim to be a
socially responsible company
• Being socially responsible is expensive
• Corporate values, vision, and culture will
often conflict with operations
• Social responsibility requires “creativity”
• Social responsibility begets social
responsibility

83. Recommendations
• Focus on differentiation
• Add organizational infrastructure devoted
exclusively to the social mission
• Use Stakeholder Mapping and Diagnostic
Typology to identify stakeholders and
develop strategy for interaction
• Establish an ethics and communications
program

84. Recommendations
Establish a mechanism to select and
evaluate both economic and social projects
Establish an issues (marketing) management
process
Board Members should support the
Economic/Social mission of the company

86. Check out more great forwards at
vparakhiya@rediffmail.com
vparakhiya@gmail.com