12. PAGE and KATZ, The Truth about Ben and Jerry's
Found in 1978, Ben and Jerry’s was a company that was “fair to its employees, easy on the environment, and kind to its cows” (Page, Katz, 39). They introduced the idea of profit and people, an idea that Cohen and Greenfield called the “double dip.” In 2000, Ben & Jerry’s was sold to Unilever, a company described by one commentator as “a giant multinational clearly focused on the financial bottom line” (39). Co-founder Ben Cohen had an interview with NPR radio back in 2010, and he said that “the laws required the board of directors of Ben & Jerry’s to take an offer, to sell the company despite the fact that they did not want to sell the company” (39). Fellow co-founder Jerry Greenfield agrees,
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Unilever’s purchase of Ben & Jerry’s serves as an example of how easily corporate command can undermine social responsibility. “‘The board was legally required to sell to the highest bidder,’ says [an attorney with expertise in social enterprise]” (39). The sale of Ben & Jerry’s to corporate giant Unilever wasn’t legally required, but because it was public they had no choice. It was not a legal obligation, but it Unilever’s purchase left Ben & Jerry’s with little choice since they were a public company. Page and Katz make a reference to a legislative report on SB 201, California’s Flexible Purpose Corporation act, which state that “The story of Ben and Jerry’s Ice Cream is an example of why a new entity form is sought” (40). Even though Ben and Jerry did not want to sell out, they had no …show more content…
Ford case, one in which argues that “shareholder wealth maximization is not a modern legal principle” (41). By the time Unilever has approached Ben & Jerry’s in early 2000 regarding the acquisition, the company was well defended. Cohen and Greenfield, along with their lawyers and lobbyist, had taken many steps to prevent a hostile takeover. In addition to promoting Vermont’s enactment of a constituency statute, which allows corporate directors to consider non-shareholder interests when making business decisions, the company had adopted a “poison pill,” meaning the company wanted to make Unilever believe that they were a company that was not worth purchasing. To cancel a poison pill, Unilever would have had to either find a friendly board or get one elected. Because elections for Ben & Jerry’s board were sporadic, Unilever would have needed at least two elections scheduled a year apart to elect the board of its choice. In the case of Ben & Jerry’s, Unilever could not have elected a friendly board because of the power and influence held by co-founders Ben Cohen and Jerry Greenfield, along with director Jeff Furman. Since Ben & Jerry’s could have adopted a “poison pill,” it would have caused Unilever to have to try and elect a friendly board. However, it would not be the case that Unilever could elect a friendly board since director Jeff Furman held enough power to sway the
The need among Americans to be diverted in ever more imaginative ways -- through high-thrill parks, virtual reality arcades, and theme restaurants, plays right into the hands of Dave Corriveau and Buster Corley, co-founders and CEO’s of Dave and Busters. The duo’s 50,000 square foot complexes include pool hall, an eye popping, cutting edge midway arcade, a formal restaurant, a casual diner, a sports bar and a nightclub rolled into one sprawling complex. In business since 1990, this is a high energy, highly efficient operation that’s comparable to a Vegas extravaganza. As a matter of fact there are even “for fun” cashless blackjack tables, with fake $10,000 chips. Pricey, but not outrageous, and you get value for your money.
While Ben & Jerry’s has multiple strengths, it is also worth noting some of the company’s weakness and how they can combat them. Although their commitment to clean resources draws in consumers, it also losing another group of people, those who do not wish to pay extra price the company must charge to offset clean technology choices. Ben & Jerry’s is one of the more expensive ice cream brands located in a local grocery store. This has direct correlation to their lack of an exceptionally large sale
Ben and Jerry’s ice cream and the amazing success the company has experience over the years could be loosely summed up as a story that began with two friends coming together with a vision to create a company that did not adhere to the traditional corporate rules of running a business. They both had certain ideals and a socially and economic responsible opinion on how a capitalist business should be run. There are a lot of similarities in the way this company is run and operated when compared to South West Airlines. They are of course offering two different things to there customers, South West providing a service where Ben and Jerry’s are providing a product but the way that they go about there daily business in the spirit of treating people a certain way, and setting out to complete a different kind of vision then say a more traditional company would is very similar.
Today, Ben and Jerry's has expanded into a multi-million dollar business, and continues to open franchises throughout the world. Maintaining their commitment to "share the wealth," these two business men have supported many charitable organizations including " 1% For Peace," "Support Farm Aid," and "One World, One Hear Festival," (1)
subject to review by the Board of Directors from time to time in light of the
The corporate governance within Ben & Jerry’s can be identified to use the two-tier management system as their board of directors is independent from the management (Benjerry.com, 2015). However, it can be argued that the board of directors from Unilever also act as board of directors for Ben & Jerry’s when it comes to financial and economic decisions, as well as the right to fire or hire the CEO at any given time. Ben & Jerry`s board of directors has the power to protect the brand, changes in product standards, introduction of new products and marketing decisions (Edmondson, 2014:
However, with some management staying on board, there is a possibility for compromise between the companies, in regards to social contribution (see Social Donation. Excel). If Ben & Jerry’s would lower the percentage of contribution from 7.5% to 5% or lower the amount of donation would have been less than $500,000 in 1999. A compromise in this regard, would benefit Unilever in keeping more profits in house, and help Ben & Jerry’s maintain their reputation of a social
However, with some management staying on board, there is a possibility of compromise between the companies, in regards to social contribution (see Social Donation. Excel). If Ben & Jerry’s would lower the percentage of contribution from 7.5% to 5% or lower the amount of donation would have been less than $500,000 in 1999. A compromise in this regard, would benefit Unilever in keeping more profits in house, and help Ben & Jerry’s maintain their reputation of a social contributor. Along with a compromise of their social endeavors, Ben & Jerry’s can target a higher offer price in negotiations. Unilever has already increased in their offer before their most recent one, and may raise it again. Though Ben & Jerry’s is suffering raising stockholder value, they still own a large share of the market space at 45%. This and having the third highest price/earnings ratio of comparable companies (see Exhibit 6), gives Ben & Jerry’s leverage to ask for an increase in Unilever’s offer, to at least $42, which is twice the amount of Ben & Jerry’s current market
BR was sold to Delta Foods in 1996 for US $2 billion. At this time, it was one of the largest fast-food chains in the world generating sales of US $6.8 billion. DF purchase of BR brought in a new cultural paradigm. DF is an individualistic, aggressive growth company with brands they believe are strong enough to support entry into new overseas markets without the need for local partnership. The DF strategy is one of direct acquisition and JV’s were not part of their strong suit. DF strategic implementation is based on hiring local managers directly or transferring seasoned managers from their soft drink and snack food divisions. The DF disdain for JVs is clearly reflected by their participation in only those JVs where local partnering was mandatory (e.g. China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR which was unlike the DF outlook. Terralumen’s strategy was misaligned and out of sync with the DF strategy. This was unlike the complementarity that existed with BR’s strategy. This misalignment began to affect the JV relationship that had worked well with BR in the initial years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles i.e. Individualistic and Collectivism leads to their inability to proactively create steps for better alignment in the early period after acquisition, creating uncertainties and difficulties for both corporations. There is a lack of communication and virtually absence of trust between two new partners. DF appeared to be flexing its muscles in the relationship and using a more masculine approach compared to Terralumen’s more feminine approach. Both the corporations are strategically involved in a complex situation where they appear reluctant to address the issues at stake and move ahead together. The DF strategy of
The case requires a discussion of fundamental firm objectives and the implications of a non-traditional corporate orientation; one needs to review the development of Ben & Jerry's strong social consciousness and the takeover defence mechanisms that maintain management's control on company assets.
In 1975, Ray Kroc, the Chief Executive Officer at the time, came up with a very ingenious idea. This is still used today and is very popular with many fast-food restaurants. McDonald’s invented the drive-thru, where the car pulls up to the window and orders their food. They pay their amount due at this window as well. They then go to the next window to get their food.
In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.).
Staying in touch with their customers would not enable Ben and Jerry to be as successful as they have become if their ice cream was not high quality as well. The second value the company espouses is to use only wholesome, natural ingredients. They began their operation on this premise, utilizing fresh Vermont milk and cream to create their frozen concoctions. During a period of volatility in the dairy market in 1991, the company went so far as to pay a dairy premium totaling a half million dollars to combat Vermont dairy farmers’ losses. This helped protect the family farmers who supplied the milk for Ben and Jerry’s ice cream.
‘Few trends would so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their
The first discussion question posed was, “How does Dr. Friedman characterize discussions on the “social responsibilities of business”? Why (Jennings, 2009, p. 79)? Friedman (1970) characterized the discussions on social responsibilities as one hundred percent unadulterated socialism. Friedman (1970) characterized these discussions in that manner because he felt that a corporate executive should focus solely on making profits and not on social aspects. He mentioned how people who conduct and express themselves in this fashion are positively reinforcing and supporting the actions of individuals that have been weakening the foundational blocks of free society. Friedman (1970) posed a question which was the crux of his 1970 article “The Social Responsibility of Business is to Increase its Profits” where he investigated the true contextual meaning of what responsibilities mean to businesses. Friedman describes how businesses cann...