Management In business there are certain things that should be done and there are things that must be done if the business wants to continue. The primary purpose of a business is to make a profit and stay profitable. At the beginning of chapter three of Concepts in Strategic Management and Business Policy Achieving Sustainability, there is a story about how General Mills took it upon itself to clean up an area that was near to its headquarters and that had become quite a dangerous place (Wheelen & Hunger, p. 0, 2010).
General Mills spent millions of dollars tearing down old drug houses and helping the community afford housing with grants, the question is why did they do it? General Mills certainly was not required to spend that money the way it was spent. There was not any government agency forcing them to help the community. It seems that General Mills helped the community because of goodwill, it may be that the philanthropic actions that General Mills takes helps the management feel good about themselves.
Whatever the reasoning for beginning to support poorer communities, it could be said that any person helped by General Mills will be a General Mills customer for a long time to come. Even telling their friends and neighbors about how General Mills help them or their community, thus spreading the reputation of the company. According to Milton Friedman, any company that spends money on the community is doing so under the persuasion or expectation of its shareholders.
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Friedman also concludes that by spending that money on the community rather than using it to cut costs or to develop new products that they organization may be doing more harm than good to its long-term efficiency (Wheelen & Hunger, p. 72, 2010).
The arguments for these points of view make sense, by donating to the community an organization fosters goodwill with the people and can create customer loyalty. On the other hand by saving that money and creating higher quality products at lower prices, a company an create the same loyalty from its customers. There is the argument that a person who receives assistance on a regular basis will become dependent on that assistance and expect it. It seems that ethics and social responsibility do play a role in strategic planning if only for the reason that it is expected of large organizations. Even some small organizations donate to the community albeit on a smaller scale, Bolt and Nut Supply Co. in Ogden donates product for Eagle Scout projects two to three times a year.
Whether or not the charity and donations ultimately lead to the loss of efficiency is difficult to quantify, however, it seems that the larger a company gets the more it is expected to contribute. Monsanto is a company that has been deemed the least ethical company in the world (“The 12 Least Ethical Companies In The World: Covalence’s Ranking,” 2013).
Monsanto started out as a chemical company and has transformed itself into an agricultural giant, creating genetically Modified seeds for farmers.
Monsanto has been allowed to patent it genetically modified seeds making it possible to use lawsuits to protect those patents. Monsanto representatives have been seeking out farmers for years with threats to sue them for patent infringement. Monsanto creates seeds which are resistant to its own creation Roundup, so a farmer who purchases Monsanto seeds can safely use Roundup for weed control without harming his crop. Traditionally farmers would collect seeds from their crop for use in the coming season for the next crop.
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When a farmer buys from Monsanto, he will be required to sign a document stating that he will not collect the seeds for later use, instead he must purchase new seeds from them if he wants to plant the same crop (“Monsanto’s Harvest of Fear,” 2008).
Farmer who have never used Monsanto seeds are not safe, when they collect seeds from the previous crop they may inadvertently be collecting seed from Monsanto crops that have blown over from neighboring farms or that have been deposited by birds.
The seeds look the same visually, the only way to tell is by lab testing, if a Monsanto mafia member does a little checking that can force the farmer into giving up money just to get them off his case (“Monsanto’s Harvest of Fear,” 2008).
It would appear that a company does not necessarily need to be ethical to be successful because General Mills and Monsanto seem to be polar opposites on the ethics scale and both are successful. However, Monsanto has a large and growing opposing force in the people whom it has wronged or who think that Monsanto needs to be stopped. If that group gets large enough it could spell the end for Monsanto.