The case provides some background information about Monsanto which is the world’s largest seed company with annual sales of $11.7 billion. The case tackles the general environment of the company which includes the technological, global, and political legal dimensions. The task environment, comprising of the customers and customers is also addressed as well as the means the company is using to balance the needs of the stakeholders and the environment. The company faces big challenges in developing and introducing GM seeds; these concerns center on the potential harmful effects of the GM seeds on the environment and the health concern of consumers. However these are disputed by research studies, thus reinforcing the case for their adoption. Next, the case deals with ethical issues, which include bribery claims in Indonesia and patent rights violation by farmers. Finally, it focuses on the future of Monsanto. The company has a bright potential to thrive as it is still focused on technological innovations.
Nature of organizational environment
The external environment of an organization comprises of two components: the general environment and the task environment. The general environment consists of non specific dimensions and forces in the surroundings that might impact its operations. Social cultural, political-legal, international and technological dimensions make up the general environment. On the other hand, task environment consists of specific groups that are likely to influence the organization. These include competitors, customers, suppliers and regulatory agencies (Beauchamp, 2008).
Monsanto’s general environment
The technological dimension
Monsanto has consistently invested in breakthrough technologies in biotechnology. Weeds have been a nuisance to farmers and herbicides that were supposed to kill weed were mostly costly and time consuming. However, Monsanto came up with seeds implanted with herbicide Round Ready, which is able to kill weeds and spare the crops. In order to keep abreast with the needs of farmers, Monsanto continues to invest heavily in research and development. According to the case, the company spends about $ 1 billion annually and uses technology to woo the support of the stakeholders. For example the company has a laboratory that offers the farmers educational tours. Farmers are shown cutting edge technologies, which offers high yield. In this manner the company is able to retain as well as gain potential clients. Through this way, the company is able to stay ahead of competition (Sawayda, n.d)
Political- legal dimension
Companies have to operate under the watchful eye of the government and legal forces, (Beauchamp, 2008), and Monsanto is no exception. Monsanto is currently under the attention of the American Antitrust institute for alleged anticompetitive practices reported by the competitors.
The task environment
As discussed above, a company’s task environment consists of competitors, customers, suppliers and regulatory agencies. These have had a love- hate relationship with Monsanto according to the case. The company received much criticism after the introduction of GM seeds and its products. However, the CEO of Monsanto decided to minimize criticism by focusing biotechnology on products that would be used in the production of animal feeds and corn syrup. Farmers are the main stakeholders of the company, and those who purchase GM seeds are able to grow more crops on less land. Monsanto prides itself by indicating that their insect protected corn has raised income in Philippines. However, this claim is disputed by critics. On the other hand, its attempt to introduce their products in Europe has been thwarted by consumers. In addition, Green Peace, which is a secondary stake holder, has been on forefront of fighting Monsanto especially the attempt to promote the GM crops in developing countries. Of specific concerns are: the safety of the GM foods and concerns about environmental effects (Sawayda, n.d)
As highlighted above, some of the Monsanto’s stakeholders are the farmers and the Green Peace who have raised concerns about GM food products and the effects on the environment. Specifically, their concerns are based on moral and safety issues. The skeptics argue that biotechnology crops are unnatural with the company controlling everything that goes into the seeds. Critics argue that, since the GM crops are new, their health implications may not be known for years. In addition, the issue of toxicity has been raised, as many Monsanto seeds have genes that allow them to produce their own Roundup Ready herbicide. Nevertheless, one of the components in dispute, glyphosate has been listed by EPA as having low skin and oral toxicity. Other studies have shown that Roundup has no health risks for humans.FDA has come also on the defense of GM food, arguing that GM food is safe to eat. As a result of this, tight restrictions on label have been initiated for rBST milk (Sawayda, n.d)
Steps taken to establish an ethical culture
Apart from organizational and health issues, Monsanto has to deal with its conduct. Pressure for performance in many organizations force employees to commit unethical conduct and Monsanto has not been without exception. Bribery claim and patent issues have led to ethical and reputational consequences.
An ethical culture should be of great priority to the management and the challenge for many organizations is trying to understand how to build one. Monsanto was fined a big chunk of money after some of the managers were reportedly engaging in bribery in Indonesia. After conducting investigations, the company unearthed and reported the bribery to the authorities. In addition to paying fines to the OOJ and SEe, Monsanto agreed to be closely monitored by the authorities. This shows that the company is willing to accept and correct its own mistakes. On the issue of patent rights, Monsanto uses investigators from law firms to investigate suspected violation. A farmer, who is found violating the patent, is fined or taken to court.
Establishing an ethical culture
As highlighted above, an ethical culture should be a top priority for every business, large or small. Therefore every organization should try to understand what it takes to build one. As a chief executive of a big company like Monsanto, I would take the following steps to establish an ethical culture.
Establish an enforceable code of conduct
A code of ethics is the foundation of any sustainable ethics program. It should not be based on past mistakes but rather a proactive effort (Malcolm, 2001).
Establish an initial and ongoing training
The purpose of training is to let employees know what is expected of them. In addition, training helps employees to know that a strong ethical culture protects the reputation of the company and enhances profitability.
Maintaining regular communications
The aim of regular communication would be to ensure ethics are live. Ongoing conversation or communication makes workers aware and more willing to defend the policies of the company whenever they see problems (Beauchamp, 2008).
Establish an anonymous reporting hotline
This provides employees with a confidential method of reporting unethical conduct. It is a well known tool in helping to enforce codes of conduct and establishing an ethical culture.
Enforcement / action plans
A code of conduct has to be enforced and therefore action is necessary when problems arise. Although about 40% of employees have been found unwilling to report unethical behavior, the rate of misconduct can be reduced significantly if by companies with strong reporting and ethical cultures.
Rewarding the employees that follow the code diligently
Finally rewarding employees that behave well and live the code of conduct is important in establishing an ethical culture. By recognizing and rewarding good behavior, a company can be able to provide a big incentive for the employees to be an integral part of helping to enforce a code of conduct and establish an ethical culture (Malcolm, 2001).
Beauchamp, Tom. (2008). Ethical Theory and Business: International Edition. New York Prentice-Hall..
Malcolm Evans. (2001). Six Steps to Establishing an Ethical Culture. Retrieved 26th September 2010 from http://knol.google.com/k/six-steps-to-creating-an-ethical-culture
Sawayda, Jeniffer (n.d) Principles of Management: Monsanto Balances Environmental &