Corporate Social Responsibility of Monsanto Company - Case Study Example

Running Head: Corporate Social Responsibility Communication in Business Name Institution Date Corporate Social Responsibility is set of voluntary policies and even guidelines which are moved by the corporate. In other words it is how the company manages the economic, social and environmental impacts of whatever it does. This concept implies that a company is obliged to going about with its businesses’ provided it sticks to the set rules and regulations which states that it must be open and in free and fair competition without any deception or fraudulent activity (Van Marrewijk, 2003). It is worth noting that corporations and corporate activities have tremendous impact on the natural environment considering the fact that they use primary resources for the manufacture of whatever product they manufacture, they use energy and water and in the long run there are wastes and emissions that come after all these processes. Due to the ongoing climate change, the impact caused by these corporations has moved a notch higher. This calls for care and regulations to be laid down so that there can be well defined measures related to environment protection and that there can be sustainable development. Under the environmental protection law, companies are subject to disclosing an annual report detailing pollutant emissions. And then the information collected is then made available to the public by the relevant department in each State or Territory. According to Windsor (2001), those corporations that are committed to ethical behaviour towards compliance with corporate code of conduct tend to perform higher financially than the firms that do not comply. Through research corporate social responsibility tends to reduce financial risks and therefore any organization benefit financially from socially responsible activities (Orlitzky, 2005). A company has a capacity of influencing the attitudes and perceptions of the stakeholders, building a strong trust and enhancing positive relationship which will result to a business advantage. In this article I am considering Monsanto Company. This company was started in 1928 with the main aim of the business being chemicals but later expanded to agricultural products in 1950s. Its original name was Pharmacia which later formed an agricultural sister company which they named Monsanto Company (Dominic Glover, 2007). . The new company was flagged to business in the year 2000 and started running as an independent company in the 2002 up to date it manages its business as a corporate entity. Being an agricultural related company; it has come up with products which are favorable to the environment and to the consumers who are farmers (Dominic Glover, 2007). For instance, there is a product called roundup which is a herbicide which was produced in 1970s which has helped farmers to develop conservation tillage techniques which help curb soil erosion. Monsanto’s Roundup ready cotton gives a chance to farmers to control weed without affecting the crop and also allows up to date water and nutrition management and drastically reduce the use of herbicides which are harmful to the soil (Van de Velde et al, 2005). Today, this herbicide is a house hold brand and also a world renowned product for weed control. Currently, the company handles the cotton industry through research, breeding and production of cotton seeds and other biotechnology products in Australia. Having been operational from 1950s, this company have provided farmers with innovative solution to various challenges they face and has in a big way helped them adopt to changing economic, social and environmental requirements (Dominic Glover, 2007). As stated above, this company is directly involved in the cotton industry. Cotton is a very important export in Australia; however, it is a plant which is prone to attack by various insects. Monsanto has developed cotton seeds which contain Bollgard ii technology, which makes them have inbuilt insect protection. Many cotton varieties have been bred with this seed so that they can reduce insect side usage from at least 18.7 litres per hectare in indigenous cotton to 2.6 litres per hectare in Bollgard ii fields. This computes to a saving of approximately 3 million litters in a single year cotton crop. It has also reduces health and safety issues that are related to handling pesticides. The company aims at giving the best to the farmers and by so doing, the farmers have increased productivity, protection from insects and deceases, plants with increased tolerance to extreme heat just to mention but a few (Dominic Glover, 2007). . For example, Monsanto has produced seed with several genes that make them drought resistance although many of this plant are under test; results are expected to be exemplary (Dominic Glover, 2007). They ensure that there are benefits to go with their products like enhancing better value in food and feed nutrition for instance the high lysine corn product which is aimed at reducing feed cost and increase metabolize able energy by incapacitating some synthetic lysine supplements used in animal feed industry. With this, the farmers benefit by having effective and nutritious feeds for their animals at an affordable price and thus reducing the cost of rearing animals (Wheeler & Freeman, 2003). Consumers also benefit in diverse ways in regard to Monsanto’s products. This includes increased protein or oil, balanced fatty acids or enhanced carbohydrates. This is made possible by the fact that this company uses biotechnology, soy and canola crops that give vegetable oil enriched with omega 3 fatty acids. This helps curd some deceases that result from people’s lifestyle and bad eating habits. The society at large faces several environmental, food production and health issues. Monsanto calls for new innovations that will address this challenges ones and for all. Biotech is one of a technology that can help solve these challenges. The company is committed to having a more sustainable and productive agriculture. Moreover, this has business benefits to the company at large by increasing profitability. This is enhanced when the company employs reduced costs, adding value to the existing brands and by developing products that will beat the heat of competition in the market (Hill, 1999). Many companies including Monsanto, are looking for ways to cut the cost of production, improve the products already in the market and creating new products that will meet the needs of the entire customers (Kotler, 2000). In any business environment, there are pressures experienced by the company coming from the stakeholders. While customers are demanding for high quality products the investors are calling for a competitive and hefty return to their investments. This in most cases forces the company to seek new consumer, labor and natural resources without regulations used in the multinational corporations (Dominic Glover, 2007). In the process of developing products that are favorable to the consumers who mostly are farmers, there has been a product that has raised controversy. For instance, Monsanto produced dioxin which contained defoliant Agent Orange, which was mostly used in Vietnam. The community in the Times Beach, Missouri, was evacuated for dioxin contamination; unfortunately, Monsanto did not accept responsibility for the contamination (Orlitzky, 2005). There was also a time when this company sued a farmer for glowing genetically engineered Roundup Ready Canola after its pole drifted into his garden and contaminated his crops. In the year 2001, Monsanto was identified as U.S environmental protection Agency which was potentially responsible of 56 contaminated sites in America (O'Rourke, 2003). This company has been sued severally for damaging the health of its employees or those living near its sites through pollution or poisoning. And according to its director, Monsanto seems not to be keen in taking care of the consumers who are the target of the products they are producing. In a certain case, the director of corporate communication was quoted saying that the company’s should not have to vouchsafe the safety of biotech food, that is the work of FDA and that their work is selling as much as they can (Dominic Glover, 2007). . Monsanto also ignited other controversy from Bovine Somatotropin which is a synthetic hormone injected into cows to increase milk production. This hormone is found in animals and human beings and it quickens the growth of infants. However, it was found that this is a cancer accelerator in adults and infants having close association with breast cancer, prostate cancer and colon cancer. As they can claim that they are being denied to sell milk which have passed all the technology that pertains dairy products, they are on the other hand putting the consumers at a risk when the take the milk and catalyze cancer causing germs (Dominic Glover, 2007). . This company has used the opportunity of corporate social responsibility to develop a competitive advantage. By building a brand, they have also tried to improve on the integrity whereby, the workers, the products and the consumers promote good morals and ethics (Windsor, 2001). It is a fact that, if a company conducts its business in an ethical and sustainable manner, then there is an impact that is going to be affected on the communities, culture, societies and environment within which the corporate operate. This will ensure a secure market share which in this case Monsanto has been able to beat companies like Sygenta in producing herbicides (Dominic Glover, 2007). . As the stakeholders and governance theory suggests, the modern business must respond to concerns of stakeholders, who include NGOs, Consumers, environmentalists and the local community. This is stressed by the fact that we live in a globalized world that is more complex, independent and risky. This calls not for just a reactive response to confrontational activism and regulation but it should be a consideration when handling the policies and the strategies of the same organization (Windsor, 2001). This being the case Monsanto have developed strategies to ensure that all the products manufactured comply with the already laid policies of not harming the farmers or destroying the soil for that’s what they need in their farming. In Monsanto, risk management is well considered. Managing risk is the key part of many organizations’s reputation. It takes quite a long time to build a reputation but this can be lost within a very short time through scandals (Dominic Glover, 2007). Events leading to this can draw a lot of attention from the media, government and NGOs. Setting goal of doing the right thing in the organization will be a relief to these risks. For the cases that Monsanto has been accused of misconduct, they must have suffered loss or trust from the clients. It is therefore worth concluding that good governance in an organization is a clear determinant of a well corporate social responsibility (Wheeler & Freeman, 2003). Investments are nowadays including even the environmental and ethical. It is very clear that the ecological sustainability and good financial performance are compatible and now the ball is left with the investors. For a successful corporate social responsibility, the company is expected to experience good environmental and financial performance and this will in the long run increase corporate transparency and contributing to changing investments behaviors. In this case, Monsanto concentrates in developing products that best suits the consumers and that is expected to yield much after planting (Van Marrewijk, 2003,). Monsanto as a company enriches farmers and works towards increase of food supply globally, developing sustainable agriculture through developing technologies. This company describes its philanthropic efforts and partnership programs as engagement activities whereby there is even free distribution of free hybrid seeds, training farmers in forestry and biodiversity protection and even giving financial aid to young farmers who enroll in the organization future farmers of America. Every development in the company is said to be done with the farmer at the back of the mind. Employees working in the company enjoy rewards for their achievements and receive coaching on how to handle ethical issues when they crop up (Morimoto et al, 2005). Conclusion Within the business world the main responsibility has been money and how to increase the shareholder value. This means that corporate financial responsibility was the main driving force towards handwork in the organizations. Monsanto was not exceptional considering that the communication officer stating that their most important thing is how much sales they make in a day. However, with time, there was a border definition of corporate responsibilities for the local communities, the environment, and the working conditions and for deployment of ethical practices in the organization’s activities. As a company steps up the investments in corporate social responsibility in the workplace, market share and the community, there are greater chances of creating corporate partnership and sustain a clean bill of health to the developing countries and thereby increase the market share. This has been the strategy employed by Monsanto and have yielded much for it made it move to an international company and a level higher than its competitors. However, there has been controversies regarding some pesticides and seeds having some side effects which have even resulted to paying some damages and this has negative impact on the company’s reputation. Monsanto has been a company that has been mindful to the stakeholder. Starting from the farmers, consumers and workers all are well taken care of by the policies in the company whereby Consumers benefit from increased protein or oil, balanced fatty acids or enhanced carbohydrates. Farmers get seeds that are drought and disease resistance and workers get rewards for any achievement they make in the organization. References Glover, D 2007 ‘Monsanto and smallholder farmers: a case study in corporate social responsibility’, Third World Quarterly 28.4: 851-867. Wheeler, D, Colbert, B & Freeman, 2003, 'Focusing on value: Reconciling corporate social responsibility, sustainability and a stakeholder approach in a network world', Journal of General Management, vol. 28, no. 3, pp. 1-28. Van Marrewijk, M 2003, 'Concepts and definitions of CSR and corporate sustainability: Between agency and communion', Journal of Business Ethics, vol. 44 Turner, RJ 2006, Corporate Social Responsibility: Should disclosure of social considerations be mandatory?. Submission to the Parliamentary Joint Committee on Corporations and Financial Services Inquiry Van de Velde, Eveline, Wim Vermeir & Filip Corten (2005). ‘Corporate social responsibility and financial performance’. Corporate Governance: International Journal of Business in Society. 5(3): 129- 138. Morimoto, Risako, John Ash & Chris Hope (2005). ‘Corporate Social Responsibility Audit: From Theory to Practice’. Journal of Business Ethics. 62(4): 315-325. Windsor, D 2001, 'The future of corporate responsibility', International Journal of Organizational Analysis, vol. 9, no. 3, pp. 225-56. Orlitzky, M 2005, 'Payoffs to social and environmental performance', Journal of Investing, vol. 14, no. 3, p. 48. O'Rourke, A 2003, 'A new politics of engagement: shareholder activism for corporate social responsibility', Business Strategy and the Environment, vol. 12, pp. 227-39. Read More