Monsanto Attempts to Balance Stakeholder Interests
Summary: Monsanto Company is the world’s largest seed company. They specialize in genetic manipulation of organisms. Monsanto was founded by John E Queeny in 1901 in St. Louis, Missouri. The company’s first product was artificial sweetener. At the start of World War 1, company leader realized the growth opportunities of industrial chemicals. In 1970’s, Monsanto had produced a chemical known as Agent Orange. Agent Orange contained dioxin; a chemical that caused a legal nightmare for Monsanto, a lawsuit was filed against Monsanto on behalf of hundreds of veterans.
The repercussions of dioxin would plague the company for years. In 1981 Monsanto leaders determined that biotechnology would be the company’s new strategic focus, so in 1994 they introduced the first biotechnology product. In 1997 Monsanto spun of its chemical business as Solutia and changed its name to Pharmacia. Two years later, a new Monsanto, focused on agriculture. The New Monsanto was tainted by disturbing news about the company’s conduct. Monsanto had been covering up years of environmental pollution.
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A paper trail showed Monsanto had known about the pollution since 1960, but didn’t stop the dumping. Hugh Grant took over the company in 2003. But because of the scandals and stakeholders uncertainty, the price of Monsanto’s stock had fallen by 50 percent, and they lost $1. 7 billion dollars. Grant knew by strategic focus on GM foods, the company would recover. Monsanto’s Pledge and Code of Ethics: The Monsanto Pledge is to listen more, to consider their actions and their impact broadly, and to lead responsibly.
The Monsanto Code of Ethics placed a special rule for Chief Executive and Senior Financial Officers it was adopted by the Board of Directors of the Monsanto Company stating that the Chief Executives and the senior leadership of the Finance Department must follow in addition to Monsanto’s Code of Conduct. Because of this special rule each agrees that they will abide to: 1. Act with honesty, and integrity 2. Provide information that is accurate, complete, objective, and relevant 3. Comply with all laws, and rules 4. Act in good faith . Respect the confidentiality of information 6. Share knowledge and maintain skills 7. Promote and be a good example of ethical behavior 8. Responsible use of and control over all assets 9. Promptly report to the General Counsel or Director of Business Conduct and conduct that is violation of law or business ethics Monsanto’s measuring up: Concerns about the safety of GM foods: •One concern is toxicity, but despite the concerns, the FDA has proclaimed the GM food is safe to consumers. Concerns about Environmental effects: There are concerns about the roundup herbicide, which is used in conjunction with the GM seed. But studies have shown that the Environmental Protection Agency maintains that glyphosate is not dangerous at recommended doses. •Another concern is that GM seeds could be carried off by the wind, bees and other insects to other areas. Monsanto has not been silent on these issues and has acted to address some of these concerns. Concerns about crop resistance to Pesticides and Herbicides: •Critics fear that continual use of chemicals could result in “super weeds” and “super bugs”. . To combat “super bugs” the government requires farmers using Monsanto’s products to create “refuges”. b. To prevent resistance to herbicide, farmers are required to vary herbicide use and practice crop rotations. Monsanto Ethics issues: In the case of Monsanto, bribes and patents have resulted in legal, ethical, and reputation consequences. Bribery Issues: In 2002 a Monsanto manager told an Indonesian firm to pay a bribe of $50,000 to an official in the country’s environmental ministry.
It was later found that this was not an isolated event; the company had paid off many officials between 1997 and 2002. As a result, Monsanto accepted full responsibility for their employee’s behavior and agreed to pay $1 million to the Department of Justice and $500,000 to the SEC, along with 3 years of close monitoring. Patent Issues: Farmers using Monsanto seeds are not allowed to harvest seeds from the plants for use in upcoming seasons. However this is a new concept for most farmers, the law protects Monsanto’s right to have exclusive control over its creations, and farmers must abide by these laws.
Since it is easy for farmers to violate the patent, Monsanto has found it necessary to employ investigators to investigate violators. Some farmers claim Monsanto investigators have used unethical practices to get them to cooperate. Legal Issues: It is suggested that Monsanto is hindering competition, exerting too much power over transgenic seed industry, and limiting seed innovation. Conclusion: Monsanto is has taken a good hard look at their actions in the past and what had transpired, and in response decided to fashion what they believe to be the best-practices FCPA compliance program.
Genetically-modified foods have the potential to solve many of the world’s hunger and malnutrition problems, and to help protect and preserve the environment by increasing yield and reducing reliance upon chemical pesticides and herbicides. The benefits of growing GMO seeds is that they can create plants with the exact desired trait very rapidly and with great accuracy, some of the advantages of GMO are pest resistance, herbicide tolerance, disease resistance, and cold tolerance. There is some criticism against GMO seeds; unintended harm to other organisms, reduced effectiveness of pesticides, and gene transfer to non-target species.
There are several possible solutions. Genes are exchanged between plants via pollen. Two ways to ensure that non-target species will not receive introduced genes from GM plants are to create GM plants that are male sterile or to modify the GM plants so that the pollen does not contain the introduced gene. Agribusiness industries believe that labeling should be voluntary and influenced by the demands of the free market. If consumers show preference for labeled foods over non-labeled foods, then industry will have the incentive to regulate itself or risk the customer. Bibliography:
Ferrell, O. C. , Fraedrich, J. , & Ferrell, L. (2011). Business Ethics: Ethical Decision Making and Cases. Mason: South-Western, Cengage Learning. LeFebvre, R. A. (2011, August 22). Business Ethics and Social Responsibility Fall Semester 2011 Syllabus. BUE 175 Section 851, Kingman, AZ, USA: Mohave Community College. Web site: http://csanad. hubpages. com/hub/GMO-advantages-and disadvantages Web site: http://www. blurtit. com/q413572. html Web site: http://www. monsanto. com/whoweare/Pages/Monsanto-pledge. aspx Web site: http://www. monsanto. com/whoweare/Pages/code-of-ethics. aspx