Ben and Jerrys

The scoop on Ben & Jerry’s Inc.: an examination of corporate social responsibility Dennis, Bryan S; Neck, Christopher P; Goldsby, Michael G. Journal of Managerial Psychology13. 5/6 (1998): 387-393.

This paper attempts to go beyond media representations as it explores the question of whether Ben & Jerry’sInc. is a socially responsible organization. This exploration includes a description of the concept of corporate social responsibility, and an investigation of some specific actions by Ben & Jerry’s to ascertain whether or not these actions are indeed socially responsible in nature.

Bryan S. Dennis: Virginia Tech, Blacksburg, Virginia, USA
Christopher P. Neck: Virginia Tech, Blacksburg, Virginia, USA Michael G. Goldsby: University of Southern Indiana, Evansville, Indiana, USA In 1963, two men met in seventh grade gym class in Long Island, New York. Fourteen years later, Ben Cohen and Jerry Greenfield moved to Vermont, completed a $5 correspondence course on ice cream making from Penn State and began Ben & Jerry’s Homemade Ice Cream Inc. The following year, the two men opened the firstBen & Jerry’s store in a renovated gas station in downtown Burlington, VT. Two years later, the two were distributing their ice cream in the back of an old Volkswagen Squareback Wagon. The following year, Time Magazine claims that their ice cream is the best in the world. Sales have increased every year since then. Also, with the exception of 1994, the company has earned a profit every year (Ben & Jerry’s Website, 1997a). However, the founders of Ben & Jerry’s appear to want more out of their company than just profits.

The company’s mission states one of the company’s goals as “initiating innovative ways to improve the quality of life of the broad-based community – local, national and international level” (Ben & Jerry’s Website, 1997b). Their philosophy of social responsibility has received much attention. When the topic of corporate social responsibility (CSR) is discussed, Ben & Jerry’s Homemade Ice Cream, Inc. is often cited as a prime example of a company that has succeeded in this arena. Beyond the hoopla and emotion often involved in these discussions, there are several questions that beg to be asked. Is Ben & Jerry’s Inc. deserving of all this attention? If we go beyond media representations and look more closely at the issues, is Ben & Jerry’s a socially responsible organization? The purpose of this article is to examine these questions by; – (1) describing the concept of corporate social responsibility; and – (2) exploring some specific actions of Ben & Jerry’s to ascertain whether or not these actions are indeed socially responsible in nature. Social responsibility

In 1960, Keith Davis described social responsibility as businesses’ “decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest”. In 1971, the Committee for Economic Development made the following statement in regards to corporate social responsibility:” Today it is clear that the terms of the contract between society and business are, in fact, changing in substantial  and important ways. Business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human values. Business enterprises, in effect, are behind asked to contribute more to the quality of American life than just supplying quantities of goods and services.” Since then, the topic of CSR is one that has been widely discussed. There are those, such as Milton Friedman (1962), who are opposed to the underlying premise of CSR and feel that sole responsibility of business is profit maximization.

On the other hard, there are those such as William C. Frederick (1960) who feel that the resources available to businesses should be “utilized for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms”. Also, in 1991, R. Edward Freeman and Jeanne Liedtka presented seven reasons why the concept of social responsibility is often abandoned. One of the reasons given was:” Corporate social responsibility promotes incompetence by leading managers to involve themselves in areas beyond their expertise – that is , repairing society’s ills.” We address the issue of whether companies are capable of addressing society’s ills by evaluating the managerial decisions and implications of an organization that has received a great deal of publicity for its alleged social responsibility. We believe Ben and Jerry’s demonstrates the challenges a company faces in attempting to demonstrate socially responsible actions. Additionally, Ben & Jerry’s may also serve as support towards why CSR can be a worthwhile pursuit. Examples of social responsibility

Without question, Ben & Jerry’s has had several CSR-related success stories. (1)Ben & Jerry’s donates 7.5 percent of pretax profits to charity, while the average publicly held corporation in the USA donates 1 percent (Miller, 1995). Some of the organizations that receive this money include environmental groups, AIDS projects, a center for immigrant rights, American Indians, and the homeless (Siebert, 1995). (2)Ben & Jerry’s also treats their employees very well in many respects. For example, the lowest paid employee receives a salary plus benefits of $22,000 in a state with an average per capita income of $17,436 (Laabs, 1996). This compensation package ranks with America’s largest employers (Laabs, 1996). Another means that Ben & Jerry’s uses to create a positive workplace is the Joy Luck Gang, a volunteer group whose sole mission is the “relentless pursuit of joy in the workplace” (Laabs, 1996). The group sponsors activities designed to improve morale, such as clash-dressing day and hiring DJs to take requests while workers are on the production line (Laabs, 1996). (3)Furthermore, the company has designed product lines to contribute to specific societal causes.

For example, in 1989, when the preservation of the rainforests was a hot topic, Ben & Jerry’s decided to create a new product (Rainforest Crunch Ice Cream) that would contain nut products from the Amazon rainforest. The intention was to assist in the preservation of the rainforest. The label from the product reads “money from these nuts helps to show that rainforests are more profitable when…cultivated for traditional harvest than when their trees are cut and burned for short-term gain” (Entine, 1995). (4) The company also has been one of the most vocal opponents of Bovine Growth Hormone (rBGH). Ben &Jerry’s claims that the hormone is unhealthy for cows, affects the nutritional value of milk in a negative way, causes milk to go sour before its time, is not necessary due to an abundance of milk, and threatens the survival of family farms (Ben and Jerry’s Website, 1997c).

In 1995, the company paid a premium of $345,000 for milk and cream that was rBGH free (Ben & Jerry’s Website, 1997d). Once again, the company exhibits a behavior of CSR. (5) Finally, the company has six “Partnershops”. These are franchises owned by “non-profit organizations working to meet employment, training and other social needs of the disadvantaged people and for which, Ben &Jerry’s waives the normal franchising fee” (Ben & Jerry’s Social, 1996). Our discussion up to this point would seem to support the contention that Ben & Jerry’s acts in a socially responsible manner. There are other actions, however, that this company has undertaken that need to be examined before this determination is made. Examples of social irresponsibility?

When placed under a microscopic lens of scrutiny, corporations, like individuals, can be found to be “less than perfect”. Ben & Jerry’s Homemade Ice Cream, Inc. is no exception. (1)First, the results of the Rainforest Crunch program were not quite in line with符合 company expectations. The source for the nuts in the Western Amazon (the Zapuri cooperative) could not produce enough nuts to meet the demand. In order to meet the demand, the company has purchased more than 95 percent of the nuts for Rainforest Crunch from commercial suppliers (Entine, 1995). One of the companies that Ben & Jerry’s purchased these nuts from was the Mutran family, one “of the most notorious, anti-labor agribusinesses in Latin America … convicted of killing labor organizers” (Entine, 1995). This is not exactly an organization that a socially responsible company would engage with in bargaining. Also, the nuts that did come from the rainforest were harvested by white rubber tappers of Portuguese descent.

The indigenous natives were forced to sell off more land rights as the larger commercial suppliers “elbowed out native suppliers in Brazil and Bolivia and flooded the market. Nut prices, already soft, plummeted, cutting the income of native tribes who did harvest the nuts” (Entine, 1995). As Rosin (1995) notes:” As for the actual “forest peoples”, many were not too happy with the project. Indigenous rights leaders complained their troops were being seduced by the lure of dollars, although the sums were paltry. After developing an appetite for Western goods, some of the forest people sold whatever land they owned to buy houses and cars. “Its concrete help has been minimal”, a report of the Alliance of Forest Peoples concluded about the mission, “and the negative repercussions have been enormous”.” Ben & Jerry’s social auditor, Paul Hawken, said “it is a legitimate question whether representations表现 made onBen & Jerry’s Rainforest Crunch package give an accurate impression to the customer” and “there have been…undesirable consequences which some say were predictable and unavoidable” in regard to the Rainforest Crunch program (Entine,1995). Although the intentions were good, it is apparent that the results were not quite as intended.

Arguably, this project has had a negative impact upon society and is not an example of social responsibility. (2)Second, Ben & Jerry’s partnership with the LaSoul Bakery does not typify socially responsible behavior. The LaSoul bakery, owned and operated in New Jersey by the Reverend James Carter, employed recovering drug addicts and alcoholics (Rosin, 1995). The following is a brief synopsis of what happened:” A week after he saw Ben [Cohen] on ABC’s “20/20”, Carter packed up a trunk full of pies and drove to the company headquarters. Ben loved both the pies and “Reverend Carter’s vision of building a sound business”. In three weeks, Carter had a letter of intent to do business with the company, which he showed to the bank to borrow money for equipment. Ben flew down to New Jersey to tape a TV show of himself helping ex-addicts mix batches of the new Apple Pie Frozen Yogurt. After two years, however, sales of the flavor were flagging. In May 1994, Ben & Jerry’s drastically decreased its orders, leaving Carter with freezers full of pies. Frantic, Carter laid off all but two employees and called Ben.

The next day, Ben flew to New Jersey, “sat down, looked them straight in the eye” and, recalls Carter, said “Don’t worry, we’ll stick with you”. But orders never picked up, and this June, Carter received a letter from the company, by fax, congratulating him on his “good works” and canceled all remaining orders. He was left half a million dollars in debt. “It’s pretty cute, this social mission”, Carter says bitterly 苦涩地, “but the bottom line is, Ben and Jerry’s buried my company” (Rosin, 1995).” Bob Holland, CEO of Ben & Jerry’s at the time, had the following to say regarding the issue in the annual “CEO Letter to Shareholders” of 1995:” LaSoul is out of business because (1) the product we sold using their ingredient did not succeed in the marketplace and (2) a number of efforts on their part aimed at the critically important task of expanding LaSoul’s customer base were not successful (Ben and Jerry’s Website, 1997d).” Also, Alan Parker (of Ben & Jerry’s) stated, “sure we feel sad … In the end, LaSoul was just not a viable business enterprise” (Rosin, 1995).

This response doesn’t quite fit the image of Ben & Jerry’s as a socially responsible organization. Those comments sound more like those from a corporation whose main concerns are maximizing sales and profits, not social responsibility. Again, a contradiction to Ben & Jerry’s image and reputation. (3)Third, the price of Ben & Jerry’s ice cream is an issue. At the local grocery store, the authors found that only Haagen-Daz’s costs more than Ben & Jerry’s (Dennis, 1996). In a nation where 39 million people live below the poverty  level (15 percent of the nation) and 15 million of them are children (22 percent of all children) (Gartner, 1995), how socially responsible is Ben & Jerry’s when they are selling a product that many Americans cannot afford? (4)Finally, the very nature of Ben & Jerry’s product itself is questionable due to the health consequences of the product.

The following is an illustration of the fat content of Ben & Jerry’s ice cream:” After every run of Rainforest Crunch, Chunky Monkey or Cherry Garcia, technicians at its Waterbury, Vermont headquarters washed down their machines with hot water, leaving gallons of diluted ice cream. At most companies, the waste would have presented no dilemma at all – just washing it down the drain. Ben &Jerry’s, with its socially conscious operating philosophy, had another idea. The ice cream water was collected and given away to local pig farmers. It seemed like a classic win-win situation: Ben & Jerry’s solves a minor environmental problem while farmers got an unexpected windfall. At least, that’s what everyone thought … But benevolence soon led to unexpected complications. Piglets that happily slurped Ben & Jerry’s Homemade sugar water never made it to 600-pound adulthood, suddenly expiring at 200 pounds, victims of oddly human-like arteriosclerosis.  And the slaughtered pigs yielded a fattier pork, according to local pig farmer Earl Mayo.

Neither Ben & Jerry’s nor the farmer had explored the implications of feeding pigs premium ice cream (Entine, 1995).” Obviously, if Ben & Jerry’s ice cream can cause this type of damage to pigs, consumption of this product can have a negative effect upon one’s health. In research undertaken by the authors, it was determined that Ben& Jerry’s ice cream is one of the most fattening ice creams available (Dennis, 1996). In addition, the authors obtained the levels of fat from the following foods (those which are publicly know as high-fat) for comparison toBen & Jerry’s: 1 pint of Ben & Jerry’s Peanut Butter Cup 104g

1 pound of pork bacon 60g
16 oz. sour cream 75g
1 stick of butter 88g
1 Large Red Baron Specialty Deluxe Pizza 90g
16 oz. bag of Oreo’s cookies 98g
7 regular size Snickers bars 98g
2 family size Stouffer’s Lasagna 100g
Studies have shown that too much fat increases the risk of obesity and cancer and too much saturated fat (found heavily in ice cream) raises blood cholesterol levels and the risk of heart-disease (Barnett, 1992). As evidenced by the United States Department of Agriculture (1995), the diet of Americans is not in need of high fat foods:” Stroke affects more than 500,000 people each year in the United States and, in 1993, killed more than 149,000.

The American Heart Association estimates that some three million people in the United States suffer from stroke-related disabilities, at an annual cost of nearly $20 billion. Risk factors include a diet high in saturated fat and cholesterol as well as being overweight or having diabetes or hypertension. Health professionals estimate that at least 20 percent of these deaths could be avoided with changes in one’s diet.” While the authors do not claim that Ben & Jerry’s Homemade Ice Cream is solely responsible for the deaths of millions due to heart disease, etc., the evidence does suggest that this product may have had a negative impact upon the general health of many individuals. Conclusion

Based upon all the information presented, the reader should be in a better position to make an independent judgment of Ben & Jerry’s in regard to corporate social responsibility. Each individual will have to weigh the positive impacts of Ben & Jerry’s actions against the negative consequences of such actions. In deciding whether the company is representative of corporate social responsibility, we argue that there is no clear answer that everyone would agree on. We do feel, however, that it is safe to suggest that Ben and Jerry’sdemonstrates the struggle of attempting socially responsible actions in a complex, global market.

As the corporate social responsibility debate continues, the only thing that can be reasonably stated with any certainty is that there are no clear-cut answers to the following questions: Can any business be classified as completely socially responsible? If Ben & Jerry’s Homemade Ice Cream, with its steadfast reputation of social responsibility, doesn’t quite measure up, who can? Why do the negative actions of Ben & Jerry’s seldom make it into the public arena? Is the wooing of the media the sole requirement for establishing a reputation as a socially responsible company? If so, how ethical is that?

Indeed, further research is needed to begin answering these questions. Hopefully, the ideas presented in the manuscript will serve as a catalyst for such investigation.

References

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