Case Assignment 1

Barry Millwood
Liberty University
Monsanto Attempts to Balance Stakeholders Interest
Business 472
Dr. Shawn Hussey
April 18, 2016

Case Assignment 1
The Monsanto Company today:
In 2003, Hugh Grant took over the company of Monsanto, even under the past scandals
and uncertainty throughout the company, including the stakeholders. Today when you hear the
name, you connect it to the worlds largest seed company. It currently is producing ninety
percent of GM seeds.

The companys history shows a chain from chemical company to

biotechnology, and now is focused on genetically modified seeds. The companys stakeholders
still has concerns over the product, like safety and environmental effect from the food produced.
There is also concerns over patents issued and wrongdoing within the company. (Ferrell,
Fraedrich, Ferrell, 2015)
The History of the Monsanto Company:
The history of the Monsanto Company has proven to travel the bumpy road. The
company was founded in Saint Louis, Missouri in 1901 by John F. Queeny. In the beginning,
Monsanto was known for producing the artificial sweetener saccharine. This sweetener was used
for soft drinks such as Coca-Cola. After World War I, the stakeholders changed the companys
name to The Monsanto Chemical Company. Through the name change and expanding its
product line, the company now is producing its own agricultural chemicals and synthetic rubbers.
In 1964, the changes were still active, but the stakeholders changed the name back to the original
name and the production of more products continued. The new products now consisted of
petroleum, fibers, and packing. This continued on until it reached its first legal challenge. They
had produced a chemical that worked like roundup, but would aid in the war by clearing out
large areas of vegetation. This was very beneficial to the soldiers fighting in the Vietnamese
jungles, but the long term effect is what the companies challenge had to face. The well-known

product of the time was Agent Orange. This challenge was settled by Monsanto and other related
companies paying out one hundred eighty million dollars. Unfortunately, the company felt the
aftermath dealt with the consequences for years. (Ferrell, Fraedrich, Ferrell, 2015)
In 1981, the company looked into new avenues, by looking into the spin off by changing
its name to Pharmacia Corporation. Monsanto merged with Solutia, until finally before 2000
separated the company into two divisions known as the old and new Monsanto. The old
Monsanto focused on the agriculture and the new focuses on Pharmacia. After the merger, the
company faced new issues. The new issue was the illegal dumping of chemical for over forty
years into a creek in Anniston, Alabama. This discovery lead to the companys agreement to
settle with 20,000 residents a grand total of 700 million dollars. The company began to
hopefully head more in a positive direction after this last issue in 2003 by the takeover of a new
CEO, Hugh Grant. After a fifty percent drop in stocks, Grant shifted the companys focus to a
new market of GM foods. This gave the delicate company time to recover and thrive again. It
also allowed the company to grow to be global front-runner in the seed production. The seeds
were being used in developing and established countries globally. The company is striving, but
concerns still exist about the products they produce. (Ferrell, Fraedrich, Ferrell, 2015)
Current products:
The company has produced seeds to meet many different obstacles of agricultural growers. It
attracts its clients by new technology and seed products they produce. Growers in drought
stricken areas such as Africa now have drought tolerant seeds. Scientist with the company are
also able to place in the seeds, products like a round up, so the plants can kill the weeds
themselves. The companys goals are to help the farmer be able to produce more quantity

without acquiring more land. So far, the companys seeds have increased from seventy bushels
an acre to roughly 150 bushels per acre. (Ferrell, Fraedrich, Ferrell, 2015)
Efficacy of Monsantos Ethical Culture:
The organization of Monsantos Ethical Culture is one of openness and ownership of the
companys achievements. The teamwork between individuals is strongly encouraged and group
improvement is promoted as well. This companys open door policy encourages employees to
contribute new ideas that changes the company in positive ways such as growth. As Hugh Grant,
the companies CEO and President, states on Monsantos website, Were a very flat
organization, were quite informal, and were highly networked and team-based. I put a lot of
value and focus on getting management directly involved with people at all levels in the
organization. (Careers, n.d.) One thing about the culture of the company is the fact that the
company promotes its employees, but through several failures, the company has let down its
stakeholders. This is evident in the changes in names, products, and company choices. This
company has had to build its reputation over and over again in society.
Agriculture Industry Globally Analysis:
Currently, four major areas of the world are using GM seeds. These areas include
America, Europe and Asia. The global world of Agriculture began to expand in the 1990s
starting with the Asian Countries. During the years between 1996 and 2003 the increase went
form 1.7 million hectares to 67.7 million hectares. This was noted as a significant increase as the
difference from 1996 to the hectares in 2003. China and Europe began to adventure out on GM
seeds, but reverted back to the old way of growing because of the skepticism on the risk that GM
seeds may have on the crops being produced. The outcome of these crops was unknown,
especially the long term risk. This skepticism in this area didnt slow down the GM seed

industry. The GM seed industry grew in 2008 by 45.3 percent to a market value of near 176.3
million. The GM seeds produced by the Monsanto Company, at this time possessed 82.1 percent
of the agriculture market in this area. 51.4 percent of this total was from the Asian area, but still
with a majority from the American, European, and Asian areas. (Singh, 2010)

Costs and Benefits of Growing GM Seed:

Looking at GM seeds verses Non-GM seeds, GM seeds are a genetic modification seed
that was patented in the 90s. A cost benefit for the grower choosing the GM seed is that the crop
the output increases, but the input to grow the crop is the same or decreases. This is because the
GM seeds are manufactured to adapt to the areas in which the grower exist. (Ma, 2013).
One of the biggest benefits to growing a GM Seed is that it again will benefit the growing
by using less pesticide. Before, growing in America were using two pesticides and the
environment was noted as being harmed. The growers were also struggling with the fact that the
environment was adapted to the pesticides, so the weeds would continue to effect the crops.
Now with the new pesticides, the chemicals inside are affecting the growth of the new weeds and
lowers the cost for growers out of pocket (Gilbert, 2010). Even though the out of pocket cost of
grows is eliminated, the effect of the seeds being genetically produced is unknown about future
health concerns and the results of this test make take several years to conclude if there is any
undesirable consequences. It is also a benefit that the growers and the seed companies and the
small business that sell the GM products are working together. This is bring revolution to the
agriculture marketplace. The company Monsanto prides itself on the ability to be enduring with
their goods. This endurance includes being patient in observing the test collected in the field and
following the markets needs. (Careers, n.d.)

Management of Harm to Plants and Animals:

In the past, Monsanto has proven to less than trustworthy and has had to prove their
selves on several bases. The company made several bad choices and in return had to pay for the
choices with several million dollar lawsuits. The companys name has been negatively affected,
but quickly rose back into the market for competition. Through the trials of the Europeans
ordeal with the GM seeds, the seeds have remained on a consist test. These test include what
risk are to be observed and maintained along with assigning the responsibilities to the operators
in the field. Different factors that need to be addressed are the environment aspect of the GM
seed. One of the big controversies is the environment aspect. Like stated previously, Monsanto
paid a law suit out for contaminating the rivers in Alabama. In the 1990s, legislation placed in
order to manage and simplify risk even before they hit the sales floor. Even though these
policies were in place, this doesnt stop how environmentalist feels towards the effect of the GM
seeds. These regulations became even more specific in 2003 as European looked into supporting
the GM seeds and adding them to their market (Levidow, 2007).
Conclusion:
Just like in previous times throughout history, Monsanto is a company that tries to reach
out in technological and chemistry innovations to serve its customers. The company tries to
provide an environment that promotes employee unity and encourages them to think outside the
box. This environment encourages its employees to speak out in a timely manner and share new
ideas, especially for the betterment of the company. The company has proven to show growth in
both their sells and the farmers productions. The farmer has increased production and lowered
cost of production. The companys growth shows evidence that their products are being used

and users are coming back for reuse of the products. One issue is the long term effect of this
product on the health of an individual. Yes, the environment isnt being harmed, but what is the
long-term effect of inserting the pesticides in to the seeds having on the consumer. This issue
may not be observed for years to come, but at the present time, both grow in the farms
production and the company Monsanto is benefiting from the sales of the GM seed.

Works Cited:
Careers. (n.d.). Retrieved from http://www.monsanto.com/careers/pages/culture.aspx

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2015). Business Ethics: Ethical Decision Making and
Cases (10th ed.). Stamford, CT: Cengage Learning.

Gilbert, N. (2013). A HARD LOOK AT GM CROPS. Nature, 497(7447), 24-26. Retrieved from
http://ezproxy.liberty.edu:2048/login?url=http://search.proquest.com/docview/1352830133?
accountid=12085

Ma, X., & Shi, G. (2013). GM vs. non-GM: A survival analysis of U.S. hybrid seed corn.
Agricultural and Resource Economics Review, 42(3), 542-560. Retrieved from
http://ezproxy.liberty.edu:2048/login?url=http://search.proquest.com/docview/1477188879?
accountid=12085

Levidow, L., & Carr, S. (2007). GM crops on trial: Technological development as a real-world
experiment. Futures, 39(4), 408-431. doi:doi:10.1016/j.futures.2006.08.002

Singh, T. R. (2010). Monsanto: From a strategic perspective. Business Strategy Series, 11(2), 9099. http://dx.doi.org/10.1108/17515631011026416