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CASE STUDY – 12

BEN & JERRY’S SUPER AUDIT


CRUNCH
Submitted to,
Professor Abhilash G N
On
August 16, 2014
In partial fulfillment of the requirements of the
course
Principles of Management
By
Nivin Vinoi
P14199
PGDM-B

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Table of Contents

Executive Summary…………………………………………………..3

Situational Analysis…………………………………………………...4

Problem Statement……………………………………………………4

Action Plan…………………………………………………………....4

Implementation………………………………………………………5

Conclusion…………………………………………………………....6

Exhibit 1……………………………………………………………....6

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EXECUTIVE SUMMARY

This case is all about Ben & Jerry’s, an ice cream maker which started
to publish unedited version of annual reports based on finance and
social performance of the organization rather than following the
usual path and due to the transparency and accountability in the
report how they got credibility from all stockholders.

(Word count: 53)

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SITUATION ANALYSIS

Usually organizations annual report tend to focus on only one aspect,


i.e. organizations financial growth. The top officials only show
organization’s best side to stockholders as the actual status of the
company. Failures, financial or otherwise, are often sugar-coated or
ignored altogether. But Ben & Jerry’s Homemade, Inc., (Exhibit 1) a
super-premium ice cream maker challenged the usual norms and
created a path of its own. They published two types of bottom lines in
its annual report: one financial, the other social. Their report was
prepared by an outside auditor and the findings of the audit, positive
or negative, are then published, unedited. Due to this brutal honesty
they have to come across lot of criticism.

PROBLEM STATEMENT

Is it good to publish unedited annual report?

ACTION PLAN

Unedited report shows the transparency and honesty of the


organization.
By adding social report, they shown they are socially responsible
too.
Stockholders get a full view about the organization that how
well they are doing in terms of managing the human capital side
of business or whether they are building a healthy company.

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The Ben & Jerry’s social audit rates the company in areas such as
employee benefits, plant safety, ecology, community
involvement, and customer service.

IMPLEMENTATION

Ben & Jerry’s, management believes that a company should be


evaluated not only on its financial performance but on its social
performance as well. “To be profitable for its shareholders and to be
socially responsible, inside and outside the organization” is an
assertion boldly made in the company’s mission statement. This
increased stockholders trust on the organization. Due to this honesty,
during an annual audit they were openly criticized regarding their
plant safety after a serious of accidents were reported and about the
vacant positions at the top of the company as they have a fixed salary
ratio of 7:1, which prevented the highest-paid employees from
making more than 7 times the salary of the lowest-paid employee.
Even Ben & Jerry’s charitable efforts like ‘Save the Family Farm’ have
been attacked in the social audits. But they never changed their stand.
Regarding the accidents if the report has not been published and
somehow the external world comes to know about this, then the image
of the company would have been tarnished badly than when they
themselves had the guts to report the problem in their own annual
report. They never changed their stand regarding employees’ salary
ratio since company wanted employees who are interested in working
for them rather than working for salary. Actually this critics alerted
the stakeholders about problems like plant safety that need to be

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corrected immediately so that employees can work in a safe
environment and number of days lost as a result of these accidents can
be reduced.

CONCLUSION

From the analysis of this case, we can conclude that in spite of certain
negative points this unedited annual report has lot of positives which
can overcome all its drawbacks. Instead of publishing sugar-coated
reports they give priority for accountability in this business context.
This increased faith in stakeholders. But it will be a different game
when Ben & Jerry have a bad year, if sales were down or they have to
significantly reduce their workforce.

(Word count: 527)

Exhibit 1

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