Corporate Social Responsibility: Ben & Jerry's

Evaluation of Ben & Jerry’s Corporate Social Responsibility Strategies

Abstract

This paper examines three key corporate social responsibility (CSR) issues Ben & Jerry’s faces and critically evaluates the nature and degree of the company’s responsibilities in relation to each issue. Ben & Jerry’s response to each issue will be analysed, and critically evaluated based on CSR theories and evidenced behaviour of the company. Finally, recommendations will be proposed as to how Ben & Jerry’s can overcome these issues.

Ben & Jerry’s is considered a pioneer of modern corporate social responsibility since it opened it’s first ice cream store in Vermont in 1978. In turning the company into a global brand, the company’s founders, Ben Cohen and Jerry Greenfield, set the standard defining how companies can act in a socially aware and ethical ways. Ben & Jerry’s incorporates far reaching strategies in many areas of their business which align with their three core missions: social, product and economic.

The company faces three main corporate social responsibility (CSR) challenges. Firstly, the company has faced difficulty remaining true to their founding beliefs as some of their political and social missions have conflicted with the beliefs of their parent company, Unilever, who acquired Ben & Jerry’s in 2000. Many have raised concern that the company would lose it’s ability to act as a force for good when it became part of a multinational corporation. Although a more stable company, Ben & Jerry’s has changed and is not as ‘quirky’ as once was when it was independant. This is supported by findings which suggest that “overall it appears that there has been a reduction in CSR activities at Ben and Jerry’s subsequent to the Unilever takeover” although there is “some conflicting evidence” (Neill and Stovall, 2005).

Secondly, Ben & Jerry’s needs to balance their activist beliefs and costs of philanthropy with the profit interests of its shareholders. In many situations, profit maximisation is forgone to pursue the founding social, environmental and product beliefs of the company. This could potentially cause issues with shareholders and management of Unilever.

Lastly, Ben & Jerry’s faces a challenge to continuously and rigorously improve it’s positive impact on the environment without negatively impacting other shareholders. As the brand has grown internationally, the company faces challenges to maintain environmentally aware strategies, such as carbon offsetting.

After Unilever’s acquisition, there was a major change in the ownership structure of the company. As a result, Cohen and Greenfield’s day to day role in the company’s operations was reduced just to a peripheral role. Stakeholder salience theory would suggest that the level of CSR practices at Ben & Jerry’s would have been reduced as a result of the acquisition. Stakeholder salience is defined as “the degree to which managers give priority to competing stakeholder claims” (Mitchell et al.,1997).

In particular, the authors suggest that managers should pay attention to the power, urgency and legitimacy claims of its stakeholders. As these factors are independent, it is possible for stakeholders to have power in the relationship but lack an urgent or legitimate claim on the management team. Without a powerful stakeholder influencing CSR, such as Cohen and Greenfield, the company’s CSR activities would likely decrease despite the fact that the claims of these stakeholders are legitimate.

In recent years, Unilever has reduced the CSR initiatives to social and economic justice, environmental issues, and community involvement. Moreover, Ben & Jerry’s social audit states that the company’s is now “more serious and more focused on financial results.” (Ben & Jerry’s, 2002), highlighting the conflicts of interest that the company faces towards CSR. However, Unilever has publically announced their support for maintaining the social missions of Ben & Jerry’s, and have stated that they will adopt a more informal approach to CSR activities. It is therefore unclear as to the impact the acquisition has had on the company’s CSR agenda. On one hand the reduced involvement of the co-founders and the new corporate vision of the company may reduce CSR activities, and on the other hand Unilever undoubtedly raised the profile of the brand, accelerated its growth and refocused the company on its financial performance. Greater financial performance will allow the company to be more capable of meeting their CSR goals, as the new CEO, Yves Couette, stated "the best way to spread Ben & Jerry's enlightened ethic throughout the business world was to make the company successful" (Caligiuri, 2012).

The second challenge Ben & Jerry’s faces is the need to balance the ability to meet its CSR objectives while being a profit maximising company. It could be argued that after the Unilever acquisition, Ben & Jerry’s was in a stronger position to achieve it’s social missions. This is due to greater communication abilities, resources and increased visibility with the support of global Unilever operations and expansion plans. The idea that businesses have a relationship with their communities, and that businesses can manage their power to influence social good can be attributed to Davies (1960). He was among the first to explore what is now known as ‘corporate constitutionalism’; the idea that impact businesses had in society and the role that power played in these relationships. He argued that businesses must use their power responsibility to do good in their society otherwise they will lose their legitimacy and fail to survive. This theory is particularly relevant today as businesses often have greater economic and social power than some governments, as a result of globalization, deregulation, lobbying and technological improvements.

The company uses their power to further its social mission, as the company’s Environmental Manager, Andrea Asch, says “It's about using the power of our brand to promote the company's values” (Jsonline, 2007), The company created a new ice cream flavour “Imagine Whirled Peace” to raise awareness of world peace. They partnered with Peace One Day and the Lennon Estate, two non-profit organisations working for world peace. This initiative shows that Ben and Jerry’s is working towards the ‘common good’ of society. This ‘common good’ approach is based on Aristotelian traditions (Smith, 1999) and maintains that a business, as with any other group, should contribute to the common good because it is part of that society and should act as a positive influence promoting the wellbeing of society.

An alternative view is instrumental theory which is seen as a strategic tool to achieve wealth creation. Friedman’s (1970) view that ‘‘the only one responsibility of business towards society is the maximization of profits to the shareholders within the legal framework and the ethical custom of the country’’. This is consistent with Adam Smith’s metaphor of the invisible hand whereby in a free market, an economic agent pushing their own interest promotes the good of society (Smith, 1790).

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