Case Assignment 1

You will complete a case assigment from Business Ethics: Ethical Decision Making and Cases. You will answer the questions at the end of the case in 4–5 pages (double spaced), not including the title or reference pages. The Case Assignments must be written in current APA format. In addition to the Ferrell textbook, utilize outside sources on the case questions. All sources must be of a scholarly nature; the sources must be either textbooks or journal articles from peer-reviewed journals. At least 5 references are required in addition to the course textbooks and the Bible. As this is a paper that requires research, it must be written in third person. The case is Case 1, “Monsanto Attempts to Balance Stakeholder Interests.” The paper must have at least 3 Level 1 headings that correspond to the following case points: Efficacy of Monsanto’s Ethical Culture.Costs and Benefits of Growing GMO Seed.Management of Harm to Plants and Animals.Questions at end of case:Does Monsanto maintain an ethical culture that effectively responds to various stakeholders?Compare the benefits of growing GM seeds for crops with the potential negative consequences of using them.How should Monsanto manage the potential harm to plant and animal life from using products such as Roundup?I have attached the case in a word document below.

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When you think of Monsanto, the phrase genetically modified likely comes to
mind. The Monsanto Company is the world’s largest seed company, with sales of
over $15.9 billion. It specializes in biotechnology, or the genetic manipulation of
organisms. Monsanto scientists have spent the last few decades modifying
crops—often by inserting new genes or adapting existing genes within plant
seeds—to meet certain aims, such as higher crop yields or insect resistance.
Monsanto develops genetically-engineered seeds of plants that can survive weeks
of drought, ward off weeds, and kill invasive insects. Monsanto’s genetically
modified (GM) seeds have increased the quantity and availability of crops, helping
farmers worldwide increase food production and revenues.
Today, 90 percent of the world’s GM seeds are sold by Monsanto or companies
that use Monsanto genes. Monsanto also holds a 70 to 100 percent market share
on certain crops. Yet Monsanto has met its share of criticism from sources as
diverse as governments, farmers, activists, and advocacy groups. Monsanto
supporters say the company creates solutions to world hunger by generating
higher crop yields and hardier plants. Critics accuse the multinational giant of
attempting to take over the world’s food supply and destroying biodiversity.
Since biotechnology is relatively new, critics also express concerns about the
possibility of negative health and environmental effects from biotech food. A
Harris Poll shows that Monsanto is considered to be the fourth most hated
company in the United States. However, these criticisms have not kept Monsanto
from becoming one of the world’s most successful businesses.
This analysis first looks at the history of Monsanto as it progressed from a
chemical company to an organization focused on biotechnology. It then examines
Monsanto’s current focus on developing GM seeds, including stakeholder
concerns regarding the safety and environmental effects of these seeds. Next, we
discuss key ethical concerns, including organizational misconduct and patent
issues. We also look at Monsanto’s corporate responsibility initiatives. We
conclude by examining the challenges and opportunities that Monsanto may face
in the future.
From Chemicals to Food
Monsanto was founded by John F. Queeny in 1901 in St. Louis, Missouri. He
named the company after his wife, Olga Monsanto Queeny. The company’s first
product was the artificial sweetener saccharine, which it sold to Coca-Cola.
Monsanto also sold Coca-Cola caffeine extract and vanillin, an artificial vanilla
flavoring. At the start of World War I, company leaders realized the growth
opportunities in the industrial chemicals industry and renamed the company The
Monsanto Chemical Company. The company began specializing in plastics, its own
agricultural chemicals, and synthetic rubbers.
Due to its expanding product lines, the company’s name was changed back to the
Monsanto Company in 1964. By this time, Monsanto was producing such diverse
products as petroleum, fibers, and packaging. A few years later, Monsanto created
its first Roundup herbicide, a successful product that propelled the company even
more into the spotlight.
However, during the 1970s Monsanto encountered a major legal obstacle. The
company had produced a chemical known as Agent Orange, which was used
during the Vietnam War to quickly deforest the thick Vietnamese jungles. Agent
Orange contained dioxin, a chemical that caused a legal nightmare for Monsanto.
Dioxin was found to be extremely carcinogenic, and in 1979 a lawsuit was filed
against Monsanto on behalf of hundreds of veterans who claimed they were
harmed by the chemical. Monsanto and several other manufacturers agreed to
settle for $180 million, but the repercussions of dioxin continued to plague the
company for decades.
In 1981 Monsanto leaders determined that biotechnology would be the
company’s new strategic focus. In 1986 Monsanto successfully spliced bacterium
DNA into a seed. The bacterium was lethal to certain types of insects that feed on
corn, potatoes, and cotton. The quest for biotechnology was on, and in 1994
Monsanto introduced the first biotechnology product to win regulatory approval.
Soon the company was selling soybean, cotton, and canola seeds engineered to be
tolerant to Monsanto’s Roundup Ready herbicide. Many other herbicides killed
good plants as well as the bad ones. Roundup Ready seeds allowed farmers to use
the herbicide to eliminate weeds while sparing the crop.
In 1997 Monsanto spun off its chemical business as Solutia, and in 2000 the
company entered into a merger and changed its name to the Pharmacia
Corporation. Two years later, a new Monsanto, focused entirely on agriculture,
broke off from Pharmacia, and the companies became two legally separate
entities. The company before 2000 is often referred to as “old Monsanto,” while
today’s company is known as “new Monsanto.”
The emergence of new Monsanto was tainted by disturbing news about the
company’s conduct. For nearly 40 years the Monsanto Company had released
toxic waste into a creek in the Alabama town of Anniston. The company had also
disposed of polychlorinated biphenyls (PCBs), a highly toxic chemical, in open-pit
landfills in the area. The results were catastrophic. Fish from the creek were
deformed, and the population had elevated PCB levels that astounded
environmental health experts. A paper trail showed that Monsanto leaders had
known about the pollution since the 1960s but had not stopped the dumping.
Once the cover-up was discovered, thousands of plaintiffs from the city filed a
lawsuit against the company. In 2003 Monsanto and Solutia agreed to pay a
settlement of $700 million to more than 20,000 Anniston residents.
When current CEO Hugh Grant took over in 2003, scandals and stakeholder
uncertainty over Monsanto’s GM products had tarnished the company’s
reputation. The price of Monsanto’s stock had fallen by almost 50 percent, down
to $8 a share. The company had lost $1.7 billion the previous year. Grant knew the
company was fragile and decided to shift its strategic focus. Through a strong
strategic focus on GM foods, the company has recovered and is now prospering.
In spite of their controversial nature, GM foods have become popular in
developed and developing countries. Monsanto became so successful with its GM
seeds it acquired Seminis, Inc., a leader in the fruit and vegetable seed industry.
The acquisition transformed Monsanto into a global leader in the seed industry.
Today, Monsanto employs approximately 22,000 people worldwide. It is
recognized as one of the 100 best corporate citizens by Corporate Responsibility
Emphasis on Biotechnology
While the original Monsanto made a name for itself through the manufacturing of
chemicals, the new Monsanto took quite a different turn. It changed its emphasis
from chemicals to food. Today’s Monsanto owes its $15.9 billion in sales to
biotechnology, specifically to its sales of GM plant seeds. These seeds have
revolutionized the agriculture industry. Not content with resting on its laurels,
Monsanto continues to use its $1.5 billion research budget to investigate new
methods of farming at its 1.5-million-square-foot complex in Missouri.
Throughout history, weeds, insects, and drought have been the bane of the
farmer’s existence. In the twentieth century, synthetic chemical herbicides and
pesticides were invented to ward off pests. Yet applying these chemicals to an
entire crop was both costly and time consuming. Then Monsanto scientists,
through their work in biotechnology, were able to implant seeds with genes that
make the plants themselves kill bugs. They also created seeds containing the
herbicide Roundup, an herbicide that kills weeds but spares the crops. Since then
Monsanto has used technology to create many innovative products, such as
drought-tolerant seeds for dry areas like Africa.
The company utilizes its technological prowess to gain the support of
stakeholders. For example, Monsanto has a laboratory in St. Louis that gives tours
to farmers. One of the technologies the company shows farmers is a machine
known as the corn chipper, which picks up seeds and removes genetic material
from them. That material is analyzed to see how well the seed will grow if
planted. The “best” seeds are the ones Monsanto sells for planting. Monsanto is
extending its reach into the computing industry as well. The company offers
software and hardware that use big data to yield important information to help
farmers in the field. It even provides recommendations on when and where to
plant. Monsanto also arranges tours for its critics to help them understand the
process of GM crops and their implications. Impressing farmers with its
technology is one way Monsanto attracts potential customers.
However, GM crops are not without critics. Opponents believe influencing the
gene pools of the plants we eat could result in negative health consequences.
Others worry about the health effects on beneficial insects and plants, fearing that
pollinating GM plants could affect nearby insects and non-GM plants. CEO Hugh
Grant decided to curtail the tide of criticism by focusing biotechnology on
products not directly placed on the dinner plate but on seeds that produce goods
like animal feed and corn syrup. In this way, Grant reduced some of the
opposition. The company invests largely in four crops: corn, cotton, soybeans, and
canola. Monsanto owes much of its revenue to its work on GM seeds, and today
more than half of U.S. crops, including most soybeans and 90 percent of corn, are
genetically modified.
Farmers who purchase GM seeds can grow more crops on less land and with less
left to chance. GM crops have saved farmers billions by preventing loss and
increasing crop yields. For example, in 1970 the average corn harvest yielded
approximately 70 bushels an acre. With the introduction of biotech crops, the
average corn harvest increased to roughly 150 bushels an acre. Monsanto
predicts even higher yields in the future, possibly up to 300 bushels an acre by
2030. According to Monsanto CEO Hugh Grant, this increase in productivity will
increase crop yields without taking up more land, helping to meet the world’s
growing agricultural needs.
Monsanto’s GM seeds have not been accepted everywhere. Attempts to introduce
them into Europe met with consumer backlash. The European Union banned
most Monsanto crops except for one variety of corn. Consumers have gone so far
as to destroy fields of GM crops and arrange sit-ins. Greenpeace has fought
Monsanto for years, especially in the company’s efforts to promote GM crops in
developing countries. Even China placed bans on certain GM corn imports,
although it has since relaxed the ban and appears to be encouraging more
acceptance of GM crops among its citizens. This animosity toward Monsanto’s
products is generated by two main concerns: the safety of GM food and the
environmental effects of genetic modification.
1-3aConcerns about the Safety of GM Food
Of great concern to many stakeholders are the moral and safety implications of
GM food. Many skeptics see biotech crops as unnatural, with the Monsanto
scientist essentially “playing God” by controlling what goes into the seed. Because
GM crops are relatively new, critics maintain that the health implications of
biotech food may not be known for years to come. They also contend that
effective standards have not been created to determine the safety of biotech
crops. Some geneticists believe the splicing of these genes into seeds could create
small changes that might negatively impact the health of humans and animals that
eat them. Also, even though the Food and Drug Administration (FDA) has
declared biotech crops safe, critics say they have not been around long enough to
gauge their long-term effects.
One concern is toxicity, particularly considering that many Monsanto seeds are
equipped with a gene to allow them to produce their own Roundup herbicide.
Could ingesting this herbicide, even in small amounts, cause detrimental effects
on consumers? Some stakeholders say yes, and point to statistics on glyphosate,
Roundup’s chief ingredient, for support. According to an ecology center fact sheet,
glyphosate exposure is the third most commonly reported illness among
California agriculture workers, and glyphosate residues can last for a year. Yet the
Environmental Protection Agency (EPA) lists glyphosate as having low skin and
oral toxicity, and a study from the New York Medical College states that Roundup
does not create a health risk for humans.
In March 2013 over 250,000 people signed a petition in response to President
Barack Obama’s signing of H.R. 933 into law. The new law, called the Agricultural
Appropriations Bill of 2013, contains a provision that protects GM organisms and
genetically engineered seeds from litigation concerning their health risks. In
other words, courts cannot bar the sale of GM food even if future health risks are
revealed. Critics of the provision claim the provision was slipped in at the last
moment and that many members of Congress were not aware of it. For
consumers, questions pertaining to the health risks associated with GM crops
have gone unanswered and are the primary reason the petition was started. Many
people have called this bill the “Monsanto Protection Act” and believe it will help
protect the survival of biotech corporations. Critics also say that the continuing
resolution spending bill will no longer allow the court system to protect
consumers, which could create a further disconnect between consumers and
Despite consumer concerns, the FDA and the American Association for the
Advancement of Science have proclaimed that GM food is safe to consume. The
European Commission examined more than 130 studies and concluded that GM
food does not appear to be riskier than crops grown by conventional methods. As
a result of its research, the FDA has determined that Americans do not need to
know when they are consuming GM products. Therefore, this information is not
placed on labels in most states, although other countries, notably those in the
European Union, do require GM food products to state this fact in their labeling.
Some states in the United States have also entered the fight to have GM food
labeled. For instance, a new law in Vermont was passed that now makes it
mandatory for GM food to be labeled. Organizations who would be negatively
impacted by the law have sued Vermont, claiming that the law creates
burdensome costs for companies without any provable advantages to the
consumer. Hawaii also tried to curb types of GM crops and require labeling, but a
federal judge overturned the law.
1-3bConcerns about Environmental Effects of Monsanto Products
Some studies have supported the premise that Roundup herbicide, used in
conjunction with the GM seeds called “Roundup Ready,” can be harmful to birds,
insects, and particularly amphibians. Such studies revealed that small
concentrations of Roundup may be deadly to tadpoles. Other studies suggest that
Roundup might have a detrimental effect on human cells, especially embryonic,
umbilical, and placental cells. Monsanto has countered these claims by
questioning the methodology used in the studies. The EPA maintains glyphosate
is not dangerous at recommended doses. On the other hand, the World Health
Organization (WHO) ruled that glyphosate probably does have the potential to
cause cancer in humans. The finding caused Monsanto shares to drop 2 percent.
Monsanto has challenged this assertion and wants to meet with WHO officials to
discuss the findings.
As honeybees have begun to die off, critics are blaming companies like Monsanto
and Bayer. They believe the companies’ pesticides are killing off the good insects
as well as the bad ones. While there is no definitive evidence that the honeybees
are dying off due to pesticide use, opposition against Monsanto is rising as the
honeybee population continues to decline. One of the projects in which Monsanto
has invested is working with the Defense Advanced Research Projects Agency
(DARPA) in developing mechanical bee-like drones that can be used to pollinate
crops. Nicknamed Robobees, these drones could help with pollinating crops,
which could lead to an increase in food crops. Opponents, on the other hand,
claim Monsanto is killing the bees and will obtain even more power by gaining
control of their mechanical substitutes.
Another concern with GM seeds in general is the threat of environmental
contamination. Bees, other insects, and wind can carry a crop’s seeds to other
areas, sometimes to fields containing non-GM crops. These seeds and pollens
might then mix with the farmer’s crops. Organic farmers have complained that
GM seeds from nearby farms have “contaminated” their crops. This
environmental contamination could pose a serious threat. Some scientists fear
that GM seeds spread to native plants may cause those plants to adopt the GM
trait, thus creating new genetic variations of those plants that could
negativelyinfluence (through genetic advantages) the surrounding ecosystem. A
major dispute has arisen between vegetable farmers and Monsanto for just this
reason. Monsanto and its competitor Dow Chemical are developing seeds to be
resistant to stronger herbicides because plants are starting to become resistant to
Roundup. However, these stronger herbicides have been known to drift to other
farms after a farmer sprays his or her crops. While the special interest group Save
Our Crops successfully convinced Dow to reformulate its herbicide to decrease
the likelihood of drift, Monsanto maintains its resistant seeds will be able to
coexist with other crops without a contamination problem.
Another controversy involves the discovery of a field in Oregon filled with an
experimental form of Monsanto’s GM wheat. The wheat was not approved by the
United States Department of Agriculture. The discovery of this wheat raised
concern over whether it could have contaminated U.S. wheat supplies. As a result,
Japan temporarily instituted a ban on U.S. wheat. Initial investigations revealed
that the wheat had been stored in a Colorado facility but were unable to provide
an explanation for how it showed up in an Oregon field. Monsanto denied
involvement and stated that it suspected someone had covertly obtained the GM
wheat and planted it. The company also claims that this incident was an isolated
occurrence. The altered wheat is not believed to have caused any damage, and
Japan lifted the ban. However, some farmers filed lawsuits against Monsanto
seeking class-action status.
Monsanto has taken action in addressing environmental and health concerns. The
company maintains that the environmental impact of everything it creates has
been studied by the EPA and approved. Monsanto officials claim that glyphosate
in Roundup rarely ends up in ground water, and when it does contaminate
ground water, it is soluble and will not have much effect on aquatic species. The
firm has stated that it will not file lawsuits against farmers if GM crops
accidentally mix with organic. Monsanto has also partnered with Conservation
International in an effort to conserve biodiversity. Stakeholders are left to make
their own decisions regarding GM crops.
1-3cResistance to Pesticides and Herbicides
Another environmental problem that has emerged is weed and insect resistance
to the herbicides and pesticides in Monsanto crops. On the one hand, it is
estimated that GM crops have prevented the use of £965 million (approximately
$1.5 billion) of pesticide use. On the other hand, critics fear that continual use of
the chemicals could result in “super weeds” and “super bugs,” much like the
overuse of antibiotics in humans has resulted in drug-resistant bacteria. The
company’s Roundup line, in particular, has come un …
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