Case Study 1: Monsanto Attempts to Balance Stakeholder Interests
This case involves Monsanto, the world’s largest seed company. This is no ordinary seed company, it specializes in the genetic manipulation of organisms, known as biotechnology. Weeds, insects, and drought have been a huge issue for farmers. Herbicides and pesticides were creators to keep pests off of plants, however, applying them proved to be expensive and time consuming. Monsanto answered this problem by creating seeds that contained the herbicide Roundup, which kills weeds without harming the crops themselves. These types of genetically modified (GM) seeds were just the beginning. Drought-tolerant seeds were also created for dry area such as Africa. Opponents of genetically modified crops have various reasons for believing that these products will have a negative effect on the people and insects that consume it. Monsanto has a history of unethical cultures that have had a negative effect on many stakeholders such as the environment, plants, animals and humans. The benefits of growing genetically modified seeds for crops do not seem to outweigh the negative consequences of using them. In an effort to manage the potential harm to plant and animal life from using products such as Roundup, Monsanto should adhere to the code of ethics and follow the EPA’s guidelines.

“Ethical culture is acceptable behavior as defined by the company and industry” (Ferrell, Fraedrich, & Ferrell, p. 15). Monsanto’s seems to have a history unethical business culture, which is effectively responding to certain stakeholders (stockholders) while unsuccessfully responding to most (environmwent. Doing what’s best for the stockholder seems to be the main goal of Monsanto. When a company that is already seen as controversial uses tactics such as bribery to meet certain standards and bypass certain studies, consumers should be reluctant to trust their motives (Ferrell, Fraedrich, & Ferrell). Another unethical culture is to hold perpetual patents for their GM seeds. “Critics argue that requiring farmers to suddenly purchase new seeds year after year puts an undue financial burden on them and gives Monsanto too much power” (Ferrell, Fraedrich, & Ferrell, p. 388).

The benefits of growing genetically modified seeds for crops are making it hard for farmers to resist. The European Commission concluded that genetically modified “food does not appear to be riskier that crops grown by conventional methods” (Ferrell, Fraedrich, & Ferrell, p. 386). By purchasing genetically modified seeds, farmers could grow crops on less land while saving billions in crop losses from weather issues and insects (Ferrell, Fraedrich, & Ferrell). The average corn harvest yield increased from 70 bushels to 150 bushels per acre, with a predicted increase to 300 bushels an acre by 2030 (Ferrell, Fraedrich, & Ferrell). Additionally, “the cotton yield of Indian farmers…doubled their income in one year” (Ferrell, Fraedrich, & Ferrell, p. 385). These numbers seem unbelievable, and critics agree, believing that not only are these numbers inflated, but that the cost of GM seeds are remarkably higher that traditional seeds and “therefore actually reduce farmers’ takes-home profits” (Ferrell, Fraedrich, & Ferrell, p. 385). Even with the possibility that these crop yield numbers are accurate, the potential negative effects of using genetically modified seeds appear to raise much warranted concern. GM seeds created by Monsanto are furnished with a gene that allows them to generate their own Roundup herbicide (Ferrell, Fraedrich, & Ferrell). The main ingredient, glyphosate, is a chemical whose residue can last for a year and is the third most common cause of illness among California agriculture workers (Ferrell, Fraedrich, & Ferrell). Studies have shown that the “Roundup Ready” seeds, GM seeds used in conjunction with Roundup, can be harmful to birds and insects, deadly to tadpoles and may also “have a detrimental effect on human cells, especially embryonic, umbilical, and placental cells” (Ferrell, Fraedrich, & Ferrell, p. 386). GM seeds are also threatening the purity of organic farming as well as non-GM crops. Bees, winds and other insects carry pollens that could “contaminate” nearby crops which could eventually “create new genetic variations of those plants that could negatively influence that surrounding ecosystem” (Ferrell, Fraedrich, & Ferrell, p. 386). One international study found that rats that consumed GM products such as corn “developed tumors and died two to three times more than those not consuming the GM product” (Ferrell, Fraedrich, & Ferrell, p. 387).

In order for Monsanto to manage the potential harm to plant and animal life from using products such as Roundup, the company must first, strictly enforce its code of conduct effectively, avoiding unethical practices such as bribery (Ferrell, Fraedrich, & Ferrell, p. 392). Having an ethical business culture will promote outcomes that have the best interest of the all stakeholders in mind. This is likely to prevent situations where there is the dumping of toxic wastes and attempting to bypass certain studies as has been seen in the company’s past(Ferrell, Fraedrich, & Ferrell). Second, Monsanto should follow the EPA, Environmental Protection Agency, guidelines for testing GM seeds. The company must be transparent when proving information to the public by providing accurate information for each product. Data must be accurately collected such as the “identification of new genetic material and all new proteins; mammalian toxicity testing of all new proteins; comparison of new proteins to known toxins and allergens; toxicity testing on birds, fish, earthworms, and representative insects such as bees, ladybird beetles, and lacewings; toxicity testing on insects related to target insect pests; length of time required for the new proteins to degrade in the environment” (EPA, 2014). Although researchers appear to be looking into many different aspects of transgenic livestock, biotech companies are not required to disclose these activities (Scientists, 2011). EPA, U. S. (2014, May). EPA's Regulation of Biotechnology for Use in Pest Management. Retrieved from http://www.epa.gov/oppbppd1/biopesticides/reg_of_biotech/eparegofbiotech.htm
Ferrell, O., Fraedrich, J., & Ferrell, L. (n.d.). Business Ethics: Decision Making and Cases (10th ed.). Southwesten College Pub.
Scientists, F. o. (2011). Risks Associated with GM Farm Animals. Retrieved from http://fas.org/biosecurity/education/dualuse-agriculture/2.-agricultural-biotechnology/risks-associated-with-gm-farm-animals.html