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M Business 5th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
Edition 5ISBN: 978-1259578144M Business 5th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
Edition 5ISBN: 978-1259578144 Exercise 1
Ben Jerry's has a reputation for social responsibility and social activism. For example, in 1996 it sued the city of Chicago and the state of Illinois for the right to label its products as free of rBGH (a growth hormone given to cows to boost milk production), and in 2005 it helped create the world's largest Baked Alaska (a type of frozen dessert) as part of a campaign to oppose opening Alaska's Arctic National Wildlife Refuge to drilling.
In 2000, Ben Jerry's was acquired by Unilever, a large multiproduct company. As part of the acquisition, Unilever agreed to remain hands-off about Ben Jerry's social activism. However, this agreement is now being tested over a recent hot-button issue: the fight to pass laws requiring labeling of products containing genetically modified organisms (GMOs).Ben Jerry's has been vocal about its support for GMO labeling. It is working to switch entirely to non-GMO ingredients, and has provided financial backing for a Vermont law requiring GMO labeling (the first law of its kind in the United States). Unilever, on the other hand, has been equally public about its opposition to labeling; it contributed more than $450,000 to defeat a similar labeling law in California and is a member of the Grocery Manufacturers Association suing to block the Vermont law from taking effect.
The conflict has been uncomfortable for both organizations. Some pro-labeling groups have boycotted Ben Jerry's because of its ties to Unilever. For its part, Unilever has kept to the agreement and declined to pressure Ben Jerry's, but both companies' reputations may be damaged by their tie to each other. If the conflict continues to deepen, a resolution or even compromise will be needed.
How involved should the relationship be between a large parent company and its many subsidiaries? Should the parent company require its subsidiaries to adhere to a unified set of values, practices, and corporate culture, or are differences and diversity allowable (or even valuable)?
In 2000, Ben Jerry's was acquired by Unilever, a large multiproduct company. As part of the acquisition, Unilever agreed to remain hands-off about Ben Jerry's social activism. However, this agreement is now being tested over a recent hot-button issue: the fight to pass laws requiring labeling of products containing genetically modified organisms (GMOs).Ben Jerry's has been vocal about its support for GMO labeling. It is working to switch entirely to non-GMO ingredients, and has provided financial backing for a Vermont law requiring GMO labeling (the first law of its kind in the United States). Unilever, on the other hand, has been equally public about its opposition to labeling; it contributed more than $450,000 to defeat a similar labeling law in California and is a member of the Grocery Manufacturers Association suing to block the Vermont law from taking effect.
The conflict has been uncomfortable for both organizations. Some pro-labeling groups have boycotted Ben Jerry's because of its ties to Unilever. For its part, Unilever has kept to the agreement and declined to pressure Ben Jerry's, but both companies' reputations may be damaged by their tie to each other. If the conflict continues to deepen, a resolution or even compromise will be needed.
How involved should the relationship be between a large parent company and its many subsidiaries? Should the parent company require its subsidiaries to adhere to a unified set of values, practices, and corporate culture, or are differences and diversity allowable (or even valuable)?
Explanation
Verified
Verified
Case Summary :
The case talks about the acquisition of two companies BJ and UL. UL being bigger has acquired BJ. BJ is a socially responsible organization taking initiatives to prove the same. UL had promised BJ that there wouldn't be any hindrance from their side in matters of their social activities.
A recent issue about GMO labeling has caused the parent and the subsidiary company to stand against each other. This is uncomfortable to both companies however they are focused to stand their ground and defend their ideas.
Relationship between companies in acquisition :
The parent company possesses entire or part of subsidiary company. However they both are separate entities. The parent company can implement rules and laws for the subsidiary to follow.
The parent has to let the subsidiary take care of their functions. The independence here is the key factor. They exist as one organization but they are different entities and the working will definitely vary from each others. The association between them is based on how they deal with each other.
The parent company has to grant them the freedom to continue work as they always work, this would help in efficiently managing them. Hence if diversity in the working and value system has to prevail both the companies should mutually agree to this form of working. They have to be confident of their work and keep progressing.
Conclusion :
UL can imply its rules and set of formats on BJ and change their way of working and activities. Here there are no restrictions implied on BJ and they possess the complete freedom to continue their work with a new leadership but same values and working patterns.
The case talks about the acquisition of two companies BJ and UL. UL being bigger has acquired BJ. BJ is a socially responsible organization taking initiatives to prove the same. UL had promised BJ that there wouldn't be any hindrance from their side in matters of their social activities.
A recent issue about GMO labeling has caused the parent and the subsidiary company to stand against each other. This is uncomfortable to both companies however they are focused to stand their ground and defend their ideas.
Relationship between companies in acquisition :
The parent company possesses entire or part of subsidiary company. However they both are separate entities. The parent company can implement rules and laws for the subsidiary to follow.
The parent has to let the subsidiary take care of their functions. The independence here is the key factor. They exist as one organization but they are different entities and the working will definitely vary from each others. The association between them is based on how they deal with each other.
The parent company has to grant them the freedom to continue work as they always work, this would help in efficiently managing them. Hence if diversity in the working and value system has to prevail both the companies should mutually agree to this form of working. They have to be confident of their work and keep progressing.
Conclusion :
UL can imply its rules and set of formats on BJ and change their way of working and activities. Here there are no restrictions implied on BJ and they possess the complete freedom to continue their work with a new leadership but same values and working patterns.
M Business 5th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
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