Monsanto’s downfall could be attributed to several reasons. The passion of Alan Shapiro’s vision blinded the Company into making rash decisions and the large amounts of money spent pursuing the objective prevented any U-turns later. The company’s unshaken beliefs that it was correct had made it arrogant and not listen to the outrage all around. Monsanto underestimated consumer resistance.
There was no obvious benefit in the products introduced.
It may have been a different story if the products were introduced in developing counties where transport is poor or people starving from crop failures.
Monsanto also ignored cultural differences. Canada and the US were indifferent to genetically modified products but there was anger in Europe and the UK. Recent blunders by the government handling the BSE and Mad Cow outbreaks dampened people’s confidence in genetically modified products.
Selling the idea of genetically modified crops is not easy. The industry needs to persuade people of the benefits and the companies must be seen to be socially responsible, socially responsive, and ethical.
Companies’ mission statements must not seem to be solely profit-driven.
Introduction – Monsanto and Alan Shapiro’s Vision
It’s about the earth, it’s about the environment and it’s about food. It’s about health and nutrition. Those are deep, ancient things for civilization, and they are for the people.” – Alan Shapiro
The Monsanto Company in 1995 led by Alan Shapiro was involved in agriculture, pharmaceuticals, food, and chemicals. Shapiro’s passionate vision was the application of biology to food, nutrition, and human health.
He believed that people would want the products offered by Monsanto. The products themselves are protected by patents, thus restricting competition. All Monsanto needed to do was dominate and position all their products as either number one or two in their respective markets.
Consolidation started in the seed market that was already concentrated in the hands of a few companies. By 1999 Monsanto spent more than $8 billion making acquisitions. Four corn seed companies had controlled 87% of the US market in 1996.
Monsanto acquired two of them, Holden’s Foundation Seeds and DeKalb. Delta & Land Pine controlled 75% of the cottonseed market and Monsanto made a bid for that company too.
It was a simple winning strategy preached by Jack Welch at GE, dominate your market or get out.
(a) The downfall on Monsanto.
Mission Statement Did Not Include All Stakeholders V Ethical Issues
All entities, individuals, and companies should have a mission statement, a set of beliefs and priorities that guide actions and ethics in decisions. Typical mission statements include paying particular attention to the demands and requirements of certain, if not all stakeholders.
For an individual, it may be the family and employer, for a company, it can include shareholders, customers etc. The term stakeholders for a company can be narrowly defined to include only shareholders, customers and employees or a wider definition to encompass the community and society generally.
Mission statements or objectives are an integral part of any organization’s culture. These beliefs are so deeply entrenched into staffs disposition that they would act automatically on them. I have no doubt that Shapiro’s passionate belief in genetically modified (GM) products would have had a strong influence on the Company’s corporate objective. Shapiro’s passion and having $8 billion committed (sunk cost factor) to this strategy would have affected his decisions.
Their confidence on the technology may even have promoted arrogance within the organization.
With hindsight, it can be seen that Monsanto’s mission or corporate objective did not include listening to the community and society generally. As Shapiro confirmed at a Greenpeace conference in 1999 Because we thought our job to persuade, too often we forgot to listen. If Monsanto’s mission statement included care for the society and the community it operated in, it is unlikely that it would have suffered the fate it did. A poorly defined objective resulted in the Companys’s unethical behavior and ultimately its demise.
Incorrect Product and Target Market V Social Issues
Monsanto targeted the wrong segment of the market.
Developed countries, especially Europe did not appreciate or need Genetically Modified Foods Essaytuffs. These products offered no obvious benefit, solved no problems but posed possible risks.
R;D has been focused on the needs of U.S. society. Hence, the largest segments of GM products are seeds.
