Monsanto Attempts to Balance Stakeholder Interests

 

 

Abstract

This paper involves two case studies which are Monsanto Attempts to Balance Stakeholder Interests and the Accounting issues that led to the collapse of Enron Company respectively. In the first study, the paper discusses the ability of Monsanto to maintain the interest of its stakeholders. It shows how Monsanto upholds an ethical culture that satisfies the interests of its stakeholders. It includes and explains the benefits of growing GMO Seeds and their impact on the costs for the farmer and the Monsanto Company. It also examines how the company manages the harm caused to plants and wildlife. In the second case study, the paper discusses how the accounting unethical issues led to the collapse of the company. It further explains how the culture of the company led to the company becoming bankrupt. It goes ahead to determine how the people involved in auditing, banking, and the attorneys led to the company’s end. Finally, it discusses the mistakes that the CFO in the Enron Company did that led the company to financial problems.

 

 

 

CASE ASSIGNMENT 1: Monsanto Attempts to Balance Stakeholder Interests

This is a case study about Monsanto which is a major and leading seed company in the world and its specialty is producing genetically modified seeds making use of the science of biotechnology. Insects, weeds, and famine have been a problem for the farmers for a long time and the use of pesticides and herbicides that were produced to help with this problem became expensive and consumed a lot of time (Ferrell, Fraedrich & Ferrell 2015). To curb this problem, Monsanto developed seeds that had the herbicide that removes weeds without damaging the crops. Over the years, the company has developed a lot of successful products. Monsanto has developed other products that have made it the most successful business in the world. 

The Efficiency of Monsanto’s Ethical Values

Monsanto has worked hard to maintain an ethical culture and values that satisfy the needs that their stakeholders have for the output of the company and the creation of products. This includes addressing the safety of GM, environmental issues, and organizational ethical issues. For the company to fulfill the needs of society, it has renovated its products and services throughout the years (Fitzpatrick & Bronstein 2006). Monsanto’s company believed that manufacturing chemicals and making scientific inquiry into chemical engineering had a lot of benefits for humanity. The company tried to apply the same techniques to other products and the impacts of these products were harmful to their stakeholders. Because the effects were so huge, the company had to pay a huge amount of money because the products caused harm to a large number of stakeholders. The company has faced ethical issues earlier concerning the products they produced and their operations. However, despite the critics and backlash that Monsanto has faced, it has strived to keep its reputation by developing products that are effective and employing a large number of people making it the most successful business in the world. Monsanto needs to continue working with stakeholders to promote the innovations it continues to create and eliminate fears about the company. 

The Benefits and Costs Growing GMO Seed

Even with the critics the Monsanto Company has, some of their supporters state that the company curbs world hunger by producing a lot of crops and increasing the food supply. Other critics have accused the company over the attempt to take over the food supply in the world and cause a decrease in biodiversity. Growing the GMO seed is beneficial to the farmer and the company. The costs of buying pesticides and herbicides are reduced when a farmer uses GMO seeds because the seed already contains them. This increases the produce because the crop will not be invaded by pests and weed. The seed flourishes and does well, therefore, rewarding the farmer with increased productivity and this increases profits for the company and farmer as well (Ferrell, Fraedrich & Ferrell 2015). The GMO seed is also beneficial to the farmer because it doesn’t require a large piece of land. The cost reduction and increase in production for the farmer has transformed Monsanto into a global leader in the seed industry. As the world of GMO seeds advances, the yields are greater in quality and quantity meeting the world’s growing agricultural needs. 

Managing the Harm caused to Plants and Wildlife

          The company has tried to address the issue of harm caused by the use of herbicides such as roundup by addressing environmental and health concerns. Monsanto maintains that the environmental effect of any product that it develops has been researched, studied, and approved. To manage and control any harm caused, Monsanto has taken the initiative of doing all the rightful studies to ensure that it does not harm animals and plants. The company has partnered with conservational international intending to preserve biodiversity. The herbicide is also said to be harmful to the human cells (Ferrell, Fraedrich & Ferrell 2015). However according to EPA, when roundup is used in the recommended does, it is not harmful to the human body. The company has partnered with relevant companies that aid and manage the growth of plants.

CASE ASSIGNMENT 2: “Enron: Questionable Accounting Leads to Collapse.”

This is a study concerning the Enron Company and its accounting disaster that led the company to become bankrupt. The only thing that the company could do at the time is to know how to return the losses to its creditors. The company distributed its assets to the creditors who were pursuing a huge amount of money. Unethical issues in the company were the lead cause of its bankruptcy (May 2012). Everyone that was linked to the company proved to have led to its demise because they all supported the illegal activities that were taking place. This case study shows the repercussions that come with unethical behaviors.

Contribution of the company culture of Enron to it becoming bankrupt

The company’s culture did not promote integrity and respect. The employees at Enron were influenced by the culture of competing rather than co-operating. This was because they were motivated by huge bonuses which made them feel scared about the criteria that were used in ranking. They did not want to get fired due to underperformance which was the norm (Sims & Brinkmann, 2003). The consequences of all these cations were unhealthy business activities that made colleagues drag each other behind rather than support each other to execute the sale agreement. The performance management at Enron proved to be a disaster and a fail for the company and ever body else that was linked to it. This demonstrates how far one can go when they are motivated by money. The company was made to appear financially okay when it was making losses and was involved in business criminal actions. Records were manipulated, information was altered and data about its growth was wrongly put. Eventually, the illegal activity at Enron was discovered, and immediately the stock price began to decrease.

Ways in which the people involved in auditing, banking, and the attorneys led to the company’s downfall. 

 The contributors to Enron’s demise did so through partiality. They all acted in ways that were in favor of the company. The primary banker of Enron facilitated its wrongdoings and fraud (Ferrell, Fraedrich & Ferrell 2017). Enron’s accounting firm which had the responsibility of auditing Enron’s financial statement and recognize the accounting issues in the company failed to do what was required of them. The accounting firm made Enron appear to be gaining a significant growth in profit which was untrue. During its fraudulent activities, Enron got active assistance from its bankers, attorneys, and auditors in securing major deals. They were all aware of the company’s scandals and did nothing about it. The company’s attorneys gave their full assistance by providing legal support to the company to seal deals. They even provided letters to help in those deals when the company needed them. The company was assisted by its attorneys, bankers, and auditors to get involved in malicious activities and that is how they led to the downfall of the company.

The role that the company's CFO played towards creating financial problems for Enron

When the company’s CFO was charged in court, he was charged with a lot of wrongdoings including conspiracy and fraud. He was involved in the company’s bad activities and being the CFO, he was the major contributor towards creating financial problems and debts for the company. He had hidden the correct financial condition of Enron by hiding its debt and being part of unethical accounting practices. This means that he contributed to the downfall of Enron Company. He also used unfair ways to earn his money and get his assets. He had made a lot of money through bribes and taking money that was meant to be channeled to other entities. He inflated revenues and acted in a very irresponsible way and this irresponsibility led to major problems for the company (Ferrell, Fraedrich & Ferrell 2017). The CFO lacked accountability and this caused losses and not only for the stakeholders but also for the entire community. He was responsible for the partnerships that were used to hide about the company’s debt and defrauded its shareholders making the company appear more profitable than it was.

 

 

 

 

 

 

 

 

 

 

 

 

 

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