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C ase 5

Monsanto: A Growing Controversy

INTRODUCTION

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 $13.5 billion. It spe -

cializes in biotechnology, or the genetic manipulation of organisms. Monsanto scientists

have spent the last few decades modifying crops—often by inserting new genes or adapt-

ing 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 sur -

vive 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. Yet Monsanto has met its share of criticism from sources as diverse as

governments, farmers, activists, and advocacy groups. Monsanto supporters say the com-

pany 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. The announcement that Bayer AG is acquiring Monsanto for

$66 billion has intensified these concerns because the acquisition would create a company

that would command over one-fourth of the world’s seeds and pesticides market. Since

biotechnology is relatively new, critics also express concerns about the possibility of nega-

tive health and environmental effects from biotech food. 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 cur -

rent focus on developing GM seeds, including stakeholder concerns regarding the safety

and environmental effects of these seeds. Next, we discuss key ethical concerns, includ-

ing 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.

*This case was prepared by Jennifer Sawayda, Danielle Jolley, and Annalisa LaRue for and under the direction of

O.C. Ferrell and Linda Ferrell. It was prepared for classroom discussion rather than to illustrate either effective or

ineffective handling of an administrative, ethical, or legal decision by management. All sources used for this case

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HISTORY: FROM CHEMICA lS TO FOOD

Monsanto was founded by John E. Queeny in 1901 in St. Louis, Missouri. He named the

company after his wife, Olga Monsanto Queeny. The company’s first product was the arti-

ficial 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 spe-

cializing 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 com-

pany 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 hun-

dreds of veterans who claimed they were harmed by the chemical. Monsanto and several

other manufacturers agreed to settle for $180 million. 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 biotech-

nology product to win regulatory approval. Soon the company was selling soybean, cotton,

and canola seeds engineered to be tolerant to Monsanto’s Roundup herbicide. Many other

herbicides killed good plants as well as the bad ones. Roundup Ready seeds allowed farm-

ers 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 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 highly elevated

PCB levels. 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, thou-

sands 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 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. 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 that 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 over 20,000

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people worldwide. It is recognized as one of the 100 best corporate citizens by Corporate

Responsibility Magazine and has made For tune magazine’s World’s Most Admired Compa-

nies list.

MONSANTO’S EMPHASIS ON BIOTECHNO lOGY

While the original Monsanto made a name for itself through the manufacturing of chemi-

cals, the new Monsanto changed its emphasis from chemicals to food. Today’s Monsanto

owes its $13.5 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 research budget to investigate new methods of farm-

ing 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 com-

pany 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. Mon-

santo also arranges tours for its critics to help them understand the process of GM crops

and their implications. 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 crit-

icism 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. 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. Consumers have gone so far as to destroy

fields of GM crops and arrange sit-ins. Greenpeace has fought Monsanto for years, espe-

cially in the company’s efforts to promote GM crops in developing countries. Even China

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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.

Concerns 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 “play-

ing God” by controlling what goes into the seed. Critics 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. In 2013 protestors began an annual

protest called March against Monsanto.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 ingredi-

ent, 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. Since its inception, glyphosate has

become the most widely used herbicide. An estimated 18.9 billion pounds of glyphosate

have been used across the world. In 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 provi-

sion 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 sur -

vival of biotech corporations. More controversy ensued in 2015 when the House of Representatives added an addi-

tion to a chemical safety bill intended to replace the outdated Toxic Substances Control

Act. The additional paragraph was interpreted as protecting chemical firms from legal

liability for chemical spills if they were the only company that manufactured the chemical.

Because Monsanto was largely the only manufacturer of the now-banned PCBs, state attor -

neys general and environmental regulators believe the law might protect Monsanto against

lawsuits involving chemical spills or dumping of PCBs. This controversy has occurred in

the midst of a number of lawsuits from individuals, cities, and school systems accusing

Monsanto of selling a dangerous chemical. Although Congress claimed the bill does not

favor Monsanto, the addition immediately sparked protest and demands for Congress to

change the bill. Despite consumer concerns, the FDA and the American Association for the Advance-

ment of Science have proclaimed that GM food is safe to consume. The European Com-

mission examined more than 130 studies and concluded that GM food does not appear to

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be riskier than crops grown by conventional methods. As a result of its research, the FDA

determined that Americans did not need to know when they were consuming GM prod-

ucts. Therefore, this information was not placed on labels in most states, although 64 other

countries, notably those in the European Union, require GM food products to state this

fact in their labeling. However, there are signs that labeling laws are changing in the United States. President

Obama signed a bill that will require foods containing GM ingredients to be labeled as

such. According to the bill, food manufacturers could choose to use digital QR codes or

1-800 numbers as a form of labeling. Some have criticized these methods, however, say -

ing that lower-income consumers do not have the technology to scan QR codes. Vermont

Senator Bernie Sanders believes the bill is a weak form of legislation and not nearly as

strong as a law Vermont passed to require GM labeling. GM labeling will take a few years

to implement, and decisions must be made about the best course to take. Food manufac-

turers continue to argue that this type of food labeling is too burdensome.

Concerns 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 par -

ticularly 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. Research has also sug-

gested that the chemical could contribute to antibiotic resistance in humans and hormone

disruption. 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 prob-

ably does have the potential to cause cancer in humans. Monsanto challenged this asser -

tion and wants to meet with WHO officials to discuss the findings. A California judge has

already ruled that the state can require Monsanto to put a cancer warning on its Roundup

products. A group of individuals have filed a lawsuit against Monsanto claiming that Roundup

contributed to their illnesses of non-Hodgkin lymphoma. They claim that former EPA

Deputy Director Jess Rowland may have concealed evidence regarding the weed killer’s

harmful impact. Rowland worked with the Cancer Assessment Review Committee to

develop a report combating the findings that glyphosate contributes to cancer. A federal

court has unsealed documents of internal emails between Monsanto officials and federal

regulators that may hint at collusion. Other emails suggest Monsanto may have manip -

ulated academic research regarding the toxicity of glyphosate. The courts must decide

whether Monsanto is innocent of wrongdoing or if it manipulated research and regulators

into ignoring potential health concerns. 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 contin-

ues to decline. Another concern with GM seeds is the threat of environmental contamina-

tion. 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 “contami-

nated” 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 negatively influ -

ence the surrounding ecosystem.

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Another controversy involved the discovery of a field in Oregon filled with an experi-

mental 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 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 stud-

ied 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. Monsanto has also partnered with Conservation

International in an effort to conserve biodiversity. Stakeholders are left to make their own

decisions regarding GM crops.

Res IsTaNC e TO Pes TICID es a ND He RbICID es Another environmental problem

that has emerged is weed and insect resistance to the herbicides and pesticides in Mon -

santo crops. On the one hand, it is estimated that GM crops have prevented the use of

more than $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 under attack. GM seeds labeled Roundup Ready are engineered

to withstand large doses of the herbicide Roundup. Because Roundup is used more fre-

quently, weeds have started to develop a resistance to this popular herbicide. Significant

numbers of Roundup resistant weeds have been found in the United States and Australia. To combat “super bugs,” the government requires farmers using Monsanto’s GM prod-

ucts to create “refuges,” in which they plant 20 percent of their fields with a non-GM crop.

The theory is that this allows nonresistant bugs to mate with those that are resistant, pre-

venting a new race of super bugs. To prevent resistance to the Roundup herbicide, farmers

are required to vary herbicide use and practice crop rotations. However, since Roundup

is so easy to use, particularly in conjunction with Roundup Ready seeds, some farmers

do not take the time to institute these preventative measures. When they do rotate their

crops, some will rotate one Roundup Ready crop with another. As a result, agricultural

pests such as rootworm are becoming resistant to genes in GM crops intended to kill them.

For the first time, regulators in the United States are encouraging limits on certain kinds

of GM corn to prevent the spread of resistant bugs. The EPA acknowledges that farmers

and seed companies have not done enough to curb resistance. It began recommending that

percent of fields be planted with another crop other than biotech corn. Resistance is

of particular concern in Latin America, Africa, and Asia, where farmers may not be as

informed of the risks of herbicide and pesticide overuse.

DEA lING WITH ORGANIZATIONA l ETHICA l ISSUES

In addition to concerns over the safety of GM seeds and environmental issues, Monsanto

has dealt with concerns about organizational conduct. Organizations face significant risks

from strategies and employees striving for high performance standards. Such pressure

sometimes encourages employees to engage in illegal or unethical conduct. All firms have

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these concerns. In the case of Monsanto, patents and other legal issues have resulted in

legal, ethical, and reputational consequences.

Patent Issues

As bioengineered creations of the Monsanto Company, Monsanto’s seeds are protected under

patent law. Under the terms of the patent, farmers using Monsanto seeds are not allowed to

harvest seeds from the plants for use in upcoming seasons. Instead, they must purchase new

Monsanto seeds each season. By issuing new seeds each year, Monsanto ensures it secures

a profit as well as maintains control over its property. This patent protection has become a

controversial subject among farmers and has led to numerous litigation battles for Monsanto.Throughout agricultural history, farmers have collected and saved seeds from previ-

ous harvests to plant the following year’s crops. Critics argue that requiring farmers to sud-

denly purchase new seeds each year puts an undue financial burden on them and gives

Monsanto too much power. However, the law protects Monsanto’s right to have exclusive

control over its creations, and farmers must abide by these laws. When they are found

guilty of using Monsanto seeds from previous seasons, either deliberately or out of igno-

rance, they are often fined. Since it is fairly easy for farmers to violate the patent, Monsanto has found it necessary to

employ investigators from law firms to investigate suspected violations. The resulting inves -

tigations are a source of contention between Monsanto and farmers. According to Monsanto,

investigators deal with farmers in a respectful manner. They approach the farmers suspected

of patent infringement and ask them questions. The company claims that investigators prac -

tice transparency with the farmers and tell them why they are there and who they represent.

If after the initial interview is completed and suspicions still exist, the investigators may pull

the farmer’s records. They may bring in a sampling team, with the farmer’s permission, to

test the farmer’s fields. If found guilty, the farmer often pays fines. However, some farmers

tell a different story about Monsanto and its seed investigators. They claim that Monsanto

investigators have used unethical practices to get them to cooperate. They call the investiga -

tors the “seed police” and say they behave like a “Gestapo” or “mafia.” In 2007 Monsanto sued Vernon Bowman, an Indiana farmer who Monsanto claims

used second-generation Monsanto seeds to plant soybeans. Monsanto claimed its patent

protection reaches past first-generation seeds and Mr. Bowman infringed upon its patent.

In 2009 the court ruled in favor of Monsanto and ordered Bowman to pay $84,000 in dam-

ages. Mr. Bowman did not accept defeat, and in 2013 brought his case before the Supreme

Court. The Supreme Court ruled in favor of Monsanto, representing a great victory for

biotechnology companies. Monsanto does not limit its investigations to farmers. It filed a lawsuit against DuPont,

the world’s second-largest seed maker, for combining DuPont technology with Roundup

Ready. Monsanto won that lawsuit, but was countersued by DuPont for anticompetitive prac-

tices. These accusations of anticompetitive practices garnered the attention of federal anti -

trust lawyers. With increased pressure coming from different areas, Monsanto agreed to allow

patents to expire on its seeds starting in 2014. This will allow other companies to create less

expensive versions of Monsanto seeds. However, Monsanto announced it would continue to

strictly enforce patents for new versions of its products, such as Roundup Ready 2 soybeans.

Legal Issues

Many major companies face occasional conflicts with government and legal forces, and

Monsanto is no exception. The government has begun to examine Monsanto’s practices

more closely. In early 2013 Monsanto settled with local residents in Nitro, West Virginia,

after claims of health problems became persistent in a now-closed Agent Orange plant.

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The company agreed to spend up to $93 million on medical testing and local cleanup of

as many as 4,500 homes. It also agreed to establish a medical monitoring program and will

make additional money available to continue the program’s operation for 30 years.In 1980 the Supreme Court allowed living organisms to be patented for the first time,

giving Monsanto the ability to patent its seeds. Despite this victory, Monsanto came to the

attention of the American Antitrust Institute for alleged anticompetitive activities. The insti-

tute suggested that Monsanto hinders competition, exerting too much power over the trans-

genic seed industry and limiting seed innovation. When Monsanto acquired DeKalb and

Delta Land and Pine, it had to obtain the approval of antitrust authorities and gained that

approval after agreeing to certain concessions. As a result of complaints, the Department of

Justice (DOJ) began a civil investigation into Monsanto’s practices. Although the DOJ even-

tually dropped the antitrust probe, concerns over Monsanto’s acquisitions continue. The announcement that chemical, pharmaceutical, and life sciences firm Bayer AG

would acquire Monsanto for $66 billion drew scrutiny from both U.S. and European

authorities (Bayer is a German company). Such a merger would create a “one-stop shop”

for seeds, pesticides and herbicides, and farmer services. Regulators are concerned that the

merger might give the combined firm too much power over the seed and pesticide indus-

try. During his presidential campaign, Vermont Senator Bernie Sanders claimed the deal

threatened Americans because it would increase prices. Regulators in the European Union

have asked for Bayer to provide them with more information before they make a deci-

sion on whether to approve—actions which might potentially delay the proposed merger.

Bayer and Monsanto deny that their merger would reduce competition. In a meeting with

President Trump, Bayer said it would spend $8 billion for research and development in the

United States and keep Monsanto’s workforce intact. However, the companies will have to

convince the U.S. Justice Department, the Federal Trade Commission, and European regu-

lators that its merger will not restrict competition for it to receive approval.

CORPORATE RESPONSIBI lITY AT MONSANTO

Despite criticisms levied against Monsanto, a study has provided evidence that GM crops

have greatly benefited farming. The study estimated that farmers who adopted GM crops

have seen their profits increase to 69 percent higher than those who did not. Today, the

public generally expects multinational corporations to advance the interests and well-

being of the people in the countries where they do business. Monsanto has given millions

of dollars in programs to improve communities in developing countries. Monsanto created a Code of Business Conduct to provide guidance on the firm’s eth -

ical expectations and is concerned with maintaining integrity among its many different

stakeholders. In 2003 the company adopted an additional Code of Conduct for its chief

executives and financial officers and a Human Rights Policy in 2006 to ensure the rights

of Monsanto employees and those in its supply chain. The company’s Business Conduct

Office is responsible for investigating cases of alleged misconduct as well as maintaining

the company’s anonymous hotline. As part of Monsanto’s culture, the company wrote a pledge informing stakeholders about

what it sees as its ethical commitments. According to Monsanto, the pledge “helps us to con-

vert our values into actions, and to make clear who we are and what we champion.” Table 1

provides the values Monsanto pledges to uphold, including integrity, dialogue, transparency,

sharing, benefits, respect, acting as owners to achieve results, and creating a great place to work. As an agricultural company, Monsanto must address the grim reality that the world’s pop-

ulation is increasing fast and the amount of land and water available for agriculture is decreas-

ing. Some experts believe our planet must produce more food in the next 50 years to feed the

world’s population than what has grown in the past 10,000 years, requiring us to double our

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food output. As a multinational corporation dedicated to agriculture, Monsanto is expected to

address these problems. The company developed a three-tiered commitment policy: (1) pro-

duce more yield in crops, (2) conserve more resources, and (3) improve the lives of farmers.

The company hopes to achieve these goals through initiatives in sustainable agriculture.

Sustainable Agriculture

Monsanto’s CEO Hugh Grant has said, “Agriculture intersects the toughest challenges

we all face on the planet. Together, we must meet the needs for increased food, fiber, and

energy while protecting the environment. In short, the world needs to produce more and

conserve smarter.” Monsanto is quick to point out that its biotech products added more

than 100 million tons to worldwide agricultural production in a 10-year period, and the

company estimates that this has increased farmers’ incomes by $33.8 billion. Monsanto

also created partnerships between nonprofit organizations across the world to enrich the

lives of farmers in developing countries. The company’s goal is to double its core crop

yields by 2030. Monsanto intends to achieve this goal through new product innovations

such as drought-tolerant seeds and better technology. Two regions Monsanto is now focus-

ing on are India and Africa.

TABLE 1 The Monsanto Pledge

Integrity

Integrity is the foundation for all that we do. Integrity includes hones\�ty, decency, consistency,

and courage. Building on those values, we are committed to:

Dialogue

We will listen carefully to diverse points of view and engage in thoughtf\�ul dialogue. We will

broaden our understanding of issues in order to better address the needs and concerns of society

and each other.

Transparency

We will ensure that information is available, accessible, and understanda\�ble.

Sharing

We will share knowledge and technology to advance scientific understandin\�g, to improve

agriculture and the environment, to improve crops, and to help farmers i\�n developing countries.

benefits

We will use sound and innovative science and thoughtful and effective ste\�wardship to deliver

high-quality products that are beneficial to our customers and to the en\�vironment.

Respect

We will respect the religious, cultural, and ethical concerns of people t\�hroughout

the world. The safety of our employees, the communities where we operate\�, our

customers, consumers, and the environment will be our highest priorities\�.

Act as owners to achieve results

We will create clarity of direction, roles, and accountability; build str\�ong relationships

with our customers and external partners; make wise decisions; steward o\�ur

company resources; and take responsibility for achieving agreed-upon res\�ults.

Create a great place to work

We will ensure diversity of people and thought; foster innovation, creati\�vity, and

learning; practice inclusive teamwork; and reward and recognize our peop\�le.

Source: Monsanto Corporation, Monsanto Code of Conduct, http://www.monsanto.com/SiteCollectionDocuments/Code-of-Business-Conduct-PDFs/

code_of_conduct_english.pdf (accessed April 1, 2017).

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some third party content may be suppressed from the eBook and/or eChapte\

r(s).

Editorial review has deemed that any suppressed content does not materia\

lly affect the overall learning experience. Cengage Learning reserves th\

e right to remove additional content at any time if subsequent rights re\

strictions require it. Case 5: Monsanto: A Growing Controversy 383

The need for better agriculture is apparent in India, with a population of nearly

1.3 billion people. Biotech crops have helped improve the size of yields in India, and

Monsanto has estimated that Indian cotton farmers using biotech crops earn approximately

$176 more in revenues per acre than their non-biotech contemporaries. Monsanto launched

Project SHARE, a sustainable yield initiative created in conjunction with the nonprofit Indian

Society of Agribusiness, to improve the lives of 10,000 cotton farmers in 1,050 villages. In Africa Monsanto partnered with organizations, scientists, and philanthropists to

develop and introduce drought-tolerant and virus-resistant seeds for African farmers. For

instance, the Monsanto Fund is working with scientists to develop cassava plants that are

resistant to two common types of viruses. The cassava is an important food product for

many African communities. As CEO Hugh Grant writes, “This initiative isn’t simply altru-

istic; we see it as a unique business proposition that rewards farmers and shareowners.” But not all view Monsanto’s presence in Africa as an outreach in corporate responsibil-

ity. Some consider it as another way for Monsanto to improve its bottom line. Opponents

see the company as trying to take control of African agriculture and destroy African agri -

cultural practices that have lasted for thousands of years.

Charitable Giving

In 1964 the Monsanto Company established the Monsanto Fund. This fund contributes to

educational opportunities and the needs of communities across the world. One recipient of

the Monsanto Fund is Nanmeng Village in China. The company is helping to train farmers

in the area about ways to improve agricultural methods and infrastructure development.

The Monsanto Fund also provides $1,500 scholarships to students who are interested in

agriculture. Each applicant must be endorsed by three farmers in their communities to be

eligible for the grant. Another program implemented by the company is the Matching Gifts Program. This

program matches employee contributions to charitable and educational organizations,

dollar-for-dollar, by the Monsanto Fund. The program matches a maximum of $5,000 per

employee every year and includes organizations supporting the environment, arts and cul-

ture, and disaster relief, among many others. In the first decade of the twenty-first century, Monsanto supported youth programs

and donated nearly $1.5 million in scholarships to students wanting to pursue agriculture-

related degrees. The company supports 4-H programs and the program Farm Safety 4 Just

Kids, a program that teaches rural children about safety while working on farms. Monsanto

also partnered with the organization Agriculture Future of America (AFA), providing

more than $100,000 in scholarships to youth in eight states who want to pursue agricul-

tural careers. In St. Louis, where its headquarters are located, Monsanto offers grants to

schools who develop innovative approaches to teaching students math and science.

CONC lUSION

Monsanto faces challenges that it must address, including lingering concerns over the

safety and the environmental impact of its products. The company needs to enforce its

code of conduct effectively to avoid organizational misconduct. Monsanto also faces scru -

tiny from antitrust authorities who are concerned that the firm is too large, especially in

light of Monsanto’s proposed merger with German firm Bayer AG. Yet despite the onslaught of criticism from Monsanto detractors, Monsanto has

numerous opportunities to thrive in the future. The company is currently working on new

innovations that could increase its competitive edge as well as benefit farmers worldwide.

scanned, or duplicated, in whole or in part. Due to electronic rights, \

some third party content may be suppressed from the eBook and/or eChapte\

r(s).

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lly affect the overall learning experience. Cengage Learning reserves th\

e right to remove additional content at any time if subsequent rights re\

strictions require it. 384 Part 5: Cases

Monsanto has teamed up with a Danish biotechnology firm to develop microscopic organ-

isms that could be used to aid plant growth and ward off pests. The company is also taking

advantage of big data and its potential uses for farming. Monsanto’s inroads into the com-

puting industry are likely to grow in the coming years.Although Monsanto has made ethical errors in the past, it is trying to portray itself

as a socially responsible company dedicated to improving agriculture. As noted, the com-

pany still has problems. The predictions from Monsanto critics about biotech food have

not yet come true, but that has not eradicated the fears among stakeholders. Non-GM food

products are becoming more popular, despite their higher costs. Faced with the increasing

popularity of organic food and staunch criticism from opponents, Monsanto needs to con-

tinue working with stakeholders to promote its technological innovations and eliminate

fears concerning its industry.

QU es TION s FOR DI sCU ss ION

1. 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 conse-

quences of using them.

How should Monsanto manage the potential harm to plant and animal life from using

products such as Roundup?

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article322692/Another-wheat-lawsuit-filed-against-Monsanto.html (accessed April 1, 2017); Brian Hindo,

“Monsanto: Winning the Ground War,” BusinessWeek , December 5, 2007, 35–41; Carey Gillam, “UPDATE

1-Monsanto Unapproved GMO Wheat Stored in Colorado through ’11,” Reuters, June 28, 2013, http://www.reuters.

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Claire Oxborrow, Becky Price, and Peter Riley, “Breaking Free,”

ecologist 38, no. 9 (November 2008): 35-36;

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http://www.salon.com/2013/03/27/farmers_and_food_safety_advocates_lead_monsanto_backlash_partner/

(accessed April 1, 2017); Crystal Gammon and Environmental Health News, “Weed-Whacking Herbicide Proves

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whacking-herbicide-p/ (accessed April 1, 2017); Dennis K. Berman, Gina Chon, and Scott Kilman, “Monsanto

Pushes Deeper Into China,” The Wall Street Journal, July 11, 2011, B1–B2; Donald L. Barlett and James B. Steele,

“Monsanto’s Harvest of Fear,” Vanity Fair , May 5, 2008, http://www.vanityfair.com/news/2008/05/monsanto200805

(accessed April 1, 2017); Drake Bennett, “What Are They Doing at Monsanto?” Bloomberg Businessweek, July 3,

2014, 52–59; “DuPont and Monsanto Agree to End Lawsuits,” Bloomberg , March, 26, 2013, http://www.bloomberg.

com/news/2013-03-26/dupont-monsanto-agree-to-end-lawsuits.html (accessed April 1, 2017); Economist staff,

“Field Research,” The

economist , November 8, 2014, 82; E. Freeman, “Seed Police?” Monsanto , November 10,

2008, http://www.monsanto.com/newsviews/Pages/Seed-Police-Part-4.aspx (accessed April 20, 2015);

Ellen Gibson, “Monsanto,” BusinessWeek, December 22, 2008, 51; Elizabeth Weise, “Monsanto in Dispute with

Veggie Farmers,” USA Today, March 18, 2014, 7B; “Even Small Doses of Popular Weed Killer Fatal to Frogs,

Scientist Finds,” ScienceDaily, August 5, 2005, https://www.sciencedaily.com/releases/2005/08/050804053212.htm

scanned, or duplicated, in whole or in part. Due to electronic rights, \

some third party content may be suppressed from the eBook and/or eChapte\

r(s).

Editorial review has deemed that any suppressed content does not materia\

lly affect the overall learning experience. Cengage Learning reserves th\

e right to remove additional content at any time if subsequent rights re\

strictions require it.