MBA 653: Organizational Behavior Ben & Jerry Case

Executive Summary In the past three decades, Ben & Jerrys has made a transition from a local ice cream maker into a large multinational corporation. The unique history and culture has made Ben & Jerrys brand into a social icon. The core values and mission of the company have been defined as three interrelated parts in Ben & Jerrys mission statement. The ever changing market has posed constant challenges to Ben & Jerrys, which calls for a comprehensive strategy that addresses the competitive difficulties, while allowing Ben & Jerrys to remain consistent with its mission and background. This report analyzes the strengths and weaknesses of Ben & Jerrys organizational design during this transitional period in terms of its culture, social mission, marketing, competition, product development, manufacturing and distribution. We recommend that Ben & Jerrys continues to strive in the global business market by taking following actions: protect the brand name while maintaining core cultural values, continue social activism at a local level, while exercising caution in the overtly politically arena, develop products that remain true to their roots, while using the new resources available from Unilever, and adopt a Lean manufacturing and distribution platform. Analysis Following the merger with Unilever, Ben & Jerrys faces challenges as it navigates within a larger corporation while maintaining its identity and making improvements to compete globally. Ben & Jerrys has a strong company culture, aggressive social mission, targeted product development, and inefficient manufacturing and distribution systems. We arrived at these conclusions by analyzing these challenges in terms of culture as normative order, management as a symbolic action, and by examining the companys core values and examples of real world strategy. Our analysis is organized as follows: First, we discuss how the culture has changed and what needs to be maintained. Next, we review Ben & Jerrys

social mission and the advantages it provides. Then, we discuss how the marketing, competition, and product development can benefit from the merger and long held methods. Finally, we delve into performance improvements in the manufacturing and distribution system used by Ben & Jerrys. Ben & Jerry has built an iconoclastic corporate culture. The company environment is unconventional and innovative, and features casual dress, relaxed demeanor, flat hierarchy, open communication and a participatory management philosophy. Unique employee benefits, such as on site day care and free employee assistance program, have created a family-like atmosphere. In the product development, Ben & Jerrys is committed to producing all-natural ice cream with no artificial ingredients or preservatives. Ben & Jerrys has created a strong Vermont trademark by using Vermont diary products, and Vermont packaging and logo image. The initial public stock shares of the company were only available to Vermont residents. All of these corporate cultural norms have built a very strong brand image for Ben & Jerrys. Ben & Jerrys unique culture has contributed greatly to the companys success both internally and externally. The distinctive culture attracted employees and engendered a deep employee commitment, especially in the realm of identification and internalization (OReilly, 1989). The level of intensity and dedication among employees represented a significant competitive advantage and characterized the success of Ben & Jerrys (OReilly, 1989). The absence of hierarchy created a fertile environment for innovation (Thompson, 2003). Ben & Jerrys unconventional roots and culture have made itself a social icon, which attracts huge attention from both media and the public. Ben & Jerrys original owners favored supporting social causes, such as world peace and environmental protection. Employees were attracted to Ben & Jerrys in large part because of the companys strong culture of high community involvement. The

company actively participated and led these activities (OReilly, 1989). After the company went public in 1984, the Ben & Jerrys Foundation was established to fund community oriented projects. As the company became better known and more successful, a company mission statement was developed which touted the core values of the firm, including the social causes for which they were well known (Collins & Porras, 1996). One of the main challenges facing the company was whether the Ben & Jerrys social mission would be able to co-exist with the Unilever policies. While Unilever was invested in corporate social responsibility practices, Ben & Jerrys social mission was intertwined with their actual business model. The social mission of the company was tied into everything from their ingredients origins to their marketing efforts. The Ben & Jerrys aggressive social mission separated its brand from many of its competitors. Unilever needed to adjust the Ben & Jerrys social approach, but had to do so with great caution, lest they adversely affect the brand and the success of Ben & Jerrys. Ben & Jerrys from its beginning has always had its niche in the super premium ice cream market. With its unique mix-in flavors accounting for most of the companys success, Ben & Jerrys had little need to market its products during the companys beginning years. The result was a strong brand image that had legions of followers. Although strong in the super premium market, Ben & Jerrys has had varying degrees of success with offerings in other ice cream sectors. New flavors were primarily developed by the founders, Ben Cohen and Jerry Greenfield, without consumer input, which could have lead to poor sales with specific products. Ben & Jerrys received significant press from their social mission. As part of their core company vision (Collins & Porras, 1996), Ben & Jerrys had primarily relied on their activism and participation in social events to raise awareness of the company, but they lagged behind in traditional marketing approaches. As the company continued to grow, new products were introduced to compete in the evolving

market and new leadership was brought in to help direct the company (Goleman, 2000). Ben & Jerrys 1994 product mission was to make, distribute and sell the finest quality all-natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. The components of this statement give us insight into Ben & Jerrys organizational design and how it shaped their manufacturing processes. Ben & Jerrys dedication to producing high quality ice cream from all-natural ingredients gave their ice cream a home-made look and taste. This focus on quality resulted in a shared set of high standards for the ice cream, and workers who took great pride in the product. Ben & Jerrys dedication to producing a wide-variety of innovative flavors forced them to have a flexible manufacturing process that could accommodate frequent changes to the factory product mix. Their signature products included unconventional mix-in flavors with large chunks of ingredients that were costly (up to 1/3 more than smooth ice-cream) and particularly troublesome to manufacture. In addition, the original mission limited them to the use of Vermont dairy products. This sent a message to the consumers that they were committed to a small group of suppliers that they believed produced the highest quality product. By only using Vermont dairy products they easily had control over their supply chain of raw ingredients because of the limited number of dairy suppliers in the state. Ben & Jerrys later removed the reference to Vermont in the product mission but maintained a commitment to incorporating wholesome, natural ingredients Recommendations We propose specific action steps related to the Ben & Jerrys culture, social mission, marketing, competition, product development, manufacturing and distribution. First, we recommend that Ben & Jerrys protect the brand name, while maintaining core cultural values. Then, they should continue social activism at a local level while exercising caution in the overtly politically arena. Ben & Jerrys needs to develop products that remain

true to their roots, while using the new resources available from the merger with Unilever. Finally, Ben & Jerrys needs to adopt a Lean manufacturing and distribution platform. Based on the analysis, we recommend that Unilever should protect the Ben & Jerrys brand image, because the companys unconventional culture emerged as its biggest asset. The challenge Unilever will face is preserving the core values, while stimulating progress and adapting to the changing world (Collins and Pores, 1996). The external board of Unilever needs to understand the difference between what is negotiable and what is not open for change. Gathering information on what should be preserved may be costly and time consuming. It is highly sensible for Unilever to leverage the social mission stance that Ben & Jerrys made their name on, by supporting causes in local communities. In order to maintain this success, Unilever needs to do two things. First, as Ben & Jerrys seeks to expand, the company should support the local communities by using unique, local ingredients in their products, and sponsoring local community events. This is consistent with the social mission, while helping the company gain a foothold in new, expanding markets. Second, Unilever needs to make the social mission a point of emphasis by exploring new ingredients that are both true to Ben & Jerrys mission and provide ingenuity in a changing marketplace. For example, using all-natural sugar alternatives, such as the Stevia plant, would allow the company to stay all-natural, using a low calorie ingredient. The research necessary to accomplish this will be challenging, but is worth the expenditure. As part of a large parent company, Ben & Jerrys needs to use the resources that are available, while maintaining the existing company vision and mission. From a marketing prospective, the strongest marketing tools in Ben & Jerrys arsenal are the ice cream itself and the media coverage that the social mission brought. This social mission, as an important part of the company vision, needs to be maintained and supported by Unilever in

order to maintain the marketing edge. Product development needs to remain true to the origins of Ben & Jerrys product, specifically the mix-in flavors. The healthier products should resemble the popular mix-in flavors. Ben & Jerrys should seek out employee and consumer input during the product development stage, even though getting an efficient feedback system into place may pose logistical problems. After partnering with Good Humor-Breyers, Ben & Jerrys should use their unified resources as a competitive advantage. After the take over, Unilever discovered manufacturing and distribution processes that were very inefficient and costly, and were able to make significant improvements based on their experience running ice cream operations like Good Humor. The employees had historically been so focused on quality, that they did not know how to improve manufacturing efficiency. To gain efficiency, we recommend that Ben & Jerrys a adopt a Lean manufacturing philosophy, similar to that used by manufacturers like Toyota, to maintain high levels of quality and output at relatively low costs. From a cultural standpoint, it is likely to be successful at Ben & Jerrys because Lean typically requires a strong culture to flourish. However, Unilever management will have to change the culture at Ben & Jerrys from one that is solely focused on quality to one that is committed to efficiency without compromising quality, which will certainly be a lengthy process. Adopting Lean manufacturing will allow Unilever management to capture the passion that the Ben & Jerrys employees share for the quality of their ice cream and direct it toward improving manufacturing efficiencies and reducing waste. Participation is a key mechanism for developing a new culture (OReilly, 1989). To drive participation and capitalize on the Ben & Jerrys mission of innovation, the Unilever management should create Lean pilot programs at Ben & Jerrys manufacturing sites and use them as examples for all of the Unilever frozen dessert companies.

Works Cited Collins, J. C., & Porras, J. I. (1996, September). Building Your Company's Vision. Harvard Business Review, 65-77. Goleman, D. (2000, March). Leadership that gets results. Harvard Business Review, 78-90. O'Reilly, C. (1989). Corporations, Cultures, and Commitment: Motivation and Social Control in Organizations. Managment of Organizations: An Integrated Perspective, 925. Thompson, L. (2003). Improving the creativity of organizational work groups. Academy of Managment Executive, 17(1), 96-109.