Case 1 – Ben and Jerry’s

Objectives:

 Consider different possible corporate objectives

 Illustrate potential tensions across different stakeholders

 Understand the separation of ownership and control, and

the implications of corporate takeovers for sustainable
corporate objectives
 Case Analysis: A General Rubric
Assess the situation:
1. Role: Who are we? [in this case]
2. Issue: Why are we here?
3. Stakeholders: Who are they, what are their interests?
4. Alternatives: What could we possibly do?
5. Decision criteria: What are the main objectives/goals/priorities? [What matters?]
Analysis:
 Weigh the alternatives, against the criteria
 Quantitative and/or qualitative
Decision and implementation:
6. What would you recommend we do? [Why? What are the risks?]
7. How would you implement your recommendation?
 Ben and Jerry’s:
Assessing the situation

Who are we?

Why are we here?

Who are the stakeholders? What are their interests?

 Ben and Jerry’s:
Assessing the situation

Alternatives: What could we possibly do?

Decision criteria: To choose between alternatives, what

matters?
 What are the stated objectives in BJ’s Mission Statement?

 How successful have they been at meeting these objectives?

 Might the Mission Statement objectives conflict?

 Examples where economic and social might conflict:




 Should B&J’s have a priority structure for their objectives?

 How would an “excessive” social focus, or an unfocused

management team, affect the firm’s financial health?

 In general, what “governance” mechanisms exist to discipline

management?
 “internal” governance mechanisms?
 “external” governance mechanisms?

 How might a firm defend against takeovers, and help prioritize

their non-economic objectives?
 What anti-takeover devices are in place at B&J’s?
What are their implications?

Implications?
 Analysis and Decision:
Analysis: weighing the alternatives against the criteria
 How does each offer fit with B&J’s mission statement objectives,
and any other criteria you [Henry] would consider?

Decision and Implementation:

 What would you recommend? [Why - what decision criteria would
you use?]
 What are the risks associated with your recommendation?

 How would you suggest B&J’s proceed/implement the

recommendation?
 Epilogue
 The board continued to debate for two months
 Unilever’s offer climbed to $43 (others to $38)

 April 2000, accepted Unilever’s offer, with provisions:

 Independent unit; continue to buy dairy inputs in Vermont;

donate 7.5% to charity

 Odak manages unit; Cohen and Greenfield manage brand and

social agenda
 Cohen obtains $5 million venture-capital fund for low-income

communities
 “fun fact”: Deal announced on same day Unilever announced
another take-over: slim-fast!
 November 2000, Odak replaced (against the wishes of Cohen and
Greenfield)
 social agenda trimmed

 unit restructured: plant closures in Vermont (expansion in

Europe)