Hypothetical Case: GMO Beef?

The year is 2012.

In line with its strategic plan, Tesco International, Great Britain's largest grocery chain, has recently opened branches throughout the Midwest. You are on the Executive Board of this new division, Tesco-MidAmerica (Tesco-MA), responsible for making this new venture a success. In particular, you are a member of one of the following Directorates:

  • Finance and Strategy Directorate You are responsible for keeping Tesco profitable and growing. You keep the corporate books, make long-term projections about where the markets are going, set long-term goals and help keep the organization on track to meet them.
  • Corporate and Legal Affairs Directorate You are responsible for maintaining good relations with Tesco stockholders and with the public at large. Your goal is to maintain Tesco's good name and reputation, including by handling PR for any crises that come along. Also, Tesco's in-house lawyers work in your division.

  • Human Resources Directorate You are responsible for keeping Tesco's employees highly productive and happy. You hire them, train them, review them, motivate them, organize their benefits, and deal with their problems.

  • Operations Directorate You are responsible for the day-to-day management of the grocery stores. You locate and negotiate with suppliers, maintain inventories, and develop marketing campaigns to lure consumers to your stores and products.

  • Corporate Responsibility Officer You are responsible for making sure that Tesco's commitment to its Corporate Responsibility policy remains vigorous.

  • Chief Executive Officer You are the final decision-maker; you will be responsible for Tesco-MidAmerica's success or failure. [Goodwin]

You can find out more about Tesco's remarkable history and current business strategy in the "inside Tesco" section, linked from its main corporate webpage.

Everyone at Tesco is also presumed to be committed to its corporate values, laid out and documented in detail in the Corporate Responsibility section of Tesco's website.

The Operations Directorate recently received a proposal from Sane Cow Beef. Sane Cow is willing to sell its meat products to Tesco-MA at 10% below what Tesco pays its other leading beef suppliers. The meat will be guaranteed mad-cow-disease free. In exchange, Sane Cow wants a guaranteed two year contract--as a start-up company, it needs to find a reliable outlet for its products in order to secure the loans it needs to grow.

"Mad Cow Disease" (officially known as " Bovine Spongiform Encephalopathy") is a disease caused by tiny unliving particles known as prions. In humans, it causes the brain to rot: hallucinations, dementia, and eventual death.

How can Sane Cow guarantee that it's beef is completely free of mad cow disease? Sane Cow has put to commercial use a technology developed by Hematech, Inc.. Hematech has been able to genetically engineer and then clone cows which lack the gene that produces prions. These cows are immune to Mad Cow Disease. They have also been certified for human consumption by the U.S. Food & Drug Administration (FDA).

The Operations Directorate has considered Sane Cows's proposal and found it attractive. The grocery business has very narrow profit margins, so a low-cost supplier is always favored. Further, mad cow disease has been detected in US cattle. But because it involves a controversial new technology, Operations has taken the unusual step of asking the Tesco M-A's Executive Board to formally approve its choice of supplier.

Information on how Tesco has handled GMO issues in Great Britain can be found in the Corporate Responsibility section of its website, under the "Environmental Responsibility" category.

The situation in the United States may be different from that in Britain, however. If nothing else, British public opinion is much harder against GMOs than is American. You may want to consider the following information:

You may also be interested in this background report on the growing importance of ethics in biotechnology debates.

You should know, too that some have alleged that Tesco is not living up to it's ethical responsibilities. Some charges against you can be found at this website.

The Executive Board meeting will open with a brief presentation by the Operations Group, explaining their proposal. Afterwards, there will be open discussion for half an hour or more, closing with a vote that the Chief Executive Officer will take under advisement. Each Directorate should prepare for the free-flowing discussion by, among other things:

  • Considering its own point of view. Given your role in Tesco-MA, what do you think are the advantages and disadvantages of the Sane Cow proposal? How does it help fulfill or undermine Tesco's corporate values? On balance, will it contribute to Tesco-MA's success or not?
  • Developing strong reasons in support. You may have a chance to make a brief, formal statement if called upon by the CEO. But otherwise, you should expect to present your reasons conversationally, at appropriate points, as they are relevant to the discussion.
  • Developing strong reasons challenging alternative points of view. Given others' roles in Tesco-MA, what are they going to think are the advantages and disadvantages, the values and disvalues, of the Sane Cow proposal? How can you reply to their doubts and objections?
NOTE: There will be a quiz on this reading. After your group is assigned one of the above roles, the question will be: What is your group's likely opinion about the Sane Cow proposal (pro, con or neutral), and why? Your answer should be "We will say that the Sane Cow proposal should be adopted/rejected/neither because..." and give a brief argument.

To prepare for this quiz, you should write down the answers for each role (except CEO--that's me). Then you can just circle the right answer and hand it in.



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