Week 8 Final Paper for LDR-5230-OL1: Leadership Ethics
The Kellogg’s Company – Who We Are
In America, between the mid-19th century and early-20th century there were many advances and changes occurring throughout all industries. Transportation was beginning to advance with new inventors shaping the way we commute across town and the country. New communication technology allowed for messages and information to be sent across the distances nearly instantly. The medical industry also began to reform and change healthcare in America. One company that emerged from the early-healthcare reform efforts was the Kellogg Company.
The Kellogg Company was born after two brothers, William Keith Kellogg and Dr. John Harvey Kellogg, created a new corn flake cereal for patients at the Battle Creek Sanitarium. Dr. John Harvey Kellogg based the nutritional needs for his patients from the health principles advocated by the Seventh-Day Adventist Church (Battle Creek Sanitarium, 2020). After perfecting the cereal, it was made available to the general population in Battle Creek. Michigan, where it competed against forty-two other cereal products. The Kellogg Corn Flake cereal gained a competitive edge in the U.S. market’s, and opened its first foreign cereal facility in 1914 in Canada (Kellogg Company, 2016). The Kellogg Company continued to grow and is now is a household name that offers a variety of food brands and products which are recognized throughout the United States and in many countries throughout the world.
Maintaining and building upon the successes of the past century requires a well-rounded vision. The Kellogg Company’s values (K Values) ensure that everyone stays on an ethical path to success. The K Values that keep everything aligned are:
· Integrity: We Act with Integrity and Show Respect
· Accountability: We Are All Accountable
· Passion: We Are Passionate About Our Business, Our Brands and Our Food
· Simplicity: We Strive for Simplicity
· Results: We Love Success (Kellogg Company, 2019)
The K Values also lay the blueprint for the Global Code of Ethical Principles which will be discussed in the next section.
The Global Code of Ethical Principles
The Kellogg Global Code of Ethical Principles took decades to be perfected. As the company expanded internationally the need to maintain streamlined codes that could be applied to all areas where the company operated was a necessary. The current Kellogg Global Code of Ethical Principles is outlined below:
· Our People: We act with integrity. We treat each other with fairness and respect.
· Our Consumers: We delight out consumers with safe, high-quality, great-tasting foods.
· Our Marketplace: We compete vigorously and with integrity. We partner with those who demonstrate our values.
· Our Investors: We are a preferred investment because we deliver the present while creating the future.
· Our Communities: We use natural resources responsibly and support our communities (Kellogg Company, 2013, p. 2).
Additionally, I’m purposing to modify the current code of ethical principles to include:
· Our Species: We are responsible and take accountability by ensuring our products promote the long-term health of our species and its habitat.
The addition of the Our Species code would simply add to the importance of the other codes, as well as keeping up with general findings throughout the world on agricultural and ecological related issues. (In a way it will tie all the other ethical codes together.) It will also serve as a reminder to not intertwine political or socio-corporate influence on decisions, and to concentrate on the quality of agricultural practices and food products being manufactured. While Kellogg has been taking steps to advance sustainable agriculture, there are still many findings that are indicating the use of agricultural chemicals and genetically modified organisms (GMOs) are not creating an environment that will not positively benefit the human species and its environment for a sustained long period of time.
To create its products the Kellogg Company has operations dealing with agriculture production, manufacturing, and retail. Since it is essentially a food product company the heart of the operations revolves around the agricultural sourcing and its food product brands. Kellogg sources food from numerous countries around the world. In Mexico there is currently only one location where Kellogg sources corn (Kellogg Company, 2019). While its reach into Mexico is on a smaller scale it can serve as an example, as to what has been occurring globally throughout the agriculture and food industries. Mexico has taken many steps to limiting or banning GMOs and agricultural chemicals throughout the country. To show how dedicated Mexico is to limiting the use of these products, it even appointed Elena Álvarez-Buylla to science minister, and she opposes the use of transgenic crops (Wade, 2018). Transgenic crops even include MON810, which is a Bt-transgenic maize (Bt-corn) plant. The stated benefit of the Bt-corn is that it needs less applications of agriculture chemicals; however, so far many scientists aren’t seeing a benefit to this GMO variety, also long-term research on the effects to the environment and humans is lacking. This particular corn is banned in several other countries, including Germany where researchers have found a lower survival rate of animals fed genetically modified (GM) maize (Bøhn, Primicerio, & Traavik, 2012).
The concerns about the global food supply, agricultural practices, and the environment go far beyond issues related to corn. In the Yucatán Peninsula area of Mexico, Maya beekeepers have been in an ongoing battle to keep their bee colonies healthy and to produce organic quality honey. According to the beekeepers, large-scale agriculture and the genetically modified soy, also called transgenic, planted by the Mennonites is killing their hives and contaminating the supply of honey with pesticides. In 2012, the beekeepers sued the government and won – resulting in a supreme court ban on transgenic soybeans four years ago (Strochlic, 2019). The court cases regarding GMOs continued in Mexico, and in 2015 Monsanto’s permit to sell GM soy in three states was suspended; however, in 2016 inspections revealed that GM soybeans were still being planted. Global issues like the ones just mentioned are important, and the Kellogg Company must stay knowledgeable on new scientific and legal findings.
To stay abreast on current information and trends it is necessary to add the additional global ethical code, Our Species. The other Global Code of Ethics Principles are excellent at creating a foundation for an ethical corporate culture; however, a slight change in rational thinking needs to be done at the corporate level to fully show that the Kellogg Company is dedicated to social responsibility at the corporate level. The five original ethical codes, Our People, Our Consumers, Our Marketplace, Our Investors, and Our Communities form a corporate blanket of integrity and responsibility for all the corporate stakeholders. The one piece missing to this puzzle is an ethical code ensuring that decisions are being made that are current to new findings and evidence, and that will help keep the human population and its environment flourishing.
The Code and Me – How to Overcome Challenges
Without the suggested code of Our Species I could foresee personal issues with accepting that the Kellogg Company is truly working in an ethical way and ensuring that the food products it sells are safe and of the highest quality. It’s important for an organization to not just say they are working in an ethical manner, but to do it from the ground up. If I was in a role at the Kellogg Company and they asked for me to promote the safety of the sourced food, I would first research the areas where the food is sourced from. Continuing with the Mexico example, if it is corn sourced from Mexico, I would want to ensure that there aren’t any legal issues going on around the area regarding the illegal use of banned GMO corn varieties, or the overuse of agricultural chemicals. If the food was sourced domestically in the United States, then I might have an issue with agreeing to promote its safety, since the regulations on the use of GMO crops and chemicals is less restrictive. While many farmers have changed to non-GMO crops and are testing other means of pest and weed control, most large-scale commercial farmers do use GMOs, and sometimes have been noted for overuse of chemicals.
Aside from the studies that I’ve read, I have personal stories of family members who were farmers and had medical conditions arise that other scientific studies say are linked to agricultural chemical exposure. Additionally, the United States Government has admitted that the chemical glyphosate can cause non-Hopkins lymphoma and other issues with humans, animals, and the environment. This topic I became fully aware of when the United States Government and the Pentagon sent a letter admitting it can cause cancer in humans after my Mother’s husband was diagnosed in 2004 after being exposed to it in during the Vietnam War and the Desert Storm Conflict. He had received a letter from the United States stating there was a link between agricultural chemicals used in war and non-Hopkins lymphoma in service members and civilians in areas where it was used. The effects of the exposure are often seen years or decades after significant exposure or routine exposure. If I would want to act with integrity and make the best decisions for the stakeholders of the organization, I couldn’t agree to promote the safety of the food that was sourced unless it was certified and known to be GMO free and/or organically grown. I would stay true to what working in an ethical manner means and educate others in the company about the newest findings, so an ethical action plan could be created.
Guide to Making Ethical Decisions
Since new studies are finding that the risk of developing cancer when exposed to glyphosate could increase as much as forty-one percent, then making ethical decisions throughout the organization is imperative if Kellogg wants to be truly acting ethically (Dixon, 2019). A guide to making ethical decisions must be put into place, and if one currently exists it must be adjusted to meet the ongoing changes facing the agriculture and food industry the 21st century.
One ethical decision-making model that I am suggesting is the Six-Step Decision-Making Model, with one added step. The six steps to this decision-making model are the following:
1. Identify the Ethical Dilemma or Problem
2. Collect Information
3. State the Options
4. Apply the Ethical Principles to the Options
5. Make the Decision
6. Implement the Decision (Beemsterboer, 2020)
The one step I would add to the Six-Step Decision-Making model is:
7. Review the Results, Adjust the Process as Needed
Implementing this decision-making model should be relatively simple. Prior to deciding on any change to the organization’s operations, or even before implanting a new marketing campaign, the steps to the decision-making process should be followed. Following is an example of where the decision-making process could potentially be used.
On the Kellogg website entitled Open for Breakfast there is a Q&A section asking, why are GMOs in your products (Kellogg Company, 2019)? The answer to this question might need to be updated due to some of the research and legal matters circulating around the world regarding safety of GMOs. In the current answer viewable to the public it references that GMOs are safe according to a study that was conducted in 2011; however, other more recent studies and meta-analysis’ have found information to the contrary. To use the decision-making model the team responsible for making the decision should gather and review evidence (scientific studies, legal cases, governmental bans, etc.) from the United States and abroad. After reviewing the information, they then should make a list of options or changes they could make to show they are staying current on new information. Then apply what they have learned and the options they have made against the Global Code of Ethics Principles, including the additional one, Our Species. From this they then can find the most ethical option and decide how to begin implanting it. If during a review they find that the option is working as expected, or if they receive feedback of a more ethical way, they should then reevaluate the process to see if another change is necessary. What was just provided was one simple change to a single Q&A that considers an important worldwide topic; however, this research and evaluation method can be used on anything the Kellogg Company wishes to address.
Stakeholders and Ethics
There are internal and external stakeholders for the Kellogg Company. Internal stakeholders have a direct connection to the company from within, for example, investors, board of directors, management, and employees. While external stakeholders do business with the company or are affected by the company’s operations. Examples include, consumers, investors, suppliers, the community, and the government.
The internal stakeholders are the key players in ensuring that the company is operating ethically. At the top, the senior management and board of directors might contribute to and approve of the organizational values, and code of ethics. All the internal stakeholders must have knowledge of the organizational values, mission, and code of ethics. It will be the responsibility of all company employees, including the board of directors, to set an example and adhere to the values and the code of ethics. This might also include their personal code of ethics, and how they act outside the organization. If they are not ethical outside of the workplace, and even committing criminal acts, then they should be reevaluated. It’s also important to note that the internal stakeholder might make decisions on who the external stakeholder is, for example the suppliers. Since you want the organization viewed as ethical from all angles, this mean that you would want an ethical employee or manager responsible for finding and ethical supplier. Finally, it’s every employees responsibility to ensure that no confidential information leaks that might lead to insider trading.
The external stakeholders are key in making sure the organization is operating within acceptable standards within the community where they are located. For example, the government makes regulations and ordinances that the organization must follow. The company also needs to be welcomed and seen as an asset to the community to gain its trust and business. This means that the organization might participate in volunteer work within the community or donate supplies to local non-profit organizations. The organization then will want to treat all consumers with dignity and respect while offering high quality customer service. If a problem arises with a consumer, it will be the responsibility of the proper employee to address the concerns and alleviate the issue.
Yes, Organizational Culture Effects the Ethics Program
Organizations are an invention of humans, and since it’s a human invention ran by humans our behaviors do influence how the organization is operating, what its culture is, and if it’s an ethical organization or not. So, what does this mean? It means that, yes organizational culture effects the ethics program. If the organizational culture of an organization is unethical and weak then it can be difficult to implement and adhere to an organizational ethics program. The organization might be operating in an unethical manner and viewed as weak, due to hiring employees that don’t follow high ethics and morals personally, or by having an inattentive management and leadership team that is either lacking high personal ethical values or is under-trained.
Therefore, for the ethics program to be implemented properly the organization needs to have a strong ethical culture. This strong culture must be found throughout the organization. The management and leadership team must be familiar with the organization’s values, mission, and code of ethics. They must also be of a higher moral caliber that is non-biased and hold integrity as a key part of their ethical leadership standards. Having these qualities will help them pick the best ethical candidates for any employment position within the organization. Once all the ethical people with proper experience and education are hired throughout the organization the implantation of the ethics program should be a relatively smooth process. This will be because the organizational culture will be strong and ethical throughout all departments. If one or two people end up not being as ethical as they were thought to have been the overall effect on the company shouldn’t be as substantial and the deviation from the ethics program would be minimal, and realigning the organizational culture, should be simple.
Conquering Global Risks as a Leader
Having a company that operates internationally can be difficult. There are numerous risks that can be foreseen, and many that can’t be. Some basic normal risks are centered on geopolitical topics, such as warfare and regulations, fluctuations in the market, foreign competition, and domestic backlash from increasing international outsourcing. As a leader at the Kellogg Company I would address these topics the following ways: (Please keep in mind this is not a full analysis of my response, but merely a brief condensed version.)
Geopolitical Topics: Hire experts on the specific foreign country, including attorneys. Interview and survey the general population that does and doesn’t use the Kellogg products for feedback. Cease operating in countries where the risk to harm of workers is too high due to warfare or other conflicts. Adhere to the regulations of the foreign government, and do not encourage farmers to plant banned crops.
Fluctuations in the Market: Hire a team to monitor the market. Seek advice if the operations need adjusted, or if the country where food is sourced needs changed. For example, if the market is down in the U.S. but the crops could be good, should more products be sourced domestically vs. internationally? Cease operations or decrease presence in countries where there might not be demand for the Kellogg products, if marketing analysis foresees no change in market share after a new campaign.
Foreign Competition: Evaluate the foreign competitors’ foods. Reexamine the local cultures and customs of the region or country. Redesign the marketing campaign to make the product more appealing to the local population of the region. If it is found that a specific product isn’t to the tastes of the local region, invent a product that is more inline with their tastes if it could be profitable. If not then decrease the stores the product is in, and market it as a specialty item.
Domestic Backlash from Increasing International Outsourcing: Reexam the supply chain, and current areas where food products are sourced from. Attempt to find areas domestically that can cover the North American product demand. Create an educational campaign on the cost and environmental benefits of decreased transportation of goods. Source food products closer to where the food will be manufactured, and ultimately sold. Essentially every continent with a high amount of product sales will have its own operations of sourcing, manufacturing, and then retail sales. Have a trained public relations team that can respond in the time of a crisis, who has kept up on all the social and geopolitical occurrences to know where the backlash is coming from.
Implementing Ethics – A Training Plan of All Stakeholders
A good training plan is essential for an organization, so everyone knows what is going on and what is expected of them. For internal stakeholders, general training sessions will be held semi-annually unless important changes are implemented either internally or externally. Additionally, upon hire all new employees will undergo a week of extensive classroom training, followed by a week of one-on-one training with a seasoned employee, and the third week will be when the new employee will be allowed to start working independently with a mentor or coach assigned to them if they need help. The mentor or coaching program will last approximately three to five weeks depending on the employment position. After which the employee will be evaluated, and then reeducated on any weak areas, especially those that might lead to behavior or choices that are unethical.
Training for external stakeholders will be less intense, and not always optional. All suppliers will be required to become familiar with and know the values, mission, and code of ethics of the Kellogg company. They will then be asked to sign a form where they agree to abide by the values and code of ethics as an external representative of the company. Furthermore, they will also be educated on any changes to the company’s polices or practices. To educate the community Kellogg’s will hold annual informational sessions where the general population will be able to come and learn about the company. They will also be provided with information regarding its values, mission statement, and code of ethics. This information will also be available online for them to view anytime. During the informational sessions the general population will be encouraged to ask questions during a Q&A session. Finally, the investors will be provided quarterly and end of year income and earnings reports. They also will be invited to participate in a semi-annual investor stakeholder meeting where the findings, and future predictions and plans will be addressed in depth. The information regarding the earning reports and what was discussed at the investor’s meetings will be available on company’s website.
References
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Bøhn, T., Primicerio, R., & Traavik, T. (2012). The German ban on GM maize MON810: scientifically justified or unjustified. Environmental Sciences Europe, 24. Retrieved February 25, 2020, from https://enveurope.springeropen.com/articles/10.1186/2190-4715-24-22
Dixon, E. (2019, February 15). Common weed killer glyphosate increases cancer risk by 41%, study says. Retrieved February 25, 2020, from CNN Health: https://www.cnn.com/2019/02/14/health/us-glyphosate-cancer-study-scli-intl/index.html
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Wade, L. (2018, October 4). Mexico’s new science minister is a plant biologist who opposes transgenic crops. Science. Retrieved February 25, 2020, from https://www.sciencemag.org/news/2018/10/mexico-s-new-science-minister-plant-biologist-who-opposes-transgenic-crops
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