Danone Organisational Behaviour Scenario

In February 2016, Emmanuel Faber, chief executive of Danone, put a radical proposal to the French food multinational’s senior US executives at a meeting in White Plains, New York.Against the grain of agricultural production in the US, where the vast majority is genetically modified, Mr Faber proposed shifting about half Danone’s products — representing some $1bn of yoghurt sales — to non-GMO ingredients. He argued that this was an important change that would improve soil health and biodiversity.

The reaction from Mr Faber’s lieutenants was immediate: impossible. One said it could only happen if the group imported the non-GMO feed for dairy cattle from Russia. As they went to work, though, the executives started to change their gloomy prognosis about how long such a shift would take.

“Three weeks later, it was 10 years. Two months later, it was five years. Finally, it was two years — and we did it in two years,” says Mr Faber, in an interview at the group’s Paris headquarters.

The pledge triggered vocal protests from some US farm and dairy groups. It did not harm sales. Despite a price rise, the children’s yoghurt brand Danimals, now certified as containing only nonGMO ingredients, has increased its US market share from 30 to 40 per cent.

Danone’s shift on GMO might be dismissed by some as a marketing gimmick and criticised by others as an exercise in managerial self-indulgence. But it is one sign of a powerful shift in the way that large companies think about their purpose and their responsibilities — and an example of the challenges companies face in managing that shift…………………………………….Coursework question

  1. From the case study information on Danone, and material covered in class, identify which organisational structure would be most effective for Danone and why? 10 marks
  2. Using theories covered in class, identify reasons why Danone first faced resistance to change when implementing their new proposal, and explain how the culture within an organisation can help or hinder this. 30 marks
  3. Taking into considerations the current business environment, what are the implications of Friedman’s (1970) statement that “the social responsibility of business is to increase its profits”? Build on the provided article and use relevant theories to support your arguments. 30 marks
  4. Provide some criticism of the stakeholder approach to CSR and explain how it is impacting organisations such as Danone and Natura & Co. covered in the case study 30 marks