Casdbury Case Analysis

Cadbury Case Analysis

Mary Grace Cortez

Master of Management (Business Management)

College of Arts and Sciences

University of the Philippines, Manila

Cadbury is a well-loved brand of chocolate in UK. Through the years, the company was able to innovate and introduce varieties of chocolate products in the market. The business was managed under a strong culture that promotes the welfare of its people, while still maintaining efficiency in its operations. The company was known for its practices that upholds positive values for the common good. Hence, it has a strong ethical reputation to the market. However, a controversy on child slavery in the cocoa bean supply chain hit the company hard and placed its reputation in a difficult situation. It was something that they did not expect to happen. The effectiveness of Cadbury’s management was in question. To understand the cause of this issue, several aspects need to be considered. This paper intends to determine the outside factors that made an impact to the company’s operations, the cultures that prevailed within the company, the lessons learned and the take away from this experience. It was noted that the company focused its energy to its internal operations, while randomly considering the outside environment as needed and on a limited scope. This approach was narrow. A comprehensive “systems-thinking” attitude is vital in management.      

Background

In September of 2000, an investigative team from Britain released a report that 90% of the cocoa crops were handled by child slaves in Cote d’ Ivoire. This was followed by the newspaper print outs on the same issue on child slavery by two reporters of the Knight-Ridder, that were published across the United States. On top of this, the protest of the group Friends of the Earth linked Cadbury to environmental degradation which was caused by Palm oil, a minor ingredient of Cadbury’s chocolates. These controversies greatly affected the strong ethical reputation of Cadbury. Cadbury was caught off guard in these controversies (Chatterjee & Elias, 2007, November 27).    

Culture prevailing within Cadbury

The Quaker beliefs of the Cadbury Family shaped the ethic of the firm. The managerial culture and strategy combined the pursuit of employee welfare with the quest for systematic organization. They value hard work. The Cadburys practiced kindness without autocracy and pursued efficiency without turning workers into living tools. The Quaker faith sanctioned the pursuit of wealth in a society where wealth was generally a means of social advancement. They naturally formed closed ties among themselves, becoming literally as a “society of friends and kinsmen”. It called for fair dealing and financial rectitude and encouraged the search for “innocent trades”. Doing good in the world, preferably in full public view, brought social status within the holy circle. For these Quakers, philanthropy became a test of religious purity. They support penal reform, and the abolition of slavery (Dellheim, 1987, February).

The Cadburys applied their religious ideals to business. The conviction that every individual must be treated with love and respect discouraged viewing labor as a commodity or a means to an end. The belief in the brotherhood of man – and the spiritual equality of woman resulted in a hatred of exploitation and a suspicion of the profit motive. It also promoted egalitarian, democratic relationships in the workplace. The Quaker abhorrence of conflict manifested itself in the belief that cooperation was the true basis of business. The custom of “taking the sense of the meeting” also encouraged the search for consensus in the factory. Business was a trust. Workers had the first claim on their employer’s benevolence (Dellheim, 1987, February).

The goods Quakers produced or sold had to be fairly priced and socially useful. They were also committed to the integrity of their products. The company sought raw materials of quality and bought much of their raw cocoa in producing regions. For them, quality meant purity. Also, a family atmosphere founded on religion and the personal touch prevailed in the firm. The traditions of the small industrial workshops of Birmingham bolstered a cooperative spirit, and labor relations were far more harmonious. For the Cadburys, the success of the firm depended partly on their personal interest in employees and the cooperation it elicited (Dellheim, 1987, February).  

Because of their religious work, they were exposed to social roles. It is through the social responsibility to inculcate moral virtues in poor people that George Cadbury realized that “the best way to improve a man’s circumstances is to raise his ideals.” However, he recognized that it was not enough to talk to a man about ideals when his home was a slum. “If I had not been brought into contact with the people in my adult class in Birmingham, and found from visiting the poor how difficult it was to lead a good life in a back street, I should probably never have built Bournville village” (Dellheim, 1987, February).  

The Bournville village provided decent quality homes in a healthy environment which could be afforded by industrial workers. It also provided a much better working environment that would not interfere with the efficiency of the business (Chatterjee & Elias, 2007, November 27).

        It was also noted in the case that the Quaker beliefs, often put Cadbury in opposition to popular opinions in England. Cadbury was concerned with social justice and human rights. This was particularly evident when George Cadbury expressed his opposition to the Anglo-Boer war. He just fulfilled the order of Queen Victoria, but did not made profit from it (Chatterjee & Elias, 2007, November 27). Also, since Quakers historically opposed slave labor in Britain and the US, he quit sourcing cocoa from Sao Tome when reports came that Sao Tome cocoa plantation owners employed slaved labor. Instead, he started sourcing cocoa materials from Ghana (Chatterjee & Elias, 2007, November 27).

Despite the strong ethical culture of the firm, they have a narrow attitude towards its environment. They were more focused on the internal operations, and were reactive to situations as needed. This was shown on their belief that social issues were probably the responsibility of the government. They did not even believed that there were social issues in the industry that must be dealt with. They also had initial ignorance on the concept of trafficking children and the ILO Convention no. 182. These were mentioned by Tony Lass, Cadbury’s Director of Global Cocoa Supplies. (Chatterjee & Elias, 2007, November 27).