You are the President of Big Cereal, a leading manufacturer of boxed cereals.

You are the President of Big Cereal, a leading manufacturer of boxed cereals.

Over the last few years, both you and other leaders in the company have pushed the company to think outside of the cereal box and how the company can do more to address societal issues. You have developed robust hiring practices that resulted in Big Cereal having a diverse, highly motivated, and highly skilled workforce. You believe this hiring has helped both Big Cereal, the local community and society in general.

One of your rising stars, Tom Say, is a person you may not have considered prior to the change in how you recruited employees. Tom has exceptionally good business judgment and he has earned your trust. Tom came to you with an idea.

Tom serves on his local school board (one of the reasons you hired Tom is that he had deep roots in his community and was committed to giving back). As a member of the school board, he is working to improve the poor math scores of his school district. Although the poor scores result from a wide variety of issues, Tom believes he can help on one: the lack of good textbooks and learning materials.

Tom learns that math has developed a bad reputation among the students as boring, hard, and unnecessary (don’t we all carry computers with us everywhere now?). The teachers complain of boring textbooks that were written years ago and no budget for updates.

With this background, Tom came to you 18 months ago and suggested that Big Cereal should help with this math education problem.

Initially, you thought Tom was just asking for a donation. Big Cereal has donated 2% of its revenue for years and has a committee the devotes time each year to picking worthy recipients. However, Tom was thinking bigger (outside the cereal box). Tom wanted to develop a new math textbook that would make learning math more relevant, more engaging, and more fun. He also thought it could be a win-win for Big Cereal by incorporating some of its products into the textbook.

Tom had already begun working on this idea by connecting with a team of leading math professors from around the country. The team had been working on some of these ideas for years and were looking for a catalyst to get these ideas into schools. The math team agreed they get the new textbook ready for the classroom with a budget of $250,000. Tom asked you for that amount. You agreed.

It was not an overly difficult decision for you. The Board of Directors’ relatively new ESG effort had set aside $1,000,000 for ESG efforts without much clarity or direction on how to use it. You have not had the time or energy to focus on ESG as cereal sales have been falling as consumers move away from highly processed, less healthy foods. In fact, you need to get back to that as soon as you can as shareholders are demanding a return to revenue growth. You figured putting money into efforts to improve students’ math skills fit the ESG efforts. What’s not good about helping kids learn math? You did not give it too much extra thought.

Tom just reported to you on the current results of that $250,000 investment from a year and a half ago. The team has been busy. The team has already launched the textbook and tested it in five classrooms. The book is widely successful. Teachers like it. Students like it. It makes teaching and learning math more relevant and fun. Math scores have improved. Tom is exceptional at what he does.

As you learn more, you learn just how much Tom and the team have incorporated Big Cereal into the textbook. The textbook is full of examples using Big Cereal’s products and even more ground-breaking, it has a fully developed series of math problems using Big Cereal’s actual cereals. To keep with the fun theme, the textbook uses more pictures and graphics in the place of words. These pictures and graphics often incorporate Big Cereal’s products.

Big Cereal’s biggest product, both in terms of revenue and profits, is Robot Tasties. Robot Tasties is a sugar cereal that comes in the shapes and colors of five different robots. The robots all have names and back stories. The back stories have appeared on the “back” of the cereal boxes for years and most school children know the stories and can relate to them. The math team was able to use this to develop a whole series of interesting math problems. Probability: if you pick a piece out of the box what is the probability it will be Zar Robot? What are the odds of five Zar Robots in a row. Calculus: if you dump Robot Tasties into a cone of a known size, how many Robots will be in the cone? The math group is fun and clever and was able to use both the physical cereal and the Robots’ backstories to make the math interesting and fun. Every chapter is filled with math that can be tested using Robot Tasties. The consistency of this approach makes learning easier and more relevant than old textbooks did.

Tom is excited. He wants to roll this out nationwide. He proposes that Big Cereal offer the textbook and materials, mostly a lot of free Robot Tasties cereal, to schools for free. He calculates this will cost Big Cereal about $1,000 per school (the book is electronic, and the cereal is at cost), but that it’s worth about $10,000 in advertising per school. Big Cereal spent $25 million advertising Robot Tasties last year, so he thinks it’s a “no brainer” to devote at least some of that to this idea. And, that’s just Robot Tasties advertising budget, the textbook uses some of Big Cereal’s other products in the book too. Tom believes this is better than any other advertising campaign Big Cereal has and wants as much as the $25 million dollar budget as possible.

In addition to the improved math results, Tom also tested improved “cereal” results. School age children are the target market of Robot Tasties and they eat the vast majority of the product. Although the cereal has always been popular and well known, the new math textbook changed the awareness from 65% of school children knowing about the Robots to 100%. Also, given that children regularly used Robot Tasties cereal in their math activities (a big part of the reason math was more fun), they also regularly sampled the product. They liked it and their home consumption went up as well. Sales of ancillary products also went up. You sell pajamas, stuffed Robot “animals,” t-shirts, and even toy robots modeled after the cereal. You have always viewed this as additional advertising to get people to wear branded clothing and use branded products (lunch boxes, etc.), but now you’re starting to think it could be a revenue source by itself. The textbook builds on the Robot characters and adds this crazy math component (maybe a superpower?). Maybe a TV series? Maybe even a movie?

You’re impressed. As a bit of due diligence, you call the school district superintendents and principals to get some feedback. All of your calls went about how you expected and the people were glad to have been part of the test and would like to keep using the new textbook.

You pressed further and you did get consistent comments that they had heard from parents that thought the school had sold out to business. Some of the school staff also felt this way, although you had not heard that through Tom’s testing. Some of the parents felt some pressure from their children to buy Robot Tasties and did not feel it was appropriate for the school to use them in math examples.

Robot Tasties has been criticized by health professionals as not a good part of a balanced diet for children and as leading to both obesity and tooth decay. Under your leadership, you have worked to partially address this issue, by reducing the amount of sugar in the cereal and by fortifying it with vitamins. You also changed your advertising to include fruit or other healthy choices alongside of a bowl of Robot Tasties to illustrate that it’s not meant to be the only item in a breakfast. With the added vitamins, the cereal meets a lot of minimum daily vitamin requirements, but it remains a high calorie choice without much nutritional value (other than relatively empty calories and added vitamins).

How do you approach Tom’s request to roll this out on a wider scale?

Describe the ethical dilemma(s). Describe the personal values you bring to the dilemmas. Choose the corporate values you find relevant, compare them to your own, identify stakeholders whose viewpoints should be considered, and explain who should be involved in decision-making. Explain alternative solutions and their consequences. Explain your choice of action.

Big Cereal’s core values as follows:

  1. Respect for Relationship with Stakeholders
    We will respect our relationships with our stakeholders, including shareholders, investors, customers, consumers, vendors, suppliers, local communities, the larger world society and employees, and will strive to maintain relationships that are both appropriate and friendly.
  2. Engage Ethically. We will be well-informed in the regulations, rules, and compliance issues that apply to our businesses around the world. We will apply this knowledge to our conduct as responsible employees and will adhere to the highest standards of ethical conduct in all that we do.
  3. Integrity. Each of us brings to the workplace personal values which guide us to meet our commitments to customers, suppliers, colleagues, and others with whom we interact. We embrace truthfulness and trust, and we treat everyone with dignity and respect-as we wish to be treated ourselves. We are each personally accountable for the highest standards of behavior, including honesty and fairness in all aspects of our work.
  4. [Added in 2019] Social, Environmental, and Diversity Integrity. We will make the world better and are committed to enhancing social equity and environmental sustainability.

You are the President of Big Cereal, a leading manufacturer of boxed cereals.

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