Page 142 - Business Principles and Management

Chapter 5 • Proprietorships and Partnerships

Focus On...

Partnerships–Ben and Jerry’s Homemade, Inc.

On May 5, 1978, Ben Cohen and Jerry Greenfield formed an ice
cream parlor partnership in a renovated gas station in Burlington,
Vermont. The two former seventh-grade buddies used top-quality
ingredients and were delighted by their early success.
The business grew rapidly, but they had early concerns about get-
ting too large. When the business was small, they enjoyed working
alongside employees while making and experimenting with new
products and flavors. But as the business expanded, they began to
grow apart from their employees and felt as if they were losing the
excitement and enjoyment they had experienced during the start-up
days. Job fulfillment clearly mattered more than profits.
They tried to resist further expansion but knew the business either
had to grow or fade away. Jerry retired. Another entrepreneur, how-
ever, convinced Ben that he could serve employees and the public while
continuing to expand. With a new focus, Jerry rejoined Ben. Together
they modified the firm’s goals to expand their product line and also
improve the quality of life for their employees and all of society.
In August 2000, Ben & Jerry’s was purchased by the international
corporation Unilever. The Ben & Jerry partnership continues because
they act as spokespersons for the company they started. The principles
on which Ben and Jerry founded the company remain relevant today.
Ben & Jerry’s is still committed to its employees. The company has
achieved national recognition for developing a proud and productive
workforce.
The Ben & Jerry’s company continues to make, distribute, and sell
super-premium ice cream, sorbet, and yogurt to supermarkets, restau-
rants, and franchised and company outlets in highly populated states
and 20 foreign countries.
One important thing has not changed: Ben & Jerry’s company is
still committed to social responsibility. The Ben & Jerry’s foundation
gives away over $1 million each year to charities and to social and
environmental causes. Ben and Jerry—an unusual pair of innovative
partners—created a unique style of doing business.

Think Critically

1. At the outset, was Ben and Jerry’s business typical for a new
enterprise? Give reasons for your answer.
2. Why did Ben and Jerry want their company to remain small?
3. If the lowest-paid employee earned $15,000 a year, what
would the maximum salary be for the highest-paid manager
under the 7-to-1 rule? Why might this manager be unhappy
with this rule?
4. Determine what the company is doing today to fulfill its
social obligations. Also find out about its new products,
sales, and profits.

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