Update (5/18/16): Just announced, a refined version of the case study discussed below, and first taught at UO, took home first place in the corporate sustainability track of the 2016 Oikos Case Writing Competition.
Growth is a good thing for any up-and-coming company, but it also presents its own set of challenges. When the company also has a deeply rooted commitment to socially responsible business, those challenges take on an extra dimension. Lundquist Professor of Sustainable Management Michael Russo and Avamere Professor of Practice Michael Crooke examined just such a challenge in a teaching case study based on the recent experiences of yerba maté beverage manufacturer Guayakí.
Known for its line of energy drinks popular with college-aged students, as well as its commitment to rain forest restoration and creating living-wage jobs, Guayakí had $26 million in sales in 2014. As sales continued to grow, it was essential that the company find a stable supply of maté—the key ingredient of its beverages—at predictable prices while respecting and even expanding its social mission.
Company management saw three options: to continue acquiring maté from a patchwork of indigenous suppliers; to buy their own land, reforest it, and begin growing their own maté; or to partner with a regional landowner. Oregon MBA students had the opportunity to parse the benefits and downsides of each of these options when Russo presented a draft-in-progress of the case in his sustainable business development course. For Russo, the case offers an intriguingly complex set of issues that touch on the interests of students in the college’s entrepreneurship, sustainability, and finance tracks.
“The students are faced with different possibilities, none of which are perfect and all of which include these difficult but compelling tradeoffs between the purely economic interests of Guayakí and its social responsibility and environmental stewardship,” said Russo.
“To make matters more challenging, the company has to appreciate how to reduce those tradeoffs by promoting social and environmental programs that support its business strategy,” he added.
What was it like for the MBAs to play a role in the development of a teaching case that may end up in thousands of business school classrooms in the United States and beyond? According to Sonya Carlson, MBA/MPA '17, the experience was eye-opening.
"I learned that the process of creating a compelling teaching case is a balance between providing the basic facts needed to make a rational and well-reasoned strategy and telling a story that engages readers while not giving away the outcome the company ultimately chose to pursue," said Carlson.
Having a Guayakí executive—“Chairman of the Gourd” Chris Mann—in attendance during the case presentation made the experience especially meaningful for Crooke, Russo, and the students.
This June, Russo and Crooke will use the MBAs' feedback and their own work to further develop the case and write teaching notes. It won't be long until the finished case and an accompanying interactive video will be available for use at business schools all over the world, giving more students a chance to try their hands at balancing a company’s social goals with its longterm financial health.