Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 28

Ethics, Product Quality Green Acres, Inc., is a large U.S.-based multinational producer of canned fruits and vegetables. While Green Acres has a reputation of traditionally using only organic suppliers for its fruits and vegetables, it has recently experimented with produce from farmers known to have genetically modified crops. These genetically modified fruits and vegetables are often cheaper than their organic counterparts because farmers are able to achieve greater yields than with organic crops, and they have provided the firm with a way to cut its production costs. As Green Acres’ chief of operations, the firm’s marketing researchers have informed you that consumers continue to view Green Acres’ products as organic despite the fact that Green Acres has never placed the word organic on its product labels. Moreover, the marketing researchers have discovered that Green Acres’ sales and profits have dramatically increased due to this misperception in the wake of debates over the health and environmental consequences of genetically modified organisms.

Required Now that you know of your consumers’ misperception about your product, should you disclose your use of genetically modified crops to the public?