Subject category:
Economics, Politics and Business Environment
Published by:
International Institute for Management Development (IMD)
Version: 28.04.2003
Length: 14 pages
Data source: Field research
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Abstract
Over the 1990s environmental problems, particularly ground water pollution, and the outbreaks of animal diseases (swine fever, mad cow disease, foot and mouth disease) created public and political concern. The Dutch ministry for agriculture introduced corrective regulatory measures that lead to an increase in farmers'' production costs. The additional cost could not be compensated by higher proceeds since retailers were dictating the prices and European Union support prices were decreasing according to the latest policy reforms. Rabobank is an internationally operating Dutch co-operative bank with a traditionally strong position among Dutch farmers. It faces the challenge of ensuring the long-term viability of this customer segment. Organic farming is a possible solution because demand from the consumer is currently strong. Initial efforts availed? An organic pig farming agreement, which is to be put into practice shortly, and pig farmers willing to switch from conventional to organic breeding methods are needed, but farmers are resistant to change. The bank''s senior management, the local bank managers and, most importantly, the bank''s advisors who directly deal with farmers are also reticent. A new division for sustainability and social innovation, created in January 2001, faces the task of promoting sustainability, and therefore either more sustainable or organic farming. What is the bank''s role in this situation? How can it leverage change on its own? With whom could it form alliances and how?
Location:
Industry:
Size:
54,000 employees
Other setting(s):
October 2001
About
Abstract
Over the 1990s environmental problems, particularly ground water pollution, and the outbreaks of animal diseases (swine fever, mad cow disease, foot and mouth disease) created public and political concern. The Dutch ministry for agriculture introduced corrective regulatory measures that lead to an increase in farmers'' production costs. The additional cost could not be compensated by higher proceeds since retailers were dictating the prices and European Union support prices were decreasing according to the latest policy reforms. Rabobank is an internationally operating Dutch co-operative bank with a traditionally strong position among Dutch farmers. It faces the challenge of ensuring the long-term viability of this customer segment. Organic farming is a possible solution because demand from the consumer is currently strong. Initial efforts availed? An organic pig farming agreement, which is to be put into practice shortly, and pig farmers willing to switch from conventional to organic breeding methods are needed, but farmers are resistant to change. The bank''s senior management, the local bank managers and, most importantly, the bank''s advisors who directly deal with farmers are also reticent. A new division for sustainability and social innovation, created in January 2001, faces the task of promoting sustainability, and therefore either more sustainable or organic farming. What is the bank''s role in this situation? How can it leverage change on its own? With whom could it form alliances and how?
Settings
Location:
Industry:
Size:
54,000 employees
Other setting(s):
October 2001