Question

1-Apply Figure 3.1 to Patagonia to determine its view of ethics. Is it in only one of the quadrants, or is it in more than one? Explain.

2-Describe how Patagonia has considered the Triple Bottom Line when exercising stewardship decisions for Patagonia.

3-In which Corporate Social Responsibility perspective would you place Patagonia? Explain.

4-Apply Figure 3.8 to illustrate Patagonia’s (Chouinard’s) commitment to corporate social responsibility.

3.1 figure on ethics

Individualism view Does a decision or behaviour promote one's long-term self-interests? Moral rights view Does a decision or behaviour maintain the fundamental rights of all humanbeing?Justice vier Utilitarian view Does a decision or behaviour do the greatest good for the most people? Does a decision or behaviour show fainess and impartiality? FIGURE 3.1 Four views of ethical behaviour.

ARTICLE

Twelve hundred Walmart buyers, a group legendary for their tough-as-nails negotiating tactics, sit in rapt attention in the company's Bentonville, Arkansas, headquarters. They're listening to a small man in a mustard-yellow corduroy sport coat lecture them on the environmental impact of Walmart's purchasing choices. When Patagonia's founder Yvon Chouinard finishes speaking, the buyers leap to their feet and applaud enthusiastically.

Such is the authenticity of Chouinard. Since 1972 he's built the company into one of the most successful outdoor clothing companies in the world, and one that is steadfastly committed to environmental sustainability. Even though he turned the CEO reins over to Casey Sheahan several years ago, it's hard to discuss Patagonia without constantly referencing Chouinard. For all practical purposes the two are one. He breathes life into the company and models the outdoorsy athleticism of Patagonia's customers. In turn, Patagonia's business practices reflect Chouinard's values and insistence on minimizing environmental impact, even at the expense of profits.

Taking Risks to Succeed

Patagonia sits at the forefront of a cozy niche: high-quality, performance-oriented outdoor clothes and gear sold at top price points. Derided as Pradagonia or Patagucci by critics, the brand is aligned with top-shelf labels like North Face and Mountain Hardware. Patagonia clothes are designed for fly fishermen, rock climbers, skiers, and surfers. The clothes are durable, comfortable, and sustainably produced, and they are not cheap.

It seems counterintuitive, almost dangerous, to market a $400 raincoat in a tight economy. But the first thing you learn about Yvon Chouinard is that he's a risk taker. The second thing you learn is that he's usually right. “Corporations are real weenies,” he says. “They are scared to death of everything. My company exists, basically, to take those risks and prove that it's a good business.”

And it is a good business. Patagonia succeeds by staying true to Chouinard's vision. “They've become the Rolls-Royce of their product category,” says Marshal Cohen, chief industry analyst with market research firm NPD Group. “When people were stepping back, and the industry became copycat, Chouinard didn't sell out, lower prices, and dilute the brand. Sometimes,” he says, “the less you do the more provocative and true of a leader you are.”

Ideal Corporate Behaviour

Chouinard is not shy about espousing the environmentalist ideals intertwined with Patagonia's business model. “It's good business to make a great product, and do it with the least amount of damage to the planet,” he says. “If Patagonia wasn't profitable or successful, we'd be an environmental organization.”

In many ways, Patagonia is just that—an environmental organization. The company publishes an online library of working documents, TheFootprint Chronicles, which is intended to help employees to make sustainability decisions in even the most mundane office scenarios. Its mission statement is to “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

Chouinard has cofounded a number of external environmental organizations, including 1% For the Planet, which secures pledges from companies to donate 1 percent of annual sales to a worldwide network of environmental causes. The name comes from Patagonia's 30-year practice of contributing 10 percent of pre-tax profits or 1 percent of sales—whichever is greater—to environmental groups each year. Whatever you do, don't call it a handout. “It's not a charity,” Chouinard flatly states. “It's a cost of doing business. We use it to support civil democracy.”

Another core value at Patagonia is providing opportunities for motivated volunteers to devote themselves to sustainability causes. Employees can leave their jobs for up to two months to volunteer full-time for the environmental cause of their choice, while continuing to receive full pay and benefits from Patagonia. Every 18 months, the company hosts the Tools for Grassroots Activists Conference, where a handful of participants is invited to engage in leadership training, much of it derived from the advocacy experiences of Patagonia management.

Growing Green

During its early growth phase Patagonia commissioned an external audit of the environmental impact of its manufacturing. Management anticipated bad news about petroleum-derived nylon and polyester. But they were shocked to learn that the production of cotton had a more negative impact on the environment—destructive soil and water pollution, adverse health consequences for fieldworkers, and the consuming of 25 percent of all toxic pesticides used in agriculture. Chouinard's response was to source organic fibres for all cotton clothing products. Company representatives went directly to organic cotton farmers, ginners, and spinners, seeking pledges from them to increase production, dust off dormant processing equipment, and do whatever it would take to line up enough raw materials to fulfill the company's promise to its customers and the environment. Ever since, all of Patagonia's cotton garments have been spun from organic cotton. Taking the credo even further, in 2011 Patagonia launched an ad campaign that somewhat tongue-in-cheek implored consumers: “Don't buy this jacket.” It went on to explain, “The environmental cost of everything we make is astonishing.”

Sustaining Momentum

Now in his late 70s, Chouinard continues to seek better ways for Patagonia to do business. “I think entrepreneurs are like juvenile delinquents who say ‘This sucks. I'll do it my own way,’” he says. “I'm an innovator because I see things and think I can make it better. So I try it. That's what entrepreneurs do.”

One of his innovations is the Common Threads initiative. Designed to minimize the number of Patagonia clothes that wind up in landfills, the program commits the company to making clothes built to last, fixing wear-and-tear items for consumers that can be repaired, and collecting and recycling worn-out fashions as efficiently and responsibly as possible. Chouinard calls it “our promise that none of our stuff ever ends up in a landfill.” Also in terms of cradle to grave manufacturing, he describes “trying to convince zipper companies to make teeth out of polyester or nylon synths, which can be recycled infinitely.” The goal is to then be able to “take a jacket and melt the whole thing down back to its original polymer to make more jackets.”

Despite his boundless enthusiasm for all things green, Chouinard, whose father was French Canadian, admits that no process is truly sustainable. “I avoid using that word as much as I can,” he says. He pauses for a moment and adds: “I keep at it, because it's the right thing to do.

Answer 1

Ans no 1

In the first look at Patagonia it appears to be a utilitarian view of ethics. It gives out a share of its profit to environment causes, allows employees to carry out initiatives. They also try to recycle their products and minimize environment impact in its operations. All these are done for the betterment of society. But if we really look at all the decisions, all are linked to profit. Chouinard believes doing good to the environment leads to profit as well. Investment in organic cotton changed the trend leading to profit in the long run. Even they don’t compromise on price for their product. Making a better product and playing the environment card, somehow they are charging high prices. So there is also an individualism view to it.

Ans no 2

Triple bottom line focuses on - profit economic value), people (social responsibility) and planet (environment).

Planet

The products of Patagonia are designed for less impact on the environment. They do everything to save the environment. From assessing their cotton manufacturing and converting to organic and also recycling product. They encourage people to buy only when they need. They also give a share of profit to environmental causes.

People

Commitment to its employees, they encourage employees to undertake social responsibilities and even pay for that period. Encourages customers to donate used product and also repairs their own products if customers damage it for a nominal charge.

Profit

They believe investing in the environment leads to profit, and indeed they have been profitable. They charge high for their products.

Ans no 3

Patagonia follows a proactive strategy in its corporate social responsibility. They actively seek to minimize environmental impact on their part be it operations, manufacturing, marketing to people management. Take the instance of cotton , they pro-activity analyzed their manufacturing and turned to organic cotton. They make clothes that last long, recycle by repairing and has less environmental impact on production. They encourage employees to take up CSR activities and also pay them for those periods. They even share part of their profit for people. In all, they are leaders in social responsibility.

Ans no 4

Chouinard’s leadership has shaped the way in Patagonia. His values of protecting the environment reflect in Patagonia's operations. They work for reducing environmental impact and even share profit for it. They make clothes for people that really need them and also encourages recycling and reuse. Standing tall in its commitment to the environment , Chouinard believes profit will follow. He has lead initiatives like common threads to share the recycles materials among various companies, encouraging people to stop throwing away their used clothes etc. so it is proactive strategy.

Also obstructionist strategy includes his charging high prices for quality and environment. Meets economic responsibility by paying their employees for their social work and also shares profit to the environmental works.