Question

The business environment has been changing over the last few years. There has been changes towards a service economy, increased global competition, time-based competition, and the need to have total quality management. There is also the responsibility to profits, people, and the planet. Research a company which has embraced the triple bottom line based on their labor practices, community service, and sustainable environmental practices. Explain their strategies of good labor practices, community service, and sustainable environmental practices.

Answer 1

The company data researched is called "Patagonia" which provides tools for climbers. By about 1970, Patagonia was the largest climbing gear maker in the United States, but its pitons were causing damage to rock walls in natural settings, so a new technology was introduced which replaced the disfiguring pitons. It was out of this desire to no longer damage the natural climbing areas that a greater environmental awareness was born.

One of the best companies to depict the triple bottom line practice, Yvon’s (the founder) focus has been protecting the environment. His wife, Malinda, has focused on caring for Patagonia’s employees. The company’s simple mission statement reflects both:

Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.

Here’s how this statement is reflected in their products, their employees and their customers and thus the strategies as explained:

Strategy of sustainable environmental practices

Patagonia’s goal is to produce the best clothing it can while not harming the environment. It starts with the materials used.

• In 1993 they started to use fleece made from recycled plastic soda bottles.
• In 1994, they realized 25% of all toxic pesticides in farming was used in the growing of cotton. The company committed to switching to only using organic cotton in their garments by 1996. They did this even though organic cotton cost 50% to 100% more and made their clothing more expensive.
• In 2015, they found a South American wool supplier was treating their sheep inhumanely; Patagonia stopped doing business with them.
• The company also encourages customers to donate used products to a charity or sell them.

• On Black Friday in 2011, Patagonia took out a full-page ad in the New York Times with the headline, “Don’t Buy This Jacket.” In the ad, they explained the cost to the environment of making its top-selling fleece jacket and urged readers to think twice about buying it or any other piece of clothing.

  Patagonia does all it can to save the environment. In addition to switching to organic cotton and using recycled products in its manufacturing process, it has donated to environmental causes regularly from the start.

Strategy of good labor practices

From the start, the goal was to hire independent, environmentally conscious outdoors people and teach them business. Malinda was committed to treating them well:

• Work/life balance is a hallmark at the company.
• There are child care centers, now called Child Development Centers, for their employees at their headquarters and in Reno. Malinda was instrumental in opening the first center in 1985.
• Employees set their own work hours. The only parameters are the Child Development Centers close at 5 p.m. and all the employees have to be gone by 8 p.m. when the buildings are locked. Buildings are also locked on weekends.
• Since the beginning, one policy at its headquarters has been when the surf is good, workers can stop working and go surfing. They can also go for a bike ride. Field trips for rock climbing or to learn fly fishing are also options.
• Both mothers and fathers can take paid parental leave for up to 2 months.
• The company also pays 100% of employee health insurance costs.
• Employee turnover rate is low — 25% compared to the industry average of 43%. For every job opening, the company averages 900 applications.

Strategy of community services

Yvon, Malinda and Patagonia also have helped or partnered with many other organizations focused on issues supporting workers, the community and the environment. Here are just a few

• The Conservation Alliance
• The Sustainable Apparel Coalition
• The Fair Labor Association
• 1% for the Planet
• The Common Threads Initiative
• Fair Trade USA
• The Benefit Corporation
• American Sustainable Business Council

In November of 2016, Patagonia decided to give 100% of its global retail and online Black Friday sales to nonprofits working on environmental issues. They projected $2 million in sales that day. Sales totaled $10 million.

The above strategies shows their fulfillment of responsibility towards the People and Planet. As a responsibility towards the Profits, Patagonia is a great success story, but like most businesses, the company has had its ups and downs. Patagonia faced bankruptcy twice:

• In the 1970’s when they got a supply of poorly made rugby shirts from a Hong Kong factory.
• During the recession of 1991, when their line of credit dried up. They couldn’t get loans they needed and had to lay off 120 employees.
• In the past decade, Patagonia has quadrupled its profits and revenues, and today the company is debt free.

• In 2011, internal audits found Taiwanese labor brokers were actually human traffickers. They were charging workers $7,000 for jobs in factories supplying materials to Patagonia. Many workers also had to pay a monthly fee to keep their jobs. Patagonia quickly stopped doing business with the brokers.

  Patagonia’s ironclad guarantee on their products states:

  “We guarantee everything we make. If you are not satisfied with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, return it to the store you bought it from or to Patagonia for a repair, replacement or refund. Damage due to wear and tear will be repaired at a reasonable charge.”

  Their adherence to this guarantee is rigid. If a customer is not satisfied with a product at any time, they can return it. If a product wears out, the company will repair it. If a customer damages a product, Patagonia will repair it for a nominal fee.

Thus, Patagonia has embraced the triple bottom line practice in it's full form and the strategies they adopt adhere to the same.