Responsibility of Companies in Protecting the Planet

The ultimate goal of Patagonia’s corporate social responsibility program is to change the idea that doing business and protecting the planet are incompatible. Since day one, CSR has been built into Patagonia’s DNA. Within business, corporate responsibility is a wide-ranging movement that encourages companies to take responsibility for the impact that their activities offer; therefore, Patagonia uses its whole company as a tool for environmental activism. The company engages in many movements to ensure that its morals are compliant with its code of conduct.

To ensure that their products are produced under safe, fair, legal, and humane working conditions, Patagonia uses CSR to help their factories find lasting solutions to improve the working conditions for each of their employees.

Translating these core philosophies into legal documents and measurable goals have been a journey. Examining their impact on their workers, the community, the environment, and their customers, Patagonia uses their environmental impact, supply chain, and CEO to ensure that no matter the assessment, the mission measures can be reliably executed.

Within these key issues, we have linked them to the OB factors of attitude development and perception, motivation, group structures and processes, and leader behavior and power. The company routinely searches for new ways to evaluate progress on their higher goals. These goals include designing their products to be durable, multifunctional, reparable, and of minimal environmental impact – goals that require participation from the entire company. The company continues to celebrate its success and focus on the fight ahead.

Since Patagonia excels in all aspects of its corporate social responsibilities, we recommend that they expand past what they already offer.

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If Patagonia expands into more programs, and skincare lines, and adds to their food line, then Patagonia will become even more successful and add to their success in the environmental impact.

Background Information

Patagonia, a clothing company that was born in the mountains of Ventura, California in 1973, was founded by entrepreneur and outdoor enthusiast, Yvon Chouinard. Growing from a small company that made tools for climbers, Patagonia is now a privately held sustainable clothing company whose heart remains in the creation of clothing and gear for outdoor sports. According to Forbes, Patagonia was worth $1 billion in the year 2017 and is continuing to grow (Forbes.com). Today, their values still reflect the minimalist style that was once promoted then, by a group of climbers.

The path that Patagonia has taken towards the design of its products demonstrates favoritism for simplicity and utility. The common fondness of Patagonia’s 2,500 employees for the native and beautiful places in the world has urged Patagonia to contribute to the fight to save them. Patagonia is determined to help reverse the steep decline that the overall environmental health of our planet is headed in.

The company’s CSR vision is composed of two main parts: environmental conservation and restoration. As stated on its website, Patagonia’s mission statement is to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” (Patagonia.com). Focusing on making the best products possible for the last thirty-plus years has allowed Patagonia to stay true to its core values and has helped create a company that each of its employees is proud to run and work for.

Overview of Management

Patagonia’s organizational structure resembles that of a functional structure, where the major functions of the firm are grouped internally. Because Patagonia is a small organization, there is no need for a more complex organizational structure. Since the company was founded, it has grown and evolved from utilizing a simple organizational structure to employing its current functional organizational structure.

The top authority in Patagonia’s organizational structure is CEO Casey Sheahan. As the organization’s leader, he is responsible for addressing problems within the organization’s functional areas and coordinating the integration of all the functional areas. Next in the hierarchical line are the company’s Vice Presidents; which include the Chief Financial Officer, the Vice President of Production, the Vice President of Marketing, and the Vice President of Product Design and Merchandising (just to name a few). These senior-level management classes are responsible for reporting to the CEO.

Patagonia’s Directors make up the next level of management, including the Director of Quality, the Director of Fabric, and the Director of Environmental Analysis. The CEO, Vice Presidents, and Directors all work closely with one another, which helps to flatten out the organizational structure of the company. The functional structure of Patagonia provides for a high level of centralization that helps to ensure integration and control over the firm’s activities and functional areas.

The leader picks the right manager and team and sets the right vision. If that’s done right, their biggest job as a leader is to get out of the way. The manager addresses how they’re climbing the mountain, keeping everyone directed at the goal, and then giving people autonomy to do their work. Their philosophy is that the manager is more of a mentor and a resource; they give you coaching and direction, they ensure the work is aligned to the highest business priorities, and they allocate resources. They give people context so they know their role, how things work, and the direction they’re headed. After that, it’s up to individuals to get work done, and they hire very independent people who do that well. environmental

Analysis

If you’ve been paying attention, you know that things aren’t going very well for the planet. It is easy to become worrisome about this topic and the one cure for worry is action. Patagonia’s reason for existence is to force the government and corporations to take action in solving our environmental problems. Over the last 35 years, Patagonia has given nearly $90 million to activist and have trained hundreds, maybe thousands of young activists to be more effective in their campaigns. Even though Patagonia has had many successes, the environment is still on a decline; therefore, Patagonia has asked itself “What more can we do?”.

Patagonia believes that the quality of their company depends, to a large degree, on whether they can reduce their impact on the environment. This means auditing the materials and methods they use to make their products, taking responsibility for the entire lifecycle of their product, and examining how they use resources at their building and facilities. Attitude development and perception are linked to Patagonia’s environmental impact because it is the intellectual process of interpreting something that we see or hear and using it later to judge and give a verdict on a situation. Some ways in which Patagonia demonstrates these include: their worn wear better than new campaign and their use of materials and technology.

Patagonia says that their worn-wear campaign is the single best thing they can do for the planet. It keeps their gear in use longer and cuts down on consumption. They say that they “make great stuff, fix it when it breaks and recycles it when you’re done with it” (Patagonia.com). Within this program, you can trade your used Patagonia gear in and either receive credit towards another garment, save and reuse by shopping for used Patagonia gear, or get your gear repaired so you don’t have to buy more when it breaks. Chouinard, says, “We promise that none of our stuff ever ends up in a landfill. Well make sure of it with a liberal repair policy and by accepting old clothing for recycling” (entrepreneur.com). This allows clothing that once sat in closets to make its way back into the field instead of the landfills.

Likewise, Patagonia uses eco-friendly materials. Their goal is to create the most sustainable fabrics without sacrificing performance. First, they start with recycled bottles. They chop them up, clean them, melt them down, and push the melted plastic into a spinneret. This process creates the actual filaments that are spun into yarn. Patagonia then takes that yarn and uses recycled fabrics. Some of the fabrics they use include hemp, organic cotton, 100% recycled down, recycled nylon, recycled polyester, recycled wool, and reclaimed cotton. To build the best product and cause no unnecessary harm, Patagonia carefully considers its use of textiles, treatments, and processes. Patagonia is constantly evaluating new materials and re-evaluating existing ones in a quest to make the best product. Environmental assessment is a key component of their strategy and drives which materials they should celebrate, which ones they should use with caution, and which materials they should avoid together.

Patagonia is pushing the supply chain to a whole new level. The definition of supply chain is a system of organizations, people, activities, information, and resources that are involved in moving a product or service from supplier to customer. With the support of social corporate responsibility, Patagonia does a very good job in the supply chain. To help customers and stakeholders learn more about the company’s global operations and suppliers, Patagonia has incorporated a link inside Patagonia.com called The Footprint Chronicles. Within this link, customers can see a map that shows Patagonia’s factories around the world. The interactive map allows viewers to click on the locations of the company’s textile mills and factories to learn more about them.

Clicking on the different locations throughout the map offers a quick list of information about Patagonia’s large-scale supply chain. The list of additional information includes how long the mill or factory has worked with Patagonia, the number of workers (including the female to male ratio), languages spoken, and what items are produced within that facility. You may ask what the benefit of this is. The answer is that Patagonia thinks about the problem from the customer’s point of view. For example, if the customer feels that the price is high for a certain product or is worried about the quality of the product, this is where Patagonia provides more information to explain the reasoning behind the price and can guarantee the quality of the garment.

Supply chain management and organizational behavior are inseparable. Organizational behavior can illustrate a lot of situations in the company’s supply chain. Patagonia indicates what they are doing about social responsibility with their supply chain. Patagonia is trying to research new materials to solve the Synthetic Microfiber Pollution. They are taking steps that go well with the company’s reference library; which not only educated customers about the various textiles the company uses, but anyone interested in more sustainable fashion can download information. Patagonia is focused on good-quality raw materials. They use organic cotton and have been working diligently to develop a new wool supply chain that reflects high and verifiable standards for both animal welfare and land management. People are more and more willing to contribute to environmental protection. Customers who want to base their product decisions on environmental or social issues have access to sustainability benchmarking data and the full traceability of Patagonia’s products.

When focusing on the OB factors of leader behavior and power in regards to having a business built on trust and ethics, it is important to have an authentic leader to make sure that their vision becomes a reality. When it came to Yvon Chouinard, he had the vision to make the environment better through better business. He wanted businesses to think about the impact that they had on the environment, rather than making a profit. That is why he chose Rose Marcario to be the new CEO of Patagonia.

Mercurio has been following Chouinard’s implementation of 1% for the environment which commits one percent of sales or ten percent of profits towards organizations that help the environment. When Chouinard found out that cotton was hurtful to the environment, Chouinard wanted to make sure that everything that was produced within Patagonia’s supply chain was changed to fulfill an environmentally safe standard. Marcario is an amazing leader because she believes that companies should look more toward the long term, rather than the short term.

When looking at the short term, it’s easy to make a profit, but it usually comes at a cost of the environment paying the price. This is where Patagonia is so successful; they constantly think about the effect of the clothing. When you go to Patagonia’s website and click on an item, you can see what the product is made of, how the product is environmentally safe, where the product comes from, and the people behind the clothing. This makes them trustworthy and it shows that they care about the end consumer as well as the environment. Not to mention that Patagonia does much more than environmentally safe sell clothing, they also run and promote other nonprofits.

One nonprofit that stood out was Grass Roots. Grass Roots is a company that’s mission is “Advancing the human rights to land, water, and food through global grantmaking, building solidarity across organizations and movements, and advocacy in the US” (Grass Roots). What makes grassroots stand out is that Marcario decided to donate 100% of sales on Black Friday 2016. She states that the reason she decided to do this would be that “During a difficult and divisive time, we felt it was important to go further and connect more of our customers… If we don’t act boldly, severe changes in climate, water, and air pollution, extinction of species, and erosion of topsoil are certain outcomes. The threats facing our planet affect people of every political stripe, of every demographic, in every part of the country. We all stand to benefit from a healthy environment—and our children and grandchildren do, too” (Patagonia.com).

This is simply one thing that shows that Marcario is a good leader. She identifies the problem, finds a solution, shows the plan of action, and then has an outcome of her vision. In 2016, this nonprofit motivated people to shop on Black Friday to help Patagonia get money to be able to donate 100% of it. Marcario continues to shake the market because she acts on her beliefs. She even sued the president for wanting to destroy half of the protected land in Bears Ears and Grand Staircase-Escalante in Utah. When asked about the motive Mercado said “This is not about marketing, this is about defending our core values” (Washington Post). This proves that she cares about Patagonia’s mission and with this passion, people are inclined to shop at Patagonia because of how conscious they are about the environment

Recommendations and Conclusion

In the beginning, Patagonia was a fairly small company that devoted its time and money to the progressively evident environmental crisis. Upon further research, it is obvious that Patagonia’s mission statement does not fully show the passionate breadth and depth at which the company’s core values are portrayed within everything Patagonia does. The company’s loyalty to the environment allows Patagonia to go above and beyond what is required. Chouinard, says “If Patagonia wasn’t profitable or successful, we’d be an environmental organization” (entrepreneur.com) – which shows his passion.

As a group, we believe that Patagonia can expand even more as a company and engage in something that is beyond what they already offer. Since Patagonia has such a strong supply chain, we recommend that Patagonia offers its expertise to entrepreneurs that are just starting in the business and need guidance. In addition, we think that it would be beneficial for Patagonia to create a self-care product line including personal hygiene products and team together with healthy alternative snack companies. Adding these additions to the company would allow Patagonia to use its favoritism for simplicity and utility to create an everyday product of minimalist style.

For small, up-and-coming businesses, it may be hard to think about the supply chain. This may cause them to over-purchase or purchase materials that are bad for the environment. Since Patagonia has a supply chain that is both, environmentally friendly as well as sustainable, we recommend that Patagonia starts a program called Start Fresh. Start Fresh would be a program where Patagonia would help new, small businesses by recommending parts of their supply chain. This would help these small businesses be able to focus more on their brand than worrying about the supply chain. Moreover, it would add another thing to Patagonia’s environmental impact since they would be helping businesses limit their material purchase.

One of Patagonia’s competitors, Lululemon, has recently launched its skincare line called Lululemon Self Care. The Lululemon Self Care line includes deodorant, dry shampoo, cleanser, moisturizer, and balm. With Lululemon’s target market of individuals who participate in yoga and indoor activities, we believe that Patagonia can create a product line for their target market – outdoor enthusiasts. Today, the United States leads the world in revenue for cosmetic and personal care products (Heiser), which is why we believe Patagonia should indulge within the beauty space. Patagonia’s skincare line can reflect their environmentally safe products and include aluminum-free, all-natural deodorant, all-natural bug repellent, and all-natural sunscreen – everything you’d need in your hiking bag for a post outdoor activity.

Since the majority of the companies today see themselves as a lifestyle brand, we believe Patagonia shouldn’t stop at the Start Fresh program and the skincare line. We think that Patagonia should expand their food line a little more a join together with Clif Bar. Chouinard says, “The tradition and culture of food have always been important to us at Patagonia. On our many travels, the meals become a vital part of the experience. What we eat does more than just fill our stomachs and nourish our bodies; good food lifts our spirits and helps us understand the world a little better” (Patagonia Provisions). Since Clif Bar is passionate about food, we believe they share the same values as Patagonia Provisions. Clif creates “Food that feeds and inspires the adventure in all of us. Whether you’re going on a hike, hitting the slopes, or competing in a triathlon, our recipes are purposefully crafted to help provide the energy you need” (CLIF).

When a company achieves a certain level of success, there are many benefits of expanding what its business already offers. Companies are always seeking growth and aspire to the success of the expansion. After researching and learning about Patagonia and its corporate social responsibilities, we stick to our belief that if Patagonia expands into more programs, and skincare lines, and adds to its food line, then Patagonia will become even more successful and add to its success in the environmental impact.