Note: Fictitious scenario
In the clothing industry, keeping input and distribution costs under control are an important driver for financial returns. In the last few years, these costs have been rising. Profitability in the sector is under pressure.
To address profitability concerns, the board of directors of Patagonia () are considering two proposals
Proposal 1: reduce product quality by reducing the quality of inputs
Proposal 2 – maintain product quality but reduce the range of CSR initiatives it supports
The board of directors are sure, however, there may be other options.
Instructions on Assessment
An introduction to the company and its current approach to corporate responsibility and sustainability.
With reference to appropriate theory and the company, discuss the key tensions or dilemmas involved in being an ‘ethical’ company.
With reference to your answer to part (1) and part (2), assess the proposal.
Develop one further proposal that the directors should consider in light of your answers to parts 1, 2 and 3.
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