At the centre stage of Patagonia Company stands its most valuable pillar and founder, Yvon Chouinard. Yvon saves is a man believed to be saving the world, one fleece jacket at a go. Being a climber, surfer, am entrepreneur, an environmentalists and a known philanthropist, he certainly stands out as one of the few business men who attained success based on his own terms of doing business. Based on his tender age experience as a climber, Yvon realized that he was capable of making more environmentally safe, cheap and effective climbing equipment than what was available in the market. Patagonia, the company that he formed makes exceptional gear as a market leader in the same with worldwide sales soaring above 240 million US dollars annually! Chouinard leadership at Patagonia has basically been a fearless one which has enabled the company to uphold innovation in its corporate practice as well as embracing new changes like when it switched to the use of organically grown cotton as well as other forms of recycled materials alone in its production process. His fearless qualities have also ensured that the company can manage to give away a small percentage of its annual gross sales to the other small scale works that are not profit oriented and maintain the profitability of the company. In “Let my people go surfing”, Yvon shows how by keeping the determined spirit of an explorer, one can blend work, play and social duty and remain successful. Through his easy leadership, Yvon has managed to curve a reputation of unsurpassed quality, long term environmental strategies and a maverick innovation plan in the company. Even the face of the challenging business world, Yvon is still into surfing and generally adventure but surprisingly maintains record success in his business.
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One of Yvon’s philosophies is that “You have to be true to yourself; you have to know your strengths and limitations and live within your means” (Chouinard, 2005). Yvon says that though he tried to look at herself just like a climber, surfer and blacksmith, he had to accept that he was also a businessman and was going to remain one for a long time probably. He however decided that if he was to stay in business, he was going to operate not by the normal rules of business but by his own terms, be serious but make his work enjoyable on a daily basis. He also realized that the terms under which he was going to operate were suppose to allow him and his employees climb one stair of their progress one at a time, allow enough freedom for their employees to dress the way they want, even bare foot if it would make them happy! And create some spare time for him to surf the waves, sky the powder or take care of issues at home. In other words he cultivated a culture in Patagonia where there was distinction between the family, the work someone did and play. Even though the company profits grew from 20 million dollars to 100 million dollars between the 1980s and 1990, he and his wife Melinda kept all the money in the business (Chouinard, 2005). The growth in the company just excited everybody and they never failed to do what they could to maintain that level of growth. Upward vertical mobility was very real since even new employees in lower paying jobs like in the warehouse or retail stores had the opportunity and indeed rose to better paying positions in the company. Yvon established a fast-growing organization which in turn helped with outsourcing of the skilled labor that they needed. Despite the growth, Patagonia staff members still managed to keep their own cultural practices. People surfed at lunch hour; they played volleyball on the sand behind the building.
When it came to the realization of Yvon, that Patagonia was likely to make a billion dollars in profits if the market mix remained as it was for some time, he decided that 10 percent of their pre-tax profit or 1 percent of their profits would go towards environmental rehabilitation and rejuvenation projects annually. His passion for environmental safety and sanity made him to decide that the Patagonia was going to start using recycled papers, an action which saved the company 6 million gallons of water, 3.5 million kilowatt of electricity and also helped keep off 52, 000 pounds of pollutants from the air. This measure which took place in 1990 also helped the company to help save about 14,500 trees from being used as fuel (Chouinard, 2005). Under his leadership, Patagonia worked together with other entities like Wellman and Malden mills to come up with recycled polyester which the company used to come up with its PCR Synchella fleece.
Later, the world financial recession came and hit hard at the company to an extent that they had to cut down on their spending to stay afloat. This is the time; Yvon realized that the company had exceeded its resources as well as its limitations. He realized that the company was dependent on a growth that it could not sustain. Re-thinking the company priorities and instituting new practices became a priority. The recession called on the company to break its rules and make use of the very resources it had deemed unsafe for the environment, a scenario that forced Yvon to organize several employee seminars in different places where they could observe the environment, ask themselves capital questions why they were in business, what they needed to do as a company to reduce environmental degradation and global warming, the culture that everybody at Patagonia was brought up in and the values they both shared as individuals. While the company managers were concerned about the interventions that would take care of the cash-flow crisis, Yvon brought to their attention slowly and bit by bit, the business’s environmental ethics and even values. With this he taught his entire staff the values he had leant as a surfer and climber that “You have to be true to yourself, acknowledging their strengths and weaknesses while trying to live within their means” because if the company tries to be what they are no, there was likely to be a mentality of “Having it all” which could be the final nail on the coffin and the business is dead!
Yvon Chouinard was in all aspects a very inspirational leader because he had followers! All his employees followed his lead without complaints. By allocating some time for play and adventure even for him, he showed one aspect of his weakness” He cannot work without playing/having fun!” This made him approachable. He used his intuition to appropriately gauge the right time to instill in his employees the values he had leant as a climber, when the financial crunch was threatening the company’s existence. He tried to capitalize on what made them unique as a company, him as the manager, owner and leader of the rest of the employees. They all had been brought up in a culture of environmental ethics. He influenced them into surfing every lunch time. Finally, his inspirational leadership skills come in because he showed tough empathy to his employees in the sense that he cared passionately about the work they did but had to be realistic with them that without operating within their limits and exploiting their strengths and weaknesses, they were headed for a hard day in office as a business. He cultivated excellence as well as innovation by adopting the environmentally safe modes of production, was a source of optimism and enthusiasm in his free style method of management. Finally he encouraged his employees to have high inspirations by putting in place structures that allowed even junior clerical workers to rise to higher ranks with more pay. He was therefore very inspirational in all means. Yvon was a leader who was driven by ethics hence an ethical leader at the same time. He encouraged his employees to involve themselves in environmental restoration programs and even take responsibility by committing a percentage of the company’s profits to the same. Striving for a balance between work, the family and play was also at the center stage of his influence as a leader. He was therefore very ethical and inspirational in his approach to issues. His leadership also has an element of contextual init because he managed to build a team identity at Patagonia. Their production method, the games they played and the central values to which all the employees subscribed to made them an outstanding lining in a fabric of similar companies in the US.
When the company faced an adoptive challenge due to the financial crisis which was calling on it to ignore its values and embrace the use of ‘environmentally unfriendly’ resources, he mobilized his employees in different teams let them pick out the values that put them together and to identify the adaptive changes in that case. Through his guidance, they realized it was necessary to live within their means. He “Got on the balcony” and studied the pattern of change which was imminent, Identified the adaptive change by looking at the risks which the current pattern of doing business posed if they were to persist with it and he regulated the distress that came with the new change by taking the employees to far off places sometimes even next to mountains or under trees to reduce stress and help them absorb the realities of the new change before making informed decisions. His contextual leadership skills pushed him to seek a bigger picture of the implications of the financial crunch on Patagonia and he maintained a disciplined attention seeking the suggestions and discussions of his team and through this, gave the work back to the people so that they can own it and protected the voice of the people from below by creating a forum where people could exchange and discuss freely without suppression of any kind. There was no blame game and he believed that because they had succeeded together, no fingers were supposed to be pointed at anyone but all needed to build a consensus and realize that operating within their means was the most convincing way out.
Sustainable Development in Businesses
Organizations the world over are faced with a challenging issue of creating a balance between the need to make a profit and the need to preserve the very same resources from which they get their profits. However it has become paramount and critical for organizations to have policy approach geared towards the use of resources without compromising their future availability. Sustainable development is that policy approach and it broadly touches on three things: a broad view of social, environmental and economic outcomes, a long term perspective concerned with the rights of future generations and an inclusive call to action that requires everyone to take charge of their actions. Some organization CEOs have been reluctant to embrace this. This paper is an argument in favor of sustainable development and the need for organization CEOs to make it a part of their policy needs.
An organization is structured basically from its human resource. An active and productive human resource in an organization is also the desire of every CEO. Sustainable development requires people in an organization to be competitive in order to drive success and create innovation. This gives an edge to the company even in the market share and general welfare of the company including profitability. When employees think of the future and ways to improve and optimally give back to the environment, they come up with highly innovative ways to tackle challenges within the organizations (Casper, 2009).
A company that has innovative human resources is always likely to drive success according to Casper and this can be noted when a effort is put into encouraging people within the organization to embrace environmental challenges of the day. A progressive CEO also considers the health and wellbeing of his employees. There is no better way to do that than to embrace sustainable development as it broadly tackles the needs of a worker’s health and wellbeing. It is very important to have a clean environment in the workplace for everyone in the organization and can only be effectively tackled when there is a sense of optimal resource usage in a business. Therefore, once a company takes that issue to their most valued human resource, the benefits are great because a certain culture is instilled inside the company.
Energy is a highly scarce commodity. Every company strives to get energy very cheaply so as to reduce overhead and drive profits. This may compromise the importance of an organization to put into consideration the need to conserve the sources of that energy. Even though it is a critical commodity it does not warrant the CEOS to use unorthodox and harmful ways to get it. This positions the organization as greedy and may be harmful to the image it portrays to the general public and to its customers (Malone & Pasternack, 2002).
This brings the importance of sustainable development to the minds of CEOs and the policy developers in an organization. Energy projects are very capital intensive and have a long gestation period. They therefore have a direct bearing on the environment and ecology at large. A lack of sufficient energy impacts badly on the economy and on the lives of people. Hence it is of paramount importance that the sources of energy are used in a wise and sustainable manner to fairly impact the people and to drive the economy of a country.
Pollution of energy sources, especially the non-renewable ones, is a threat even to the national security of a country. The sectors that offer jobs that are energy affiliated are significantly affected and an employment situation may present itself and this is a threat to the security and national wellbeing of a country. It is imperative therefore that those ceos sustainably use the energy resources if they are patriotic nationalists. The economic growth realized will only serve as a plus to the organization as this means more business and hence profits and the overhead costs are greatly reduced.
Organizations expand and have growth targets for the future that should impact the lives of future generations. A future-oriented ceo is the one who has the capacity to embrace sustainable architecture. This is a bit costly when considering the capital required. But when viewed from an angle of the need to conserve the environment and the future’s positive impact on the lives of future generations, it is worth putting in maximum effort. The design for architecture should put into consideration energy consumption, employees health and well being, plus maximum utilization of available resources. For example, instead of using electricity for lighting and heating, the organization may employ the use of solar energy for the same utilities. In addition, the material for construction that is recycled, such as reclaimed lumber, and low volatile organic compounds, may play a big role in the reduction of harmful emissions in the environment.
An organization can also incorporate waste management that is progressive and places into consideration the issue of environment. The current trends show that governments the world over are going to enact legislation barring people from using certain materials for the construction of buildings and this may be a step ahead of the rest. Obviously this will be profitable then since the price of materials required will have shot up due to inflation and demand as the others try to grapple with the government requirement. It is therefore prudent for a ceo to use environmentally sustainable construction since it is likely to drive profits in the future (Casper, 2009).
Human health and sustainable development are inexplicably linked and go hand in hand. It is the desire of every organization to have healthy and able employees. This reduces medical bills due to insurance, reduces interruptions during work and positions the company for future growth and development. However the threat to the health of people is very real when viewed from the angle of the manner in which big companies and corporations are either inadvertently or knowingly engaging in activities that are harmful (Malone & Pasternack, 2002). Productive CEOs must come up with ways of stemming this and there is no better way than to embrace sustainability of the sectors that massively affect health.
There is a notable change in demographics, consumption and behavior in people. Most of them are moving towards towns where companies are situated and this poses a threat to their health if the issue of waste management and harmful gaseous emissions by companies is not properly checked. As a company’s broader task to embrace corporate social responsibility, a progressive and future oriented ceo should press for policies geared towards ensuring that the heath of people is a priority. This positions the organization to have a good image when viewed by people and it enhances its customer base through that (Casper, 2009).
The governments of today and the international community at large, in its last gasp to enhance sustainable development, are coming up with laws to govern the use of resources. This has made it necessary for companies to try and make policies fit into the legalities or face strict penalties. In a country where these laws exist, there is more pressure from human rights organizations to make them stricter than they are. Some have gone to the extent of inserting in the constitution the basic right of a clean healthy environment so as to stress the importance (International Law Commission, 2003).
Due to this pressure across the board, it is imperative that an organization embraces the need for sustainable development. This will reduce friction with the law and greatly reduce any legal costs that the organization may have. This is also beneficial to a country’s development because it enables compliance with environmental treaties that it has signed and also ratifications of the United Nations (International Law Commission, 2003).
In most countries where use of resources is not closely watched, the less privileged in society are most affected. This includes the youth and the women and children. This group forms the foundation for a country’s growth and if not consistently checked can be a disadvantage to the economy of the country (Malone & Pasternack, 2002). This group of people is paramount to the security situation in every country. The youth are known to create chaos in a country where unemployment levels are huge. This is a future problem being propagated today and it threatens the future of organizations.
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In light of this problem, organizations should therefore embrace sustainable development to position themselves for future markets. The available resources should be used carefully to realize this goal. The organization stands to benefit security-wise and the country is likely to realize economic growth hence benefitting the organization further. Also people once faced by such problems resort to mass action and this is dangerous to organizations’ reputations especially if it deals in sensitive products such as food (Malone & Pasternack, 2002).
To sum up, sustainable development is an aspect of current time and any ceo who seeks to position his organization for future growth and development should embrace the task of environmental conservation. The many aspects of the business are invariably touched in one way or the other by the issue and any business leader who ignores these risks could well be considered retrogressive or insensitive in his quest to grow business wise. Also through sustainable development, three important issues are affected positively: the environment, finances and social welfare. These three issues are interrelated and form the pillar of growth in any organization. Therefore business leaders should welcome sustainability (IANS, 2008).
Ethics and Business
In this post Enron era, managers are still struggling to find a fit between ethical codes of behavior in the workplace. They also are identifying practices that are not only ethical but consistent with organizational productivity and sustainability, both in the short run and the long run. Ethics, a word derived from the Greek word, “ethos,” meaning a way of living, can be termed as an accepted code of behavior in the workplace. Ethics are mainly informed by society values whereas a business operates in terms of their economic, social, cultural and political diversity. Despite the lack of generally accepted workplace ethics worldwide, managers should develop strategic plans in their organizations that would promote basic human rights, while at the same time, improve organizational teamwork and productivity.
Strategic planning refers to the systematic identification of an organization’s short, medium and long term goals, followed by the development of action blueprints on how to achieve them (Gray, & Larson, 2006). The first approach that I would take on ethics in the workplace is to ensure the observance of basic human rights of all stakeholders involved in the business. This is based on the premise that managers of organizations would interact with stakeholders such as employees, suppliers, debtors, creditors, financiers, customers, government and society in general.
Impact of ethics on various stakeholders of the business
It is universal knowledge in psychology that human beings tend to build relationships and develop confidence in people who treat them fairly. Paying suppliers at the right time after delivery of goods or services creates supplier confidence regarding the organization. To maintain and safeguard this relationship, a supplier will strive to honor his delivery contracts to the corporation. This will ensure a continuous production of goods in the organization. This has the capacity to reduce any loss that can emanate from unsatisfied demand due to internal inefficiencies.
A manager, who is ethical in terms of the way he or she sources for finances for the organization, is likely to develop a good credit rating. This ensures that the company can access finances when the need arises on short notice as a result of the manager’s reputation for having excellent collateral. Communicating to a customer in the right way, offering the right service at the right price and being open to a client about a product is likely to develop the confidence of such a customer towards the company and its brands. It is a well known fact in the field of marketing and psychology that a satisfied customer acts as a voluntary promoter of the company and its products to other people. Such a customer recommends the product to family and friends. This action increases the organization’s client base leading to growth of sales and profitability. To achieve this, managers must come up with a clear customer focused strategy on how employees are supposed to talk to customers and how they are supposed to serve them (Sison, 2008).
The public forms the market base on which a business thrives and managers should ensure that the organization is not engaged in unethical practices that may negatively affect society. It should carry out activities that promote growth and the development of society. This is a long term investment by the company since a well developed society provides the organization with a wider customer base for its goods while at the same time ensuring sustainability of the organization in the long run. This understanding has in the recent past culminated to a move by a number of organizations to achieve brand positioning on corporate social responsibility.
The shareholders of the organization are affected by both ethical and unethical actions of any of the stakeholders of the business. The managers are only custodians employed by the shareholders to take care of their investment. Consequently, when they engage in unethical practices within the organization, such as embezzlement of funds, managers lose the shareholder’s confidence in them since such unethical behavior can lead to the collapse of an organization.
Finally, when many people refer to ethics in the workplace, they have employees’ behavior in mind. Observance of basic human rights in organizations ensures that employees feel secure in carrying out their duties. This peace of mind influences them to be more productive. Once managers treat their employees fairly, such employees are likely to remain motivated. It would also ensure that employees have negligible, if any, work related stress. Many people can attest to the fact that when working in an organization where a person feels valued and respected, an employee executes his duties in an enhanced manner leading to higher productivity and profitability. To achieve this, managers should come up with ways and means of creating a good work environment where there is no abuse of employees by the employer and where basic human rights are respected and observed.
How to promote ethics in the workplace
Implementing strategic plans on ethics requires accommodation of diverse behaviors from individuals. Some organizations thrive in utilizing employee’s diversity to generate unique products and services instead of trying to standardize their behavior. In the post Enron era, organizations are paying more attention to the issue of ethics in the work place when developing their strategic plans. To do this, they start by collecting views among their employees and other stakeholders. This helps in understanding the social and cultural diversity of an organization’s stakeholders. For instance, bowing slightly before shaking hands with senior individuals is treated as a sign of respect in some cultures. In other cultures, it is seen as a symbol of slavery and abuse. Consequently, it is only after understanding individuals’ cultural orientation that managers can develop a fit in workplace ethics which is not only inclusive but also consistent with the organization’s strategic mission.
Ethics in the workplace can be promoted by strategically developing an organization’s culture that supports ethical behavior. This is based on the principle of the need for association by human beings. This helps employees in developing a sense of belonging to the company and to its culture. To fit in the work environment where they spend many of their waking hours, employees are likely to take up the code of behavior portrayed by senior managers. As a result of this, if the top managers are corrupt, disrespectful or posses any other vice, employees are likely to follow suit. A healthy corporate culture such as one that promotes quality in their employees’ ways of delivering services and interaction with all business stakeholders is likely to increase profitability in the long run. A good and ethical corporate culture ensures that senior members of the company act as role models for junior employees who will most likely strive to maintain ethics in such a workplace.
Workplace ethics can be promoted by ensuring that an organization has satisfied employees. The satisfaction may be as a result of proper remuneration. Consequently, managers should not only view an employee’s salary as a cost, but they should also view it as an investment in ensuring that the organization retains highly skilled employees in the long term. Hard working employees who contribute a lot to the company feel cheated when the salary they receive is too small. This makes them feel justified in their corrupt activities (Swartz, & Watkins, 2003). The organization should also have a good work environment.
Another factor that managers should consider is proper orientation of employees. This may demand the use of a professional alongside reliable managers in the orientation process of new employees. Such a set up ensures that the right ethics code is clearly communicated. When carrying out their duties, new employees compare their actions with what they were taught on the first day rather than what their colleagues are doing (Wiggins, 2006). This ensures that unethical individuals in the organization do not pass the vice to new employees.
What is ethical is interpreted differently by different people. Managers should come up with a set of ethical behaviors in the workplace in collaboration with employees. Efforts should be directed at sensitizing employees on what is termed unethical in such organizations. The organization should develop benchmarks on progress of the employees in terms of ethical behavior in the workplace. This is because, like any other strategy, a strategic plan in promotion of ethical behavior should be monitored and controlled after implementation. Those who follow the ethics code should be consistently recognized and rewarded in order to motivate them to maintain ethical behavior in and outside the organization.
In conclusion, it is worth noting that ethical behavior as indicated above affects the productivity of the organization. It affects the interest of all the stakeholders of the business. Despite the lack of specific attributes to good ethics, it is worth noting that good ethics should promote the achievement of an organization’s goals and objectives. They should be entrenched in the organization by the management in collaboration with their employees. Continuous control and the monitoring of strategic plan implementation progress are both vital as they help in keeping employees and other stakeholders on course.
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