Analysis of case study of Patagonia
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Analysis of case study of Patagonia
Patagonia has set a high standard on how businesses can operate sustainably. Therefore, this essay discusses the case study of Patagonia featuring its sustainable business practices. The company supports ethical consumerism, and it is keen on pursuing its profits in an ecologically sustainable environment. From the case study, the company is devoted to operating in a sustainable environment but assuring profits. Even though Patagonia is committed to environmentalism, it still has to make profits to grow and survive. Therefore, with a focus on the Patagonia case study, the paper will address product choice at Patagonia, what other Patagonia executives should do to sustain their CEO’s ideals, a proposal on a new-forward-looking sustainability plan, and loss of ethics due to greed.
Discussion on executives deciding on a product
The case study shows that the Patagonia Executives will choose a product based on their ability to keep it green. This company has gone green, and its product choice should be dependent on the company’s ability to keep it green. Therefore, the executives are likely to look at possible options that can help them keep their production green. This implies that the product executives choose to offer to the market should be that which cannot compromise Patagonia’s environmental ideals.
Patagonia’s CEO, Chouinard, is an executive on a mission to keep this company unique and green. In this case, the company will only choose a product that it deems has the ability to preserve its environmental ideals while protecting its profit interests. Every business operates to make profits to survive and meet stakeholder interests (Alhaddi, 2015). Shareholders expect the business to be profitable, which affirms that the executives must consider stakeholders’ interests before choosing a product to offer.
From an analytical perspective, Patagonia executives will choose a product from a triple bottom line (TBL) perspective. This implies that the company executives will assess the ability of the product to meet the three pillars under the triple bottom line. Notably, TBL is a sustainable business strategy that ensures the company’s product can address profit, people, and the planet (Khan, Ahmad, & Majava, 2021). Therefore, the executive is expected to consider product choice through the TBL lens to be profitable and sustainable.
According to Birkel and Müller (2021), the triple bottom line observes sustainability by focusing on economic, social, and environmental pillars. Based on this business concept, the executives at Patagonia will be required to evaluate the product early enough on its economic, environmental, and social impact. Once the product is chosen by considering its impact on these pillars, it can succeed and keep the company profitable and environmentally friendly.
Moreover, the economic aspect of the product will help the executives to predict the financial performance of the product. If the product can generate profits or sustain financial performance, the executives will consider choosing such a product. A capitalist economy is more focused on the ability of a profit to generate profits for shareholders and business expansion (Khan, Ahmad, & Majava, 2021). When the executive is fully satisfied that the product can generate profit, they move to its impact on people.
A product targets to meet the needs of society. Such a society comprises people who have needs that a product offered should meet. If a product can create value for shareholders, it should generate value for society equally. Therefore, the executives of Patagonia shall be expected to assess the social impact of the product on customers, community, and employees. Hence, the executives’ business decisions should be guided on the possible environmental effects of the product they choose to offer.
After assessing the profit and social impact of a business, the executive shall further move to the environmental impact of its product. Based on TBT, Khan et al. (2021) agree that the environmental impact of a business is the last area that the executive looks at before they finally decide on the product to offer. Notably, Patagonia wants to use its devotion to sustainable practices to improve its competitive advantage. Therefore, the executive will fully evaluate the product’s environmental footprint. If the product will protect the environment or be produced in a green business environment, it would settle on it.
Nevertheless, I will also evaluate the newly proposed hiking boot at Patagonia based on TBL. It is more evident from the case study that this company wants to keep its employing thinking green. It wants its employees to make sustainability decisions for it to be profitable while protecting the environment. Therefore, to assess this new product, I will look at the hiking boot’s economic, social, and environmental impact to fully understand its success. This evaluation will be easy to establish if the company is still focused on its ecological ideals.
As noted in the case study, Patagonia CEO Chouinard affirms that despite the zest to keep the company green, it would be challenging to keep it fully sustainable. Therefore, using TBL for sustainability assessment will give a true picture of how the company is progressing to realize its sustainability fully. Birkel and Müller (2021) believe that TBL helps a company measure with exactness its delivery on economic, environmental, and social pillars to fully understand if Patagonia will keep its proposed new hiking boot green.
Discussion on keeping Chouinard’s ideals permanent
On the question of what the CEO Yvon Chouinard and other executives should do today to ensure that the environmentalist ideals instituted remain permanently integrated into Patagonia’s culture when he is long gone, there are necessary actions to be observed. Fast forward, he should ensure that his ideals are his legacy. The Chouinard should build his ideas as his legacy. In addition, he should make his ideals Patagonia’s legacy. As long as his ideals shall be observed as Patagonia’s legacy, they shall outlive him and remain permanent in Patagonia’s culture.
Agreeably, even though Chouinard will not permanently serve as CEO at Patagonia, his environmentalist ideals should outlive him. Although future management may come with radical changes which may seek to overhaul his beliefs around ethical consumerism and green production, Chouinard should move to cement them as Patagonia’s legacy in the corporate world.
Before leaving the company, Chouinard should align his environmentalist ideas to existing federal regulations on the environment. Notably, the current corporate world is shifting to green operations. This alone makes it hard to undo the ideals Chouinard establishes in Patagonia. Therefore, aligning his environmentalist ideals to the current federal environmental policy will ensure that they remain permanent.
Suitably, going green is becoming indispensable for many companies. For an organization to gain a competitive advantage, it should prioritize green manufacturing. Also, today consumers are informed and environmentally sensitive. Since Patagonia operates to make profits, it would be illogical to undo the environmentalist ideals established by Chouinard. The current administration can only improve these ideals so that they can fit into new regulations by the government. Notably, government intervention is increasing due to climate change. Since businesses operate in a legal environment, it would be challenging to erode a milestone Patagonia has made thus far in protecting the environment and sustaining green production.
Additionally, Chouinard and other Patagonia executives can make their ideals an integral part of this organization’s operation by promoting green thinking. Green thinking should be Patagonia’s culture. The case study underscores that employees at Patagonia are allowed to make sustainability decisions. This implies the CEO and other executives have inculcated green thinking in the current employees. This kind of thinking shall be sustainable because it will be transferred to future workers. Encouraging green thinking among employees and senior management would be impossible to undo. Hence, green thinking will become a cultural component in Patagonia’s operations.
Apart from imparting green thinking culture among employees, the environmentalist ideals of Chouinard and other executives shall be permanent if they involve shareholders in the making of an environmental policy embraced by shareholders. As long as shareholders and other stakeholders subscribe to the ideals established by the current CEO and other executives, it would be difficult for future management to overhaul them. Even if a new manager came with ambitions to make radical changes, it would be unlikely to eliminate an environmentalist policy that protects the ideals of Chouinard and other executives.
Ensuring the current business sustainable practices are manageable and profitable. Profits drive businesses, and if such profits are not achievable, they attract change in strategy. It will be the onus of Chouinard and other executives to ensure that the ideals or practices they institute now drive Patagonia to profitability. As long as these ideals help the company gain a competitive advantage, the future CEO and executive shall not eliminate them.
Looking at the case study, Patagonia is already profitable and successful. Also, the CEO notes that if Patagonia were not successful, it would have been an environmental organization. Thus, the future executives will have to run Patagonia on the foundational ideals on which Patagonia was founded. This will ensure that the environmentalist ideals are permanently integrated into the company’s business model and culture.
Proposal: a new” forward-looking”-sustainability plan for the firm
The demand for green thinking and sustainable practices is on the rise. The corporate world is quickly changing, and organizations that fail to embrace environmentally friendly practices risk making losses that will force them out of the market. Thus, while working at Patagonia, my new forward looking-sustainability agenda for the company shall be based on market transformation. I will propose that the CEO center his environmentalist ideals on the competition. This is because green manufacturing and sustainable practices align with ethical consumers’ expectations.
Today, research shows that businesses that go green and commit to protecting the environment easily gain a competitive advantage in the industry (Silvestre & Ţîrcă, 2019). Since environmental regulations were introduced, many firms have made an effort to transform the market by jumping into sustainable practices. For Patagonia to exploit its environmentalist ideals for competition in the future, it should brand itself as the only company that responds to the environmental demands of its customers. Once the company continuously markets itself as the only one capable of producing its products ethically, its brand reputation will significantly improve.
Proposing to the CEO to advertise strategically as the only company that matters when it comes to supporting green production will eventually see customers view it differently. The CEO should note that many companies are promoting themselves as environmentally sensitive in the modern corporate world. This demands that the CEO considers promoting Patagonia to consumers as the only company keen on producing and selling organic products that meet their ethical standards.
As long as Patagonia places itself as a leader in green production, green thinking, and green products, its corporate image will improve. This will translate into customer loyalty and high sales volumes. The objective of this company is to see that its environmentalist ideals do not just remain within the company. Instead, the public must be informed of such ideals to trust Patagonia more and buy from it.
I will also propose that Patagonia releases its sustainability report annually. This is because customers and other stakeholders shall be interested in understanding its performance on pillars such as economic, environmental, and social. The sustainability report will underpin Patagonia’s commitment to protecting the environment and profitability. This report will allow stakeholders to assess the devotion of Patagonia to being a company that can be trusted.
I will also include in the proposal the corporate strategy for sustainability. The entire goal of environmentalist ideals is to make an environmental impact on the business environment. Sustainability is an integral part of modern businesses that all companies must embrace (Silvestre & Ţîrcă, 2019). Hence, I will insist that the CEO integrate sustainability into its corporate strategy. This will enable the company to have a strategic direction, grow its market and enhance its operational efficiency.
Ideally, going into the future, Patagonia should focus more on embracing environmentalist ideals to be at par with market transformation and consumer demands. While marketing or branding itself as an environmentally friendly company, it should further weave its sustainable practices into its corporate strategy (Cantele & Zardini, 2018). This will guarantee Patagonia’s expansion and high profitability.
Evaluation of loss of ethics due to greed
There is a risk of ethics loss at Patagonia due to greed. However, it is still preventable as long as the company commits to protecting its ethical standards. The employees, especially at the managerial cadre, are the ones that can risk the loss of moral standards at Patagonia. However, since Patagonia operates in a legal environment where corporate greed can lead a manager or any other employee to imprisonment, there is hope that Patagonia shall retain its shine on the environmental front.
There is no obvious misstep from the case study where Patagonia prioritized profits ahead of its environmental goals. Chouinard’s vision is to keep the momentum and ensure that the company sticks to its environmental goals. Even though the CEO indicates that the company cannot be fully green, it still puts its ecological goals ahead of everything. The case study links the company’s products to the marketability of Rolls Royce. This is to imply that the company’s focus is to sell ostentatious products and targets only consumers that are willing to incur any cost as long as the company remains ethical in its operations.
Chouinard’s environmentalist ideals are already an integral part of Patagonia. This evidences that Chouinard has set a high standard that succeeding executives will be expected to match. Setting the bar high affirms the strong governance and leadership that the company expects from any managerial member to keep and sustain the legacy of Chouinard. Furthermore, Patagonia has carved out itself as a company keen on producing ethical products, differentiating itself from companies unable to meet its standards. The company has created its brand and set its prices, implying that it already has a competitive advantage over its potential competitors.
Patagonia is a role model that other businesses should emulate its practices. The company has set high standards in environmental protection. With scientific consensus that climate change is real and poses many threats to people and the planet, many businesses should pursue market transformation like Patagonia. They can borrow from Patagonia to improve their environmental sustainability. Nevertheless, other firms that need to be studied on the environmental impact are Amazon, Tesla, Amazon, and Walmart.
References
Birkel, H., & Müller, J. M. (2021). Potentials of industry 4.0 for supply chain management within the triple bottom line of sustainability–A systematic literature review. Journal of Cleaner Production, 289, 125612. https://doi.org/10.1016/j.jclepro.2020.125612Khan, I. S., Ahmad, M. O., & Majava, J. (2021). Industry 4.0 and sustainable development: A systematic mapping of triple bottom line, Circular Economy and Sustainable Business Models perspectives. Journal of Cleaner Production, 297, 126655. https://doi.org/10.1016/j.jclepro.2021.126655Alhaddi, H. (2015). Triple bottom line and sustainability: A literature review. Business and Management Studies, 1(2), 6-10. DOI:10.11114/bms.v1i2.752Silvestre, B. S., & Ţîrcă, D. M. (2019). Innovations for sustainable development: Moving toward a sustainable future. Journal of cleaner production, 208, 325-332. https://doi.org/10.1016/j.jclepro.2018.09.244Cantele, S., & Zardini, A. (2018). Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship. Journal of cleaner production, 182, 166-176. https://doi.org/10.1016/j.jclepro.2018.02.016
