M: Business 3rd Edition by O. C. Ferrell, Geoffrey Hirt, Linda Ferrell

Exercise 45

Patagonia founder and owner Yvon Chouinard proves that ethical business practices and product quality can lead to profitability, even during periods of economic contraction. In fact, during the latest recession, Patagonia had its best two years ever. What was Patagonia’s secret to success? Dedicated employees, loyal customers, and products built to last. Patagonia’s values are minimalistic and reflect those of a business founded by climbers and surfers.

Based upon these values, Patagonia’s goal is to create durable outdoor gear and clothing. Since it specializes in environmental gear, the company is dedicated to environmentally friendly practices. Its adoption of organic cotton and its recycling efforts are a few of the reasons consumers are fiercely loyal. Since the inception of its “cradle to cradle” Common Threads recycling program, most of its products, when they do reach the ends of their life spans, may be returned to Patagonia and made into new products. These efforts help drive environmentally concerned consumers to pay more for its products. Consumers, who often opt for long-lasting products during periods of economic contraction, began purchasing from Patagonia to get the most out of their money.

Patagonia is also debt free and creates quality relationships with stakeholders. To maintain its debt-free status, Chouinard carefully monitors Patagonia’s growth. This allows him to assist suppliers in tough times and to keep business running smoothly. It also gives Patagonia freedom to retain its strong values. Patagonia treats its employees with respect and promotes a strong balance between work and personal life. The company provides flex time, on-site child care, paid maternity/paternity leave, and paid leave for volunteering. Patagonia’s success epitomizes what can happen when high ethical standards and sound business strategies are implemented.

How do Patagonia’s employee policies improve its bottom-line success?

Step 1 of 2

Company P is not only known for its business model but also the management philosophy it implements in its employee policy, which is solely concerned about the employee experience while working with company P.