Patagonia Ethical Issues

However, the following figure shows a more elaborate view of the exchange between two parties. Although on paper it states that there are only four criteria for an exchange in contract law to be ethical, there may be other externalities and parties that come into play. In the case of IBM and Nazi Germany, since there were negative externalities due to the horrendous acts of Nazi Germany, their actions would affect the Jews and many others in Europe, therefore the externality would be Actors C or D in the figure. Since there are negative externalities, IBM’s actions are also under scrutiny and are viewed as unethical by society.

The second conceptual area “Harmonization with the Social Matrix” can be defined with a mixture of Gundlach & Murphy’s

According to the Fortune 500, Patagonia’s successful financial performance generates $700 million in revenue each year. Patagonia operates at their shareholders’ and communities’ best interests. Patagonia donates $70 million in services and cash to community organizations and is an involved advocate for environmental initiatives. It is important to Patagonia to source labor ethically. They have created a safeguard against child labor and better working conditions for workers overseas. Patagonia has high migrant employee protection standards in their supply chain and plan to share them with other companies to eradicate unfair migrant labor practices. Patagonia takes into account their products entire life cycle when considering the materials used in their products. Plastic bottles and materials, including their own garments, are recycled into polyester fibers to reduce Patagonia’s dependence on petroleum. This is just one example of Patagonia’s effort to minimize their environmental

The responsibilities at the bottom of the pyramid are required of a corporation. As a corporation moves up the pyramid, the more responsibilities it will take on. Economic responsibilities are summarized as being profitable. Legal responsibilities must be met and a corporation must act within legal limits. The next tier up on the social responsibility of a corporation are expected. Expected responsibilities of a corporation are based on ethical decision making. This includes fair trade of labor and sourcing materials in developing countries. Companies have been known to look over the expected ethical responsibilities when sourcing labor and materials in order to achieve cost efficient means and maximize profits. Ethical responsibilities pertain to the supply chain. Even though the means may be more expensive when sourced ethically, consumers expect a transparent supply chain and are no longer turning a blind eye to a corporation’s supply chain. The final tier of the pyramid are desired responsibilities which include discretionary/philanthropic responsibilities. Along with maximizing profits for a corporation’s shareholders, acting within legal limits, and have an ethical supply chain, corporations are desired to contribute resources to the community. Philanthropic activities could be held anywhere, even in communities far away from the businesses. Even if companies do