Felicia Andersson
BADM 2003W
3/4/2012

Paper 2

Introduction to Company:
Coastal Uniforms is a Boston-based publicly traded U.S. Company with $200 million in sales and 2,000 employees (Cases in Business Ethics). Coastal provided work uniforms and uniform cleaning services to manufacturing and services industries. Until 1999, “Coastal had achieved steady growth for the past 22 straight years”, after 1999 the company started having some financial issues. Corners were cut in the manufacturing process and management started adding fees to the invoices without letting customers know.
Summary of Past Activities:
In 1999, Coastal noticed that several small competitors had negotiated some key contracts away from Coastal. Sales and profit were flat this year and Coastal management’s “Rule 35” was not going to be met. This was only the start of Coastal’s rough decline. In 2000, Coastal decreased the quality of their uniforms by ordering lower quality cotton and polyester uniforms, yet they sold them at the same price as the higher quality ones. They also reduced “unnecessary features” such as extra buttons, snaps on cuffs and name patches were sewn on using wider stitches. Coastal stopped putting their customer first and started prioritizing profit. They also added a “delivery surcharge” to each order, and only removed the extra cost for those few customers who complained. The sales quotas for delivery personnel were increased from $300/week to $800/week. In one year, Coastal managed to lie to its customers by not informing them that the products were poorer quality for the same price, scammed customers into paying a delivery surcharge and pressured delivery personnel into trying to more than double their sales.
In 2001, several charges were added to client’s invoices. The first one was an “environmental charge” that was supposed to contribute to the cost of