Patagonia
Problem
Patagonia, a highly recognized brand that manufactures high end outdoor gear, refers to the Fair Labor Association’s accredited monitors for monitoring its manufacturing standards. The conflict of interest arises with the methods FLA uses to monitor its corporate affiliates like Patagonia. FLA allows its affiliates to pick the factories that need to be inspected as well as the inspectors who will be conducting these inspections. The affiliates are also responsible for compensating these monitors. As a result, FLA, which claims to be a third party monitor, ceases to be one thereby allowing its corporate affiliates to monitor themselves. The other issue in the case is that since Patagonia is a privately held company, the standards and procedures it expects of its manufacturers and suppliers are not made public. This lack of transparency does not necessarily help Patagonia back its claim operating 100% organic, since the data that proves it is not available to the public. The third issue is the fact that Patagonia enables farmers to pick their own certifier to certify the cotton fiber and production. This could pose a problem as farmers may jeopardize quality by using certifiers that are cheaper and require fewer and less thorough inspections to cut costs. The totality of these issues raises questions whether Patagonia is genuine in their efforts to promote the use of organic textiles in its effort to tackle the environment crisis or is it another case of greenwashing?
Recommendations
Patagonia’s current monitoring system for its manufacturing standards is conducted by FLA for namesake. Patagonia has complete control over who is assessing them. Since the FLA is a recognized body, Patagonia should continue working with them. However, Patagonia should play a smaller role in the process. Having complete control over its self assessment may not be beneficial to Patagonia as biases tend to arise during assessment. Since Patagonia is compensating the inspectors, they should be allowed to pick the inspectors. To avoid complete control, the FLA can pick a pool of inspectors from which Patagonia can pick the final inspectors. This way both parties have a say and the party being assessed does not have complete control over their assessment. The FLA could also do a more effective job by posting detailed assessments online for public records.
Patagonia’s approach to its code of conduct seems to be working for them as the lack of transparency has enabled Patagonia to avoid public scrutiny from tarnishing their brand. Not revealing their standards and procedures is not really affecting their business as a majority of their customers are loyal due to the performance, quality and technical excellence of Patagonia’s products. Patagonia should stick with this approach; however they should be meticulous in documenting their standards and procedures regarding their manufacturers and suppliers to avoid inconsistencies if a problem does arise. Patagonia should not take advantage of their lack of transparency. Not revealing their standards and procedures is their personal approach however if Patagonia is asked to reveal its standards and procedures due to some legal issues, inconsistencies in this regard could prove to be detrimental and the slightest hint of Patagonia jeopardizing quality could affect their customer base.
The issue regarding Patagonia allowing its farmers to pick their own certifiers for their cotton fiber and production needs some fine tuning. Patagonia should play a bigger role in the certification process of their cotton fiber. A lack of attention could jeopardize the quality of the final product due to poor quality cotton fiber being certified as acceptable. Since the quality and performance of its products is what is driving their market, Patagonia should spend more resources in making sure that the cotton fiber that is being used in their products meets the required global standards and is consistent throughout their supply chain. Patagonia could rely on third party assessors such as the Global Organic Textile Standards (GOTS) to carry out their global certification for cotton fiber. Hiring a third party could be expensive, but if Patagonia is serious about the quality of their products, this investment would be worth it.
Alternatives and Analysis
Patagonia is highly regarded in the industry that it operates in. It has a loyal customer base that is willing to purchase the expensive high end outdoor gear that Patagonia manufactures. Considering these facts, it is obvious that the current system that Patagonia has adopted regarding the assessment, code and conduct transparency and outsourced supplier certification is not unsuccessful. An alternative to the recommendations provided above could be that Patagonia carries on with the same processes as the ones mentioned in the case. However, if they do, they are putting themselves in a vulnerable position. The FLA and its affiliates currently operate in a system that ensures that both parties involved encounter minimal contradictions. This system loses its sense of purpose. Keeping their standards and procedures confidential has proved to be effective for Patagonia in terms of avoiding public scrutiny but it could also create a sense of doubt in the consumers mind. Consumers might wonder what Patagonia has to hide. This lack of transparency could detract some their loyal customers. As far as certification is concerned, Patagonia doesn’t really have an option besides making sure that the cotton fiber is certified by the right authorities. Since quality is the primary aspect consumers are looking for in Patagonia products, Patagonia needs to ensure that the cotton fiber standards meet the expectations of their customers.
Conclusion
I am not completely convinced that Patagonia is committed to their mission statement. A firm cannot build the best product if it is willing to compromise on the certification of the quality of its primary raw material. A firm could be causing unnecessary harm if the assessment of its workers has unwanted biases involved. A firm that is committed to producing organic products to help the environmental crisis is not providing effective business solutions if it decides to keep its standards and procedures confidential.