Patagonia's Code of Ethics

As an organization known for being environmentally conscious and emphasizing corporate responsibility, it is not surprising to learn that Patagonia would have an extensive code of ethics. Part of Patagonia's code of ethics deals with promoting fair labor practices and safe working conditions throughout their supply chain. Besides this concern, Patagonia also has a specific workplace code of conduct that states what is ethical and acceptable in regards to a variety of topics inside and outside the workplace.

The mission of Patagonia, which is to "build the best product, do the least harm, use business to inspire and implement solutions to the environmental crisis" is very important in guiding how the company operates on a daily basis. Ethically, the people of Patagonia push themselves and their suppliers to continuously lead an examined life and improve social and environmental conditions. The standards of Patagonia's workplace code of conduct reflect the company's desire to promote ethical standards in the highest regards.

Patagonia is also involved in a number of environmental initiatives, programs focusing on corporate responsibility, and other ethically sound practices. For example, Patagonia's Common Threads Initiative is a program where you can pledge to partner with Patagonia in reducing, repairing, reusing, recycling, and re-imagining. The Footprint Chronicles is another development that allows users to go online and view a map of Patagonia's suppliers. The idea is to create transparency in Patagonia's supply chain so that consumers can see exactly where products are coming from.

Patagonia has been continuously named to Forbes and the Ethisphere Institute's list of the world's most ethical companies as a result of their ethical conduct.

Organizational Structure

Patagonia's organizational structure resembles that of a functional structure, where the major functions of the firm are grouped internally. Because Patagonia is a small organization employing some 1,200 employees and is privately held, there is no need for a more complex organizational structure. Since the company was founded, it has grown and evolved from utilizing a simple organizational structure to employing its current functional organizational structure.

The top authority in Patagonia's organizational structure is CEO Casey Sheahan. As the organization's leader, he is responsible for addressing problems within the organization's functional areas and coordinating the integration of all the functional areas. Next in the hierarchical line are the company's Vice Presidents, which include the Chief Financial Officer, the Vice President of Production, the Vice President of Marketing, and the Vice President of Product Design and Merchandising, just to name a few. These senior level management classes are responsible for reporting to the CEO. 

Patagonia's Directors make up the next level of management, including the Director of Quality, the Director of Fabric, and the Director of Environmental Analysis. The CEO, Vice Presidents, and Directors all work closely with one another, which helps to flatten out the organizational structure of the company. The functional structure of Patagonia provides for a high level of centralization that helps to ensure integration and control over the firms activities and functional areas.

Patagonia's Strategic Controls

Patagonia uses the concept of strategic control as a tool for monitoring and correcting their strategy and performance in the business world. From an informational perspective, Patagonia is "doing the right thing" by offering products aligned with protecting and conserving the environment. Behaviorally, Patagonia is "doing things right" by positively influencing the actions of their employees. The firm's strong organizational culture, which emphasizes environmental conservation and a solid work ethic, is one example of how Patagonia utilizes behavioral controls. You never hear any negative press or news about Patagonia because they do such a nice job of placing effective controls, which minimizes unethical conduct.  

The role that corporate governance plays at Patagonia is a big one in forming relationships between the various company stakeholders. Patagonia's key stakeholders in this case would include its shareholders, suppliers, board of directors, and management. Recently, Patagonia was deemed a "Benefit Corporation," which gives the company's board of directors legal protection to consider social and environmental benefits over shareholder financial returns. This means that Patagonia shareholders no longer have the legal right to sue the company for not trying to maximize profits. The overall goal of this effort is to align the interests of all of Patagonia's stakeholders in conserving and protecting the environment.