Ala Gracia Case Summary

Joseph Bozich’s path towards an ethical international business owner in the apparel industry arose out of a perceived near-death experience. Bozich founded Knights Apparel to sell athletic collegiate clothing. His first “model plant” was a “Alta Gracia”. In the business of staying ethical, Bozich has chosen to accept low profit margins compared to his competitors in order to give his factory employees a fair living wage, good working conditions, and the opportunity to unionize. His “fair wage” practices have been successfully marketable to the college consumer. While the cost per item is 20 percent higher at Alta Gracia than other factories, there might be a way to reduce costs in the long run. The main way this could be accomplished is reduced production time. With higher wages and better working conditions than other competitors, there would be a greater selection of candidates to choose from, meaning more qualified workers. Workers would also be more content. Happy workers are generally more productive, translating to more product in less time, thus lowering costs. Moreover, happier workers would also lead to a higher retention rate, meaning the factory would be staffed with workers who were very familiar with …show more content…
While college students might value the “fair wage” marketing structure more so than the typical consumer, if a competitor is able to sell their merchandise at a much lower sale, the average college student might think twice about going for the ethical product. In order to minimize this failure, Bozich could turn to the student advocate groups and concerned fitness parties and ask them to promote his company. Another challenge might be the demands coming from the labor unions. To minimize this risk, Bozich should have communication channels for workers to go through with grievances in order to keep the unions out of it whenever