Case Study Essay

10948 Words Aug 16th, 2012 44 Pages
9- 11-020 -7
REV: OCTOBER 19, 2010

FOREST REINHARDT RAMON CASADESUS-MASANELL HYUN JIN KIM

Patagonia
[Patagonia] is business conducted upside down and inside-out. Everything about it flies i the face of in ical. consultants’ recommendations about How to Maximize Profits and Cut Costs. Simply put, it’s radi — Fortun Magazine1 ne ou It’s okay to be eccentric, as long as yo are rich; otherwise you’re just crazy. — Yvon Chouinard, Founder of Pat tagonia, Inc.2 In the spring of 2010, Casey She eahan, CEO of Patagonia, and senior executives wer in intense re discussions about the future of the co ompany. They were wrestling with the challenge of im mplementing a new, radical environmental initiativ that was at the forefront of their
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(See Exhibit 1 for Patagonia’s financials.)

Business Philosophy
Chouinard stated that he would “never be happy playing by the normal rules of business.”17 He saw business as deserving much of the blame for many of the world’s economic, social, and environmental problems. However, he believed that business had the potential to alleviate these problems and inspire positive change. For Chouinard, Patagonia represented an “experiment” to “challenge conventional wisdom and present a new style of responsible business.”18 Expressing that he wanted to “distance [himself] as much as possible from those pasty-faced corpses in suits,” Chouinard asserted, “If I had to be a businessman, I had to do it on my own terms.”19 He firmly believed in Zen philosophy, which he saw as “perfect” for the business world. He explained, “In Zen archery…you forget about the goal—hitting the bull’s-eye—and instead focus on all the individual movements involved in shooting an arrow. . . . If you’ve perfected all the elements, you can’t help but hit the center of the target.” Applying this philosophy to Patagonia, he oriented its goal away from profits and toward “doing things right.”20 Chouinard also applied to his business important

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