Guess Inc. is a leading American apparel company specialized in clothes, watches, perfumes, jewelry, and other fashion accessories. Within the last three decades, the company has faced numerous challenges and lawsuits arising from its unethical business practices.
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This discussion identifies the use of toxic chemicals, sweetshop labor practices, and controversial advertisements as the major ethical issues affecting the company. The discussion examines the experiences of the company’s employees and the best managerial strategies to deal with its current ethical issues.
Guess Incorporation is an American apparel company. The company’s brand includes products such as clothes, watches, fashion accessories, perfumes, and jewelry. It is also the owner of Marciano Clothes. Four brothers founded the company in 1981.
After a few years, the company expanded its products to include “denim-driven” apparels for children and teenagers. Although Guess has been a successful brand within the last three decades, it faces various ethical issues and dilemmas that continue to affect its business.
Ethical Dilemmas and Issues
The company has been trying to build its reputation after several years of unethical practices from its manufacturing processes and advertisements. Such ethical issues have significantly affected the company’s business strategy. In the 1980s, Guess Company was accused of sweatshop labor practices.
The company became a major “crook” for such unethical production and manufacturing processes. Different authorities and observers accused the company’s contractors of unfair labor practices including inadequate salaries and failure to provide the required minimum wages (Guess Who’s Unhappy with the IRS 2012).
The same allegations surfaced in the 1990s. There were numerous protests and campaigns against the company’s clothes. In the United States, the company was facing numerous lawsuits for such malpractices. In the recent past, many people have criticized the company for being “demeaning” to American women. This is the case because it uses controversial advertisements.
This has become a major challenge because the world has been promoting the idea of “feminism”. Although the company has been trying hard to deal with such issues, the outstanding thing is that they continue to affect the company’s image (Guess Who’s Unhappy with the IRS 2012).
The other major issue associated with the company includes the use of toxic compounds and pesticides. This has continued to affect the people and employees. Apart from its history of relying on sweatshops, the company does not promote the best “Code of Conduct”.
This has continued to affect the company’s image. The company’s financial reporting systems and supply chain practices are not transparent (Guess Who’s Unhappy with the IRS 2012).
How Guess Company is dealing with the Issues
That being the case, it has been necessary for the company to deal with the above issues. To begin with, the company decided to monitor its contractors in order to prevent unfair or illegal manufacturing practices. Towards the end of the last century, the company was constantly inspecting the practices of the major contractors to ensure such violations did not take place.
As well, the company came up with new policies for employees’ salaries and compensations. This move was necessary to ensure the company retained its positive image. Presently, the company has been looking for ways and strategies to hire the best contractors in order to deal with the problem of “sweatshop labor” (Guess Who’s Unhappy With the IRS 2012).
As well, the company is currently relying on new advertising strategies including the use of social media and television. By so doing, the company has continued to create a positive impression to the global consumer. The company has also considered the best strategies to ensure its contractors are ethical. The company is also promoting the best product development practices.
This is necessary towards providing the best clothes, perfumes, and accessories to the global consumer. However, the company is doing very little to address the use of toxic chemicals and pesticides in its manufacturing process.
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As well, the company failed to establish a “code of conduct” to ensure the company is ethical. The supply chain process lacks the needed transparency. These are some of the issues for the company to address (Willard, 2011).
How the Public Perceive the Company and Its Actions
In the last few years, Guess has continued to record a positive performance from its business activities. However, the outstanding fact is that many people and consumers still consider the company activities to be unethical. It is also notable that the company does not promote social functions and activities. This explains why it ranks low in terms of social responsibility.
It is agreeable that many employees at the company are aware of the company poor manufacturing practices associated with the use of toxic chemicals. The company has also been using pesticides. With such unethical practices, it becomes quite clear that the public perceives the company as socially irresponsible unless it works harder to improve the situation (Willard, 2011).
The Company’s Operations and Value of the Triple Bottom Line (TBL)
The “Triple Bottom Line” concept examines how a company addresses the three major pillars. These pillars include “Profits, the Planet, and People”. Business organisations should their profits to support the society and the environment. An ethical company will be committed to “TBL Reporting”.
That being the case, the company’s operations show clearly that the company has a long way to go before it complies with the concept of “TBL Reporting”. Although the company is trying to change most of its malpractices, it is agreeable that the company’s activities do not show commitment to the Triple Bottom Line.
This is the case because the company does not provide the best working conditions for its employees. As well, the leaders at the company are doing little to change the company’s image (Willard, 2011).
How the Company’s Employees View their Employer
Majority of the employees working for Guess and its contractors are dissatisfied with their current working conditions. This means that only a small faction is contented with the working conditions. For instance, the continued use of pesticides and toxic substances in the production process is unethical.
This affects the health of the employees. As well, most of the employees only get the stipulated minimum wages from their employer. Although a better salary is not the only source of motivation, it plays a significant role towards boosting the morale of the workers.
The company does not support its employees through work-life balance. The employees find it hard to have their concerns addressed at the company. The employees strongly believe that their employer should do something in order to boost their morale (McShane & Von Glinow, 2009).
Recommended Processes for Improvement
The current situation at the company calls for some improvements. The first thing to consider is the company’s organisational strategy. There is need to have new leaders who can motivate the employees and ensure they have the best working conditions. The leaders will monitor the working conditions and address the needs of different employees and stakeholders.
The other important thing is to use the best “Code of Practice” to govern all the activities undertaken by the company. The managers should also understand the importance of being “socially responsible”. The managers can embrace the use of the “Cultural Web”. This will help the managers examine the current practices that make the company unethical.
The “Cultural Web” will offer new insights and strategies for ethical practices. The approach will help the company utilize the best business practices in order to empower both the society and its employees (McShane & Von Glinow, 2009).
Guess Who’s Unhappy With the IRS 2012, <https://app.secure.griffith.edu.au/reference_tool/index-core.php>.
McShane, S. & Von Glinow, M. (2009) Organisational Behavior: Emerging Knowledge, Global Reality. New York: McGraw Hill.
Willard, B. (2011). The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. New York: New Society Publishers.