BUS 322 Ashford Timberland Company Challenges and Opportunities Paper

  

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the class is ORGB(organizational Behaviours), Answer the questions in the doc.

THE TIMBERLAND COMPANY: CHALLENGES AND OPPORTUNITIES
Answer all of the questions following the case including the multiplechoice and the true-false questions. These questions are posted in
the Quiz link in Moodle for Assignment 1. You are to access the quiz
by clicking on the link and are required to type in your answers
directly into the quiz document. Do not email me your answers.
The Timberland Company, headquartered in Stratham, New Hampshire, makes and markets
footwear, apparel, and accessories. Its footwear includes hiking boots, boat shoes, sandals,
outdoor casual footwear, and dress shoes. The apparel line includes socks, shirts, pants, and
outerwear, whereas accessories involve products such as watches, sunglasses, and belts.
Timberland sells its products around the world through department stores and athletic stores and
operates over 220 company-owned and franchised outlets in the United States, Canada, Latin
America, Europe, the Middle East, and Asia.
Timberland has a strong international operation with a growing market in China;
however, it has experienced increased labour costs and tariffs in Europe. In 2006 the tariff issue
became very important due to the sourcing of approximately 30 percent of Timberland’s total
volume from factories in China and Vietnam. The company’s international strength has been
offset somewhat by its declining market fortunes in the United States. Timberland also faces
increased competition globally, particularly from Nike and Adidas. From 2001 to 2005,
Timberland had an average annual revenue growth of 7.5 percent, compared to the industry
average of 9.0 percent during the same period. Moreover, revenue growth has been decelerating.
In 2006 Timberland had $1.6 billion in revenues that reflected growth in the business segments
serving casual, outdoor, and industrial consumers. However, the boot business declined due to
significant fashion changes that diminished demand for those products.
Although Timberland experienced some market difficulty in 2006, it was still recognized
as a great place to work. The company was honored by Working Mother magazine as “One of
the Best Places to Work for” and by Fortune magazine as “One of the 100 Best Companies to
Work for.”
Timberland develops and uses technology to further its business interests and to benefit
its customers and distributors. For example, Timberland uses innovative technology that enables
customers to customize their footwear online. Timberland’s configuration software allows
shoppers to “specify so many product details⎯including colors, hardware, laces and typefaces
for monogramming⎯that more than one million combinations are possible for any one base
[footwear] style.” The results of the customization are visualized instantaneously on the
customer’s own computer. A company spokesperson observed, “ no one else out there has this
technology. It was really important to us to include that because the challenge in the online
environment is trying to replicate that tactile-visual experience of an offline environment.”
Another application of innovative technology occurred in the summer of 2005 with
Timberland’s test of its PreciseFit System in 54 stores, in Europe, Asia, and the United States.
The PreciseFit System, tested in the men’s casual footwear category, enables Timberland to
exactly fit footwear for the 60 percent of men who can’t get an optimal fit otherwise and for
those men⎯about 35 percent of the market⎯who have a half-size or greater difference between
their left foot and right foot. Each pair of shoes comes with inserts that fit full and half-sizes in
narrow, medium, and wide widths, thereby enabling retailers to more easily service hard-to-fit
customers, maintain a smaller inventory, and have fewer lost sales.
In addition to its efforts to run the business more effectively and efficiently, to provide
customers with continually improving service, and to meaningfully support suppliers and
distributors, Timberland is also committed to social and environmental causes. Timberland is
committed to using “the resources, energy, and profits of a publicly traded footwear-and-apparel
company to combat social ills, help the environment, and improve conditions for labourers
around the globe.” Jeffrey Swartz, Timberland’s CEO, believes that the best way to pursue social
objectives is through a publicly traded company rather than through a privately owned company
or a nonprofit organization because it forces commerce and justice⎯business interests and
social/environmental interests⎯to be enacted in a public and transparent manner.
Timberland’s social and environmental commitments and efforts are evident in its
products and operations as well as in its relationships with suppliers and customers. In terms of
its products and operations,
Timberland practices full-disclosure labeling on its footwear. Every footwear box has a
label describing the ecological impact with respect to the amount of energy used in the
manufacture and distribution of that particular product. Timberland’s goal is to decrease
its ecological footprint by increasing the use of wind or solar power in the manufacture
and distribution of its products. Future plans for full-disclosure packaging include
labeling that details the environmental impact of the chemicals and organic materials
contained in Timberland’s products.
In dealing with suppliers around the world, Timberland promotes fair labour practices
and human rights. According to the company’s Global Human Rights Standards, “[w]e’re
equally committed to improving the quality of life for our business partners’ employees. Through
our Code of Conduct program, Timberland works to ensure that our products are made in
workplaces that are fair, safe and non-discriminatory. Beyond training factory management,
educating factory workers, and auditing for compliance with our Code of Conduct, we also
partner with nongovernmental organizations and international agencies such as Verité, CARE,
and Social Accountability International to help us develop programs focused on continuous
improvement and sustainable change.” How does Timberland operationalize these standards?
One way is that it tries to constructively engage suppliers who commit labour infractions. Rather
than immediately discharging such suppliers, Timberland works at getting the suppliers to
change their policies so as to keep the workers employed.
Timberland engages in similar influence attempts with its customers. For instance, in
making a sales presentation to executives from McDonald’s Corporation regarding the possibility
of Timberland becoming the contract supplier of new uniforms for the fast food giant, Jeffrey
Swartz, Timberland’s CEO, used a novel approach. To the surprise of the McDonald’s
executives, he did not provide product prototypes or pitch the company’s creativity or
craftsmanship. Instead, he talked enthusiastically about Timberland’s corporate culture and what
the company was doing in terms of social, environmental, and labour commitments. Swartz’s
message was that he expected Timberland’s culture would rub off on McDonald’s, thereby
helping McDonald’s to build a unified, purposeful, motivated workforce.
Can commerce and justice⎯business interests and social/environmental
interests⎯peacefully coexist and mutually reinforce each other for Timberland and its
stakeholders over the long term?
Source: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian
Business Ethics and Professor of Management, College of Business Administration, Valparaiso University.
References: Current Research on Timberland Co., M2PressWire (February 13), www.BellwetherReport.com
(accessed August 21, 2007, from Newspaper Source database); The Timberland Company: Company Profile,
DataMonitor, reference code 4905, pp. 1–8, www.datamonitor.com (accessed August 2006); 2006 Annual Report,
Timberland, p. 3, http://sec.edgar-online.com/2004/05/12/0001047469-04-016994/Section7.asp (accessed February
11, 2008); Power, D. (205) Timberland Kicks Up Customization, Women’s Wear Daily (October 12), Vol. 190, No.
78, p. 10; Leand, J. (2006) Timberland Launches PreciseFit, SGB (February), Vol. 39, No. 2, p. 9; Reingold, J.
(2005) Walking the Walk, Fast Company (November), Issue 100, p. 80; Frazier, M. (2007) Timberland ‘Walks the
Walk’, Advertising Age (June 11), Vol. 78, No. 24, p. S8; Global Human Rights Standards (2007), The Timberland
Company, http://www.timberland.com/timberlandseve/content.jsp?pageName=timberlanserve_inform (accessed
August 21, 2007).
Answer all of the questions below including the multiple-choice and
the true-false questions. The questions are posted in the Quiz link in
Moodle for Assignment 1. Access the quiz by clicking on the link and
type in your answers directly into the quiz document.
1. How does Timberland’s commitment to social and environmental responsibility influence the
ways in which it deals with the diversity, technology, and globalization challenges that it
faces? Be sure to visit https://www.timberland.ca/responsibility.html to learn about Timberland’s
impact to date.
2. Consider the ethical, diversity, technology, and globalization challenges that have confronted
Timberland. How has Timberland converted these challenges into opportunities for the
company?
3. What are some advantages and disadvantages of Timberland’s attempts to influence suppliers
and customers regarding corporate social and environmental responsibility? How can these
influence efforts help Timberland as it seeks to deal with its own ethical, diversity,
technology, and globalization challenges?
QUIZ QUESTIONS
True/False
_____1. Timberland faces both local and international pressures.
_____2. Timberland is innovative in its technology.
_____3. Timberland does not engage in ethical practices.
_____4. Timberland focuses only on profit.
_____5. Timberland has a demonstrated commitment to social responsibility.
_____6. Timberland shows that commerce and justice do not co-exist.
Multiple Choice
1. Timberland operates in a country that demonstrates
(a) low power distance.
(b) low individualism.
(c) high indulgence.
(d) none of the above.
2. Timberland’s technology
(a) allows it to focus on batch production.
(b) allows it to focus on customization.
(c) isn’t a key strategic differentiator.
(d) hurts its susutainablity efforts.
3. Timberland can be considered
(a) a domestic company .
(b) a global company.
(c) a hybrid.
(d) none of the above.
4. Timberland’s ethical approach most resembles
(a) rule-based.
(b) character-based.
(c) consequence-based.
(d) none of the above.

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