a) The main facts about the activities of the company.
TOMS was founded in 2006 by Blake Mycoskie, after a trip to Argentina where he witnessed extreme living conditions and poverty, and how children were running around barefoot. TOMS main product is shoes, which are sold through retailers and flagship stores all over the world. The business core lies in its slogan ?One for One?, which means that for every pair of shoes they sell, one pair will be given to a child in need. TOMS works closely with their Giving Partners, which are charity organizations that work on a non-profit basis. With the Giving Partners, they assess different situations in the world, so that they can contribute as much as possible. They do the following: Identify communities that need shoes, get the proper shoes to children, give children shoes as they grow and lastly improve through feedback. The process, from the sale of a shoe, to hand-placing them on a child in need, is estimated to take 4-6 months.
b) The ethical challenges this company is addressing.
TOMS base their business on giving away one pair of shoes to a child in need, when a pair of shoes has been purchased. TOMS is a ?for profit? business. By this TOMS refers that their business model aims for making profits, but that their core value is to give away shoes to children in need. First of all the product, shoes, addresses TOMS main ethical challenge. According to Mycoskie shoes are a fundamental resource for protecting children?s health and providing them with opportunity. Giving TOMS to a child in need will result in the fact that children won?t have to walk miles on barefoot anymore to important places such as school, clean water and medical help. In addition, shoes protect children?s feet from infection and soil-transmitted diseases. At last, educated and healthy children are more likely to be successful and are better to improve the future for themselves and other people. It is important to mention that TOMS controls the complete process from the production of shoes to the personal delivery of shoes to children in need. Even though they work together with other companies and organizations, they are strongly involved in the process and take responsibility of all the direct consequences of their activities. For example TOMS shoes requires factories to operate under sound labor conditions, pay fair wages and follow the International Labor Standards set by the International Labor Organization. A code of conduct is signed by all factories. Besides, another ethical issue which TOMS is aware of is that there cannot be any adverse socioeconomic effects. TOMS has to avoid that local businesses suffer from the actions of TOMS and has to carefully chose the locations for ?Shoe-drops?.
c) What makes you believe this company is really ethical and why you trust it.
To our point of view TOMS can be trusted for several reasons. First, a code of conduct is signed by all factories that produce for TOMS. The production staff regularly visits these factories to make sure they are maintaining these working standards. TOMS also has third parties auditing the factories at least once a year to ensure they adhere to proper labor regulations. Second, we agree upon the fact that the view of TOMS regarding doing good business or ethics, go beyond what other companies do. TOMS operates ethical on the basis of a ?buy-one-give-one-away model? instead of using a charity model. They do not donate money for so called ?social responsible? activities or donate to charity organizations, but they directly help people by personally dropping shoes. Due to this straightforward business model, we think it is easy for the public to monitor the activities of
TOMS. In addition TOMS regularly update the website and social media about their actions in order to inform people and increase their transparency.
Besides, their ability to make profit relies heavily on their ethical values. If TOMS looses any trust, they would lose profits as well. So in order to gain long-term sustainability TOMS cannot afford to act unethical. Finally, within a year after their existence TOMS received recognition for their work. In 2007, TOMS was honored with the prestigious People?s Design Award from the Cooper-Hewitt National Design Museum, Smithsonian Institution. Two years later, Mycoskie and TOMS received the 2009 ACE award by Secretary of State Hillary Clinton, which recognizes companies? commitment to corporate social responsibility, innovation, exemplary practices, and democratic values worldwide.
d) The possible challenges facing the company in the future and how you think this company may improve.
TOMS main challenge is to make sure that people keep buying TOMS shoes. Due to the great competition in the shoe market, TOMS has to develop their shoes continuously and eventually extend their line of products. The past years it has been proven that the concept of TOMS holds. It is a self-feeding loop that has the viability to continue over years. Furthermore it will be relevant for TOMS to closely monitor the developments in the industry in order to sustain their business position. If TOMS not responds to the fast changing environment it will be harder to reach their ethical goals as well.
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