Abercrombie and Fitch: A Case Study Clothing giant A&F has a not-so-good reputation in the arena of business ethics, and has been sued several times for size discrimination, sexism, and racism. In 2003, the company was taken to court by employees who felt that it had a systematic discrimination policy in place. What exactly did the company miss in its diversity understanding? This text, amongst other things, analyzes the situation and the ethical issues involved.

Abercrombie & Fitch (A&F)

Abercrombie & Filch has been accused of being insensitive on many fronts. For instance, the company has in the past been involved in a tussle with angry parents, who found a sexual phrase on the company's newly-launched line of pre-teen innerwear offensive. In 2003, the company was sued for discriminating against minority groups in its human resource practices (Greenhouse, 2003). Aggrieved employees accused the company of favoring whites for its sales floor jobs, and steering those from minority groups into the stockroom, where they wouldn't interact directly with clients. Not learning from its mistakes, the company again found itself on the wrong side of the law in 2005 and again in 2009, this time for releasing t-shirts bearing sexist slogans against women (I have included the link to an image of the offending t-shirts in the references section of this text).

It is evident that A&F missed quite a number of things in their diversity understanding. It would be prudent, however, to begin by outlining what they did not miss -- the company obviously was aware of the changing demographics of the U.S. population, which is evident from the fact that they at least took time to hire people from different genders, races and ethnicities. However, in as much as the company recognizes the existence of multicultural diversity, it does not appreciate the same and hence, does not recognize that what is acceptable by one group -- say teens and pre-teens - may not necessarily be acceptable to another, say their parents (Rao, 2012; Appelbaum, 2002). It is this lack of appreciation for multicultural diversity that i) drives the company to hold on to stereotypes and prejudicial beliefs -- for instance, that blacks did not have what it takes, or were not qualified to interact with, and more so, convince white clientele to purchase from the company; and ii) makes it fail to realize that having diversity among sales floor employees presented better opportunities for creativity and innovation (Stevens, Plaut & Sanchez-Burks, 2008; Sowell, 2010).

Essentially, three ethical issues are involved in this case. The first is racial discrimination against minority groups. The principles of justice, fairness, and equity call for the fair and equitable allocation of resources and opportunities. By denying its 'minority' employees the opportunity to interact directly with the white clientele, the company was unfairly creating some form of disconnect between employees, causing those from the group being discriminated against to feel inferior and of less important than their colleagues.

Sexism is the second ethical issue at play in this case. Guillaumin (2004) defines sexism as discrimination or prejudice against women on the basis of gender. Messages such as 'the Freshman 15' (accompanied by a list of 15 boy names) and 'Who needs a brain when you have these' printed on girls' t-shirts unfairly portrayed the female gender as sex objects.

Thirdly, the company showed insensitivity to age diversity. Just because the young population was company's main market does not give it an excuse to offend the elderly population. What may appeal to the young may actually be offending to the elderly, and the company simply failed to recognize this fact.

The best ethical theory that makes for the best analysis of the scenario is the deontological theory. According to Lamb, Hair, and McDaniel (2008, p. 107), "the deontological theory states that people should adhere to their obligations and duties when analyzing an ethical dilemma." Duty remains the central concept in this case. As Elder (as cited in Leung, 2003) points out, Abercrombie & Fitch reserves the right to come up with, or develop, their own rules of operation and procedures. They should be permitted to set their own policies. This is particularly the case given that the company is responsible for its own success in a highly competitive marketplace and, hence, ought to be allowed to make decisions that auger well with its competitive strategy, i.e. By hiring only those that can help it connect better with its target clientele. This seems to be the thinking...

However, it is important to note that this is not necessarily the right thing to do. The company's executives, just as is advocated by deontologists, appear obsessed with enhancing the success of the enterprise -- they see this as their duty. By this, I mean that they appear overly concerned with executing, performing, or accomplishing that which they feel or are convinced is their duty, regardless of whether or not it puts a smile across the face of other people.
In essence, the lawsuit, as far as the outcome is concerned, was legally well-founded. In the settlement reached, the company, as Greenhouse (2004) observes, agreed "to alter its well-known collegiate, all-American -- and largely white -- image by adding more blacks, Hispanics and Asians to its marketing materials." This was the legal outcome of the lawsuit filed to challenge the company's alleged racial and gender bias. By agreeing to embrace diversity in its various operations, the company rejuvenated its image and averted future abrasions with the law as far as discrimination is concerned.

In my view, the lawsuit was also ethically well founded. When the company was sued, a number of "Hispanic, black, and Asian plaintiffs complained that when they applied for jobs, they were steered not to sales positions out front, but to low-visibility, back-of-the-store jobs, stocking and cleaning up" (Greenhouse, 2004). These complaints had an ethical basis. In my opinion, and with the backing of character-based ethics, a course of action could be considered right if someone else (a virtuous person in this case) would choose the same course of action in similar or identical circumstances. My assertion has its basis on the basic tenets of virtue ethics, and hence is largely person (as opposed to action) based. Virtue ethics, in the words of Mascarenhas (2007, p. 169), "deals with the rightness or wrongness of the human person." As the author further points out, the all important question as far as this ethical theory is concerned is, what kind of person should I be? The top officers of the firm were, in my opinion, lacking on the virtuous front. This is more so the case given that it is they who advanced the discrimination agenda, which later on informed the lawsuit. They lacked a set of characteristics that would have set them apart as virtuous people: they lacked prudence, exercised poor judgment, and failed miserably when it came to the impartial treatment of others. In essence, the young men and women who applied to work at Abercrombie should have been judged on their qualifications, and not their skin color or gender" (AFjustice, 2014). The top executives failed on this front, meaning that the lawsuit was ethically well-founded.

Some of the stakeholders that were injured in this case include, but they are not limited to, existing and prospective employees, customers, and shareholders. Those who worked for the company and were forced to work where nobody saw them (i.e. The stock room) or were fired just because their look was inconsistent with the preferred look of the store were clearly injured; and so were prospective employees whose numerous applications to the company were turned down, not on merit, but on flimsy and clearly discriminative grounds. The company's customers were also injured because their expectations were not met. Just as any customer would, those who shopped at the outlets, including Asian, black, and Latino customers expected the company to operate in an ethical, open, and fair manner. Nobody would be comfortable buying goods or services from a company that openly flaunts some moral and ethical standards. The company's shareholders were also let down. This is particularly the case given that the executives of the firm, to whom they entrusted the duty of making the right decisions, demonstrated poor judgment by engaging in practices that were clearly in conflict with the basic tenets of good corporate governance. These were practices that, if discovered, could have had a negative impact on whatever shareholders had pumped into the company as investment.

To mend relations with offended parties and stakeholders, A&F must embrace a number of measures. To begin with, it must issue an apology to all those who were hurt, inconvenienced, or put-off by its acts and decisions. The said apology should be published in the popular media and should indicate what the company is doing to correct the situation. Next, the company should, as per the settlement, compensate the plaintiffs and others who may have been disadvantaged as a result of its discriminative practices. A&F also ought…