This study examines the Patagonia organization and its products which are focused on being environmentally safe and of high quality. The company makes a switch to organic cotton and experiences difficulties in the manufacturing process. An analysis is conducted based on specific literature and recommendations stated. Patagonia has historically been very conscious of consumer wants and needs and the company is advised to proceed in this manner in the future to ensure sustainability.
¶ … Large System: Managing Strategic and Large Scale Systems Change
The objective of this study is to describe Patagonia's organization design or the Star Model and specifically the Galbraith Star Model. This study will assess the alignments among the elements of the design and explain how Patagonia integrates sustainability into its design.
Description of Patagonia's Organizational Design
Patagonia's organizational design is based on Jay Galbraith's 'Star Model', which is characterized by five categories including those of: (1) structure; (2) people; (3) strategy; (4) rewards; and (5) process. (Reinhardt, Casadesus-Masanell, and Freier, 2003, paraphrased) Patagonia is a privately owned company, which provides the leadership with a great deal of freedom since it does not have to answer to a public array of shareholders and investors. Two strategic decisions that were closely linked were addressed by Patagonia executives in 2003. Patagonia designs, markets and distributes high-performance wear for the outdoors. The first decision was centered on whether Patagonia should expand their product base, which included mountain and rock climbing clothing as well as clothing suitable for snow and ice activities including snowboarding, fishing, and other outdoor sporting activities. The question was how much expansion could be undertaken without sacrificing quality and reputation. As well, Patagonia's designs were very innovative enabling the company to charge 20% higher prices than their competitors charged. Patagonia hoped to be "a catalyst for social change" while providing an example for other firms in the clothing industry. However, the question of the impact of the company's stand on the environment and the effect on its bottom line was still in question.
II. Assessment of the Alignments Among the Elements of the Design
The entire product line of Patagonia was comprised by eight smaller lines with each representing a percentage of Patagonia's overall sales. Three factors were considered by the company during the design and development phases of its products, including quality, environmental impact, and aesthetics." (Reinhardt, Casadesus-Masanell, and Freier, 2003, p. 2) The search for higher quality informed Patagonia that this could be accomplished through improvements in raw materials, products designs that were better or higher attention to detail in manufacturing of the products.
Patagonia further surveyed world-class climbers and other professional athletes on its products and spends a great deal annually on testing products in the field. The company is highly innovative and has a high commitment to lessening the environment impact of the products and processes of the company. Patagonia further wanted to bring about a reduction in its supply chain and believed that customer demand should be the driver for production.
The communication tools used by Patagonia include those of advertising in print form, the use of electronic media for advertising as well as gaining support of grassroots groups, public affairs advertising, and advertising via trade shows and graphics of the company's products. Print advertising was specific to outdoor and sports magazines that were nationally circulated. Lost Arrow Corporation owned Patagonia, which was not a publicly traded company. The company was happy with only small and slow growth achievements. Net sales went from $86,136 FY 1990 to $223,956 FY 2003. Patagonia made the switch to organic cotton and experienced difficulties with organic cotton due to the changes in the processes of dying the cotton and the colors not fading from the products
III. Explanation of How Patagonia Integrates Sustainability Into Its Design
Winter ( ) relates that dynamism is a characteristic of the organization that is prepared to cope with change and that views change as integral to the process. Developing effective sustainability requires that a company develop a strong identity. Otherwise, the company will be at the mercy of the tangent of any leader that manages to take control over the company. Therefore, it can be gathered from the literature that dynamic change is a type of change that is directed, controlled, and structured rather than being simply 'change'. Organization of work and the appropriate appointment of CEOs are both requisites to sustainability for the organization. Structure of the organization is important in that the organization must be customer-focused.and "embrace multiple stakeholders including employees, the communities, and countries in which they do business, and the environment." (Lawler and Worley, 2011, p. 2) In addition, it is reported that work systems are sustainable meaning that redundancies are reduced as well as "overlaps in distribution channels, customers, and product lines." (Lawler and Worley, 2011, p. 2)
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