STEVE MADDEN LTD., THE COPYCAT (2009)

Based on a paper by: Alyssa Chamberlain
Summary by Mayara Jordani

 

Steve Madden Ltd. is an American Shoe company that has become very famous over the past decade. It was founded in 1990 by Steve Madden and their goal was to design and sell women’s, men’s and children’s footwear in different countries including Asia, Canada, Europe, the Middle East and Australia. Steve Madden faced a difficult situation in 2009 and 2010 in getting their revenues up to high numbers. In 2009 and 2010, Steve Madden Ltd. had had a negative cash flow. However in 2011 the company was able to increase their numbers positively to an income of $36,679 thousand.

In 2009, Steve Madden was sued by French Couture House Balenciaga’s Lego shoe and Alexander McQueen’s ‘faithful’ bootie for creating similar versions of their shoes, however at a more affordable price. However, the rights to copying a designer’s clothing or shoe style are unclear in today’s market. Even though these rights are unclear, it does not mean that Steve Madden did not violate ethical standards. Under the Individualism theory and part of the Utilitarian theory,  Steve Madden Ltd. did nothing wrong. However, under the Kantianism theory, Virtue theory and part of the Utilitarian theory, Steve Madden Ltd. acted unethical.

The Individualism Theory according to Friedman states that the only goal of a company is to profit and maximize the profit for the owner and stockholder. According to the individualism theory, Steve Madden Ltd. did nothing ethically wrong. In order to maximize the profit of the company, Steve Madden Ltd. copied other designer’s shoes and marketed them as their own. Steve Madden Ltd. marketed a shoe for $99.95 when the exact same shoe cost $4,175 by French Couture House Balenciaga. In 2011, the company increased their revenue by $333,131 thousand and increased their net income by $21,594 thousand from 2010.
The Utilitarian Theory states that we must act in order to maximize the overall good to the greatest amount of people. The stakeholders in this situation were Steve Madden Ltd., its customers, Steve Madden, French Couture House Balenciaga and Alexander McQueen. Steve Madden and Steve Madden Ltd. were able to bring happiness to themselves and their customers by creating a similar shoe for a very low price when compared to the original. By doing his, Steve Madden Ltd. was able to bring happiness to the company in the money earned from the shoe sales. However, this did not being happiness to French Couture House Balenciaga and Alexander McQueen. French Couture House Balenciaga and Alexander McQueen were not happy with the businesses’ decision to create a cheaper version of their shoes and market them as their own. In doing so, they filed a law suit against Steve Madden Ltd. From the view point of Steve Madden Ltd. and its customers, the company did not act unethically because they are bringing happiness to them. However, in the stylist’s viewpoint, the company was acting unethically.

The Kantianism theory has several different parts. Part one states that one must act rationally and not consider one exempt from the rules. With this, Steve Madden did act unethical. This is because he considered himself exempt from the rules of copying someone’s work. The second part of the theory states that it allows and helps people make rational decisions. Under this part, the company did not act unethical. He allowed the customers to make their own decision by either buying the original $4,000 shoe or the knock-off $100 version. Steve Madden Ltd. never forced the customers to buy their version, however the cheap price was an incentive. The third part to Kantianism states that it respects people, their autonomy and individual needs and differences. According to this part, Steve Madden Ltd. did not act ethically because they were not respecting the original designers work or company by copying their work. The company also violated the companies individual needs and differences by using other companies ideas as their own and selling it at a low price. Lastly, the fourth principal states one is motivated by the good will, seeking to do the right thing because it is right. Steve Madden Ltd. did not act ethical according to this principal because they stole someone’s idea. If they wanted to act ethically right, they would have created an idea on their own. According to Kantianism, Steve Madden Ltd. did not act ethically correct.

Lastly, the Virtue theory is based on four characteristics, courage, honesty, temperance/self-control and justice/fairness. Steve Madden Ltd. did not display courage. If they had, the company would have created shoe designs of their own instead of copying another designer’s. They also did not display courage in owning up to their mistakes and giving credit to the original designers. Steve Madden Ltd. did not act honestly because they let the customers think the shoe design were their own when in fact they were copied. Also, Steve Madden Ltd. did not display any self-control in this situation. This is because they did not resist copying someone else’s work. Finally, Steve Madden Ltd. did not display justice because the idea for the shoe design was copied from another designer. Although they made a great profit from the design, it was not their original, unique design. Because of this, the company acted unethical based on the Virtue Theory.

According to the four ethical theories described above, Steve Madden Ltd. acted unethical in their work and to their stakeholders.

These analyses and facts are based upon the original paper by Alyssa Chamberlain entitled "Steven Madden a copycat?" (Apr. 23, 2012).

Desjardins, Joseph. (2009). An Introduction to Business Ethics (Ed: 4). New York, NY:

The McGraw-Hill Companies, Inc.

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