Sunday, November 16, 2014

Under Armour: Core Value Contradiction (2014)

Under Armour Company logo
The unethical article I found on Under Armour was “Under Armour deal contradicts core values” (Jackson Santy, 2012). The article was about how Under Amour was given a grade of a "C-" when being evaluated for apparel supply chain compliance and the integrity of their manufacturing units, including fair working conditions among other criteria by “As You Sow” which is a corporate responsibility group. This came as a shock because Under Armour has been known as a company that has been known to mainly act ethical especially since on they were given four out of five stars for job work/life balance (, 2014). What the article also talked about was how students from the University of Missouri through the organization United Students Against Sweatshops held protests against the labor injustices of several companies which included Under Armour(Jackson Santy, 2012). The problem is schools are being offered these big apparel contracts by companies like Under Armour so athletes can wear their apparel and when they make their decision the schools only think about which sports apparel offers the best deal for them and not how the decision is unethical. The schools and the administrator's don't think about nor do they seem to care how the products they are using are made in unfair working conditions, but the only thing they care about is the fact that the money will justify the means. Many schools only look at it as which company will offer the school the most money. The problem is that what schools don’t realize is that major sports retailers are basically buying the schools out so they can use them as a marketing platform to promote their products so everyone can see it at colleges and nationally, especially when they know there will be a lot of people at an event or viewers watching. Under Armour is viewed as being unethical for this reason.

Kevin Plank, CEO of Under Armour
From the unethical issue that Under Armour is accused of, many stakeholders are affected by it. Upper management is affected by this because they are seen as an unethical company and they would be seen as having a poor sense of judgment for not doing anything to fix it. Also, by having this unethical issue linger around the company it could cause sales to decrease which could then lead to upper management being fired. This affects the customers because in society they would be viewed as supporting a company that allows unfair labor practices which would then cause Under Armour to lose customers since people wouldn’t want to be associated with a company that allows that. Another way this affects customers is that the products they buy would viewed as tainted from the labor injustices and no one would then wear them and they would then return them. This affects stockholders because if Under Armour allowed for this to happen, people would stop buying their products since they wouldn’t want to associate themselves with an unethical company. This would then cause the company stock to decrease causing stockholders to lose money. Also, if Under Armour knew about the unfair labor conditions then they would essentially be cheating the stockholders out of their money. Employees are affected by this because they are the ones who are dealing with the unfair labor practices. Also, because of this issue being presented, actions can be taken to fix the unethicalness of Under Armour. The community is affected by this because anyone who is seen wearing an Under Armour product would be viewed poorly by society because they would be seen as supporting unfair labor practices.

Individualism’s ethical rule is defined as making decisions that would maximize profits for not only the company but owners as well as long as it’s in accordance with the law. What individualism says about this case is that Under Armour should do what it needs to maximize profits even if that means if their labor practices aren’t up to the standards of other companies as long what they are doing isn’t illegal. Since the article doesn’t refer to what the labor injustices Under Armour committed then we are left with just assumptions. If the employees just work long hours and the pay isn’t good because Under Armour wants to maximize its profits then that wouldn’t be unethical. However, if Under Armour would was found to have had their employees working with hazardous materials because they were cheaper than that would be deemed to be unethical. Under Armour is viewed to be an ethical company for the most part and have been able to maintain profits throughout their history. Under Armour is perceived to be a company that produces great products in accordance with the law and has never been the subject of any wrong doing. In Friedman’s version of individualism, he states that, “the only obligation that the business person has is to maximize profit” (Individualism PowerPoint, Slide 12) and that they “should not attempt to be socially responsible” (Case Manual, Chapter 2). So in essence, Under Armour should keep doing what it has been doing because they are able to maximize profits that seems to be legal and according to the statement by, the rating seems to contradict what the report is saying about Under Armour. Also, if the working conditions are so poor at Under Armour, Friedman would state that the employees should work somewhere else if they are unhappy because Under Armour is working to maximize profits, not to be socially responsible. The best option for Under Armour is to keep production at the same level it’s at already with maybe some minor adjustments so they can get rid of the label that they have unfair labor injustices. By keeping production this way Under Armour will be able to maximize profits since within the past five years their profits have increased each year and in 2013 they reached a gross income of $1.14 billion which was over a $300 million increase from the year before. (, 2014).

Under Armour's "4 Pillars of Greatness,"
found on their website
Utilitarianism is described as maximizing happiness in not only yourself but others as well and businesses should aim to maximize the happiness in the long run for everyone who is affected by the business decision. Whenever a business decision is made, the stakeholders are affected. In this case, when Under Armour allowed unfair labor practices to occur, they weren’t taking into consideration the costs and benefits of each stakeholder, and for this case mainly the costs. The cost and benefits of upper management allowing this to occur was that it allowed them to pocket more money for themselves, however, they were selfish for allowing unethical labor practices to occur. Employees are affected by this decision because they are the ones who are producing the product but they are being put in unfair working conditions which basically gives them no benefits to working at Under Armour. These labor injustices affect the customers because when people buy the product, they are buying into the company and what it stands for, and if a company is being unethical then people won’t want to be associated with that product since in society they would be viewed poorly. Another set of people that would be affected mainly are the stockholders because in the short run they would gain a profit since Under Armour is trying to maximize profits but in the long run they would lose money since people wouldn’t want to be associated with buying an unethical product. Suppliers would also be affected by this because they wouldn’t be able to sell an unethical product which means they would have to take down the product from their shelves. Since utilitarianism looks for the best option that allows everyone to be happy, the best solution for Under Armour to have is to clean up the mess at the factories that is causing them to have unethical labor practices and give the employees some benefits. This would be the best outcome because all stakeholders are happy and according to John Stuart Mill, “we ought to bring about happiness and pleasure in all beings capable of feeling it and do so impartially” (Utilitarianism PowerPoint, Slide 6). 

Kantianism is defined as acting and making decisions that honor and respect individuals that are informed and have consent from all parties. (Case Manual, Chapter 2). Kantianism states that decisions you make shouldn’t harm others in any way and it wouldn’t have been appreciative of the way Under Armour acted with its unethical decision. Under Armour didn’t act in accordance with the formula of humanity because for the formula of humanity Kant says, “act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same as an end and never simply as a mean” (Kantianism PowerPoint, Slide 9). When Under Armour made its decision to act unethically by allowing labor injustices, their only motivation was to maximize profits. For the humanity part, Under Armour used the employees of their company and put them in poor working conditions because they found out it create more profits for the company which disregarded any rationality. The end was that more products could be produced which could then be sold. The means were that by having people work in poor conditions there could be a surplus of production and an increase in sales. However, not only is it unethical for Under Armour to act this way but it would be unethical for them if they tried to withhold the information because if they knew people found out about their products being made in poor working conditions then people wouldn’t’ want to buy their products. In Kantianism there are four basic principles. The first one is to act rationally which Under Armour didn’t conform to because Under Armour acted as if it was exempt from the rules by allowing to have labor injustices go on at their factories. In order to conform, Under Armour needs to make sure they have rules and regulations set as far as working conditions for employees. The next basic principle is allowing and helping people to make rational decisions which Under Armour didn’t do because they didn’t tell anyone about the labor injustices that were going on which means customers are not being informed and they are buying products that are being produced unethically. For Under Armour to conform they must always report to the public what is going on with the company and the products. The next basic principle is respect people and their individual needs and differences which Under Armour didn’t conform to because Under Armour disregarded the employees and made the decision to act unethically in order to make a profit. In order to conform Under Armour must take into consideration the needs and differences of all individuals that may be affected by any decision that is made. The last basic principle is seeking to do what is right because it is right which Under Armour didn’t conform to because they didn’t do anything right when they allowed labor injustices and didn’t tell about it to the public. In order to conform to this Under Armour must treat their employees fairly and report anything that goes on with the company to the public.

Very popular Under Armour sweatshirts, sold in countless sports stores
Virtue Theory
Virtue theory is described as acting in a way that portrays good character traits and act in a way to avoid bad character traits. According to Aristotle, “we all have rational capacities and social capacities, so we all need to exercise our rationality in whatever talents we have and to relate to others in the world in a way that brings balance into our relationships.” (Case Manual, Chapter 2) However, Under Armour didn’t follow this philosophy as they neglected to act rationally when making their decision. In accordance to virtue theory, there are four virtues in business. The first virtue in business is courage which is the willingness to take a stand for the right actions and ideas which Under Armour doesn’t. They don’t have this because they aren’t taking a stand for anything good but what they should do is lead a movement that allows companies including themselves to have better working conditions and benefits for all employees and not have employees work with anything hazardous. The next virtue in business is honesty which is hiring and treatment of employees and customers. Under Armour doesn’t have this because the allowed their employees to work in unfair labor conditions just so they could gain more money and they neglected to tell their customers that the products that were made and sold by Under Armour were being made unethically. What they should do to have this is to treat their employees better and have them work in better conditions and not fail to tell customers about what the company is doing and how products are being made. The next virtue in business is temperance which is reasonable desires and expectations. Under Armour showed this virtue because they wanted to make more money but the way they went about it was unethical. They can fix this buy having reasonable expectations for themselves and their employees by having better working conditions for them which is what employees of any company expect. The last virtue in business was justice which is fair practices and quality products. Under Armour didn’t have this virtue because the products they were making had become tainted since they were being produced unethically and fair practices were being upheld for the employees since there were labor injustices. Under Armour can fix this by having the people making the products have a better quality of job life while working at Under Armour.


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