Thursday, April 6, 2017

New Balance " Official Shoe of White People" (2016-2017)

 Jason Lofaro 

New Balance Logo
          The end of 2016 and beginning of 2017 has been the same story on repeat for the New Balance Company watching Nike as the number one sports, shoe and apparel company in the business. It's hard to bump Nike out of first when they had/have endorsers like LeBron James, Michael Jordan, Derek Jeter, Tiger Woods and Cristiano Ronaldo and many more. Yet, New Balance continues to expand and find ways to make their brand become more successful. Although, the end of 2016 and beginning of 2017 was different then just looking at the ranks and looking up to Nike and other competitors. This will be an unforgettable time with the Presidential election and the animosity surrounding the topic. As the race for the 45th President came to a close each party was pretty even, with Donald Trump coming out on top. As Donald Trump won the latest Presidential election this has left a bad taste in many's mouth. While, on the other hand he has many supporters to what he offers to bring to the table. This has created an immense dissidence between the country and ethical issues that have risen from this election. New Balance sneaker and apparel company became the hottest topic in the news in late 2016, as New Balance became affiliated with Donald Trump from a comment made in support of Donald Trump. The comment was made by New Balance's Vice President of Public Affairs Matt LeBretton that stated a "move in the right direction" after Trump won the Election. The response to Trump's opposition towards the Trans-Pacific Partnership was the real reason for the support. The Trans-Pacific Partnership was a trade deal New Balance thought would hinder its production of shoes in the U.S. while rewarding competitors to make more of their product overseas. The full statement by Matt LeBretton wasn't said just the part to make the company look bad. The full statement read, "(President Barack Obama's) administration turned a deaf ear to us and frankly, with President-elect Trump, we feel things are going to move in the right direction". As said before the statement was in regards to the Trans-Pacific Partnership trade deal initially led by Obama, which Trump opposed, along with other notable people such as Hillary Clinton, and Senator Bernie Sanders of Vermont had the same view on this as Trump did. Although, New Balance has factories overseas that employs 900 people they are the only major company that still makes their athletic shoes in the U.S., which would hinder the business and help competitors who operate overseas. New Balance tried to rebound from the political stance they implemented themselves in by supporting Trump known as "Official Shoe of White people" to some prevail. This name was given to new Balance by a white supremacist group that wanted to stand behind New Balance and endorse the slogan. New Balance rejected the white supremacist group and had a statement regarding the companies' values and not in support of bigotry, or hate. That the company was value-driven, culture beliefs in humanity, integrity and mutual respect for everyone around the world. Which led the white supremacist group to call New Balance out and that the statement was fake.

New Balance decrease after comments supporting Trump
          Unfortunately in today's society and use of social media, what we say will be publicized and can be easily mistaken for something out of context for anybody to see. This was the case for New Balance as one of the upper management staffing went on to state a "move in the right direction" about Trump. New Balance has received backlash with customers who purchased their product with pictures of their shoes in the garbage taking knives and cutting them up or lighting them on fire. New Balance is not a publicly traded company, so finding their records of sales and stock decrease is irrelevant. This for the most part is a good thing for New Balance, as people can't see how the comments made in support of Trump has effected the companies' financials. While actual dollar amounts are hard to come by, New Balance did rise in social conversation by 100%. That was New Balance's highest conversation-generating event of the year. Although, it was negative conversation New Balance brand sentiment declined by 75%. Finally just a week after the comments New Balance's sales decreased by 25%! After the company struggled for a week or two they started to gradually increase and get back on track. New Balance's actions will be analyzed using the four ethical theories.

          Individualism's main focus is making profits within the law. Friedman's theory shows that the only obligation that the business person has is too maximize the profits for the owner's as well as the stockholders. Individualism states that a person has the right to pursue his/her interest, and should do so, while no one has the right to make other people's pursuit about them. New Balance was about profits, the statement given was meant for the Trans-Pacific Partnership deal. This would allow for free trade zone in the U.S., Latin America, and other nations. New Balance's biggest competitor Nike even supported the deal of the Trans-Pacific Partnership. This being their interest to pursue, and about profits it makes sense that New Balance did not in fact do anything wrong and wasn't being racist by the comment supporting Trump. In fact New Balance's support with Bernie Sanders, Hillary Clinton, or Donald Trump, was focused on American manufacturing job creation and have continuous support for them.

          Utilitarianism is to maximize happiness in yourself as well as others. John Stuart Mill's
New Balance losing 25% in sales and stakeholders
reasoning behind this theory was that "if happiness was valuable, there is no difference morally-speaking between my happiness and yours". In the case manual by, Heather Salazar precisely states that the overall goal of utilitarianism is to maximize long term happiness for everyone affected by a certain activity. New Balance did not think about the long term happiness of their stakeholders before releasing a political statement. As well as for their consumers. As many were disgusted by the comments it made them look bad by supporting their shoes or apparel they had bought. The stakeholders did not receive long term happiness because the sales decreased by 25% meaning the stock they invested in drastically fell and they did not get a return on the money they invested to the company.

          Immanuel Kant centered the focus of Kantianism based on the rational decisions and doing what is right. Kant states to not act inconsistently in your own actions or exempt yourself from the rules. Kant's last part to his theory is to be motivated by good will, which is seeking to do what is right, strictly because it is the right thing to do. New Balance didn't think about the rational decision of speaking out on politics and considered themselves exempt from the rules or any consequences that might occur from the statement. New Balance didn't respect their supporters/followers by not informing the company was going to release a statement or elaborate on the statement to make it clear and understood. Kantianism theory is to no lie or cheat in anyway, and the white supremacist group called out New Balance that they indeed were lying. New Balance cleared the air, by saying the statement was about the Trans-Pacific Partnership not support of Donald Trump. Also, releasing a statement they don't support bigotry or hate directed towards the white supremacist group. They considered themselves exempt from the rules, but seems to make amends with some of their supporters/followers.

Virtue Theory:
          Virtue Theory is based on the ideas of rationality, and fulfilling a functional life. Aristotle reasoning to fulfill a functional life is to look at a person individually, and find the characteristic that distinguishes them. To be happy Aristotle believes one must fulfill their function, but act rational in the process. New Balance's VP of Public Affairs would not be considered virtue or ethical because they showed poor character traits such as racism through verbal actions. According to Heather Salazar the most important characteristics are courage, temperance, honesty, and justice. The lack of temperance was by not having a complete direct answer to the actual support of the statement. Honesty and justice they claimed to not be apart of the white supremacist group after they were affiliated with them. This caused anger by the group in a good way for New Balance that they were being honest.

Ethics Justification:
          I'm sure that the company wants to be justified for their response that was said in regards to
New Balance Gear, most things are discounted on the website
supporting Trump. I believe that New Balance did not act unethically in their released statement. The statement was vague, but had been edited to make New Balance look bad. New Balance didn't actually say anything that was racist and they are the ones that shut down the white supremacist group who wanted to be affiliated with New Balance. They were honest yet, the stakeholders and many customers were not happy with how New Balance decided to make a public statement, as well as what was said. It caused loyal customers to leave as well as stakeholders since they lost money invested in the company as well as dissatisfied with what occurred. While I believe New Balance is not ethically wrong, they should make notes of this issue and learn from it so that something like this doesn't happen again. This was a borderline ethical issue, because of connection parties like Donald Trump, and the white supremacist group. I think from the knowledge New Balance provided they weren't unethical. The company issued out a statement way back and the scrutiny the company was receiving has simmered down and New Balance seems they can move forward.  A code of conduct should be implemented to have the upper management practice what they say better publicly. This should be an eye opening opportunity for New Balance's competitors that they can learn from.


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