Question

Ethical Decision Making at Black Diamond

Task: Read the “Black Diamond Equipment” case below and then answer the following questions.

>> The way that Black Diamond is run, I don't really consider this the American way, I consider Black Diamond an extension of the attitude, the culture, the ethos, and the values of the life defining mountain sports that we were founded to serve. Hi, my name is Peter Metcalf. I'm the CEO and lead founder of Black Diamond. Very early on in the beginning of the company the sports of climbing, mountaineering, alpinism and alpine skiing were relatively small at that time. They've grown dramatically. However, if you aggregated the global demand for that product then you could have a fairly meaningful business. So from that recognition and understanding the amount of money that goes into research and development, commercializing a product, and recognize it to be competitive, to do what we really wanted to do we had to think globally. It was going to be about finding these global markets through finding other people who shared our passion, who were young embryonic business people in many cases who wanted to get into the business because they shared that passion, they knew the markets, they knew the space, and could develop a business as a distributor for us. And as time went on we did begin to recognize that nobody really cares about Black Diamond as much as Black Diamond people do, and for that reason we would have to take charge ultimately of the businesses that we were, the business we were conducting overseas through independent distributors. And there was also a recognition that to be the same brand in Europe or in Asia as we were in North America, we would have to be something slightly different because of cultural values, cultural interpretations.

>> In Salt Lake, like every two to three months stay here for one week to two weeks and but we work together on a daily basis. My name's Thomas Hodel, I'm from Switzerland. Born in Lucerne. Doing outdoor sports were, was always a big part of my life so a big passion of me and that's why I'm here working at Black Diamond sharing that passion and I have two roles at the moment. On a global view I'm responsible for all the ski categories, so together with the team here we define strategies and directions for all the categories which belong to the ski side. And then in Europe I'm the European Category Director so the role there is to make sure whatever we do here works also in Europe and the European needs are covered. And it takes a long time to really figure out the differences in Europe and it's every country has a different culture, mentality. Having that European perspective, I think that's a, that's definitely asset I can bring into this glob- into this company and help this company to become more global and to address those needs better.

>> What is most important to the success of Black Diamond is our unique culture and in all of the, in all of our locations the people that we've put in place there to lead those businesses, they all have a real passion for these activities. They have spent substantial time here. They've been immersed in this culture. They see how we operate. At our Asian facility that we built as a Greenfield project eight or nine years ago, what we did right in the process of hiring, right when we started, was we got people, anybody like you have to learn to repel, repel off the roof. We'd do weekend events where we'd take them hiking. So we're instilling in folks in a myriad of ways what the BD attitude and philosophy is towards life, towards work, collegiality, cooperation. You're only as strong as your weakest member. You have to have implicit trust and confidence in the competency of your partners.

>> So yeah having been in Asia for almost seven years it's a very dynamic culture, especially in China. There's a strong sense of change. There's a strong sense of growth. My name is Vindi Agher [assumed spelling]. Actually you pronounce it as Vindi Agher, but that's difficult so Vindi Agher, I go with Vindi Agher. I'm the VP of Manufacturing here at Black Diamond. Our business is really global. Our customers are global. And our manufacturing is definitely global as well. So yeah we own our own factory in Zhuhai. The products that we assemble and produce in the factory in Zhuhai are also part of this protective products that we use, that will be used in climbing and mountaineering so the quality needs to be good. But also we want to ensure that it's been done in a good way. So we control it from start to finish which means how we treat the people, how we manufacture, and how we run the organization that we ensure that everything is done in the right way.

>> Then another part of our business when it comes down to the soft goods, that is made what we call in the trade OEMs, original equipment manufacturers. Our people, our engineers-- in this case also my daughter, she's a developer of the apparel line-- she is spending weeks at a time at these factory partners in a place like Vietnam or China or Bangladesh and I would not send a 26 year old, my 26 year old daughter to spend time and be in these factories if I weren't comfortable with them. But more importantly, we have a certification and compliance process. We have auditors that go into these factories. We have a very strict guideline of ethical sourcing requirements. So we check these factories. We're not at some sweatshop. The factories that we're in, I think of the apparel factory in Bangladesh, the people get three meals a day, there's healthcare, there's English language, there's money for additional education, it's well ventilated, well lit. It's clean. It's safe. Because that's very important to us and what our values are. Being a global operation brings with it incredible opportunities for growth, for unique insights, for innovation, for just thinking differently than you would otherwise think. It also is taxing, time consuming. It demands that you are constantly questioning your, we're Americans so our American sort of perspective on things. It requires us, if we want to be true to being global, to not just nod at being global but create a true global management team, make sure that that team is part of the leadership team and part of the decision making process. Because being global is about more than just selling globally. If you really want to be a global brand, you have to think globally. And that's easy to say and harder to do.

Questions:

1. How does Black Diamond integrate social responsibility into its culture? (1 mark)

    

2. How does the global nature of the company and its markets influence how it thinks about employee diversity? (1 mark)

3. (a) How would you describe Black Diamond’s ethics in terms of how it treats its employees at the company’s factory partners in Vietnam, China, and Bangladesh? (1 mark)

     (b) Do you think that it is appropriate for firms like Black Diamond to scrutinize its partner factories like this? (1 mark)

     (c) Why or why not? (1 mark)

Answer 1

1. Black diamond's processes from manufacturing to sales to customer base is all global by design encouraging a more inclusive culture. In their plants in other countries such as the one in China they have made a supreme effort to ensure that people working there are being treated right, such as being given regular meals, healthcare, education opportunities, proper living conditions., and to enforce strict guidelines about ethically sourcing requirements, all contributing to a increased social responsibility on the firm's part.

2. Black Diamond has made a conscious effort to embrace social responsibility and diversity in their work culture by hiring people from other countries into key leadership roles so that the organisation is global in every way. As the company caters to a global customer base, it utilises this global workforce to think like their customers, put themselves in their partners/vendors shoes, to ensure ethical treatment for all and to constantly question their perspective which can be skewed by the predominant culture of a firm. This firm places high value on employee diversity to be a truly global firm, to encourage various and unusual insights and innovation, and ensures that this global workforce has active participation in key decision-making to best cater to their diverse customers' needs.

3.a) Black diamond displays a highly ethical outlook in the way it treats its employees/partners in other countries. To ensure that people are treated fairly and equitably, it provides additional facilities for all so that their basic needs for food, healthcare, living and education are met. They have made their out-of-country offices safe with strict compliance and certification processes and trust them implicitly as evidenced by the owner sending his engineer (daughter) alone to the location for an extended period. In doing so, BD ensures that all their employees are treated equal whether they be in US or in other countries so that only the highest level of ethics are encouraged and practiced in the firm.

b and c) Quite often outsourced firms that are run by local agencies with no intervention from the parent company, can end up exploiting local labour in an effort to maximise profits. This has been viewed time and again over the years, even with prestigious brands, as firms are largely unaware of the working and living conditions that the vendor sets for his workforce (that might be entirely unacceptable in the parent company's country). This has resulted in bad working conditions (too many hours per day), bad living conditions (not enough to eat, too many people in a dorm), employment of child labour, no access to healthcare or redressal for damages from the employment. It is therefore appropriate and highly necessary for firms to acutely scrutinise their vendors/partners/employees in other countries to ensure anyone employed by them, even extended employment, should be treated fairly and equitable and as they would be in the firm's own country. More scrutiny from the parent firm will result in all employees being treated well, requirements being sourced ethically and the creation of a global and inclusive workforce where all workers' rights are taken care of.