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Case Summary - Essay Example

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TOMS Shoes, a company in the business of manufacturing shoes, is collaborating to provide shoes to the needy children worldwide through ‘One for One program. Tom Shoes has taken this decision to provide shoes to the needy children because children can become easy victim of…
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Case 3 TOMS Shoes: Helping Soles All Over the World Case Summary Summary of the case TOMS Shoes, a company in the business of manufacturing shoes,is collaborating to provide shoes to the needy children worldwide through ‘One for One program. Tom Shoes has taken this decision to provide shoes to the needy children because children can become easy victim of certain foot related diseases, such as hookworms, podoconiosis, jiggers, and tetanus. Especial about One for One program is that the company will return back to those villages after a certain time where it has distributed one million pairs of new shoes through its customers to replace outgrown shoes with newer and bigger shoes. Another feature is that shoes are customized as per specific fitting and color needs of the children. TOMS Shoes is expanding its community involvement program in another product, eye glasses, in collaboration with Seva Foundation on the same lines, as in the sale of shoes. For every eye-glass sold, a new pair will be given free to the needy children in poor countries. Tom Shoes has been criticized for affecting the sale of local companies. TOMS Shoes has not been transparent enough in reporting the financial details of the company to justify its stance that it is leading to fulfill its corporate social responsibility.
A) What is the ethical issue?
The ethical issue pertains to affecting the local businesses of shoe shops. Another ethical issue relates to non-publication of financial statements of TOM Shoes.
B) Why is this ethical issue?
This is an ethical issue because local businesses are suffering losses in their business operations, as their sales are not happening.
2. Who is effected and how?
Local businesses are the most effected stakeholders. Rather than encouraging local shoe manufacturing industry and creating new enterprise potential, TOMS Shoes is going against their interests. Instead of helping local businesses over how to reduce costs and earn revenue, it is creating the crisis of their survival.
3. What leadership issues need to be addressed?
TOMS Shoes need to address the issue of making available all its balance sheets of the past and present financial years so that other stakeholders could know the cost incurred to TOMS on a single air of shoe and the sale price. Until these and other financial details are made public, how can the Company claim its right of doing praiseworthy work in the field of corporate social responsibility? This is a big leadership issue. No company can claim its right to doing social and humanitarian work, although a private company, but claim needs to be authenticated. Critics counter-claim that TOMS One for One program can be a marketing tactics to sell in huge quantity its production of shoes in the name of doing social service. The onus of relieving from this burden lies on the management of TOMS Shoes. Its corporate leaders need to be transparent enough on the cost incurred on a pair of shoes to silence the critics. Read More
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