CASE STUDIES

CASE: Tom’s of Maine: “Doing Business” Means “Doing Good”

Questions:

1. Does the Tom’s of Maine experience prove that one can “do business with principles,” or are there business realities that make it hard for others to copy this principled management model?

Yes, because what Tom’s of Maine did is that they made their employees appreciate and apply the principles that Tom and Kate believed in. Despite some of the mistakes that they did, they were not afraid to try again and to make better decisions. Their principles set them apart from their competitors. Because of their principles, they became a unique company who exemplified “business with principles”.

It’s true that there are business
The whole process of manufacturing, delivering, selling and redesigning of the clothes in Zara International is a science. Every process is clear and every function is delivered.

Another noticeable element is Control, which is under the Administrative principles. When Zara’ sales reports are received they immediately rake corrective actions to the designs that did not make enough sales in the market. The designers would immediately make new products to be sold to the outlets. Though there are a couple of hits and misses in the designs when it comes to Sales, Zara is always able to cover up their losses by coming out with fresh ideas and designs.

Since the styles or designs are coming out fresh from the designers so fast, patrons of the store are on a shopping spree demand to buy the clothes they want because those clothes might not be available next time. The “scarcity” strategy of Zara keeps their buyers hungry and craving for more.

2. What elements of the behavioral management approaches are being used by Zara’s management team?

Zara International also exhibits behavioral management approach. Such is McGregor’s Theory Y. In Theory Y, the management assumes that people are willing to work, capable of self-control, willing to accept responsibility, imaginative and creative and capable of self-direction. (Schermerhorn, 2010) The management of Zara believes in its