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The larger implications of the Ralph Lauren signature scandal

When a well-known company takes a stand on a controversial issue, this action tends to either positively or negatively influence consumers’ perception of that company’s brand. As a result, businesses must often weigh the costs and benefits of taking a stand versus following standard practice. If a company takes a stand, it must generally be worth the ethical and financial risks of doing so.

Sometimes this kind of action directly benefits the company’s employees. For example, when Starbucks became the first major American chain to grant medical benefits to its part-time employees, workers reaped the benefits of this company’s commitments. On the other hand, a company’s stand could also negatively impact workers. Most recently, a scandal involving clothing giant Ralph Lauren stood its ground in ways that signal danger for the safety of factory workers associated with the business and other employees tied to the company as well.

In the wake of the 2013 factory fire in Bangladesh which killed over 1,100 workers, a number of major clothiers signed an international agreement designed to ensure safer working conditions for workers in Bangladesh. Given that this nation is one of the world’s largest suppliers of clothing, this agreement symbolizes a commitment not only to Bangladesh workers but to clothing workers everywhere.

Ralph Lauren weighed the costs and benefits of signing the agreement and has adamantly refused to do so. Activists are calling upon the company to change its stance, given that refusing to sign the agreement imperils the company’s commitment to worker safety everywhere. Sometimes a signature is just a signature. And sometimes it signals something much larger and more meaningful.

Source: The Huffington Post, “Ralph Lauren Under Fire For Refusing To Sign Worker Safety Pacts,” Kim Bhasin, Aug. 8, 2014

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