Patagonia Case Study

Assignment 5-2: Analysis Discussion

Crystal Stonebraker

Franklin University

Accounting 725

Alisa Di Salvo

June 18, 2016

Assignment 5-2: Analysis Discussion

Summary

        Patagonia, Inc. manufactures and distributes high quality outdoor equipment and clothing. The company was established by Yvon Chouinard in 1957 (Merchant & Van der Stede, 2012). Since 1957, the company grew rapidly into a billion-dollar company, which Mr. Chouinard did not want due to his views of how the culture would change within the company.  

        Patagonia, Inc. uses the open book management system because it coincides with the company’s culture and the company’s concern for their employee’s quality of life (Merchant & Van der Stede, 2012). Patagonia, Inc. began the Workbook Process in 1994. The Workbook Process involved all employees, but required a lot of work.

Open Book Management Systems

        According to Merchant and Van der Stede- (2012), the goal of an open book management system is to provide an insight to each employee’s actions/decisions and the company’s financial performance, which instills an incentive for the employees to behave in the company’s best interest and make useful suggestion for improvement (p.93). Therefore, I would recommend that management of Patagonia Inc. continue to use the open book management system considering it will increase company moral and involvement among company employees. This recommendation is strong because it is important to keep employees moral high and ensure employee’s keep the best interest of the company in mind when making key decisions.

Recommendations

        My first recommendation would be that Patagonia, Inc. needs to provide further training to the staff to ensure the financial information that is being presented is fully understood by everyone. This training may need to be broke up into several sessions in order to ensure all staff gets trained and all questions are answered. Furthermore, if employees still have questions after information/training sessions, a designated employee should be available for further questions and explanations. This recommendation is strong because it ensures that everyone has an understanding of the information being presented to them and will feel more connected to the company, which will ultimately increase moral.

        My second recommendation would be that Patagonia, Inc. incorporate projected budgets, business plans, actual year to date figures, and comparisons to show growth trends for the full fiscal year verses a few months at a time. This recommendation is based on the fact that employees need insight of the future. This gives them a sense of stability within the company. This recommendation is strong because it gives the concerned employees the full years information as requested verses the few months currently being presented. Patagonia needs to listen to the employees concerns to ensure they stay onboard with this process (Merchant & Van der Stede, 2012).