Lululemon, an athletic wear brand aimed at people who live active lives, has significant roots in the yoga community. It is one of the few companies that sells clothing for this niche and was founded by Denis “Chip” Wilson in 1998. Lululemon’s objective was to promote a healthy and active lifestyle inspired by author and philosopher, Ayn Rand. Lululemon has experienced several ethical challenges over the years, including accusations of deceptive advertising and concerns about customer privacy. Chip was known for making controversial statements that drew a considerable number of backlashes. He finally resigned as Chairman of the Board of Directors.
Lululemon’s culture has also been questioned since it appears to be excessively competitive, which contradicts Buddhist doctrine. Some employees have also expressed dissatisfaction with the Landmark Forum, a three-day self-improvement program that Wilson ardently endorses. Lululemon has also received praise for its ethical practices. It aims to motivate employees to set objectives and maintain a healthy lifestyle. It offers free weekly yoga courses to members of the community, as well as a 15% discount on purchases for participants (Agnihotri & Bhattacharya, 2019). It also appears to take client concerns seriously, as evidenced by the fact that it has been known to execute improvements fast in response to user feedback.
Charges of deceptive advertising and concerns about client privacy have been leveled against the company. Chip Wilson has made several questionable statements that have sparked widespread outrage. With its too-sheer yoga trousers, the company faced quality control concerns. Lululemon’s culture also appears to be excessively competitive, which contradicts Buddhist teaching. In addition, several employees felt compelled to attend the Landmark Forum, a three-day self-improvement program heavily endorsed by Wilson (Agnihotri & Bhattacharya, 2019).
Impact on the Various Stakeholders
Customers are misled by false marketing and have privacy worries, causing them to lose faith in the firm and what it stands for. Wilson’s controversial remarks resulted in a decline in sales, forcing investors to reconsider their Lululemon investment. Customers were also subjected to unintentional indecency as a result of the sheer pants, and the company was forced to return its products, resulting in a drop in sales. Its competitive atmosphere, which goes against Buddhist doctrine, may cause employees uncertainty and confusion about how to conduct themselves in the workplace. Employees may become demoralized if they are forced to participate in the self-improvement program.
Action as the CEO
To avoid fraudulent advertising, always provide accurate product information without omitting critical details. Ensuring the product’s quality by conducting numerous tests to make sure that it is suitable for all women before it is released for sale. Engaging customers regularly to obtain product reviews to ascertain that the product continues to satisfy their ever-changing demands. Finally, employees’ morale and productivity will also be boosted by adhering to Buddhist philosophy to promote company culture, as well as making the Landmark Forum optional.
How Lululemon has Handled Past Ethical Issues
Wilson’s decision to resign as chairman helped to mitigate the impact of his offensive remarks. Employees were no longer required to attend the Landmark Forum, and the company acted promptly to address customer reviews.
Impact of Lululemon’s Ethical Culture on its Relationship with Customers and Employees
The ethical culture has had a great impact on its employees in terms of encouraging them to live healthy lives and create goals. The community has also benefited by receiving discounts, while they improve their health by attending the company’s yoga courses. Customer loyalty and good relations have risen as a result of the prompt response to customer feedback (Agnihotri & Bhattacharya, 2019).
Steps Lululemon Should Take to Avoid Negative Publicity, Ethical Challenges, and Improve its Stakeholder Relationships
Negative publicity can be avoided by acknowledging mistakes and responding to criticism immediately and effectively. Ethical problems can be avoided by making sure that ethical expectations are clear and by leading by example. Lululemon can strengthen its stakeholder relations by promoting clear communication, anticipating their needs, and involving them in the business by offering avenues for them to share their ideas.
Agnihotri, A., & Bhattacharya, S. (2019). Executive crisis at Lululemon: Who is responsible for establishing company culture? SAGE Publications: SAGE Business Cases Originals.