TOMS Shoes: A Dedication to Social Responsibility

Undoubtedly, manufacturing companies contribute to environmental pollution. It is for this reason that there is mounting pressure on manufacturing companies to go beyond the empty rhetoric of “doing well by doing good” to making positive contributions and changes at the community level. Moreover, employees are looking for employers who can embrace practices that provide meaning to the workplace. Corporate social responsibility (CRS) serves as a means of reducing the effects of manufacturing activities and increasing stakeholder trust (Guo, et al., 2014) . TOMS Shoes is one of the manufacturing companies that have been on the radar for their corporate social responsibility practices. The company designs and manufactures shoes and apparel. What is more, the company offers a variety of products such as jewelry, wedges, slippers, boots, flats, eye wears, accessories, clutches, totes, and bags. The company’s commitment to corporate social responsibility is a matter of public record. In this light, this essay seeks to look into TOMS Shoes’ CRS practices while focusing on the company’s policies, practices, principles, and management approaches. Most importantly, the essay will look into the ways the company manages to balance between corporate social responsibility and its duty to the company’s shareholders. 

History

TOM Shoes was started by Blake Mycoskie. Mycoskie was on a trip to Argentina when he got used to wearing the national Argentinian shoe  alpargata (Buchanan, 2016) . Mycoskie was impressed by the simplicity and the cosines of the shoe. He came across the shoe in almost every social event he attended. He immediately started thinking about the American market and whether the shoe would appeal to American consumers. He then met an American woman who was on a mission to ensure Argentinian children had shoes. The woman collected shoes from willing donors and distributed them to the children (Buchanan, 2016). However, most of the shoes were either oversize or not suitable for the terrain. Mycoskie took a trip to the Argentinian villages to have a firsthand experience of how poverty was ravaging the communities. He, therefore, thought of an idea that would ensure the children had a constant flow of shoes. Mycoskie was fully aware that the solution to the children’s problems was in entrepreneurship and not charity. For this reason, he started working with an Argentinian shoemaker.

Mycoskie eventually got the help he needed from Argentinian artisans who were willing to help in the small scale manufacture of a lpargata.  He, however, had to slightly alter the shoe’s design to fit the American market. While Mycoskie had excellent entrepreneurial skills, he had scanty knowledge about the world of fashion. He, therefore, sought the help of his friends who also happened to be his first customers. To expand the business, Mycoskie decided to personally approach fashion businesses in an attempt to publicize the shoe. His breakthrough came when American Rag accepted his shoes and publicized the story behind the shoe. Within no time, TOMS shoes were being featured in the  Los Angeles Times, LA Times, Vogue among many other popular magazines.  By 2016, TOMS Shoes was making an estimated revenue of $392 million (Buchanan, 2016). The company’s ability tom fuse business with charity is unprecedented. Today, the company has more than 500 employees and different product lines. Moreover, the company has an online presence that allows it to supply its products in different countries and to also engage in different charity events.

Corporate Social Responsibility

There is no doubt that Mycoskie’s business model redefined the meaning of Corporate Social Responsibility. For every shoe sold by TOMS, the company donates a pair to a needy child. Most customers enjoy shopping at TOMS Shoes because they know that their purchases make a difference in a poor child’s life. The price of the free shoe is built into the price of the one on sale. For this reason, TOMS Shoes is capable of maintaining profits as well as providing shoes to millions of children across the world. According to the company’s website, more than 35 million children have benefited from the charity initiative. 

TOMS Shoes’ business model not only applies to shoes but also its other products. For instance, in 2011, the company introduced eyewear to its many products. Instead of giving free glasses for every piece of eyeglasses purchased, the company uses part of the profit from the sale to help people with eyesight problems in the developing world (Torelli, Monga, & Kaikati, 2012) . According to the company’s website, TOMS has restored the sight of more than 275,000 people across the world (Torelli, Monga, & Kaikati, 2012) . The same business principle was extended to Mycoskie’s book  Start Something That Matters.  With every book sale, a child in need receives a book. The philanthropic component of the TOMS business model is what makes the company unique. 

Also worth pointing out is TOMS Shoes commitment towards societal issues. Gun violence is one of the major problems that the United States is currently grappling with. Gun violence is the second leading cause of death for most children and teenagers in the U.S. a majority of Americans have demonstrated their support for universal background checks as a means of reducing cases of gun violence. In this regard, TOMS has demonstrated its support for the background checks by creating a 30-second system that allows electorates to send their legislators a postcard announcing their support for universal background checks (Buchanan, 2016) . Moreover, TOMS has been donating $5 million to organizations that are working towards ending gun violence. 

TOMS shoes currently has factories in Argentina, China, and Ethiopia. Given that most of the shoes are donated in Africa, Asia, and South America, it made sense to have production plants in those countries (Mishra & Schmidt, 2013) . Not only did the company improve distribution efforts but it also mitigated the distance needed to transport the shoes from the manufacturing country to those in need. This initiative has considerably decreased the environmental impact of the company’s manufacturing activities. Moreover, these factories have created sources of employment for the locals. 

Currently, while many companies use the “sell one give one” philosophy, there is no single company that has been able to match TOMS Shoes’ success. As such, TOMS Shoes is still enjoying the advantages of being a market mover in its market. However, while the company has done exceptionally well in Corporate Social Responsibility, concerns have been raised about the impact of the company’s charitable activities on the economies of the developing countries. A study conducted in 2008 established that clothing donations were potentially responsible for more than 50 percent fall in employment opportunities in the clothing sector in Africa (Torelli, Monga, & Kaikati, 2012) . Given that local businesses cannot compete with the donations, they end up closing shop thus rendering thousands of workers jobless. While TOMS Shoes may be involved in a noble cause, the company’s charitable initiatives are not only killing industries in Africa but also increasing the African’s dependency on donations. TOMS Shoes outcompete the local shoe industry, therefore, inhibiting economic development. Additionally, the company claims to be committed to environmental sustainability. It is for this reason that the company developed the “Vegan Shoe” which is said to be an eco-friendly shoe made out of recycled plastic bottles and hemp. However, to date, the materials used in making the shoe have not yet been certified. In the same breath, TOMS Shoes has been criticized for creating a large carbon footprint by encouraging their followers to join them on shoe drop missions across the globe. 

Notably, TOMS Shoes is notoriously vague and secretive about the origin of its products, the ethical nature of its business model, the sustainability of its suppliers and distribution channels as well as labor practices (Handayani, Wahyudi, & Suharnomo, 2017) . On the company’s website, it stated that the company abides by the laws labor and does not condone child labor. There is, however, no communication about workplace conditions especially in countries such as China that are known for employee exploitation. It is therefore difficult to evaluate the company’s commitment to environmental sustainability. 

           TOMS Shoes has managed to do what most companies cannot. The company started on a humble background but is currently one of the major distributors of gifts to developing countries. TOMS Shoes business model ensures that the company remains profitable while also engaging in charitable initiatives. The company’s commitment to corporate social responsibility is a matter of public record. By giving out free shoes to children from poor communities, TOMS Shoes has managed to endear itself to the masses and to attract customers from across the world. What is more, the company has helped in restoring people’s eye sights and has also been vocal on societal issues such as gun violence. The only problem with the company is that its business model has led to the closure of most companies in the developing nations. In particular, shoe producing companies cannot compete with donations from the like of TOMS Shoes. Moreover, the company is secretive about its manufacturing practices. Even so, overall, TOMS Shoes makes a difference in millions of people’s lives. 

References

Buchanan, L. (2016). What's Next for Toms, the $400 Million For-Profit Built on Karmic Capital . Retrieved from Inc: https://www.inc.com/magazine/201605/leigh-buchanan/toms-founder-blake-mycoskie-social-entrepreneurship.html

Guo, W.-F., Zhou, J., Yu, C.-L., Tsai, S.-B., Xue, Y.-Z., Chen, Q., . . . Wu, C.-H. (2014). Evaluating the green corporate social responsibility of manufacturing corporations from a green industry law perspective. International Journal of Production Research, 53 (2), 665-674. doi:10.1080/00207543.2014.972525

Handayani, R., Wahyudi, S., & Suharnomo, S. (2017). The effects of corporate social responsibility on manufacturing industry performance: the mediating role of social collaboration and green innovation. Business: Theory and Practice, 18 , 152-159. Retrieved from 10.3846/btp.2017.016 

Mishra, P., & Schmidt, G. B. (2013). Unfortunately, Ambiguities Still Abound in How We Conceptualize Corporate Social Responsibility. Industrial and Organisational Psychology, 6 (4), 379-383. doi:10.1111/iops.12072

Torelli, C. J., Monga, A. B., & Kaikati, A. M. (2012). Doing Poorly by Doing Good: Corporate Social Responsibility and Brand Concepts. Journal of Consumer Research, 38 (5), 948–963. doi:10.1086/660851