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6 Maintaining Core Values: The Case of Nau
31 • ORGANIZATIONAL BEHAVIOR
to create outdoor urban apparel constructed from sustainable materials and processes, with the entire life
cycle of the product in mind. This includes taking into account the cultivation of textiles all the way through
to end-of-life disposal. After 3 years of aggressive growth and expansion, Nau declared bankruptcy in the
spring of 2008 when they could not secure further funding. But only a few short months later, Nau reopened
as a subsidiary of outdoor clothing company Horny Toad Inc., headquartered in Santa Barbara, California.
Although Nau is part of a larger company, it has been able to create a balance between the ideals of a small,
independent, entrepreneurial business while being a successful part of a larger company.
The power structure that Nau shares with Horny Toad is decentralized; logistically, the companies share a
human resources department, IT, warehousing space, and finances, but Nau maintains its product independence and business strategy. From the time of its inception, Nau created a network of close relationships
with its overseas manufacturers, which allowed the company the power and ability to closely control its production process. During the transition, Nau desired to maintain these relationships and so had to explain the
arduous process of bankruptcy to its overseas vendors and attempt to explain transferring debt and liabilities
from one company to another company. Although the people and faces were the same, they were no longer
connected with that debt. Nau’s small size enables it to effectively control its supply chain and to determine
everything from which farm its raw materials come from to how and where textiles are produced. For Nau,
responsibility does not end with the consumer’s purchase. Other changes include the number of employees
at Nau, which prior to the bankruptcy was 65. In 2010, this number is down to 15 employees. While several
of the individuals who took part in the founding of the company are still there, change was not embraced by
others who felt that becoming part of a larger company would make it difficult to maintain the original core
values and beliefs.
So far, these changes have been good for the company and good for business. Nau was acquired at the beginning of an economic downturn, and for a company that is dependent on consumer discretionary spending,
this might have been a recipe for failure. But business is picking up for Nau, and it has been able to continue
its Partners for Change program, in which Nau donates 2% of each sale to one of its partner organizations,
such as Mercy Corps, Kiva, or Ecotrust, together working to create positive economic and social change.
Based on information from an interview with Jamie Bainbridge, director of textile development and sustainability at Nau. Additional information from Nau Web site (http://www.nau.com) and Future Fashion White
1. What benefits might result from becoming a part of a larger organization?
2. What are the benefits of maintaining the autonomy of a small company?
3. How does globalization affect Nau’s business strategy?
4. What ethical dilemmas might employees at Nau and Horny Toad face during their day-to-day
This chapter is designed to familiarize you with the concept of organizational behavior. We have covered methods
organizations might use to address issues related to the way people behave at work. In addition, you should now be
familiar with the large number of factors, both within an individual and within the environment, that may influence
a person’s behaviors and attitudes. In the coming years, society is likely to see a major shift in the way organizations
function, resulting from rapid technological advances, social awareness, and cultural blending. OB studies hope to
enhance an organization’s ability to cope with these issues and create an environment that is mutually beneficial to
the company as well as its employees.
Create an Action Plan for Developing Your OB Skills
1. Hopefully you have already completed reading this chapter. If not, wait until you’ve done so to
complete this individual exercise.
2. If you have not done so already, please take the learning styles survey at http://www.varklearn.com/english/page.asp?p=questionnaire.
3. In addition, please be sure you have reviewed the table of contents for this organizational
4. What themes do you see? How do you think these topics affect your interactions with others?
How might your learning style affect how you’ll approach this course? Have you ever considered
journaling as a technique for self-improvement and reflection?
5. Now, write down five action steps that you plan to take as you work through this book. Refer to
these steps throughout the term and modify them as needed.
Best Job–Worst Job
1. Please think about the best and worst jobs you have ever had. If you have never had a job, think
of a school project instead. What made the job or project great or horrible?
2. Now get into a small group of students and share your experience with them. Listen to what
others are saying and see if you see any themes emerge. For example, what are the most common
features of the best jobs? What are the most common features of the worst jobs?
Chapter 2: Managing Demographic and Cultural Diversity
After reading this chapter, you should be able to do the following:
1. Understand what constitutes diversity.
2. Explain the benefits of managing diversity.
3. Describe challenges of managing a workforce with diverse demographics.
4. Describe the challenges of managing a multicultural workforce.
5. Understand diversity and ethics.
6. Understand cross-cultural issues regarding diversity.
Around the world, the workforce is becoming diverse. In 2007, women constituted 46% of the workforce in the
United States. In the same year, 11% of the workforce was African American, 14% were of Hispanic origin, and
5% were Asian (Bureau of Labor Statistics, 2007). Employees continue to work beyond retirement, introducing
age diversity to the workforce. Regardless of your gender, race, and age, it seems that you will need to work with,
communicate with, and understand people different from you at school as well as at work. Understanding cultures
different from your own is also becoming increasingly important due to the globalization of business. In the United
States, 16% of domestic employees were foreign born, indicating that even those of us who are not directly involved
in international business may benefit from developing an appreciation for the differences and similarities between
cultures (Bureau of Labor Statistics, 2007). In this chapter, we will examine particular benefits and challenges of
managing a diverse workforce and discuss ways in which you can increase your effectiveness when working with
As we discuss differing environments faced by employees with different demographic traits, we primarily concentrate on the legal environment in the United States. Please note that the way in which demographic diversity is
treated legally and socially varies around the globe. For example, countries such as Canada and the United Kingdom
have their own versions of equal employment legislation. Moreover, how women, employees of different races,
older employees, employees with disabilities, and employees of different religions are viewed and treated shows
much variation based on the societal context.
Bureau of Labor Statistics. (2007). Employed persons by detailed occupation, gender, race, and Hispanic or Latino
ethnicity. Retrieved November 4, 2008, from the Bureau of Labor Statistics Web site: ftp://ftp.bls.gov/pub/special.requests/lf/aat11.txt.
2.1 Doing Good as a Core Business Strategy: The Case of Goodwill Industries
Mike Mozart – Goodwill Store – CC BY 2.0.
Goodwill Industries International has been an advocate of diversity for over 100 years. In 1902, in Boston,
Massachusetts, a young missionary set up a small operation enlisting struggling immigrants in his parish
to clean and repair clothing and goods to later sell. This provided workers with the opportunity for basic
education and language training. His philosophy was to provide a “hand up,” not a “hand out.” Although
today you can find retail stores in over 2,300 locations worldwide, and in 2009 more than 64 million people
in the United States and Canada donated to Goodwill, the organization has maintained its core mission to
respect the dignity of individuals by eliminating barriers to opportunity through the power of work. Goodwill
accomplishes this goal, in part, by putting 84% of its revenue back into programs to provide employment,
which in 2008 amounted to $3.23 billion. As a result of these programs, every 42 seconds of every business
day, someone gets a job and is one step closer to achieving economic stability.
Goodwill is a pioneer of social enterprise and has managed to build a culture of respect through its diversity
programs. If you walk into a local Goodwill retail store you are likely to see employees from all walks of
life, including differences in gender and race, physical ability, sexual orientation, and age. Goodwill provides
2.1 DOING GOOD AS A CORE BUSINESS STRATEGY: THE CASE OF GOODWILL INDUSTRIES • 36
employment opportunities for individuals with disabilities, lack of education, or lack of job experience. The
company has created programs for individuals with criminal backgrounds who might otherwise be unable to
find employment, including basic work skill development, job placement assistance, and life skills. In 2008,
more than 172,000 people obtained employment, earning $2.3 billion in wages and gaining tools to be productive members of their community. Goodwill has established diversity as an organizational norm, and as
a result, employees are comfortable addressing issues of stereotyping and discrimination. In an organization
of individuals with such wide-ranging backgrounds, it is not surprising that there are a wide range of values
Management and operations are decentralized within the organization with 166 independent communitybased Goodwill stores. These regional businesses are independent, not-for-profit human services organizations. Despite its decentralization, the company has managed to maintain its core values. Seattle’s Goodwill
is focused on helping the city’s large immigrant population and those individuals without basic education
and English language skills. And at Goodwill Industries of Kentucky, the organization recently invested in
custom software to balance daily sales at stores to streamline operations so managers can spend less time on
paperwork and more time managing employees.
Part of Goodwill’s success over the years can be attributed to its ability to innovate. As technology evolves
and such skills became necessary for most jobs, Goodwill has developed training programs to ensure that
individuals are fully equipped to be productive members of the workforce, and in 2008 Goodwill was able
to provide 1.5 million people with career services. As an organization, Goodwill itself has entered into the
digital age. You can now find Goodwill on Facebook, Twitter, and YouTube. Goodwill’s business practices
encompass the values of the triple bottom line of people, planet, and profit. The organization is taking advantage of new green initiatives and pursuing opportunities for sustainability. For example, at the beginning of
2010, Goodwill received a $7.3 million grant from the U.S. Department of Labor, which will provide funds
to prepare individuals to enter the rapidly growing green industry of their choice. Oregon’s Goodwill Industries has partnered with the Oregon Department of Environmental Quality and its Oregon E-Cycles program
to prevent the improper disposal of electronics. Goodwill discovered long ago that diversity is an advantage
rather than a hindrance.
Based on information from Goodwill Industries of North Central Wisconsin. (2009). A brief history of
Goodwill Industries International. Retrieved March 3, 2010, from http://www.goodwillncw.org/goodwillhistory1.htm; Walker, R. (2008, November 2). Consumed: Goodwill hunting. New York Times Magazine, p.
18; Tabafunda, J. (2008, July 26). After 85 years, Seattle Goodwill continues to improve lives. Northwest
Asian Weekly. Retrieved March 1, 2010, from http://www.nwasianweekly.com/old/2008270031/goodwill20082731.htm; Slack, E. (2009). Selling hope. Retail Merchandiser, 49(1), 89–91; Castillo, L. (2009,
February 24). Goodwill Industries offers employment programs. Clovis News Journal. Retrieved April
22, 2010, from http://www.cnjonline.com/news/industries-32474-goodwill -duttweiler.html; Information
retrieved April 22, 2010, from the Oregon E-Cycles Web site: http://www.deq.state.or.us/lq/ecycle.
1. What are Goodwill’s competitive advantages?