Tom of Maine's Success

Introduction: Tom’s of Maine creates effective personal care products using simple, natural ingredients derived from plants and minerals. Tom’s of Maine products-toothpaste, mouthwash, floss, deodorant, and soap-do not contain artificial sweeteners, preservatives, colors, flavors, or animal ingredients; are tested for safety and efficacy without the use of animals; are biodegradable; and are packaged in earth-friendly ways. Our philosophy of “Natural Care” guides us in doing what is right for our customers, employees, communities, and environment.

They fulfill the Natural, Then Tom’s of Maine was moving beyond health food stores and into supermarkets and drugstores, where 70 percent of toothpaste is purchased.

Even as Tom’s product distribution expanded nationwide, the company’s marketing strategy was low key. Care mission by donating 10% of our profits to charitable organizations; by encouraging our employees to use 5% of their paid time in volunteer work; by adhering to our standards of natural, sustainable, and responsible; and by not testing on animals. Tom’s of Maine products and packaging are designed to be sustainable and recyclable.

Each year, Tom’s uses packaging made of 100% recycled paper board. The number of consumers interested in natural personal products is growing rapidly, fueled primarily by shoppers making purchases based on their health and wellness values. This large and growing segment of the population is 57 million strong. Tom’s of Maine’s savvy, passionate, environmentally aware consumers have been seeking and getting 100% happiness for almost 40 years. 1. Critically discuss which way of thinking about ethical behavior best describes Tom’s of Maine and its founder, Tom Chappell?

Ethical behavior is acting in ways that are consistent with one’ personal values and the commonly held values of the organization and society, A reputation for ethical decisions builds trust in your business among business associates and suppliers.

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Tom Chappell dedicated himself to creating a company that produces natural products in a caring and creative work environment. Tom Chappell hopes to set an example of ethical business standards for others. His first book, The Soul of a Business: Managing for Profit and the Common Good, set a practical yet powerful new agenda for ethical and profitable business leadership.

Like the company he pilots, Tom Chappell has received many awards including the “New Englander Award” sponsored by the Small Business Association of New England, 1991 “Entrepreneur of the Year” from CNBC and 1995 “Socially Responsible New England Entrepreneur of the Year” by the Entrepreneur of the Year Institute. Tom’s of Maine has been named one of the “100 Best Companies in the U. S. for Working Mothers” by Working Mother magazine and one of the “Top 10 Healthiest Companies” by Health magazine. Tom’s of Maine has received the prestigious “Corporate Conscience Award for Charitable Contributions” from the Council on Economic Priorities.

Tom Chappell is active in many cultural and philanthropic organizations, among them: the Dean’s Council for Harvard Divinity School, the Advisory Council for the Center for the Study of Values in Public Life at Harvard Divinity School, The Nature Conservancy of Maine, and the Washington National Cathedral National Advisory Group. Tom’s of Maine distinguishes itself from other companies by stressing the “common good” in all of its endeavors. The company is passionately concerned about corporate wellness, customer wellness, product wellness, community and environmental wellness, and employee wellness.

In late 2000 the company launched Tom’s Online Wellness Store to make its full product line available to customers around the globe. Among other customer-oriented activities, Tom’s utilizes the services of a wellness advisory council and provides wellness education. Tom’s of Maine practices stewardship through its commitment to natural, sustainable, and responsible ingredients, products, and packaging. In embracing the philosophy of “doing well by doing well” Tom’s has continued to produce impressive business results that attest to an ongoing stream of corporate wellness.

In fiscal year 2001, Tom’s sales exceeded $35 million, which directly reflects the continued strengthening of its various product lines. Tom Chappell had his own views which made him work confidently towards the best with his ethical behavior. Sweet, Franklyn (1964). 2. Discuss critically what potential dilemma did Tom Chappell face in the mid-1980? Tom Chappell’s focus on growing his company had again placed him front and center in the bottom line oriented world of capitalism, the distaste for which had once driven him to move from Philadelphia to Maine.

Still questioning whether such a life was truly meaningful, he enrolled in Harvard Divinity School in 1986, to which he would make a twice-weekly, 90-mile commute. After five years of study, he earned a master’s degree in Theology. Chappell, a frequent public speaker, went on to publish a book in 1993 called The Soul of a Business: Managing for Profit and the Public Good, which outlined his ideas on running a company with a strong set of personal ethics. His search for a more values-based approach to business also led to a new look at the company’s mission, which was examined over a year’s time beginning in June 1989.

Input was sought from the entire workforce, and a multifaceted set of goals was finally agreed upon, which defined the company’s purpose as making a profit while working toward the common good. Tom’s would now place a much stronger emphasis on adhering to its core values, which had begun to recede into the background during the early 1980s, when a number of “M. B. A. s” were hired to “professionalize” the company. Though it took some time for the new mission statement to take hold, the company was ultimately revitalized by the process of implementing it.

One unusual byproduct of the new mission was the decision to “tithe” 5 percent of Tom’s of Maine’s profits and donate the money to environmental, arts, and human needs causes. This figure soon became 7 percent, and then 10. In addition to public giving, the company also looked after the welfare of its employees, offering them retirement savings and profit-sharing programs, childcare benefits, and parental leave, and even free fruit to eat on the job. Factory workers rotated stations every hour to avoid fatigue and boredom, and all were encouraged to perform volunteer work in the Kennebunk community on company time.

The firm’s corporate values were tested in 1992 after the company reformulated its popular natural deodorant. The new version, which eliminated petroleum products and added glycerin and lichen, proved to be ineffective for about half of users, who complained to Tom’s. In October of that year the company recalled the product at a cost of $375,000. The old formula was restored, and customers who had written to complain were given replacements and coupons for money back on their next purchase. The recalled deodorant, less effective but not useless, was donated to an organization that distributed it to the homeless.

The company’s distribution by the mid 1980’s was still somewhat limited, despite of all the hardships the company did not lose hope and kept on working till they got success. Anof, (1965), Chandler, Alfred (1962). 3. Critically evaluate how important were Tom Chappell’s personal views in helping Tom’s of Maine to be successful? Following the successful introduction of its toothpaste, the company began to add other personal care products, including deodorant, mouthwash, and shaving cream, all made with natural ingredients and without testing on animals.

In 1978 the Chappell’s decided to develop a line of fluoride toothpaste a controversial idea in the natural foods marketplace. The move was a success, however, and sales of fluoride toothpaste eclipsed those of the original formula within two years, during which time Tom’s toothpaste sales doubled. In 1981 the company’s name was changed to Tom’s of Maine, Inc. By 1983 the firm’s annual revenues were approaching $2 million. Recognizing that sustained growth would require new outlets for its goods, the company began to seek distribution to chain stores.

The years that Chappell spent as a part-time student at the Divinity School brought him to a new understanding of his role. “For the first time in my career, I had the language I needed to debate my bean-counters” he explained. He realized that his company was his ministry. ”I’m here to succeed. But there’s a qualifier. It’s not to succeed at all costs; it’s to succeed according to my principles. ” One tangible result was the development of a mission statement for the company that reflected both the company’s business aspirations and its commitment to social responsibility.

This document spelled out the values that would guide the company in the future. It covered the types of products ordered and the need for natural ingredients and high quality. It also included respect for employees and the need for meaningful work as well as fair pay. It pointed out the need to be concerned with the community and even the world. Finally, it called for Tom’s of Maine “to be a profitable and successful company, while acting in a socially responsible manner. ” Some of the company’s programs were the result of decisions made by top management.

The company began donating ten percent of its pretax profits to charities ranging from art organizations to environmental groups. These included funds donated to state and local curbside recycling programs, and a pledge of $100,000 for the Rainforest Alliance. Tom’s of Maine was facing increasing competition. Its prices were similar to those of its national competitors for baking soda toothpaste, but 20 to 40 percent higher for deodorant and mouthwash. Tom Chappell did not appear worried, however. He believed that “You have to understand from the outset that they have more in the marketing war chest than you. That’s not he way you’re going to get market share, you’re going to get it by being who you are. ” He explained his philosophy. ”A small business obviously needs to distinguish itself from the commodities. If we try to act like commodities, act like a toothpaste, we give up our souls. Instead, we have to be peculiarly authentic in everything we do. ” This authenticity is applied to both ingredients and advertising decisions. ”When you start doing that customer is very aware of your difference. And they like the difference”. It was Tom Chappell’s personal views that took out the company from all the problems and made it the best and the different.

James R. Evans (2005), Drucker (1974). 4. Critically evaluate how Chappell’s approach to ethical management can work at larger firms. Socially responsible businesses should be encouraged to make regular assessment and self-criticism a priority, which in turn will make them less vulnerable to destructive criticism. Socially responsible businesses have experienced serious ethical failures and lapses, and there are many factors that make it difficult for organizations to carry out strong social missions. The employment of ethical business practices can enhance overall corporate health in three important areas.

The first area is productivity. The employees of a corporation are stakeholders who are affected by management practices. When management considers ethics in its actions toward stakeholders, employees can be positively affected. For example, a corporation may decide that business ethics requires a special effort to ensure the health and welfare of employees. The company began donating ten percent of its pretax profits to charities ranging from art organizations to environmental groups. These included funds donated to state and local curbside recycling programs, and a pledge of $100,000 for the Rainforest Alliance.

The company also urged its employees to get involved in charitable causes. It set up a program that allowed employees to donate five percent of their work time to volunteer activities. Employees enthusiastically took advantage of the opportunity. When one employee began teaching art classes for emotionally disturbed children, others became interested, until almost all of the company’s employees were involved. Employee benefits were not strictly psychological. The company offered flexible four-day scheduling and subsidized day care. Even coffee breaks were designed with employee preferences in mind, providing them with fresh fruit.

The company also helped individual employees earn their high school equivalency degrees and develop skills for new positions. By 1993, Tom’s of Maine was moving beyond health food stores and into supermarkets and drugstores, where 70 percent of toothpaste is purchased. Even as Tom’s product distribution expanded nationwide, the company’s marketing strategy was low key. The consumers vote them with dollars daily as they are impressed with the product and purpose. It set up a program that allowed employees to donate five percent of their work time to volunteer activities.

Employees enthusiastically took advantage of the opportunity. When one employee began teaching art classes for emotionally disturbed children, others became interested, until almost all of the company’s employees were involved. In late 2000 the company launched Tom’s Online Wellness Store to make its full product line available to customers around the globe. Among other customer-oriented activities, Tom’s utilizes the services of a wellness advisory council and provides wellness education. Tom’s of Maine practices stewardship through its commitment to natural, sustainable, and responsible ingredients, products, and packaging.

In embracing the philosophy of “doing well by doing well” Tom’s has continued to produce impressive business results that attest to an ongoing stream of corporate wellness. In fiscal year 2001, Tom’s sales exceeded $35 million, which directly reflects the continued strengthening of its various product lines. Throughout the 1990s Tom’s of Maine has been repeatedly recognized for providing a model of ethical business standards for others to follow. It is Tom Chappell’s approach to ethical management he created a different Tom’s of Maine and can also work at larger firms. Boatright, J.

R. (1999). Conclusion: To serve the customers by providing safe, effective, innovative, natural products of high quality. To build relationships with our customers that extends beyond product usage to include full and honest dialogue, responsiveness to feedback, and the exchange of information about products and issues. To respect, value, and serve not only the customers, but also the co-workers, owners, agents, suppliers, and our community; to be concerned about and contribute to their well-being, and to operate with integrity so as to be deserving of their trust.

Reference: Sweet, Franklyn (1964) “Strategic Planning… A Conceptual Study”, Bureau of Business Research, the University of Texas. •Chandler, Alfred (1962) “Strategy and Structure: Chapters in the history of industrial enterprise”, Doubleday, New York. •Anof, (1965) “Corporate Strategy McGraw Hill”, New York. •Drucker (1974) “The Practice of Management”, Harper and Row, New York. •James R. Evans (2005) “ Principles of Operations Management”. OH: Thomson South-Western, Manson. •Boatright, J. R. (1999), “Finance ethics. A companion to business ethics”, R. E. Frederic. Oxford, Blackwell. Word Count: 2412.