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Business Ethics: Abercrombie & Fitch Company Case


Ethics is a vital aspect for the successful business operation. Progressive organizations have formulated policies that guide individual employees, departments, units, and organization as an entity. These policies ought to function based on the ethical principles for the organization to achieve its vision and objectives. The ethical principles are defined in terms of their rightness or wrongness. They are intrinsic functionalities of the organization embodied in the organizational vision and mission. Legally, ethics is defined in terms of the law because organizations are legal entities. The operations of the organization must function within the ethical parameters.

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In the following paper, the Abercrombie & Fitch Company (A&F) is a case for business and organizational ethics. Its unethical practices of discrimination lead to protests and lawsuit that saw the company pay to the former workers and the prospective employees who missed employment in the company. The latter is also in a raw with the public over racial and discrimination sentiments. The case of A&F is apt for organizational ethics and management.

Things that A & F missed in their diversity understanding

According to Hartman and Desjardins (2011), Abercrombie & Fitch strived to maintain the image of the white American authenticity. This forced the company to employ most whites in positions of the public service and influence. The company did not consider the diversity of its customers and the changing perceptions in a population of cultural diversity. Driscoll, Field, and Pendry (2007) consider that diversity improves organizational skills, motivation, and knowledge.

Psychologists add that the lack of diversity in organizations is caused by stereotyping, discrimination, and inherent prejudice. Therefore, besides the repute of A&F, it failed to understand that the workers who missed job in the company and those, who retired, maintained direct or indirect concern with the company. This is potential for a backlash, especially if there was an unfair employment process (Hartman & Desjardins, 2011; Driscoll, Field, & Pendry, 2007). The company failed to comprehend that it was under public scrutiny and workers who had left the company or missed a job there had rights to question it.

Ethical issues

Shaw (2011) and Rhode (2006) define ethics as a moral understanding of processes, phenomena and interactions. It also refers to the conscious judgment of right and wrong, fair and unfair, just and unjust. Ethics is the conceptualization of the human conduct within reason and virtue. In the context of the case study, ethics is considered in two aspects. The first one, organizational ethics, refers to the values and best practices, on which the organization operates. It ensures employees, departments, and units function morally. The second aspect, business ethics, is the moral principle that guides an organization on services, products, and its customers (Shaw 2011; Rhode 2006; Hartman, & Desjardins, 2011). In this case, A&F may have been doing better in business but its organizational ethics was under question. The employment procedure was racial and adverts had prejudice.

Ethical theory: utilitarian hedonism

Utilitarian hedonism theory would greatly help in analyzing the A&F case. According to Martineau (2011), Utilitarian hedonism is a morality theory in which maximum pleasure is derived from pain. The act that leads to happiness for one person causes similar amount of unhappiness to another person. To perpetuate an act that causes pain to self is a metaphysical impossibility, which means that pain cannot be self-inflicting.

Therefore, an entity channels the pain to an individual or phenomena. The theory describes the company that thrives at the pain of others (Martineau, 2011). In this regard, the company produced T-shirts that aimed to poke certain ethnic groups. It took it as a form of advertisement, deriving the benefits of publicity while the message on the T-Shirts hurt the targeted groups (Hartman, & Desjardins, 2011).

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When the offended non-white Americans protested, the company’s spokesman responded that the company thought that the message would please everyone. This is a utilitarian hedonistic sentiment that indicates that A&F did no careful moral consideration of the advertisement. Business ethics ought to take into account the entire stimuli within which it operates. Ethics looks not only at the individuals in the company but also at the principle of operation and conduct of the entity (Hartman, & Desjardins, 2011; Shaw, 2011).

Ways of mending relations with the offended stakeholders and parties

Hartman & Desjardins (2011) observe two strategies that can ultimately amend relations with the offended stakeholders and parties. The first recommendation is that the company should observe due process, which refers to a systematic, all-inclusive and versatile process of achieving results. In corporate, this relates to the standardized mechanism of acquisition of human resources, property, equipment, and other organizational requirement. Due process as an organizational ethics protects the company from practices that would cause disrepute like unfair employment and insensitive advertisements. From the case study, the messages on the T-shirts show that due process was ignored (Rhode, 2006; Hartman & Desjardins, 2011; Shaw, 2011).

The second aspect stated by Hartman & Desjardins (2011) is justice. The law prohibits discrimination of employees and job seekers on race, religion, gender, age, and origin. The workers should receive equal opportunities for service, benefits and promotions. In the case of A&F, the company instituted strategic measures to ensure that the whites served in positions of publicity while “people of color” took stock room jobs (Hartman & Desjardins, 2011). A just system that observes due process would enable the company to incorporate the workers that suffered discrimination. A&F ought to observe fairness in job ranking, classification wages, and policy implementation. In effect, the company would improve on its public image (Rhode, 2006; Shaw, 2011).

Diversity training based on virtue ethics

A&F needs to adopt virtue ethics in diversity training. Diversity training facilitates organizational integration by making the minority and inferior group of the organization feel accommodated. It also helps the employees serve customers in better ways because of their diversity. Training may be done with the help of video, lectures, persuasion, or seminars. Exercises, field trips and discussions are also known to enhance team work (Driscoll, Field, & Pendry, 2007).

In the view of Selden and Selden (2001) as well as Driscoll, Field and Pendry (2007), both internal and external factors affect the functions and objectives of an organization. Internal factors include employees, policies and direct stakeholders. External factors refer to the state organs, competitors, prospective employees, and prospective customers. To keep abreast the dynamics of the two organizational stimuli, an organization ought to observe ethics.

Shaw (2011) believes that the company should be able to set moral standards that guide the conduct of the employees and the organization as an entity. Moral standards should be set on conventional norms such as equity, honesty, and protection of life and health of the workers. Training on ethics should envisage the role of management in decision making and ancillary aspects like legalities, diversity, regulatory systems (Hartman & Desjardins, 2011; Rhode, 2006).

Rhode (2006) systemizes the role of leadership in organizational ethics. Organizations are better placed to establish standard morals, policies and administrative structures when they have good leadership. It rallies the company on the goals and objectives (Rhode, 2006).

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In conclusion, I would approve the campaign on A&F because there are critical lessons the organization will learn. First, the organization will understand that whatever it does to the public is significant in making or breaking. Second, it will look at its business and organizational morality. Third, the company will see social importance of diversity and inclusivity. The company must formulate progressive policies that change its culture.

Reference List

Driscoll, M.D., Field, C. S., & Pendry, L.F. (2007). Diversity training: Putting theory into practice. Journal of Occupational and Organizational Psychology, 80, 27-50.

Hartman, L.P., & Desjardins, J.R. (2011). Business ethics: Decision making for personal integrity &social responsibility (2nd ed.). New York, NY: McGraw-Hill.

Martineau, J. (2011). Types of ethical theory. New York, NY: Cosimo, Inc.

Rhode, D.L.(Ed.). (2006). Moral leadership: The theory and practice for power, judgement, and policy. Sanfrancisco, CA: John Wiley & Sons.

Selden, S., & Selden, F. (2001). Rethinking diversity in public organizations for the 21st century. Administration & Society, 33, 303-329.

Shaw, H. W. (2011). Business ethics (7ed). Boston, MA: Wadsworth.

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