BUS 4474 Troy University Seko Designs Business Ethics Paper
You are to compose a short paper that addresses all ethical issues you identify in the case. As we are also evaluating your writing, your answers must be in an essay format, rather than using outlines or bullet points. You are to submit your answers in narrative form. Keep in mind that communication has multiple dimensions to it. Communicating substantive information is only one dimension. How well you communicate it and the grasp of the English language that you display in your communications will all have a bearing on how the individual grading your submission will evaluate it. Minimum of 6 pages; Maximum of 10 pages.I typically expect to see 6 pages typed, 12point font, no more than double spaced with normal margins. Headings and paragraph indentation help your reader follow your argument. Liz Forkin Bohannon, Founder and CEO of Sseko Designs, a socially-minded fashion and designcompany from Portland, Oregon, uses the company as a platform to empower women in Uganda andEast Africa. In 2008, after travelling to Kampala, the capital city of Uganda, she was appalled to see theextreme poverty of the people, especially that of its women. She discovered that the top 2 percent ofhigh school girls who were eligible to go to a university were required to return to their villages andwork for 9 months while saving their money for tuition. Most of these girls did not continue theireducation because the families needed the money for their subsistence. She also learned these womenpreferred to work rather than receive a handout. Her first attempt at a socially conscious for profit business was a short lived chicken farm. It wasthen that she recalled an incident from her college days when she made a sandal that used ribbons toavoid he noise made by flip-flops, so she redesigned them by purchasing rubber flip-flop bottoms tiedwith ribbon. Liz believed she could improve upon her original design using materials obtained locally. Fortwo weeks she traveled through Kampala looking for suppliers while gaining skills in sandal makingthrough tutorial videos on YouTube. She developed a business idea for a work-study model for Ugandanwomen who showed college potential. Liz would offer women employment during the nine-monthperiod they had to earn enough revenues for college. The women would make sandals and otherproducts that could be sold to consumers in the United States. In the process the Ugandan womenwould not only learn skills but also have the chance to earn their wages to go to college.Of course, making the sandals was only half the battle. The Bohannons also had to find buyers.Together the couple traveled the nation for six months in their Honda Odyssey minivan—often sleepingin the van and showering at truck stops to save money— 3 to try and convince stores to purchasesandals from Sseko Designs. In 2009, this became the first product offered by Sseko Designs. The sandalsbecame an immediate success when Martha Stewart recommended them in her gift ideas and theirinventory was soon depleted.To continue the company’s growth, Liz and her husband, Rob, sought funding via the popularABC reality show Shark Tank, on February 13, 2015. Entrepreneurs Mark Cuban, Barbara Corcoran,Kevin O’Leary, Lori Grainer and Robert Herjavec were offered 10% stake in Sseko for a $300,000investment. At that price, the company would be presumed to be worth $3 million. On the other hand,Sseko had suffered a $90,000 loss in 2014 and anticipated it would lose money in 2015 as well. TheBohannons explained that the reason for the loss is that they are putting more money into developmentand are hiring more salespeople. They expressed their belief that as more Americans learn about Sseko,its unique products, and its social mission, sales would increase, and the firm would recoup its profits. Itis not unusual for an organization to incur debt or suffer losses as it expands. Debt, managed correctly,could actually help a firm because it allows it to take on opportunities it would not normally have withlimited funds. However, a negative cash flow often turns off investors, and the sharks were noexception. Of greatest concern to the sharks was the belief that the Bohannons overvalued theirbusiness. However, the Bohannons explained that they could not lower their valuation due to the dealsthey had already struck with the four private investors.Mark Cuban made an offer for 50% ownership which they declined. The sharks maintained thatwas too high a value, especially for a company that, in their judgment, was too focused on its social mission and philanthropy and not enough on profitability. The Bohannon’s countered that many oftoday’s retailers and their customers value companies with a social mission. This, they maintain, isespecially the case with the millennial generation, their target customers. They noted that youngerconsumers are less concerned about brand names and more interested in the story behind the brand.They believe that many customers prefer buying from firms that share their values. They maintain thatif a company supports a cause the consumer cares about, then the company’s brand will be viewedmore favorably. They told the sharks that this will be the key to increasing Sseko’s sales and profits.While the Sharks declined the opportunity to invest in Sseko, their exposure on the showresulted in a 500-fold increase in traffic on their website and a 1000% increase in sales for the month ofFebruary. In addition, other investors came forward. They received the entire investment that theyinitially wanted from the sharks without having to decrease their estimation of the value of theircompany. Sseko Designs has already had a major impact on Uganda. Not only is it the largest footwearmanufacturer—resulting in more jobs for Uganda as well as for the Ethiopian and Kenyan artisans whocreate crafted products for Sseko to sell—it also serves to empower women. Currently, Sseko employs65 women in Uganda and is the country’s largest footwear manufacturer. Their product offerings haveexpanded to include apparel, footwear, jewelry, accessories and leather bags. Today, the company supports the education of women by providing scholarships for their employees.Each employee is encouraged to save 50% of their salary which goes into their personal Sseko savingsaccounts for 9 months, after which the account receives a 200% match from the company. Additionalfunding for these scholarships comes from the Sseko Fellows program. This program began two yearsago and has 300 Fellows. Sseko fellows are US social entrepreneurs who sell the company’s productsdirect. Every Sseko Fellow is matched with a Sole Sister in Uganda; every dollar of Sseko product sold inthe U.S. by one of these fellows provides income for the fellow and generates funding that helpscontribute to sending a Sole Sister to the university. To date, 87 female employees have been able to get a university education, thanks to Sseko Designs.