The Maximization of Profit

In the business world, the maximization of profit is considered as a major goal; however, in order for a business to develop other goals also need to be accomplished (Werther and Chandler 2010). One of them is for the company to establish a Corporate Social Responsibility (CSR) agenda. Taking part in socially responsible endeavors has proved to be vital for an organization’s future sustainability and success. These responsible behaviours towards society are called Corporate Social Responsibility actions. Society in this aspect includes, but is not limited to, employees, shareholders and other members of the community. This paper will discuss socially responsible practices using American Apparel as the main example.

The success of an organization relies heavily on the employees involved in the production and delivery of service. Thus, it is important that each staff member is working productively each day. Unfortunately, high efficiency is not achievable when employees are unmotivated. Motivation is a key contributing factor towards an employee’s level of productivity (Mullerat 2009). Motivation comes from both intrinsic and extrinsic factors. With the increase in industry competition, there is a need for a firm to craft unique methods of survival within a harsh environment. This involves the adoption of extending CSR to HR practices (Mullerat 2009). This strategy is highly effective and rewarding as shown in the circumstance of American Apparel.

American Apparel has recognized the beneficial value of integrating CSR into their operations by ensuring that employee welfare during work or absences is covered by the company. A resulting benefit is an improvement in employee motivation accompanied by high productivity. American Apparel offers one of the highest salaries and wages to even the lowest ranking employees. For example, factory workers are paid $12 an hour which is twice then the minimum wage in the States (American Apparel 2012). The firm provides affordable transport to work by subsidizing transit fare. Subsidies also include lunch and messaging services in the workplace. Days that employees are absent are paid for by the company and a program that lends bikes is available to every worker. Due a surge in immigration, the company has established ESL classes for its newcomers (Malhotra and Birks 2007). This not only improves their language skills but generates self-esteem. The firm also focuses on health insurance by providing employees $8 per week and $3 per week for each child in the family (American Apparel 2012). A clinic was built on site for easy access to professional medical care and provides numerous services including pediatrics and emergency treatment (American Apparel 2012).

Additionally, American Apparel is planning to allow employees to own company shares. This is uncommon in the garment industry since many do not ensure permanent employment and are operated on a private basis. However, American Apparel