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That the owners’ personal values led to conflicts over competitive strategy with
the professionals hired to lead the growth of the company.
How individual spirituality helped the owners reaffirm the mission of the
company and make critical decisions that balanced their values and efforts to
maximize profits.
That the ethical and spiritual values embraced by Tom’s of Maine permeate
various aspects of the business and create both advantages and challenges.
First 30 Minutes of Class
Spend the first 10 minutes of class reviewing the main facts of the case including a
description of the history of Tom’s of Maine, the conflict between the professional
managerial staff and the owners, Tom Chappell’s experience with divinity school and
how that experience informed his approach to business, and the current competitive
strategy and HR practices of the firm.
Next 20 Minutes of Class
Students should identify and discuss:
The various stakeholders in this case and their shared and conflicting interests.
How efforts to increase the ethical and spiritual bases of the business may hurt
the bottom line.
How policies toward suppliers, customers, and employees can be aligned with
the values and beliefs of the owners of the company.
Any potential difficulties or opportunities created by connecting spirituality and
business.
Summarize Students’ Responses
Ask students whether they would like to work at or do business with Tom’s of Maine
and why.
Issues to consider:
By the standards of most industrialized nations, people in the United States are
unusually religious; yet, American society is extremely diverse. This religious
diversity might create both opportunities and potential difficulties for businesses.
A strong organizational culture is often credited as an important factor in the
success of leading companies. Religion can be an important aspect of ethnic or
national culture but usually is not part of organizational culture. Consider
whether the foundations of business and spirituality are in fact compatible.
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Tom and Kate Chappell for years could not find a buyer for their company who
would agree to their ethical and spiritual terms. Colgate, a publicly-traded $11
billion consumer products company, agreed to buy an 85% share in the company
for $100 million in 2006 and has also agreed to keep the Chappell’s vision in
place for at least several years. Many would argue that it is unreasonable to
expect a new owner to continue the old owner’s policies indefinitely.
Last 15 Minutes of Class
Conclude the discussion.
Make sure that students understand the possible relationship between personal ethical
and spiritual values and managing a for-profit business. Students should consider the
possible synergies and the possible conflicts that infusing business with spirituality can
produce.
Timeline of Events
1970 Tom’s of Maine introduces its first product, an innovative non-phosphate detergent
marketed in returnable containers.
1973 Tom’s develops a line of personal care products.
1981 Sales exceed $1MM and Tom’s of Maine decides to expand distribution beyond natural
foods grocery stores to the mainstream market.
1983 Sales exceed $2MM but conflicts over how to grow the business emerge between the
professional managers and owners Tom and Kate Chappell.
1988 Tom Chappell enrolls at Harvard Divinity School. A few years later he returns full time
to Tom’s of Maine and develops its mission statement and statement of beliefs.
1991 Tom’s of Maine insists that suppliers agree not to test ingredients on animals.
1993 The new formulation of Tom’s of Maine’s deodorant fails and the product is recalled a t a
cost of $400,000. Tom Chappell publishes The Soul of a Business.
1994 The deodorant debacle and stiff competition from major brands leads to the company’s
first annual loss ($400,000).
1995 After hiring new professional managers from mainstream consumer products companies,
earnings recover to $650,000.
1996 Tom and Kate Chappell attempt to sell their company but cannot find a buyer who
agrees with their stringent spiritual and ethical expectations.
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1999 Tom’s of Maine expands offerings to include a line of wellness products. Tom Chappell
publishes Managing Upside Down: The Seven Intentions of Values-Centered Leadership.
2006 Colgate buys Tom’s of Maine for $100 million.
Discussion Questions
1. How should management accommodate a variety of conflicting spiritual perspectives in
the workplace?
2. Tom Chappell created a spiritual framework for Tom’s of Maine, a family-owned
business. Can such a framework be created for a publicly-traded company? What
differences might there be in its effects?
3. To what extent is Tom Chappell’s spiritual perspective responsible for the company’s
organizational culture and the company’s successes and/or failures?
4. What risks might a company encounter when encouraging the expression of spiritual
values in the workplace? What advantages does it gain?
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NIKE AND THE LGBT COMMUNITY:
DIVERSITY + INCLUSION = A SUCCESSFUL BRAND
This teaching note was prepared by McCall Lewis, MBA (David Eccles School of Business,
University of Utah).
Purpose of the Case Study
1. To help students understand the importance of supporting diversity and inclusion in
and out of the workplace, even if not required by law.
2. To illustrate how an inclusive and diverse workforce attributes to the success of a
company.
3. To provide students with a brief overview of the Human Rights Campaign and its
annual Corporate Equality Index.
4. To provide students with an example of a company who is successful in part because it
fosters inclusion and is committed to equality.
Identifying the Business Problem
For over 20 years, Nike has embraced diversity by endorsing athletes and hiring
employees, regardless of their race, religion, gender, age, physical disability, and sexual
orientation/identity. The company also shows its commitment to inclusion and equality
for all by supporting legislation and policies that prohibit discrimination based on sexual
orientation and identity. Nike attributes its success to diversity and maintains that it
gives the company an advantage over competitors. Additionally, Nike believes
supporting equality is the right thing to do.
Forecasting the Most Desirable Outcome
Nike continues to support inclusion and equality in and out of the workplace and, in
doing so, serves as an example for other companies.
Identifying the Critical Issues
Nike, like other companies, is facing increasing competition for top talent.
Nike recruits and hires a diverse group of employees and has internal policies to
protect them against discrimination based on sexual orientation and identity.
Why should a company support inclusion of employees in the workplace
regardless of sexual orientation and sexual identity, especially since it is not
required by law in all states?
Nike shows its commitment by supporting pro-equality legislation and policies,
despite some negative public reactions.
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To what extent should a company show its support for equality? Should it focus
only on its internal policies or should it support external policies, too?
Stakeholder Perspectives Include:
Possible Solutions to the Problem
Nike could expand its support of equality legislation outside of Oregon. This would help
More diversity should be encouraged within Nike to further the company’s success and
growth.
Teaching the Case
1 Week Prior
Distribute the case at least one lesson prior to when you will discuss it in class. Tell the students
that you intend to focus on several matters during the discussion, including:
First 30 Minutes of Class
Spend the first 10 minutes of class reviewing the main facts of the case including a brief
description of the history of Nike, the Human Rights Campaign’s Corporate Equality Index,
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Nike’s role in the passage of Oregon Senate Bill 1000 in 2006, and the company’s reasons for
embracing a diverse workforce.
During the next 20 minutes, students should identify and discuss at least the following topics.
certain consumers while alienating others. So, how involved in the community/politics
should a company be?
What is the role of diversity within a company?
Last 15 Minutes of Class
Conclude the discussion.
Timeline of Events
1964: Nike is founded by Philip Knight and Bill Bowerman as a shoe distributor.
1971: Nike releases its own product, a soccer shoe.
1980: Nike goes public. It has a 50% share of the US athletic shoe market.
Human Rights Campaign is founded.
1982: First commercial is aired during the New York Marathon.
1988: “Just Do It” slogan is introduced.
2002: The Human Rights Campaign begins to compile an annual Corporate Equality Index
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2006: Nike supports the passage of Oregon Senate Bill 1000, which prohibits discrimination
based on sexual orientation.
2011: Nike ranks 135th on Fortune 500 List. It also has received a perfect score on the Corporate
Quality index for the past ten years.
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THE CRACKER BARREL RESTAURANTS
This teaching note was prepared by Dr. Harris Sondak (David Eccles School of Business;
University of Utah).
Purpose of the Case Study
1. To illustrate how preferences of senior management regarding hiring diverse employees
can affect business opportunities.
2. To provide students with an example of how attitudes toward hiring diverse employees
can complicate public relations.
3. To raise the question of what actions aggrieved groups might take in reaction to what
they see as unfair company policies.
Identifying the Business Problem
Cracker Barrel has a socially conservative management. For much of its history and
Barrel should investigate what policies are truly in the interest of the shareholders and
carefully assess the advantages of implementing non-discriminatory diversity
management policies.
Identifying the Critical Issues
1. Cracker Barrel is a publicly traded company with a socially conservative management
that sought to ban gay and lesbian employees.
2. Cracker Barrel began as a regional company in socially conservative regions that provide
little or no legal protection against discrimination for sexual orientation – whether that
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3. While Cracker Barrel’s core customer base was originally conservative and likely
4. Cracker Barrel has a number of gay and lesbian employees who perform well.
5. Interest groups have the ability to generate negative publicity for a company, but that
6. Shareholders can try to bring both financial market and internal governance pressure on
management, but if a company is profitable, the effectiveness of these efforts might be
limited.
Stakeholder Perspectives Include:
and lesbian employees. However, the national market probably has different attitudes
insofar as most Americans support equal employment rights for gays and lesbians.
Certainly customers in some localities – such as New England – are more liberal than
both Cracker Barrel’s original base and the U.S. average.
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Shareholders. Most shareholders tend to care more about profitability than about social
issues. As such, they had an interest in having Cracker Barrel’s personnel policies make
business sense.
Possible Solutions to the Problem
Cracker Barrel was faced with a tension between management’s preferences to keep
a. Cracker Barrel could maintain its discriminatory policies company-wide. This course of
stand.
b. Cracker Barrel could give up its discriminatory policies company-wide. This course of
c. Cracker Barrel could develop different personnel policies in different regions. This choice
having different menu choices for different locales, runs the risk of disappointing
customers from outside the local area.
Explaining How to Communicate the Solution
Cracker Barrel’s communication strategy must be carefully aligned to the choice it makes
among the possible solutions to this problem. The company must communicate clearly to
