Audit of Garmin LTD.

Lucas Airhart
CC 200
Final Audit
 Table of Contents

Executive Summary pg. 3

General Stakeholder Commitment pg. 4-5

Consumer Relations pg. 6-7

Employee Relations pg. 8-9

Environmental Commitment pg. 10-11

Recommendations for Improvement pg. 12-13

Images pg. 14-15

Glossary pg. 16

Reference List pg. 17-18

 A. Executive Summary

The following audit will look at the company Garmin and how they manage and interact

with its stakeholders from multiple different perspectives. This audit will cover a general

stakeholder commitment, consumer relations, employee relations, environmental commitment,

and recommendations for improvement. These aspects will be addressed utilizing the audit

methodology established by Kim Davenport which is based off the Delphi Method. “Using

Delphi expert opinions and judgements are elicited and pulled in multiple iterations to invent or

discover a satisfactory course of action” (Davenport, 2000).

Through this methodology we will be able to examine Garmin from multiple points of view

and lead to a consensus under each of the predetermined sections. Garmin is generally

considered a favorable company as it is commonly on top of the best employer lists published

by companies such as Forbes, is recognized for being open with its stakeholders, and has also

been the subject of case studies for favorable work environments. Garmin actively uses social

media to engage with its consumers but there has been recent evidence it needs more attention

in the customer support aspect. Garmin does have environmental policies in place that put a

focus on sustainability.

Like any major company there is always room for improvement in some or all these aspects.

Using public information such as Garmin’s website, social media accounts, case studies, and

reports from outside organizations we can examine its practices and determine how Garmin has

established such a positive influence as a massive company.

 B. General Stakeholder Commitment

For every successful company one of the most important aspects is managing and properly

communicating with their stakeholders. “Stakeholder management assumes that all persons or

groups who hold legitimate interests in an organization do so to obtain benefits and there is, in

principle, no priority for one set of interests and benefits over another” (Cornelissen, 2017, p.

92). However, for companies that want to stand out above their peers this is not the best

methodology to think of stakeholder management. Garmin can be considered a “FoE” (firm of

endearment) as established by Sisodia, Sheth, and Wolfe in their book Firms of Endearment.

“FoE leaders view stakeholders as partners not as objects of exploitation or means to their

financial ends… instead they encourage stakeholders to collaborate with them in moving their

companies forward” (Sisodia et al, 2014, pg. 190). This is one of the key aspects Garmin utilizes,

inviting its stakeholders and investors to sit in at quarterly meetings as well as an annual

shareholder meeting, and allows them to speak their ideas and concerns.

On Garmin's website, they supply a list of upcoming meetings and events as well as a record

of past events that occurred within a five-year time frame. These old meetings are even

available for anybody to listen to online which shows great transparency and openness. This is

because it wants to provide value that is sustainable to all its stakeholders and manage its

finances properly and the best way to do this is allow everybody to view this. It shows Garmin

has nothing to hide. CEO Cliff Pemble states on Garmin’s website “For a company to provide

sustained value to all stakeholders proper financial management and resource allocation must

be key components of corporate sustainability” (Pemble, 2023). This shows that the CEO

focuses heavily on the aspect of the company being sustainable well into the future, and it’s not
just looking for short term profit at the expense of their stakeholders. “Unfortunately, many

CEO's all too gladly adopt the short-term perspective for reasons of quick personal gains via

stock options” (Sisodia et al, 2014, pg. 198). This is not the case with Pemble since he became

CEO in 2013 after working with the company since 1989. On its CEO ranking page, Comparably

ranks Pemble within the top 10% of CEOs for companies of similar size (Comparably Staff, 2023).

Garmin 's website also highlights its mission to serve all its stakeholders and provides

corporate sustainability reports which provides an easy-to-read overview over its financial gains,

operations, growth, sustainability, and products. Other sections cover its stance on human

rights, health and safety, diversity, and community which all display its human side. Garmin is

stating it cares more about the people that worked for them and that they serve than profit.

This is a themed message that has allowed Garmin to build a distinctiveness to its brand and

image that is different from its competitors and attracts stakeholders to the company. Not many

companies offer this level of insight to the public, but this is again a trait of a firm of

endearment. All these elements combined show a well-planned out, attentive commitment to

its current stakeholders as well as attracting potential new stakeholders. Any information

somebody could need to make an informed decision is readily available off Garmin 's website,

and its goals are clearly stated but are not set in stone, as Garmin values input every step of the

way.
 C. Consumer Relations

Within the Davenport report, three important aspects to consumer relations are covered

and they are as follows. “Respects the rights of consumers, offers quality products and services,

provides information that is truthful and useful” (Davenport, 2000). Garmin would not be as

successful as the company as it is without creating products that meet a certain expectation

through the consumer's eyes. While Garmin was originally known for making GPS units for on

road and off-road vehicles, they have shifted heavily into the wearable watch market based off

consumer reports. “In the world of fitness trackers and health wearables, Garmin watches have

a reputation as being among the most reliable, high-quality watches on the market” (Dustin,

2023). While the watches come with a significant cost over lesser brands, Garmin has built up a

reputation with consumers so that they are willing to spend more on a higher quality product

which allows it to make a better product consumers will enjoy more.

Garmin has helped establish this reputation through its truthful information supplied about

its products. They do not utilize hidden fees or subscription services within its marketing tactics

to deceive potential customers. Garmin lists all the features that its products utilize as well as its

build quality which many consumers can translate to why they cost so much from that

information. Better materials cost more. Garmin does offer a wide variety of models for

consumers who have differing incomes. This is a clear representation that Garmin pays attention

to its customer base, and cares about its customers’ wants and needs instead of embracing the

common 21st century marketing idea of hucksterism. “Marketing remains heavily committed to
a 20th century paradigm based on seduction, conquest and manipulation of customers” (Sisodia

et al, 2014, pg. 87). One look at Garmin 's social media accounts and it is clear it does not focus

on these outdated principles of marketing. “Garmin are likely to use particular creative

elements in their social media posts. Creative elements seek to translate the content of

intended and targeted messages into specific communication elements which include design

and content features such as imagery, typeface, the content of the text, and any interactive

features” (Edney et al., 2018). Garmin focuses on high quality videos and pictures of consumers

using its products and the commenting sections allow for consumer input.

Respecting the rights of customers for businesses that produce physical products is

extremely important. Eventually products are going to break and a company that employs FoE

principles needs to have good systems in place to supply consumers with answers and fixes.

Some companies want to sell a product and once it's in the hands of the consumer it is not their

problem anymore. Unfortunately, even with Garmin superior reputation, it has been struggling

with this aspect lately. Looking at consumer websites such as consumer affairs or Better

Business Bureau, a trend has been established in which Garmin is failing to provide adequate

solutions to consumers experiencing issues with its products. This potentially could cause

consumers to lose trust. “In other words, trust is a measure of how well a company serves its

customers, in a broader sense, how well it serves all stakeholders” (Sisodia et al, 2014, pg. 99).

While this can be common for every company that operates on a large scale, Garmin needs to

continue adapting and learning from its stakeholders and potentially change its “customer help

policies”.
 D. Employee Relations

Davenport goes on to highlight within her methodology that employee commitment

consists of the following. “Provides a family friendly work environment, engages in responsible

human resource management, provides an equitable reward in wage system for employees,

engages in open and flexible communication with employees, and invests in employee

development” (Davenport, 2000). Garmin has commonly been recognized as one of the top

companies to work for and was recognized in 2019 as being in the top five best employers by

Forbes. “Forbes America's best employers are chosen based on an independent, anonymous

survey of more than 50,000 employees” (Business Wire, 2019). This goes to show that many of

Garmin’s current and former employees hold the company in high regards, and Garmin takes

care of its employees regarding many different aspects. One of the new concepts that

businesses are embracing is the happier your employees are, the more successful your business

is going to be and the more satisfied your customers will be from experiencing great service.

“Many of the most reputable firms and most admired organizations spend in fact more than

three times as much on employee communication than their less admired counterparts”

(Cornelissen, 2017, p. 231). Garmin values its communication with employees highly and to

create an effective communication climate has established programs such as placing digital

signage around the company's headquarters which relay information to the employees about

products, finances, and what is going on in general with the company (AMSCREEN, 2014). It has

even initiated a creative quality of life benefit called “life in balance pilot program” that allows
employees to obtain their pilot certification and is part of its internal well-being program for

employees. Other benefits that Garmin guarantees employees are educational reimbursement,

healthcare, 401K match, paid time off, employee stock purchase plans, parental leave,

discounts, professional development, and many other benefits (Garmin, 2023). Garmin does not

just look at its employees like numbers on a spreadsheet but treats them like human beings,

which encompasses aspects of a firm of endearment. “To us, it is self-evident that greater

employee engagement leads to superior performance” (Sisodia et al, 2014, pg. 97).

Garmin also employees reward systems for its employees such as patent incentives and

service awards. It does not just want its employees to complete their everyday tasks and go

home but explore their creative side and have a voice within the company. Garmin has been the

setting for multiple case studies regarding employee happiness such as Laurie Heap’s study

titled Fostering happiness through balance and integration: A Garmin case study. The study

looked at Gamin’s pilot training program and the happiness it created within the workplace by

allowing employees a constant state of growth and development in the form of a spiral

staircase” (Heap, 2019). All these aspects combine to show that Garmin and its leadership

deeply cares about the human side of its employees, and this has translated to employees

feeling favorably towards the company which can help explain why the company has been so

successful.
 E. Environmental Commitment

Garmin is a company that has its main consumers consist of people who enjoy outdoor

activities that require GPS on road and in remote locations. This means Garmin, to be successful

with its consumer base, must embrace the fact that they are a large corporation that has a

responsibility to address any environmental concerns that arise from its production. Referring to

Firms of Endearment, “FOE strive to operate in environmentally friendly ways… many FoEs

invest resources to ensure they have a neutral or positive impact on the environment… they do

so not because it may be a legal requirement but because it is the right thing to do” (Sisodia et

al, 2014, pg. 198). Garmin has launched its own sustainability website in which the environment

is one of the key aspects they cover. They lay out the company’s commitment as well as its

certifications and it doesn't necessarily state that its production manages a positive impact on

the environment, it states that Garmin endorses recycling as well as following all legal

requirements for other materials and substances. It shows a sense of responsibility for not

ignoring environmental issues but instead addressing them even if it's not perfect. Garmin is a

company that has always allowed ideas to be formed internally and externally so perhaps even

greater environmental solutions are right around the corner. But at this moment on most

marketing websites such as MarketBeat and Yahoo Finance, which monitor companies’

standings in overall assessments, Garmin is consistently scoring low in the environmental risk

ratings.
 Garmin monitors these aspects within its company as a preemptive way of issue

management. Given that the environment ties in so closely with its business model it is an area

of special concern, especially after the recent outage crisis that struck the company in 2020.

“Garmin 's long running outage is a case study and how not to handle an IT meltdown in

cybersecurity attack and may indicate a longer recovery than expected” (Dignan, 2020). This is

why transparency is now crucial for Garmin and was part of the reason it launched the

sustainability website. Garmin shows off information such as the amount of waste they have

recycled, how they bulk ship packages to save on airline fuel and eliminate the use of certain

plastics within its products to have a greener footprint. Garment allows anyone who can access

its website to view the actual forms and certifications they have regarding environmental

regulations.

One of the key points that Garmin captures here is the ability to cooperate with various

world governments, which is a key aspect of companies wishing to be successful in the 21st

century. “The pressure on companies to play larger roles in addressing social concerns will

mount as we become less of a ‘having’ society and more of a ‘being’ society” (Sisodia et al,

2014, pg. 155). Garmin follows and sometimes goes beyond regulations set in place on

substances which are necessary for its products and provides all this information for the

consumer on its own website to view, which in turn should help build trust with the consumer

that the product they are buying is not going to have adverse effects on the environment at

least by the government standards.

 F. Recommendations for Improvement

Even though Garmin is a very successful company and succeeding in many aspects of being

a model company others can follow behind, there is always room for improvement as society is

constantly changing and evolving. Through our analysis this study has identified a few areas in

which Garmin can improve its policies and communications. Our first area of interest is Garmin’s

consumer relations and its external communications. The company's social media could be

more engaging with the consumers, which would allow many people to make a more

personable connection with the company. This would be the perfect time to deploy a heavier

presence on social media since it is one of the main sources of new consumers.

It is a crucial time for the company as they are just three years after a crisis which lowered

its public opinion, but they are still being named in the top companies to work for. This means

the company’s internal communications methods and strategies are very effective, but its

external communications could use some work, especially during a crisis. When it struck Garmin

used a blend of an acceptance strategy of a full apology as well as the suffering strategy of

victimization. “Garmin Ltd, today announced it was the victim of a cyber-attack that encrypted

some of our systems on July 23rd, 2020” (Olathe, 2020). Garmin went on to explain that its
systems would be resetting and everything would turn to normal operation, however they

offered no remediation or explanation of how they were going to prevent a similar situation

from happening in the future. Garmin was correct for taking responsibility, but a form of

communication should have been relayed to the public discussing the rectification going to be

put into place. This is why many people were unsatisfied with Garmin’s response.

A second area that has room for improvement is Garmin’s environmental policies and

communications regarding them. The company is very tied to nature and therefore should be

striving to have a greener footprint. As previously discussed in this audit, Garmin outlines all the

government policies that they are following and its commitment to recycling. This is not enough

for a company to satisfy its consumers and stakeholders. It was very interesting to me that

Garmin highlights its own environmental concerns on the website but does not necessarily lay

forward a plan. Garmin needs to go beyond these set standards and challenge the industry

dogma. There are tried and true formulas that companies follow, “but not every successful

company in an industry needs to follow such best practices formulas for success” (Sisodia et al,

2014, pg. 192). Garmin needs to implement more environmental policies to create a new

benchmark for others to follow. Many of the products are based off finite resources, or harmful

materials such as plastics. If Garmin can become a rule breaker, and find greener ways of

conducting business, it could drastically improve public opinion especially during this crucial

time.

A final area for improvement would be customer service. As previously discussed in this

audit there is a growing trend of dissatisfied customers who have not received proper customer

service after a product is broken. Perhaps clearer communications could be made about the
products’ warranties and how customers should communicate with the company to address

problems. Even the organizational structure of the customer service aspect of the company

could be reworked to follow a different chain of command to produce better results and build

trust with the consumer. It pays off for a company to always be vigilant of where its next

problem area could be and address it before it becomes an issue.

Appendix

G. Images

A.

B.
C.

D.
 H. Glossary
Firm of Endearment - The term used by Sisodia, Wolfe, and Sheth used to describe an
organization that values its stakeholders and shareholders and gives value to all their interests
(Sisodia et al, 2014, p. 1).
Themed Message - “These messages are continuously and consistently communicated to
stakeholders to achieve the strategic intent of changing or consolidating the company's
reputation” (Cornelissen, 2017, p. 157).
Hucksterism – This is a business practice that uses aggressiveness, lies or other forms of
marketing that is unbecoming of a respectable company (Sisodia et al, 2014, p. 88).
Trust - While not a primary business objective, this is the reputation that is built up by a
business with its customer (Sisodia et al, 2014, p. 99).
Communication Climate - A communication climate describes how freely communication flows
within an organization, and how effective communication is (Cornelissen, 2017, p. 230).
Creative Quality of Life Benefit - A benefit that a company offers to its employees which is not
normal, or a benefit the company can offer due to a specialization within their field (Sisodia et
al, 2014, p. 74).
Issue Management - this refers to the ability of a company to identify and address problem
areas within an organization utilizing various methods before they escalate (Cornelissen, 2017,
p. 251).
Crisis - This is an event that jeopardizes an entire organization in an instant whether it is a
natural event, or something caused by technological issues. It needs to be addressed
immediately by a communication team before business can resume and can be very stressful
(Cornelissen, 2017, p. 276).
Acceptance Strategy – This is when a company acknowledges a crisis is occurring and takes
responsibility for it (Cornelissen, 2017, p. 285).
Suffering Strategy - This is when a company claims that they are the victims of a crisis to gain
sympathy from the consumers (Cornelissen, 2017, p. 285).
Rectification - This is the proposed plan an organization or business presents as a crisis
communication to explain how they are not going to let this problem happen again
(Cornelissen, 2017, p. 285).
Challenge the Industry Dogma – The act of a company going against the “best practices”
established by previous companies to discover a better way. (Sisodia et al, 2014, p. 192).
Rule Breaker - The name given to companies that do not follow these “best practices” (Sisodia
et al, 2014, p. 192).
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