"Crazy For You" Bear Raises Ethics Questions

"Crazy For You" Bear Raises Ethics Questions

Straitjacketed Teddy Bear Raises Questions About Ethics And Public Relations

Teddy bear flap could become business school case study

By DAVID GRAM, Associated Press February 14, 2005

MONTPELIER, Vt. -- W. Michael Hoffman says he might use the controversy generated by the Vermont Teddy Bear Co.'s straitjacketed "Crazy For You" bear as a case study in one of his graduate seminars on business ethics.

"Even though it has that kind of cutesy flavor, it brings up issues about corporate behavior and how corporations should be sensitive and interact with society," said the director of the Center for Business Ethics at Bentley College in Waltham, Mass.

The decision to market the bear, and to keep doing so even in the face of widespread criticism that its straitjacket and "commitment report" made it insensitive toward people with mental illness, has put the Shelburne-based company under the spotlight among business ethicists and public relations executives around the country.

Among the question he would ask students, Hoffman said, would be, "Does the company need to be more sensitive? ... Does the fact that the bear sold out mean you were right to put it on the market?"

The company began advertising the "Crazy For You" bear in early January. When mental health advocacy groups raised an alarm, the company responded by saying it was sorry if it had offended anyone, but would continue selling the bears until its inventory had sold out.

As the pressure built, with scoldings both from Republican Gov. James Douglas and the state Human Rights Commission, the company stuck to its guns.

A company official did not respond to messages requesting an interview with CEO Elisabeth Robert. Robert, whose name is pronounced "ro-BEAR," gave a round of media interviews on Jan. 29, during which she said it was "a very difficult decision" not to withdraw the bear from the market.

"I listened to customers, from a lot of feedback from our employees. These people are Vermonters who really don't like to be told what to do," Robert told The Burlington Free Press.

That didn't score any points with the company's critics, some of whom said Robert had gotten a distorted view of the message they were trying to send.

"No one's trying to tell them what to do," said Rep. Anne Donahue, R-Northfield, who has struggled with serious depression and is a leader of the group Vermont Psychiatric Survivors. "We're not demanding; we're pleading."

For Robert, a 1978 Middlebury College graduate who joined Vermont Teddy Bear in 1995 and was appointed president and CEO two years later, the "Crazy For You" flap has been a black mark on what otherwise by all accounts has been a shining career.

Her company's annual report for 2004 reported 38 percent growth in revenues for the year, to $56 million. The company offers a range of teddy bears and "BearGrams" geared mainly to adults looking to spend $70 or more for a token of their affection for a sweetheart.

The controversy appears not to have harmed sales: The "Crazy For You" bears sold out last week. But there has been a personal cost to Robert. She gave up her seat last week on the board of Vermont's largest hospital, Burlington-based Fletcher Allen Health Care after both the board chairman and its CEO said disparaging the mentally ill is contrary to the mission of institution that serves them.

And Hoffman said there could be longer-term costs to the company. "The capitalist system has a way of punishing companies that misbehave, either through lost sales or because some segments of society no longer want to invest" in the firm, he said.

In the eye of Howard Rubenstein, a New York public relations executive, "the cost to them is dramatic. It hurts their reputation." He said whatever punishment may come the company's way may not be wholly undeserved.

"That's a lesson in poor public relations. They violated every rule in the game on public relations," Rubenstein said. Putting a product on the market likely to stigmatize the mental ill was "just thoughtless," he said. But once the controversy was called to their attention, "their reaction should have been dramatically different."

He said he was particularly troubled by the notion that no one would tell the company what to do. "In today's media environment, a lot of people can tell you what to do and you better analyze what they're saying. ... People will forgive a mistake but they won't forgive arrogance."

One Vermont company with a reputation for well-oiled public relations is Green Mountain Power Corp., the state's second-largest electric company. Dorothy Schnure, the company's manager of corporate relations, said there are certain steps that should be followed when a public relations crisis looms.

A quick response is important, she said, as is listening respectfully to critics. "If you have very important reasons for reaching your decision you need to clearly express why it is you believe you're right, why you have good reasons for disagreeing with whatever the opposition is."

A willingness to admit mistakes is key, Schnure said. She described an incident in the late 1980s when a Vermont newspaper called to ask about electrical transformers, which contain significant quantities of oil, that were being stored in Montpelier very close to the Winooski River.

"I told the (Barre-Montpelier) Times Argus, `Yeah, you're right. We made a mistake.' And the next day we had cranes in there so they could be stored safely away from the river."

So far, it doesn't appear Vermont Teddy Bear has suffered any of the punishment Hoffman and Rubenstein described -- if its stock price is a guide. The company opened the year Jan. 3 at $6.45 per share. It was selling Monday at about $7.23.

And anyone looking to buy a "Crazy For You" bear now most likely would pay a premium, with prices on the online auction service eBay ranging up through the multiple hundreds of dollars.

That didn't much impress Hoffman, who noted that the scandal-plagued Enron Corp. code of ethics also was selling in the multiple hundreds of dollars for a time on eBay.

"Just because it's selling on eBay doesn't mean it's something to be proud of," he said.

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'Crazy For You' teddy bear spurs questions

By DAVID GRAM ASSOCIATED PRESS WRITER

MONTPELIER, Vt. -- Someday, the straitjacketed "Crazy For You" bear may be a case study in America's business schools.

The decision by the Vermont Teddy Bear Co. to market the stuffed toy - and to keep doing so despite widespread criticism it was insensitive toward the mentally ill - has intrigued business ethicists and public relations executives around the country.

Was the bear a brilliant marketing ploy or a big mistake? And did the company violate a code of ethics in a state where Ben & Jerry's ice cream set a high standard for socially responsible business with such causes as its save-the-rainforest campaign?

"Even though it has that kind of cutesy flavor, it brings up issues about corporate behavior and how corporations should be sensitive and interact with society," said W. Michael Hoffman, director of the Center for Business Ethics at Bentley College in Waltham, Mass.

Hoffman said he may use the bear as a case study in one of his graduate seminars on business ethics. Among the questions he would ask students would be, "Does the company need to be more sensitive?" and "Does the fact that the bear sold out mean you were right to put it on the market?"

The company started selling the "Crazy for You" bears in January for Valentine's Day, and they sold out Feb. 3. The $69.95 brown, furry bear comes with a straitjacket and commitment papers that read: "Can't Eat. Can't Sleep. My Heart's Racing. Diagnosis: Crazy for You."

It is one of dozens of novelty teddy bears the company sells, including a pom-pom-holding Cheerleader Bear, a stethoscope-wearing Doctor Bear, and a sunglasses-and-leather-clad Rocker Bear. Vermont Teddy Bear also offers gift pajamas and flowers. It has a factory in Shelburne and employs about 290 people, doing most of its business by mail and over the Internet.

When mental health groups and Gov. James Douglas complained about the "Crazy for You" bear, the company responded by saying it was sorry if it had offended anyone, but would continue selling the bears until its inventory was gone.

"We're not in a position to be told what we can and cannot sell," chief executive Elisabeth Robert (pronounced roh-BEAR) said during a round of interviews last month.

Those remarks did not score any points with critics, especially considering the company is a member of the group Vermont Businesses for Social Responsibility.

"In Vermont of all places," said Ken Libertoff, executive director of the Vermont Association for Mental Health. He noted that the state was the first, in 1997, to require health insurers to cover mental illnesses on par with physical ailments.

From a bottom-line standpoint, the company's strategy appears to be a winning one - at least in the short term. Vermont Teddy Bear said the media frenzy over the bears provided a big boost to sales during the Valentine's Day season.

The company received 214,000 orders during January and the first half of February, a 33 percent increase from last year, though much of that growth was in the pajama line. (The company has not said how many Crazy for You bears it sold.)

The company's stock climbed while the Crazy For You controversy raged, from $6.45 at the beginning of January to $7.23 last week.

But there has been a personal cost to Robert, who joined Vermont Teddy Bear in 1995 and was appointed president and CEO two years later. She resigned from the board of Vermont's largest hospital, Fletcher Allen Health Care, after both its chairman and CEO said disparaging the mentally ill is contrary to its mission.

Hoffman said there could be longer-term costs to the company. "The capitalist system has a way of punishing companies that misbehave, either through lost sales or because some segments of society no longer want to invest," he said.

To Howard Rubenstein, a New York public relations executive, "the cost to them is dramatic. It hurts their reputation."

Clarke Caywood, a professor of communications at Northwestern University in Evanston, Ill., said the company's stance "undercuts their good will, and they live on good will. They're trying to be warm and cuddly. What's warm and cuddly about a straitjacket?"

Does the old saw that any publicity is good publicity apply here? No, said Paul Argenti, who specializes in corporate reputations at the Tuck School of Business at Dartmouth College and hopes to use the controversy as a classroom case study.

"They're going to lose this battle eventually," he said. "It's just a question of when."

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January 23, 2005

STRAITJACKETS HAVE HISTORY OF ABUSE AND DEATH

The National Stigma Clearinghouse has been unable to find current information about the use of straitjackets. For the first time, Google failed us: most of their links sent us to S&M sites.

Nevertheless, our files show decades of straitjacket abuse and public indifference, an indifference now demonstrated by the Vermont Teddy Bear Company (scroll down for contact information).

In 1991, Newsday (Long Island, NY) exposed a shocking record of death by restraint in New York. Their investigation, described in a series of articles by Kathleen Kerr, was followed by a 2-year investigation by the state's office of mental health. In 1994, new guidelines for use of restraints were issued "amid growing pressure from advocacy groups made up of former patients." (Quote from NY Times)

In 1998, Eric M. Weiss of the Hartford Courant reported that between 50 and 150 deaths by restraint occur every year across the country. Weiss was referring to an unprecedented study of restraint statistics commissioned by the Hartford Courant and conducted by a research specialist at the Harvard Center for Risk Analysis.

The study's findings brought calls for nationwide reform in 1998 led by the congressional delegation from Connecticut. At that time, the article reported, "The federal government does not collect data on how many patients are killed by a procedure that is used every day in psychiatric and mental retardation facillities across the country. Neither do state regulators, academics, or accreditation agencies."

The researchers found that in the 114 cases where ages could be confirmed, children accounted for more than 26 percent of the deaths.

Did the federal government ever act? If you know, please let us know. Email stigmanet@webtv.net.

REFERENCES

Article: "Mental Patients' Deaths Probed," by Eric M. Weiss, Hartford Courant, October 11, 1998.

Article: "Proposal Urges an End to Straitjacket Use," by Lisa W. Foderaro, New York Times, July 27, 1994.

Series of articles: "Death By Restraint," by Kathleen Kerr, New York Newsday, December 15, 16, 17, 1991.

Source: Boston Globe

Source: Seattle Post-Intelligencer

Source: National Stigma Clearinghouse

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