Adidas Human Rights Policy and Euro 2000

Adidas Human Rights Policy and Euro 2000

Since the late 1990 Adidas has struggled to find a new strategy concerning 4 principal trends:

carry out a total organizational restructure

face a growing environmental uncertainty by elaborating a contingency strategy

maintain and improve it's public image threatened by social activist programs

manage an external supply chain

In the end of 1980 and the beginning of 1990 adidas was brought to the brink of bankruptcy, representing inflexible, rudderless organization. In 1993, the new CEO Robert Louis-Dreyfus faced a challenge: to bring back adidas profitable and dynamic, creating a new type of open, young, flexible organization. He replaced senior and middle managers with a highly international team, outsourced production to lower-wage subcontractors in Asia, and also replaced the organization built around a product with one along functional lines. Such changes permitted adidas to find its profitability; decision-making became quick and non-hierarchical.

Adidas was also faced with the necessity to reorganize its policy according to the growing economical and social uncertainties. The new competition took place in a rapidly evolving world economy. In little time Japan, Taiwan, Korea transformed themselves from low-wage, emerging markets into some of the most dynamic high-tech economies in the world. In order to reduce prices, many companies such adidas, Nike had to move the production from developed to low-wage countries.

Armed in the 1990s with the Internet, the new global activism threatened to generate enormous interest worldwide, accusing world companies of infringing human rights. adidas created and published Standards of Engagement in 1998, which served as the company code of conduct.

Adidas was criticized by social opinion for over hours, low wages, bad working conditions and children exploitation in its subcontractors factories. Adidas has less direct control over suppliers’ operations or workplace and environmental conditions at their factories than at company owned sites. So adidas realized that it has to elaborate a social strategy to maintain and improve its public image. It has to find solutions for monitoring, developing suppliers and subcontractors network. The main tasks were to convince manufacturers of the value of total quality management and to bring subcontractors' factories to accepted international standards.

Adidas hired David Husselbee to promote company's social and environmental politics. His job was to hire monitors and proceed to factories check. His staff expanded to 27 persons, limiting the control of local managers. Much of the group's work was reactive, devoted on “putting out fires”, generated by the investigation of complaints and accusations from NGOs. Husselbee's program: performance in the human rights area has been incorporated into the bonus evaluation for country managers at the end of the year. The group worked also towards a more progressive, long-term vision.

Sponsor of the Euro 2000 Football