Adidas and Organizational Behavior
Introduction- as organizations grew more complex after the Industrial Revolution, it became necessary to develop a robust and scientific way to study them, their intricacies, and the manner in which human interaction changed organizational behavior. Organizational behavior is a combination of political science, sociology, and anthropology and focuses on the study of human groups (organizations) from multiple viewpoints, methods, and various levels of qualitative and quantitative analysis. Within this, the group, or organization, may be perceived in modern, symbolic, critical, or postmodern paradigms with the overall goal of developing a better conceptualization of organizational behavior and life (Scott, 2007). Within the human organizational structure, or group behavior, power, control and resistance are key determinants of the rubric of organizations. By the very nature of culture and humanity, humans tend to be group animals — they thrive in groups, coalesce into groups, indeed, the very process of moving from hunter-gatherer to cities was part of a group behavior. Within organizations, there are rules — covert and overt. Group norms are defined as a set of internal rulings that are followed by the group members in order to increase the overall efficiency of the group’s activity (Jones, 2004). This is the model to which we will focus for our case study.
Case Study — Adidas (Background)- the Adidas Group is a sports apparel manufacturer that consists of Adidas AG, Reebok, Ashworth and Rockport. The company is the largest sportswear manufacturer in the European Union and second globally, after its American arch-rival, Nike. Posting 2010 sales of almost $12 billion and on the rise since 2006, the Adidas Group is a significant force in the global sporting goods industry. The Group employees almost 43,000 worldwide and posted a three-year high in their stock share price in 2010 (adidas-group.com, 2011). Both footwear and apparel are almost equally important to the organization, however, the Adidas brand far outshines any other division, making up almost 73% of the organization’s income (adidas-group.com).
Although a 2009 study found that despite the billions in advertising by the major sporting goods manufacturers did not necessarily engender brand loyalty, Adidas focuses primarily on the traditional sport’s marketing paradigm (Dawes, 2009). Organizationally, Adidas is divided into three groups: Adidas Performance focuses on the athlete; Adidas Originals focuses on fashion and life-style, and Style Essentials picking up on trends and the youth market. “Impossible is Nothing,” is the current mainstream marketing slogan for Adidas, and they continue to increase their marketing and sponsorship budget in both the EU and United States. The believe that the global economic recovery is well on its way, and with that their organizational responsibility is to increase their partnership with sporting teams and professional athletes around the globe (Outlook 2011 in adidas-group.com).
Theoretical Rubric for Organizational Behavior — One interesting way we can view the traits of groups — power, control and resistance is by comparing modern vs. postmodern theories of organizational behavior. Modern organizational theory was developed as a response to the Industrial revolution. Essentially it is a hierarchical theory that focuses on the integration of human needs, wants, and desires within the organizational structure; and how those relate to the way the business of the organization occurs. Structure, power, actualization and interdimmensional dynamics tend to focus on the individual and way that individual interacts, societal relationships within the workplace and how they mimic external society and culture, and what management skills need to evolve in order for the group to behave in a more efficient manner (Jaffe, 2008). Postmodernism, however, tends to look at an organization more in light of contemporary views on diversity, job satiscation, teamwork, managers as leaders, and coordination of efforts. Hierarchies exist, but are not the primary form of organizational behavior — teams are more of a flat design. This view holds that the success or failure of a contemporary business or organization is quite dependent upon the management of diversity. Public and private sector organizations, both are involved in numerous federally mandated programs that are designed to reduce cultural and communication barriers within the workplace. Multiculturalism is no longer a “nice-to,” with the era of globalization upon us, and rapidly growing, diversity training and maximization of multicultural understanding, combined with management and leadership commitment to provide a diverse workplace, is now the norm. The same is true in accepting and managing a diverse workforce — those over 55 perhaps vs. those under 25 (Glass, 2007).
Organizational behavior is not only theory, but the way a company sees itself covertly and overtly. It goes beyond the balance sheet, beyond the press release, into the very heart of the way upper management views the talent pool, the strategic direction, and the tactical plan for remaining profitable in such a changing world. Indeed, as globalism becomes the norm, companies must step up to the table to find new solutions to these basic problems identified by the modern and post-modernist approach to organizational behavior. The table below is illustrative of some basic theoretical changes between modernism and post-modernism in organizational behavior.
Short-term goals based on profit
Mass product, vertical planning
Top down approach; workers are a cost
Over planning and orderly workplace
Flexible production with workers as an investment
Focus on customers both internal and external
Disorder can be functional
Rote jobs, lack of skill
Labor and Management conflict
Work teams, cooperative approach
Labor and Management cooperation
Diversity is strength
Efficiency decreases with overspecialization
Authority in title
Carrot and Stick
Watch and control
Authority in leadership
Shared motivation and profit
Diversity paid equal
Either or paradigm
Centralized with many layers
Tell and demand
Servant leadership (make it happen for teams)
Allowing more than white males into “club”
End of line inspection
Information is power, therefore secret
Focus on quality control as everyone’s job
Train people not procedures
Self-control and independence warning
Information is shared, job is part of a balance life
(Sources: Boje & Dennehy, 2000; Robbins & Barnwell; Hatch).
Application of OB Theory to Adidas – Using the above Organizational Behavior Matrix and applying Adidas, we find that as an organization they exhibit a number of traits outlining the importance of studying organizational theory and behavior. Thus:
Adidas as an Organization
Extremely influential in the professional sporting market, particularly in global sports that are popular in both the Americas, the EU, and in Asia. Nike’s relationship with colleges and various NFL teams precludes Adidas from being more aggressive, but these contracts will expire. Adidas has expressed interest as an organization in increasing their strength in these markets, using the forces built up in the field over the past several years to revamp the way organizations react to them, and to others (Hellriegel and Slocum, 2007, 464-5).
While Adidas does have a hierarchical structure for its combined organization umbrella; it has more flexibility and self-managed teams in its field operations and within some of its groups. For instance, for its tennis shoe division, it has restructured based on scientific discoveries and market needs (e.g. providing the most advanced sneaker that the market demands). It has also taken responsibility for its factories in the developing world — modernizing them and increasing cross-training and multicultural awareness, responsibility and opportunity. In an unprecedented step, Adidas worked with Nike and humanitarian organizations to end child labor in sportswear factories around the world (Hartman, et al., eds., 2003).
Adidas is a master at influencing behavior through its brand awareness management. It has a well-established name, contracts with many of the movers and shakers in the sports world, and most recently (2008) focused a campaign on key influencers to say to the world that Adidas as an organization not only supports innovation and influencers, but is one themselves (Troy, 2008).
Adidas has a solid performance as a sustainability leader — economic, environmental, and social. This despite accusations of slave-labor in China, which proved to be less than accurate. The company actively engages its stakeholders in key day-to-day operational issues that involve the environment, along with leading the market in advanced supply chain efforts to promote stability (Adidas, 2009).
Adidas’ strategy is to “be the leading sports brand in the world.” To accomplish this they must merge the idea of Sports Performance and Sports Style. Adidas realizes that individual departments and segments must have the authority to act, to generate ideas, and to postulate and decide because they have their ears closest to the client. Integrating a highly sophisticated system in which groups talk (email, video chat, etc.) and combine ideas levels out the hierarchy and is more responsive to market needs (Adidas Strategy, 2007).
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