Analysis Of Adidas

Critique of strategy

By engaging in stakeholder management Adidas is avoiding behaviour that is detrimental to society in the short term and securing the company’s long-term economic performance (Porter and Kramer, 2006). Stakeholder management involves identifying the concerns of various stakeholders and looking to align organisational objectives with these concerns in an effort to achieve benefit for all stakeholders (Freeman, 1984). Addressing the concerns of stakeholder does not mean that the organisation must abandon the pursuit of profit-maximisation (Crane et al, 2009). As Freeman et al, (2004) point out, the goal of stakeholder management is to create value for all the stakeholder of the organisation, company’s including shareholders.

Stakeholders can impact several aspects of an organisation’s performance, including its financial performance (Berman et al, 2006) by affecting its license to operate by granting approval for its operations (Wilburn and Wilburn, 2011). The ability of an organisation to achieve long-term profit-maximisation is therefore determined by the organisation’s relationship with key stakeholders (Post et al., 2002, p9). Organisations must create and implement processes that respond to the concerns of stakeholders (Freeman and McVea, 2001). Adidas understands this and believes that managing stakeholder expectations enables the company to “generate shareholder value” (Adidas, 2012, p1). In addition to this, stakeholder management helps Adidas to elevate risk (see Perrini and Tencati, 2006) by enabling it to address areas of stakeholder concern thereby safeguarding the company’s “reputation and economic value” (Adidas, 2014, B,

Managers at Adidas can engage in self-serving behaviour by claiming to represent the interest of stakeholder (Crane et al, 2009). This means that any action taken by Adidas could be considered to represent the interests of stakeholders thereby reducing business accountability (Sternberg, 2000). A final criticism of the stakeholder management approach is found in the lack of distinction between interests. As the next paragraph shows, such an approach can lead to corporate involvement in social activities which are not aligned with business activities (Jenson,