Doing Well and Doing Good - Adidas' Human Rights Policy and Euro 2000

It’s hard to think of the shoe manufacturer Nike without recalling the litany of accusations it has weathered over unfair work practices and exploitation of child labor. Its response, to place the blame on subcontractors over which it had no control, bombed with the news media and human rights advocates, who trounced CEO Philip Knight for his arrogance and refusal to accept responsibility. In this Case Study Professor Jill Klein and Research Associate Robert Crawford look at how adidas faced similar issues going into the Euro 2000 world soccer championships, a high stakes event that had the potential to produce priceless goodwill or unwanted attention from global activists.

by Jill Klein, Robert Crawford
Last Updated: 23 Jul 2013

When David Husselbee joined footwear company adidas as its new Global Director of Social and Environmental Affairs in 1997, the company was far from establishing a clear human rights and environmental policy. Having weathered near bankruptcy in the early 1990s and the removal of nearly its entire board in 1993, the company had focused more on survival than anything else. By 1996, however, several worker rights scandals, namely the discovery that children were stitching footballs in Sialkot, Pakistan, had made headlines throughout the world. With adidas preparing to sponsor the Euro 2000 world soccer championships, a high stakes, high profile event, Husselbee had the delicate responsibility of enforcing the company’s newly drafted Standards of Engagement, a code of conduct that addressed such issues as child labour, wages and benefits, right of association, and work hours.

Authors Jill Klein, Associate Professor of Marketing and Robert Crawford, Research Associate, review the complexities facing Husselbee. Despite this newly created position, Husselbee, who had a distinguished career at Save the Children Fund, must rally for support within the company. “In the beginning, I had little independence and almost no clout,” recalled Husselbee. “I worried that all they wanted was to trot me out for public relations purposes, [in which case] I would have had to quit.” To have credibility, he insisted that he be able to quickly and honestly find out what was really happening in the field and then be able to put corrective programs in place. After meetings with board members and top managers, he gained the control he had sought.

Husselbee’s first acts included establishing a database of the 1,000-plus adidas supplier-subcontractors. (An essential first step in protecting employees is to know how many there are and where they are.) He also hired and trained an international monitoring team for health and safety, the environment, and workers rights, and also set up uniform monitoring standards for all adidas factories and subcontractors.

Though he was making progress, organizational change was slow going. Upper management continued to view human rights as a strictly defensive tool, to be used cautiously and only when necessary. This view complicated matters when it came to the Euro 2000 event. While the taskforce charged with the marketing around the event thought Husselbee might make a valuable addition to the Euro 2000 team, how to do it was a difficult question.

With the experience of Nike on the minds of adidas managers, and facing threats of protests from the Clean Clothes Campaign (CCC), a human rights organization, adidas had three main issues to consider going into Euro 2000:

  1. Marketing

    Should adidas position their brand as the “human rights brand” in the athletic footwear category or remain silent, risking a defensive position should CCC attack?

  2. Organizational Behavior

    Husselbee must generate change within a large organization. Is now the time to do it? Who are his constituents and what is his basis for power?

  3. Economics

    Husselbee and adidas have to decide whether to engage the CCC in debate about the economics and ethics of their production facilities in Vietnam. What arguments should adidas make and what objections can they expect to encounter?

This case is designed to be taught jointly by professors of marketing, organizational behavior, and economics. A video of Husselbee discussing how PR was handled during Euro 2000 and adidas’ report titled “Our World: Social and Environmental Report 2000” provide an interesting postscript for students.

INSEAD 2002

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