(a) Risk Management Plan
A risk management plan helps in dealing with the potential risks which an organization is facing or the risks which have already affected an organization. This is a systematic and effective approach to deal with the situation by involving all the member and employees of an organization. Adidas is in an urgent need for a management plan to control the damage which has been incurred by the article published by the Oxfam. An efficient risk management plan will help in controlling the damage and will show a right image of the company to its consumers.
1) Stakeholder Analysis
The stakeholder analysis is important for Adidas to perform, as it will enable the organization to utilize a brainstorming session with them to identify a list of risks and to collectively get an opinion on the various risks and prioritizing them according to the brand reputation and the stakeholder approach. The stakeholder analysis at Adidas will help in building a plan which will be directed to dealing with the major risks (Aboulian, Charnley & Watkins, 2008).
The communication plan for stakeholders is vital as it will keep all the stakeholders in a loop and will also keep them informed about the various strategies which have been implemented for dealing with risk. For the current situation at Adidas, a synchronous communication strategy has to be implemented to build an effective communication plan. A synchronous communication strategy can be implemented through live meetings, conference call, computerized conference, video conference, instant messaging and texting.
The organization Adidas have a set of policies and procedures which are strictly followed. The organization has a policy for its massive workforce. Adidas has a labor right charter which deals with the policy on employee recruitment, equal opportunities, development and the various benefits for the employees. There are several other policies which are integrated management system policy for environment, health, safety and energy, sourcing and purchasing policy, code of conduct for employees and suppliers and some other (Chaudhuri & Puri, 2013).
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The main processes are –
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The identification of the major risks is important so that they can be tackled first. They are-
- Loss on sale.
- The loss of brand image in the market.
- The impact on the workforce.
- The quality of the product is in jeopardy.
The prioritizing of the risks is very important to form a risk management plan which will provide a direction to the various different risks in a systematic manner (Dickson & Fuss, 2010).
Australia is a country which is very culture oriented and the article will have a major effect on the population and this can be a huge risk for them to withdraw from Adidas and choose other brands. The competitors of Adidas can also use this as a strategy to pull the loyal customers of the Adidas to their side. This will also have a bad result on the company’s reputation in the market.
1) Stakeholder Analysis
The workforce will also have trust issues due to the differentiation in their wages and also there is no proper workforce union, which will affect the credibility of the organization in the opinion of the workers (Ku?ay, 2014).
With everyone questioning the work ethics of Adidas, the company’s product quality is in question and this will have an impact on the sales and the people of Australia. This issue is the most important one and has to be dealt as soon as possible.
iii. Selecting the Process
The strategy which has been accepted by the organization Adidas is the risk reduction strategy. The risk reduction strategy will help in reducing the percentage of loss, especially in a situation of high risk manifestation. For, effectively conducting this strategy, the Adidas team has come up with an idea of improving the brand image in the eyes of the consumers by stating that the shoes which are produced at Adidas are ethical shoes, through an advertisement which will also display that the organization Adidas is community oriented and keeps the ethics and the community at high priorities. This will reduce the damage on sale, brand image and product quality. The budget for the advertisement is $2 million (Park, 2017).
The four steps of implementation-
All the important people at Adidas should be informed about the risk management plan and also the intention of the organization. The risk management will outline the key people and the strategies which have been chosen for the reduction of the risk through the risk reduction strategy.
This is the main identified risk of the organization which will affect the brand image, sales and the workforce. This has to be collectively managed to reduce the loss which will happen in the organization. The workforce also has to be included as the organization needs to build and increase their credibility in the eyes of the workforce (Roberts, 2009).
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All the important procedures associated with the risk management plan and the identified risks have to be established in a systematic procedure which will help the organization get a clarity of thoughts and procedures. All the important meetings have to be documented to be clear about everyone approaches and opinions on various aspects of the risks.
The team is about five people, but there are also other important people who are associated with the risk issues. The work of advertising is of key importance as it is the main and the only response initiative towards the risk. The team should effectively divide responsibilities according to the potential and capabilities of each teammate (Irving, Prager & Standley, 2010).
- The risks identified should be continuously monitored
- Monitoring the responses to the advertisement.
- Also reacting to the new risks.
- Evaluating the result of the response action.
- Making sure that all the risk procedures and policies are followed.
- Bring change if required in the action plan(Wunsch, Kröll, Stöggl & Schwameder, 2016).
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Conclusion
The risk management plan will help Adidas in dealing with the risks in an effective way. The risk reduction strategy is implemented which will help in controlling the loss of brand image and the sale. But there is a need for controlling the loss on the workforce. The organization has to utilize and implement their labor charter in an effective manner that helps the organization to create trust and respect for the organization in the eyes of their workforce.
References
(2018). Retrieved from https://www.adidas-group.com/media/filer_public_thumbnails/filer_public/d8/b2/d8b29352-e476-4de3-9b19-f10084e6e2f1/sustainabilitystrategy.jpg__0x476_q85_autocrop_crop-smart_upscale.jpg
(2018). Retrieved from https://images.slideplayer.com/13/3800933/slides/slide_7.jpg
(2018). Retrieved from https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQ-ve23l4z4NnOnpqnbo173L1KYHVHDjzs70QZCEIAMigWgZW510Q
(2018). Retrieved from https://valuestream2009.files.wordpress.com/2010/05/6a00d8341ca4d953ef010536a13c42970b-800wi.jpg
Aboulian, L., Charnley, P., & Watkins, H. (2008). Case review: Adidas AG, Adidas Benelux BV v Marca Mode CV, C&A Nederland CV, H&M Hennes & Mauritz Netherlands BV, Vendex KBB Nederland BV. Journal Of Brand Management, 16(3), 213-215.
Chaudhuri, M., & Puri, S. (2013). Competency assessment of the retail staff in top stores of Adidas India. International Journal Of Human Resources Development And Management, 13(2/3), 178.
Dickson, M., & Fuss, F. (2010). Optimization of directional energy transfer in Adidas bounce tubes. Procedia Engineering, 2(2), 2795-2800.
Irving, A., Prager, A., & Standley, C. (2010). A customizable plan for effective claims management. Journal Of Healthcare Risk Management, 30(2), 11-19.
Ku?ay, Y. (2014). The Social Media Reflections of Communication Applications of Entities Operating in Sportswear Sector “Examples of Nike, Puma and Adidas”. AJIT-E: Online Academic Journal Of Information Technology, 5(14), 37-59.
Park, Y. (2017). The Influence of Plan Demographics on Contribution Behavior of 401(k) Participants. Risk Management And Insurance Review, 20(1), 7-35.
Roberts, C. (2009). Board meets to review, plan activities. Perspectives In Healthcare Risk Management, 4(4), 2-3.
Wunsch, T., Kröll, J., Stöggl, T., & Schwameder, H. (2016). Effects of a structured midsole on spatio-temporal variables and running economy in overground running. European Journal Of Sport Science, 17(3), 303-309.
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