Week seven - Brian

Adidas recently unveiled a new shoe that featured a clip-on shackle, similar to those commonly associated with prison and more disturbingly, slavery. The shoe sparked controversy, was deplored by the public and as a result, the company found itself facing the wrath of outraged consumers and high-profile civil rights activists, eventually nixing plans to release it. In response to continuing backlash, Adidas initially defended the shoes, but issued a public apology soon after (Sterlin, 2012).

In her Washington Post column, Sterlin (2012) doubts Adidas’ commitment to corporate responsibility and questions the company’s motive for releasing a shoe that harkens back to such a negative snapshot of American history. She alludes to the fact that Adidas’ motive in creating the shoe was to make a splash and boost sales (Sterlin 2012); the company’s lack of regard and/or planning for the social ramifications that followed the announcement resulted in negative press, more resources spent in public relations efforts, and potentially damaged its reputation (Porter and Kramer, 2006).  

Sterlin (2012) mentions the importance of good will in business and how it takes a long period of time to develop rapport with the public. Last year, Adidas found itself in another situation that shook that rapport when it unveiled the new jerseys for the All Blacks, rugby-crazy New Zealand’s national team, to be worn in the Rugby World Cup. Following the unveil, New Zealand fans realized that the jerseys were being sold online in the United States for around half the price that New Zealanders paid locally. After the initial wave of fan outrage, Adidas directed Internet stores to remove New Zealand from their delivery options, sparking a higher level of public angst. Adidas refused to lower jersey prices in New Zealand and retailers began discounting them and absorbing the price inflation, leaving only small profits to be made. The situation captured the attention of government officials and eventually, Adidas apologized (Hutchinson, 2011).  This is another example of Adidas engaging in short-term, socially damaging behavior in search of short-term benefits (Porter and Kramer, 2006) while ignoring potential long-term, negative effects.

Although both of these blunders resulted in negative public attention, it is yet to be seen how they will impact brand perception. Porter and Kramer (2006, p. 4) state that “the vehemence of a stakeholder group does not necessarily signify the importance of an issue – either to the company or to the world,” and it seems that Adidas recognizes this, however, when the vehemence of multiple stakeholder groups begin to span the world, I would assume that a certain level of importance is eventually achieved.

References

Hutchinson, J. (2011, August 24). The price of jerseys sets rugby fans against Adidas. New York Times. Retreived June 28, 2012 from http://www.nytimes.com/2011/08/25/sports/rugby/adidas-angers-all-blacks-fans-with-price-policy.html?_r=4&pagewanted=all

Porter, M., Kramer, M. (2006). Strategy & society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 1-15.

Sterlin, S. (2012, June 26). Business advice: Lessons in social responsibility from the Adidas “shackle shoe.” Washington Post. Retrieved June 28, 2012, from http://www.washingtonpost.com/business/on-small-business/business-advice-lessons-in-social-responsibility-from-the-adidas-shackle-shoe/2012/06/26/gJQAvWG44V_story.html