Manage Risk in Adidas: Addressing Poverty Wages and Trade Union Rights

This assessment task focuses on the knowledge evidence and performance evidence related to risk management in the context of Adidas. It includes short answer questions about risk management standards in Australia and a case study analysis of Adidas' risk management policies and procedures. The case study highlights the importance of addressing issues such as poverty wages and trade union rights in the supply chain to manage risk and protect the brand image.

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1 May 2018 AHMI—BSBRSK501-
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BSBRSK501 Manage Risk
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BSBRSK501 Manage Risk
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BSBRSK501 Manage Risk
ASSESSMENT TASK 1:
KNOWLEDGE EVIDENCE
APPLIED SHORT ANSWER QUESTIONS
INSTRUCTIONS
1. You are required to answer all questions.
2. All questions are of equal weight.
3. Answer all questions in the spaces provided.
4. Answer all questions by referring to your learner guide and case study material as
provided and by undertaking your own research.
ASSESSMENT SUBMISSION REQUIREMENTS
 Your assessment must be typed in Arial font size 12 only.
 You must provide your completed assessment in one document with an assessment
cover page
 You are required to format your document including spell-check and indicate each
Task answer [e.g. Task 1 (a.) then the answer, Task 1 (b.) then the answer etc.]
according to this Assessment Tool Task requirement.
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BSBRSK501 Manage Risk
KNOWLEDGE EVIDENCE APPLIED SHORT ANSWER QUESTIONS.
Q1.By referring to page 4 of the introduction to the document: 31000-2009 Risk Standards
Australia Guidelines, outline 1 primary purpose of current risk management standard in
Australia: AS/NZS ISO 31000:2009 Risk Management Standard.
Q2.By referring to the document: Art_RiskAnalysis_ISO31000, List 11 key principles of the
current risk management standards in Australia.
Answer questions 3 – 12 with reference to the Adidas Case Study – by using the support
material provided.
Q3.What key legislative and regulatory areas must Adidas management take into account
when developing and implementing their Group Risk Management Policy?
The Adidas Company need to take into account the Fair Work Act 2009 (Cth) under which it is
important for the companies to pay the minimum required wages to the employees to keep up
the health and safety of the employees working in the firm. The Adidas Company need to
implement the Contract law to uplift the brand image that will help to safeguard the worker
from being exploited at the hands of the company.
Q4.How does Adidas define Risk and opportunity?
Adidas defines risk as the threat to the brand image and the loss of the potential customers due to
the negative impact in the brand image. The sales rate of the Adidas has also decreased owing
to the fact that it does not have a good track record in terms of upholding the trade union
rights. The opportunities defined by the Adidas Company taking a positive step towards
signing the new Freedom of Association Protocol in the Indonesia.
Q5. In what Report does Adidas summarise the most important of these risks and
opportunities?
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BSBRSK501 Manage Risk
Adidas summarizes the risk and opportunities in the Risk and Opportunity report that explores
and develops opportunities to sustain the earnings and give a long term success to the
company. The report also supports the risk and opportunity management principles of the
Adidas Company.
Q6.In what three main categories does Adidas management consider risk?
The three main categories that Adidas management needs to consider risk are mainly the lack of
proper system and structure, the decision making body and keeping up the transparency in the
organization.
Q7. What is the primary purpose of the Adidas organisational policies, procedures and
processes for risk management?
The organizational policies and procedures have helped Adidas to maintain the moral set of
principles that will help to uplift its brand image. The Company has started to dedicate itself
towards providing better remuneration, improvement in the work culture. The Company
administration has developed certain strategies for the screening of the employees in the firm.
Q8.The policies and procedures designed by Adidas to facilitate effective risk and
opportunity management is held in what business system?
The administration of the company has developed a proper administrative framework that will
help the company to deal with the various hazards in the Company related to the employee
issues and low wages. The company has further developed a body named the COSO board that
aims at maintaining the proper laws and regulations in the Company (adidas-group.com).
Q9. What is the key objective of this system?
The system helps to drive the business of the Company and also evaluates the risks that remain in
the company. The strategy to improve the hazards highlights the standards as well as the
fundamental obligations that needs to be maintained in the Company
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BSBRSK501 Manage Risk
Q10. How does Adidas management make available to employees the Group Risk
Management Policy?
The Adidas makes its group risk management policy available to the employees by using the
appropriate fitting level of administration that helps to improve the transparency among the
employees and the managers. Further the company has developed Social and Welfare Affairs
(SEA) that has helped to maintain the hazards against the employees and Organization.
Q11. What is the key purpose of the Group Risk Management Policy?
The key purpose of the Group Risk management Policy is to make the Company aware of the
dangers and threats that may hamper the brand image of the organization. The policy helps the
company to set the reasonable pay standards for the employees so that they do not leave the
organization Chiambaretto et al., (2016). It has also helped the Company to deal with the
environmental factors that harm the organization.
Q12.By referring to the Adidas Risk and Opportunity Report 2017,
Identify 1 key feature of system policies as they refer to: Responsibility andRisk and
opportunity identification.
The risk and opportunity report states that Adidas unfaltering nature of the budget report and it
also further identifies the internal routine of setting up the cash related report that has been
able to meet the accounting benchmarks of the organization (Fournier & Srinivasan, 2018).
The report further states that there must be a well organized system for dealing with the risks
and threats possessed by the organization. The report has been able to detect the vulnerabilities
of the organization and it has also helped the Company to make certain strategies for the risk
management.
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BSBRSK501 Manage Risk
SSESSMENT TASK 1:
KNOWLEDGE EVIDENCE
APPLIED SHORT ANSWER QUESTIONS
ASSESSOR MARKING SHEET
Question satisfactory Not yet
satisfactory
Question satisfactory Not yet
satisfactory
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Assessment 1
Outcome
Assessor sign Date
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BSBRSK501 Manage Risk
Student Assessment Feedback Form
To be completed by students at the end of each assessment
Dear Student
The most important feedback to continue to improve training services – is from our students.
Please assist us by completing this course feedback form and providing it to you Trainer/
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you have learned in the course on the
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BSBRSK501 Manage Risk
ASSESSMENT TASK 2: PERFORMANCE EVIDENCE
INSTRUCTIONS
1. You are required to undertake all assessment tasks.
2. All tasks are of equal weight.
3. Answer all tasks using the templates and forms provided.
4. Answer by referring to your learner guide and case study material as provided and by
undertaking your own research.
ASSESSMENT SUBMISSION REQUIREMENTS
 Your assessment must be typed in Arial font size 12 only.
 You must provide your completed assessment in one document with an assessment
cover page
 You are required to format your document including spell-check and indicate each
Task answer [e.g. Task 1 (a.) then the answer, Task 1 (b.) then the answer etc.]
according to this Assessment Tool Task requirement.
SCENARIO
You work as a Business Manager at Adidas – NSW Head Office in the Public Relations
Department.
This department is managed by the Public Relations Manager and you work in a team of 5
Business Managers
Your role as Business Manager in the Public Relations Department includes the requirement
to identify and manage business risk that results from adverse public relations
Recently Oxfam (Australia) released an article over the internet – this article is re-produced
below
Oxfam Australia is an organisation that is reportedly dedicated to fighting social injustice
around the world – especially social injustice which is created by businesses
Adidas: So what’s the problem with adidas? July 2016
Thousands of workers endure poverty wages and harsh sweatshop-like conditions to make
adidas their coveted sports shoes.
Adidas also don’t have a good track record in relation to upholding trade union rights.
We have been in constant correspondence with adidas since 2006 asking that they uphold the
rights of their workers.
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So what’s the solution?
Better wages
Workers require a living wage, which is one that allows them to meet the basic needs of a family
after working a full-time working week without overtime. Adidas won’t commit to a living wage for
its workers.
But it will commit to paying already high earning sport stars millions of dollars to endorse their
products.
The right to form trade unions
Adidas gets much of its gear made in countries and free trade zones where it is illegal or
extremely difficult for workers to organise into unions. Without this united structure it is near
impossible for individual workers to ask for improved conditions without fear of retribution.
Adidas has taken a positive step by signing onto the new Freedom of Association Protocol in
Indonesia. Adidas was an active participant in negotiations with Indonesian unions and supplier
factories to develop the Freedom of Association Protocol. The Protocol, which Adidas signed
onto in June 2011, is already having positive impacts in a number of supplier factories. But
Adidas must work hard to ensure that the Protocol is implemented at the factory level throughout
its supply chain.
A confidential complaints structure
When workers suffer sexual harassment, intimidation, violence or other human rights violations
they need to be able to access a confidential complaints mechanism, and they need those
complaints to be taken seriously and handled sensitively. In response to public pressure, adidas
has made some effort to establish complaint mechanisms in some factories, but most adidas
workers don’t have access to a complaint mechanism which they have reason to trust.
Ban short-term contracts
Adidas moves its production where it likes when it likes and does not ban or discourage short-
term contracts for its workers. So when it leaves an area those workers on short-term contracts
are left with nothing.
Incentives for respecting workers’ rights
Adidas should offer meaningful incentives to factories that respect workers’ rights, particularly
workers’ right to organise trade unions. Without genuine incentives human rights abuses will
continue
https://www.oxfam.org.au/what-we-do/ethical-trading-and-business/workers-rights-2/adidas/
Your Department Manager has requested that you idenitfy and manage one of the possible
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buisness risks that might result from the release of this article – that is a drop in sales figures
for Adidas shoes in NSW
Part A: Risk Management Plan
In the first instance you are reuired to undertake the required research and stakeholder
analysis to determine the scoipe and context of the risk and to develop a Risk Management
Plan – which includes a communication plan
Your Dapartment Manager has sent the team this email
ADIDAS
PUBLIC RELATIONS DEPARTMENT
Internal Email
Date: 20 July 2017
To: Business Managers - PUBLIC RELATIONS DEPARTMENT
RE: Possible business risks associated with the Oxfam release of article: ‘Adidas: So what’s
the problem with adidas?’
Dear Business Managers
No boubt you are aware of the release this year of the Oxfam Australia article
This type of adverse publicity can have serious effects on our sales – as you know the
Australian population is severely affected by these types of allegations and our competitors
will quickly put out advertising that assures consumers that they don’t do what Adidas does –
so buy their shoes not ours!!
As Business Managers I want you to undertake a Risk Managemnt Plan to reduce the impact
of the Oxfam article on NSW sales by releasing an advertising campagn: ‘When you but
Adidas shoes you are buying ethical shoes ‘ in the Sydney Morning Herald– 2 x full page,
colour, graphics etc that assures the Australian Consumers that we are a very ‘community’
conscious company – very ethical – and that our production processes and products refelcts
these values- so when you but Adidas shoes you are buying ethical shoes
I require you to undertake a risk management strategy that involves:
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BSBRSK501 Manage Risk
1. Establishing the risk context: Adidas policies and procedures involved, risk
management process, stakeholders, critical factors.
2. Communicating the risk plan to other Business Managers and your Department Head
– have a meeting – get some feedback and amend the plan if necessary
3. Identifying the risk.
4. Analying the risk.
5. Selecting, implementing and evaluating your risk management process.
However I need you to take into account all of the following risk factors
1. To date (the article was released a year ago) there is no real evidence of a related drop
in shoe sales in NSW as a result of the article.
2. However sales figures from past occurances such as this for other companies sahows
that this type of bad publicity takes approximatey 2 years to impact on sales
3. The expected dop in shoe sales is expepected to be around 20% in NSW alone
4. The value of this is $1.9 million.
5. The type of advert I want will cost $2 milion to create and further costs to place in the
Sydney Morning Herald.
6. There is no evidence that this advert will work.
You are required to compete the Adidas Risk Managemnt Pan using the standard Adidas
Template which inlcudes provision for a Commuication Plan with stakeholders. You might
identify as stakeholders the Public Relations Manager, Marketing Manager, Sales Manager,
Finance Manager and externally a representitive from the Shaeholders Committee
Please hold a stakeholder meeting and invite the relevant parties to assist with the
identification of risks that may apply to this scope. So in consultation with relevant parties
 generate a list of risks that apply to the scope,
 Assess likelihood of risks occurring.
 Assess impact or consequence if risks occur.
 Evaluate and prioritise risks for treatment.
You can document this meeitng using the Meeting Minutes Template . I have booked 21 July
2017 in the Meeting Room 1 Sydney Head Office – for you to hold the meeting. 9 am start.
Please refer to the folowing Adidas publicaitons for further information:
Adidas 2016 Report
Adidas Group Code of Conduct
Adidas POLICIES AND STANDARDS
Adidas Risk and Opportunity Report
Adidas Risk Management Pan Template
Adidas Records Management Policy and Procedure
Australian Risk Standard: Art_RiskAnalysis_ISO31000
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BSBRSK501 Manage Risk
Thnak you
Jan Peterson
Public Relations Manager
Part B: Implement and Monitor
By using the agreements from the Stakeholder Meeting and your own research (through the
Risk Management Plan) you are required to determine and select the most appropriate
options for treating the identified risks and subsequently Develop an action plan for
implementing risk treatment
a. Use the Adidas Action Plan and Schedule Template to document your plan
b. Send an internal email to the Manager Public Relations explaining your decision
Part C: implement the action plan
Now that you have received management approval you are to implement the action plan to
treat the risk of a sales fall in NS.
a. Send an email to the Advertising Department to design the advertisement.
b. Complete all required Sydney Morning Herald documentation to place the advert.
c. Lodge the documentation (using the portal provided by your trainer and assessor).
Part D: Monitoring
1 month after you placed the advert you send out a communication to your ‘customer group’
asking them to provide feedback on the advert. You receive the following market
feedback:
‘this advert is an obvious attempt to take away from the issue that Adidas is not ethical’
‘we know you use child labour ‘
‘we are now buying Ike shoes’
a. Send an email to your manager outlining your monitoringtechnique and evaluation of
the action plan and risk management process to date.
b. Issue a letter to the stakeholders (as at your initial meeting) and inform them of the
situation i.e. the feedback.
Part E: maintain documentation.
By creating an electronic folder manage and store correctly all documentation as per Adidas
Records Management Policy and Procedure in the Adidas POLICIES AND
STANDARDSdocument
Part A: Risk Management Plan
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BSBRSK501 Manage Risk
Risk planning refers to the process of identifying the risk along with managing and
prioritising the risk. According to the words of Tidd & Bessant (2018), the process of risk
management involves identification of the risk, analysing the risk along with evaluating the
risk and monitoring the risk. The risk management helps in reducing the impact of external
factors on the organisation. The publishing of Oxfam article on NSW affected the brand
image of Adidas which might have affected the sale of the company.
The Risk management plan of Adidas involves analysing the content of the risk with respect
to the policies and procedures of Adidas along with assessing the role of stakeholders. In the
views of Sadgrove (2016), the risk management process analyses the threat along with
providing solutions in order to reduce the damage on the organisation. In order to implement
the risk management plan the plan must be communicated to all the stakeholder of the
organisation along with head of department and business managers. In order to minimise the
impact of the articles published by Oxfam the organisation can organise charity event in order
to compensate the workers along with meeting necessary requirements of the trade unions.
The risk management plan also analyses the legal aspects of the actions that would be taken
in order to minimise the impact of the article. This plan needs to be communicated to all the
board members along with the stakeholders. The next step of this process is to identify the
risk regarding the brand image and sales of the organisation. In the case of Adidas, the risk
identified is the chances of reduction in sales along with the damage to the brand image of the
organisation.
The identified risk are analysed in order to minimise the impact of article on the sales of the
company. The sales of the company, like Adidas, hardly face any changes in the first few
quarters. However, it is seen that these types of articles affects the sale within a span of 2
year. The risk management plan expects the drop in sales due to bad publicity to be around
20% which amounts to around 1.9 million dollars. The final risk management plan is
discussed with stakeholders such as Public Relations Manager, Marketing Manager, Sales
Manager and Finance Manager in order for it to be implemented. The risk if occurred will
affect the company’s sales along with the brand image of the company. The stakeholder
meetings will also assist in identifying the risks along with providing solutions in order to
keep a check on the risk. In order to discuss the plan the meeting can be held on 21st July
2017 in meeting room 1 of Sydney Head Office exactly at 9 am.
Part B: Implement and Monitor
ADIDAS
MANAGER PUBLIC RELATIONS
Internal Email
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BSBRSK501 Manage Risk
Date: 23 July 2017
To: Public Relations Manager - MANAGER PUBLIC RELATIONS
RE: Implementation of action plan in order to reduce the impact of the Oxfam article
Dear Public Relations Manager
As we are aware of the present situation, it is high time to implement the action plan in order
to reduce the impact of Oxfam article.
The publication of the article affected the sales of the company along with the brand image.
We have lost a considerable amount of loyal customers due to the publication of the article.
However, by implementing the action plan we can regain the customers we have lost along
with rebuilding a stronger brand image. The action plan includes gathering of funds through
charity events in order to provide the employees a hike in their wages along with listening to
their demand of forming a trade union. The company should create a team of individuals who
will look into the matter of various types of harassment, intimidation along with violence.
These actions plan along with providing discount on their products will help them to increase
their sales as well as rebuilding a stronger image.
Thank you
Jan Peterson
Business Manager
Part C: Implement the action plan
ADIDAS
ADVERTISING DEPARTMENT
Date: 23 July 2017
To: Public Relations Manager - ADVERTISING DEPARTMENT
RE: Design the Advertisement for Adidas
Dear Public Relations Manager
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BSBRSK501 Manage Risk
The company, Adidas, has decided to publish an article on your Newspaper regarding
discount and other offers related to our brand. Therefore, we would like you to publish the
advert in your Newspaper in order to target a larger customer base through your platform.
Thank you
Jan Peterson
Business Manager
The Required documentation for Sydney Morning Herald is quality images of the product
along with a well written advertisement in order to attract a larger number of customers. The
business managers completed all the required documentation in order to place the adverts.
Part D: Monitoring
ADIDAS
MANAGERIAL DEPARTMENT
Date: 23 July 2017
To: Manager - MANAGERIAL DEPARTMENT
RE: Discussion on monitoring technique along with evaluation of the action plan and risk
management plan.
Dear Manager
The monitoring method implemented in order to analyse the impact of adverts as well as the
action plan we will be using Quantitative method and Qualitative method. These methods
will help in finding the accurate information based on the responses from the customers along
with different stakeholders of the company. The action plan implemented in order to reduce
the impact on the sales of the company is working fine as the adverts helped in increasing
sales in some regions of NSW. The risk management plan analysed and identified most of the
risk which helps in minimising the effect on the sales of Adidas.
Thank you
Jan Peterson
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BSBRSK501 Manage Risk
Business Manager
Letter to Stakeholders
ADIDAS
STAKEHOLDER
Date: 23 July 2017
To: Stakeholders
RE: Discussion of Feedback
Dear Stakeholders
The feedback gathered from the customer group is not looking bright as a lot of customers are
criticising the company based on the articles published by Oxfam. In order to reduce the
impact we need to plan countermeasures strategy which will help the company in increasing
its sales while rebuilding a stronger brand image.
Thank you
Jan Peterson
Business Manager
Part E: Maintain documentation
The electronic folder helps in storing files and folders in a systematic way. The steps for
creating an electronic folder involves opening up of file manager, creating a folder view,
creating a file folder by naming the folder as policies and standards document. After creating
the folder all the necessary documentation needs to be transferred to that folder with respect
to the Adidas Records Management Policy and Procedure.
ASSESSMENT TASK 2:
PERFORMANCE EVIDENCE
ASSESSOR MARKING SHEET
Question satisfactory Not yet
satisfactory
Question satisfactory Not yet
satisfactory
Part A: Risk
Management
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BSBRSK501 Manage Risk
Plan
Part B:
Implement and
Monitor
Part C:
implement the
action plan
Part D:
Monitoring
Part E:
maintain
documentation.
Assessment 2
Outcome
Assessor sign Date
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BSBRSK501 Manage Risk
Student Assessment Feedback Form
To be completed by students at the end of each assessment
Dear Student
The most important feedback to continue to improve training services – is from our students.
Please assist us by completing this course feedback form and providing it to you Trainer/
Assessor or to Administration.
Course: ------------------Assessment Type: -----------------------
Trainer/Assessor(s): ---------------------------------- Date:--------------------
Please circle the appropriate
response.
Yes No Comments
Did the assessment provided give you
clear instructions?
Did the assessment cover the information
provided in the course?
Were the assessment tasks sufficiently
challenging for you?
Were the assessments tasks fair?Did they
make sense, were they answerable or
achievable?
Did the Trainer/Assessor(s) had a good
knowledge of the topic information?
Did the Trainer(s) answer all of your
questions?
Were the course facilities, equipment and
resources satisfactory?
Do you feel you will be able to use what
you have learned in the course on the
job?
21

BSBRSK501 Manage Risk
Reference List
adidas-group.com , 2019 HOME Retrieved on: 25th May, 2019 Retrieved from:
https://www.adidas-group.com/en/investors/corporate-governance/risk-and-opportunity-
report/#/grundlagen-des-risiko-und-chancenmanagements/
Chiambaretto, P., Gurău, C., & Le Roy, F. (2016). Coopetitive branding: Definition,
typology, benefits and risks. Industrial Marketing Management, 57(4), 86-96. Retrieved on:
26th May, 2019 Retrieved from:
https://www.researchgate.net/profile/Frederic_Le_Roy/publication/301216721_Coopetitive_
branding_Definition_typology_benefits_and_risks/links/59e47b38458515393d60e8c7/
Coopetitive-branding-Definition-typology-benefits-and-risks.pdf
Fournier, S., & Srinivasan, S. (2018). Branding and the Risk Management Imperative. GfK
Marketing Intelligence Review, 10(1), 10-17. Retrieved on: 25th May, 2019 Retrieved from:
https://www.degruyter.com/downloadpdf/j/gfkmir.2018.10.issue-1/gfkmir-2018-0002/
gfkmir-2018-0002.xml
Sadgrove, K., (2016). The complete guide to business risk management. Abingdon:
Routledge. Retrieved on: 24th May, 2019 Retrieved from:
http://llrc.mcast.edu.mt/digitalversion/Table_of_Contents_129744.pdf
Tidd, J., & Bessant, J. R. (2018). Managing innovation: integrating technological, market
and organizational change. Hoboken: John Wiley & Sons. Retrieved on: 24th May, 2019
Retrieved from:http://erl.ucc.edu.gh/dspace/bitstream/123456789/3001/1/%5BJoe_Tidd
%2C_John_Bessant%2C_Keith_Pavitt%5D_Managing_In%28BookZZ.org%29.pdf
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