PUMA: Decision Making and Problem Solving

This report discusses PUMA's failure in CSR regarding critical conditions of the supplier and the decision-making and problem-solving approach adopted by the company. It includes a critical analysis of the approach, stock market analysis, and an action plan for implementation.

Running Head: DECISION MAKING AND PROBLEM SOLVING 0
PUMA
Decision Making and Problem Solving
(student name)
11-21-2018

DECISION MAKING AND PROBLEM SOLVING 1
Contents
Introduction......................................................................................................................................2
PUMA’s Failure in CSR: Supplier’s critical situations...................................................................3
Background of the case................................................................................................................3
Critical analysis of decision-making and problem-solving approach adopted by PUMA..............5
Stock market analysis of Puma........................................................................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

DECISION MAKING AND PROBLEM SOLVING 2
Introduction
The two major area at work place includes problem-solving and decision-making. In an
organization to run effectively, effective and quick problem solving is very significant, and can
gain benefit from having appropriate skills of problem-solving. The major reason for not proper
problem solving can be either the company or individual was unable to identify the core of the
problem, or if the problem is identified correctly, then the approach for solving the problem was
not right (Lusa, 2017).
Decision-making is another important criteria at work place, in simple terms, it is deciding one
solution, among different alternatives to solve a problem, it includes quick or intuitive or it can
be done through a process (Pettigrew, 2014).
For this, the selected company is “Puma,” a sportswear company, and one of the major issue
faced by this company was company’s lack in CSR regarding critical conditions of the supplier.
Puma is a sportswear brand that is German Based. The most popular products offered by the
company include all sportswear like shoes, sports t-shirts for men and women, sports
equipment’s and many more, and the company is offering their products globally. The major
competitors of PUMA are Adidas, Reebok, sketchers, and Nike who are dealing in the same
industry worldwide (chinalaborwatch, 2018).
The issue and the problem-solving approach of the company to tackle the issue will be discussed
in the report further.

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PUMA’s Failure in CSR: Supplier’s critical situations
Background of the case
The companies headquarter is in “Germany, although the production sections are mainly in other
developing nations and China. The organization has invested a huge amount while advertising,
but when it comes to the workers involved in the process of manufacturing, are earning the bare
minimum yet. In China, suppliers of Puma were been monitored by the “China Labor Watch
(CLW),” and while investing Taiway sports ltd., who was given “A” ranking in 2006 report. The
conditions were found to be deplorable by CLW, and it was found by PUMA that now the
company is at “B+” grade. Moreover, the company claims that finding of CLW; either was
exaggerated or is unfounded on Taiway. For further investigation, the workers of the Taiway
were interviewed, which was arranged by CLW along with a media group of German that is Der
Spiegel. After the interview was conducted, the company responded to CLW, on fifth may,
claiming that the efforts of PUMA in improvising the factor was not considered by CLW and
again stated that majority of conditions presented by CLW were unfounded. China labor watch
on 19 April 2008 had presented a report, investigated on Taiway sports ltd. That identified
various approaches used by PUMA to take due advantage of their staff. For this, PUMA
responded that the company has made large efforts on the factory’s corrective action, even after
believing that most of the findings of CLW were unfounded, ask not to consider only one
supplier case, and generalize it with the overall supplier’s condition of the company, and must
conducted future investigation for the same. The next investigation was taken at Surpassing shoe
co. ltd, where CLW found that the similar conditions were there as of Taiway, and PUMA did
not address any poor conditions that were brought under public attention by media and was not
able to monitor all the suppliers efficiently (chinalaborwatch, 2018).

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The major reason for choosing this company and this issue, as the issue, has affected the
company very much, and it is the responsibility of the company to provide good working
conditions and work for all the stakeholders. Moreover, suppliers are a significant part of the
company, due to which the products are improvised and company sales are affected. The choice
can be justified, as clear change in grading of the supplier over years has been observed, that was
recorded in PUMA’s sustainability reports (fairlabor.org, 2018).
To handle this situation, the company approach was to refuse for what it was accused by China
labor watch. The company tries to justify themselves by stating that the grade of its supplier
factory has been decreased, and the investigation was exaggerated, presented by CLW. The
decision-making and problem-solving approach used by PUMA was a creative problem-solving
approach (eu-china.net, 2008).

DECISION MAKING AND PROBLEM SOLVING 5
Critical analysis of decision-making and problem-solving approach
adopted by PUMA
The company adopted a creative problem solving for the issue for decision-making. According to
this approach, the solver’s has an ability to find out several outcomes, create assumptions as to
what is essential to do so comes up with a result or outcome, and the solver is generally risk
taker, as they are quite sure about their own judgment instead of others perception. These solvers
are generally started finding the result from the beginning and are not a follower of a particular
process. , they are unique path creators and try to find a new solution (Pettigrew, 2014).
In this case, like a creative solver, the company assumes that CLW has exaggerated the
investigation, and was trying to put the company down, to tackle the situation, the company put
the point against the reporting of CLW, keeping their own assumption largely. The confidence of
the company among themselves while considering this issue was a plus point. Moreover, the
strong statement of the company to press, make their viewpoint and approach more relevant. The
only problem with this approach used is, that there is no limitation to creativity, and assumptions
(Klein, 2014).
The allegation over PUMA Company was regarding poor conditions of suppliers and workers at
the factory, this included excessive overtime, nonpayment of minimum wages, discrimination,
excessive fines, and poor food. For this issue or allegation, the company instead of adopting a
creative approach could have adopted an analytical approach to problem-solving. If initially, the
creative approach was okay, later when the conditions were not improved as per CLW report, the
company could have reached to the core of the problem, gets the exact detailing of the issue,
understand another perspective, and determine where it is going wrong and what is missing.

DECISION MAKING AND PROBLEM SOLVING 6
With the Analytical approach, PUMA leaders could have found the gaps between the expected
and the actual performance and must fill the gaps with appropriate action taken by the company,
like decrease the working hours, paying the workers their overtime hours, provide appropriate
health care facility and work breaks, to reduce the risk of accidents. This approach depends
more on the process of facts and findings. For example, the case of many food chains in various
countries had faced issues, like MC Donald’s, have face the food quality issues in many
countries, and solve the problem with analytical thinking, and trained to fulfill the required gap
and came back with a kick in industry (Cotton, 2016).
Other than this approach, another approach that can be applied is “rational problem solver,”
according to this the solver makes assumptions on the information available to him, but removes
the most optimal solution that is based or personal perception. Instead, they found the best
approach as per their own perspective; they believe that their perspective is true to the extent
instead of the world’s perspective (Sarkis & Govindan, 2015).
Instead of providing a statement to the media regarding the exaggerated facts by CLW, the
company could have followed a well-developed procedure to solve this problem, and then make
a decision. The process for followed for most effective problem solving is:
 Identifying the issue- at this first step of the process, PUMA could have identified what
CLW is trying to say while accusing the company of poor conditions of workers at the
suppliers. The company could have research on the conditions and laws towards the
workers, before providing any statement (Newman, 2017).
 Understand interest of all- at this step, the company could have understood the perspective
of China labor laws, workers involved in the issue subject, the suppliers working and their
perspective. What are the general interests of the public, as if workers need breaks at their

DECISION MAKING AND PROBLEM SOLVING 7
work, the suppliers are not able to provide a healthy and safe environment to the labor (Isen,
2014)
 Identify possible solution- the possible alternatives, like in this case the alternative
approaches are the creative, rational, or analytical approach. Where the company will be
liable to take different actions that are for creative the company manipulates with the
investigation of CLW. By adopting analytical, the company would have taken actions in
favor of labor or workers (Isen, 2014).
 Evaluate the alternatives- the alternatives identified are then evaluated, like in this case, the
best approachable alternative was a creative problem-solving approach, that the company
adapted. The pros and cons of each alternative are studied at this stage so that the
alternatives ability to solve the problem is there (Basadur & Gelade, 2014).
 Select appropriate alternative- after evaluating each alternative, PUMA leaders could have
selected the most suitable alternative for solving this issue and justify the reason for
selecting the same (Weisberg, 2015).
 Reporting the agreement- the agreement on the decision taken are documented legally, and
reported accurately. Like if the company decides to enhance the environment for workers,
and increase wages of workers, and improve the conditions of the suppliers of PUMA
(Seidman, 2016).
 Agree on monitoring, contingencies, and evaluation- at this last stage the future perspective
or contingency is considered and since the future is uncertain, the agreements are made for
that purpose as well. Moreover, the opportunities are created to evaluate the taken decision,
an agreement; it is implemented properly and is working as per the requirement (Sharpio,
2016).

DECISION MAKING AND PROBLEM SOLVING 8
Another technique of problem-solving and decision making that PUMA can adopt while solving
this issue is cause and effect analysis. According to this analysis, a visual tool is available to
map out the problem identified, the factors influencing this issue and the cause of individual and
its effects are observed and evaluated. This technique will help to define the exact problem and
the possible factors that are concluded to the problem. In this case, the other factors like the
wrong behavior of the workers, or the environment, or the locality where the factory is situated
can be the influencer for this issue. In addition, after researching this cause and effect, the
appropriate alternative solution can be made and selected. Although, analyzing the cause of the
issue, of PUMA, could be difficult and it could be the management of the company, which is
responsible for this issue and influencing (Perkins, 2016).

DECISION MAKING AND PROBLEM SOLVING 9
Stock market analysis of Puma
Considering the statistics, facts, and figure of PUMA financial condition during the period of this
issue happening. As per the financial report of PUMA of 2007, the profit earned was
$510,944,031. On 28th may 2018, the exchange rate was $1 USD= 6.94 RMB. Since the
company had a strong brand loyalty, and at that period, the market was not in good condition, the
stock prices of all the companies were going down. Therefore, there was no significant effect
was observed for this company at that duration of time. Moreover, the reason for no significant
change is that the company refuses to accept itself guilty, and through its statement, at the end,
CLW accepted the efforts made by the company for improving the worker's condition (Ellis,
2018).
One of the stages of problem-solving and decision-making is implemented after the solution has
been prepared and decided, it needs to be expected as well, this stage is the action of the plan.
The elements included while implementing the plan of the problem solving are:
 Task- the plan prepared need to be divided into small tasks to be conducted. In this case
of PUMA, the tasks could by finding out the supplier actual conditions, the allegation is
to be researched and study in detail, the change in working hours, wages of the workers,
the reporting and presentation of all changes done by the company in media through a
statement (Lusa, 2017).
 Schedule- the time concern is very important as if the action planed is taken in time only
then it has any relevance, otherwise it would make no sense to plan or implement it. In
the case, the scheduling regarding the completion of the entire task needs to know well
before (Lusa, 2017).

DECISION MAKING AND PROBLEM SOLVING 10
 Resources- the resources like in this case human resource, research and development
team, other resources regarding the worker's consent, are required to implement the
strategy. The resources must be available for successful implementation of the tasks
(Stamatis, 2016).
 Contingencies- the future is uncertain and the risk involved in the implementation of the
plan, and contingencies must be well prepared. For example, in the case, CWL after
Taiway investigation also conducted the same investigation with other suppliers as well.
Therefore, the company needs to plan for other suppliers as well (Stamatis, 2016).
 Management- the implementation team is made for the applicability, they will handle the
process and the management of the implementation.
 Evaluation- the implemented plan is to be evaluated, that is evaluated if the
implementation of the plan has resulted in positive outcomes or not, if not then the
variations are to be made. In the case, initially the company gave a statement that CLW
has given exaggerated allegations, but after the response of CLW, the company provides
its response will all the evidence, like working hours, wages paid and all facts and figure,
and presented the report formally (data-group, 2018).
 Monitoring – this stage includes the monitor of the implemented plan, and its outcome,
this includes comparing the planning and the actual implementation. Is the action taken
has the same result as planned? In the case, the outcome is that the CLW accepted the
efforts made by PUMA, but also recommend some of the improvements that the
company must make in the last response of CLW through media (AFB, 2018).

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Conclusion
The report discussed one of the major issues of PUMA, a sportswear company. The china labor
law in its report in 2018 stated the allegation over the company that the condition of the suppliers
of the company was very poor. The investigation was based on Taiway sports ltd, which is one
of the suppliers of PUMA. The allegation includes the large working hours of the labor or
workers in the factory; no overtime payment is paid to the employees and poor working
conditions at the factory.
PUMA used creative problem-solving approach, for this issue, and keeping its own assumption,
and believe at top priority. The company stated that CLW investigation and allegation were
unfounded and exaggerated. To handle this issue, the rational problem-solving technique or
analytical problem-solving technique could have also used.
CLW, to show that with only one supplier, it cannot be generalized, another supplier that is
surpassing co. ltd. was investigated, and the similar poor conditions were found for this as well.
In the response, PUMA stated and presented the response through media, about all efforts that
the company has made in order to improve the condition of workers, and was justified with all
statistics related to a worker, the working hours, salary, and every relevant data.

DECISION MAKING AND PROBLEM SOLVING 12
References
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problem/12345
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fairlabor.org, 2018. PUMA AG ASSESSMENT FOR REACCREDITATION. [Online]
Available at:

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http://www.fairlabor.org/sites/default/files/documents/reports/puma_reaccreditation_report_2010
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