Adidas Business Risk Analysis: Assessment and Mitigation Report

This report provides a comprehensive business risk assessment for Adidas, addressing both corporate and business risks stemming from an Oxfam announcement. It identifies risks such as worker strikes, future employee risks, and potential sales drops. The analysis evaluates the likelihood and seriousness of each risk, proposing mitigation strategies including revised human resource policies, marketing campaigns, and public relations efforts. The report outlines implementation plans with assigned roles and responsibilities for executive management, business managers, and various departments. It includes a stakeholder communication plan and an action plan involving an advertisement design to counter negative publicity. Monitoring strategies involve feedback collection and evaluation, with subsequent actions based on public perception. The report offers a detailed analysis of the risks, providing a strategic framework for effective risk management and stakeholder communication.

Running head: BUSINESS RISKS 1
Business Risks
Name
Institutional Affiliation

BUSINESS RISK 2
Part A: Risk Assessment
• Identification
The type of risk involved here includes both the corporate risk and business risks.
Corporate risks include the risks that the workers may be involved in a strike or in future, no one
would be willing to work with us. Business risks include the risk that the sales may go down due
to this negative publicity and loss of money used in advertising (Association, 2016). In Australia,
the mass is very sensitive to injustices that are done to the workers and may react very negatively
towards the Oxfam report.
• Analysis and Evaluation
Both the business and the corporate risks are likely to occur though the business risks
associated with the drop-in sales possess the highest risk. Such a conclusion since the corporate
risk associated with the employee strike and future lack of qualified staff risks may be averted
effectively through a revision of our procedures (Munier, 2014). A large supply workforce also
enables aversion of the latter risk.

BUSINESS RISK 3
Risk matrix
Likelihood
Seriousness
Low Medium High EXTREME
Low Workers strike
Medium
Lack of
qualified
employees
High \ Loss of sales
• Risk Mitigation
Risk
Possible Action
Workers
strike
Workers should be involved in developing new human resource policies so as to
have an ownership feeling. The actions may be done by incorporating
nonfinancial benefits. The actions should include permission to join the workers
union.
Future
employee
risk
The reversal of the destroyed publicity can be done through creation and
attendance of workers meetings and seminars where the public is sensitized about
the benefits employees of Adidas accrue . This should be in line with the
modified policies.
Sales
drop
The diversion of this risk shall include a lot of marketing and company
positioning. Different marketing channels and strategies should be included in

BUSINESS RISK 4
this campaign.

BUSINESS RISK 5
Part B: Implementation and Risk Monitoring
From the meeting held in relation to the risks as posed by Oxford announcement, the
stakeholders have settled on the following action plans
The worker's policy changes should be overseen by the human resource departments and
reported in a span of not more than one week in relation to eminent workers strike. This is
because this can happen any time as fueled by the public (Delogu, 2016). The company's
employee policies can be overturned in the long run and since it requires resources, it can be
done in a span of a whole year.
The business risk, however, is very detrimental and thus should be started immediately
and overseen by the marketing department collaborating with the public relation department
since it is able to collect information from the public (Lev, 2017). The appointed committee
should, however, be reporting frequently so that any corrective action can be taken soonest.
Roles and Responsibilities
• Executive Management
Since the risks have been identified, the responsibility of the executive management shall
include the decision on the course to be taken, availing the resources required and frequently
receiving the progress report and recommending the best way forward (Anderson, 2013). The
proposal is for them to be meeting after every three weeks to discuss the progress of the
implementation of the action plans.

BUSINESS RISK 6
• Business Manager
The role of the managers is to lead their respective teams in the action plans and
continuously and closely monitor the progress. According to Lam, (2017) respective manager
should also be monitoring the work schedules to ensure that respective activities have been
implemented on time, test the effectiveness of the action plan, and guide the executive on the
progress.
• Appendix A:
Rating for Likelihood and Seriousness for eminent workers strike
M Rated as Medium
Rating for Likelihood and Seriousness for future lack of qualified staff
M Rated as Medium
Rating for Likelihood and Seriousness for sales drop risk

BUSINESS RISK 7
H Rated as High
Grade: Combined effect of Likelihood/Seriousness
Seriousness
Likelihood
low medium high EXTREME
low Future
employee
risk
medium Employee
strike
high Sales drop
Stakeholder communication Plan
Stakeholder type Communication method Communication contents

BUSINESS RISK 8
Board of governors
Meeting led by the business
manager
-progress of the plan
-resolution of the meeting
-Requirements for
implementation purposes
Human resource
department
Indoor meeting - Progress of the
implementation plan
Marketing department
emails -understanding of the customers
- customer feedback
Public relation department Emails and indoor meetings - Appraisal of the plan
progress
- Discussion of the
feedbacks
- Decision of the action
plan

BUSINESS RISK 9
Part C: Implementation and Action Plan
a) Email to the advertising department to design an advertisement
Following the decisions made in the risk assessment meeting in regard to the Oxfam claims
and the subsequent approval of the same, you are hereby requested to design an advert to be
forwarded to the Sydney Morning Heralds in the effort to avert the negative perception instigated
(Sadgrove, 2015). The proposal being, the advert should contain a message that when you are
buying Adidas, you are buying ethical shoes. It should be two colored pages and contain
graphics et cetera. The advert should assure consumers that Adidas is a “community” conscious
organization, ethical and that all our products and processes ensure this.
Part D: Monitoring
A). Email to the manager
To: Public Relation Manager
Having done an advertisement to avert the negative publicity from the Oxfam, I have
now embarked on monitoring. Monitoring shall be done through the marketing department. The
choice being since they are in contact with the public during their day to day activities, they are
in a better position collect feedbacks from the public.

BUSINESS RISK 10
As discussed earlier, the evaluation shall, therefore, be done in relation to the feedback
that has been collected to from the customers and the public at large. If the feedback is positive,
then the action plan shall be continued and if negative, then a new plan shall be devised.
Up to date, the feedback has been negative, as the report from the marketing department
has indicated that we are doing the advertising just for the sake of averting the previous negative
publicity (Rael, 2017). They also claim to have the knowledge that we use child labor and that
they are now buying Ike shoes.
b). Letter to stakeholders,
In relation to the meeting held for averting the negative publicity, we have received
feedback that the perception has spread a lot and that our customers believe that the advertising
is just for the sake of diverting the public negative perception, we are using child labor and that
they are now buying Ike shoes.
You are therefore required to prepare for the next action plan since our previous advert
plan seems not to be working as efficiently as intended. The meeting date to discuss the way
forward shall be announced in the due course.