Corporate Social Responsibility Report: Adidas and Nike Comparison

This report provides a comprehensive analysis of the corporate social responsibility (CSR) strategies of Adidas and Nike. It defines CSR and examines the social, economic, and environmental factors influencing the companies' reports. The report compares Adidas and Nike, highlighting their differences in areas such as technology, market focus, and pricing strategies. It also explores the quality of their social accounting approaches, including organizational learning and stakeholder engagement, and discusses how their values are reflected in their social reports. Furthermore, the report considers the principles of effective social accounting as outlined by Zadek, and concludes with a group discussion on the two organizations. The report uses financial statistics, comparative analysis, and case studies to provide a detailed overview of the CSR practices of Adidas and Nike, making it a valuable resource for students studying business development and related fields. The report is available on Desklib, a platform providing AI-based study tools for students.

Running head: CORPORATE SOCIAL RESPONSIBILTY
Corporate Social Responsibility
Name of the Student:
Name of the University:
Author’s Note:

1CORPORATE SOCIAL RESPONSIBILTY
Executive Summary
This report intends to shed light on the concept of corporate social responsibility. The two
companies selected to study the process of corporate social responsibility are Adidas and
Nike. The report takes into consideration the various factors like social, economic as well sa
the environmental factors which influence the reports of two organizations. The report also
takes into consideration the various precepts of the principles provided by Zadek for the
process of effective social accounting. Lastly, the report concludes with a group discussion of
the two organizations.

2CORPORATE SOCIAL RESPONSIBILTY
Table of Contents
Introduction................................................................................................................................3
Adidas and Nike.........................................................................................................................5
Differences between the two companies....................................................................................7
Differences between the two companies on the basis of the reports........................................10
Quality of the Social accounting approach..............................................................................12
Values of the company reflected by the social reports............................................................13
Group discussion of the companies..........................................................................................14
Conclusion................................................................................................................................15
Part B........................................................................................................................................16
Part C........................................................................................................................................19
References................................................................................................................................25

3CORPORATE SOCIAL RESPONSIBILTY
Part A
Introduction
Corporate Social Responsibility, can be defined as the concept which helps in the
process of self-regulation of the corporate companies as well as organizations (Tai &
Chuang,2014). It is also known by the names of corporate conscience, responsible business as
well as corporate citizenship (Hood & Birkinshaw, 2016). In other words, it can be defined,
as the self-regulatory kind of mechanism, which a helps a business organization or a
company to monitor as well as ensure the active compliance of its employees as well as the
rules and regulations followed by it with the spirit of the national as well as international laws
and the ethical standards mandatory for the business organizations (Tai & Chuang,2014). The
following figure shows the various components of the concepts of corporate social
responsibility-

4CORPORATE SOCIAL RESPONSIBILTY
Figure 1: Components of the process of Corporate Social Responsibility
Source: (Created by the Author)
The opinion of Howard Schultz, the ex-CEO Of Starbucks, is important in this
regard-“Companies should not have a singular view of profitability. There needs to be a
balance between commerce and social responsibility.......... The companies that are authentic
about it will wind up as the companies that make more money” (Schultz, 2012).
The two companies selected to study the process of corporate social responsibility are Adidas
and Nike.

5CORPORATE SOCIAL RESPONSIBILTY
Adidas and Nike
The company Adidas AG, is a multinational corporation which was founded in the
year 1920 by Adolf Dassler in the small house of his mother ("adidas Official Shop | adidas",
2018). The company as per a May 2017 statistics is the 219 largest company in the world in
terms of the global annual revenue ("Forbes Welcome", 2018). The corporation presently, is
the second largest manufacturer of sportswear in the world, just after Nike and the largest one
in the continent of Europe. The company is operational in more than 160 different countries
of the world, employing more than 60,000 employees from these countries ("adidas Official
Shop | adidas", 2018). The company specializes in the manufacture of the various kinds of
sports apparels, shoes, sportswear as well as accessories. The financial statistics of the
company are represented by the following figure-
Figure 2: Financial Statistics of the company Adidas
Source: Factset, Bloomberg, S&P Cap IQ; Forbes.
The company Nike, on the other hand, was founded in the year 1964 by Bill
Bowerman and Phil Knight, as the company Blue Ribbons Sports. The company Nike, just
like the company Adidas specializes in the manufacture of sportswear, apparels as well as

6CORPORATE SOCIAL RESPONSIBILTY
accessories. It is the largest supplier of sports-shoes as well as apparels related to the sports
industry in the world. The company Nike, just like Adidas operates in most of the major
countries of the world. It is an American multinational company, employing more than
44,000 employees as per a 2017 statistics ("Forbes Welcome", 2018). Some of the financial
statistics of the company are represented by the following figure-
Figure 3: Financial Statistics of the company Nike
Source: Factset, Bloomberg, S&P Cap IQ; Forbes.
It is presently one of the most loved brands in the world along with Nike and Adidas
as the following figure shows-

7CORPORATE SOCIAL RESPONSIBILTY
Figure 4: Ranking of the Sportswear manufacturing companies on the basis of revenue.
Source: (Created by the Author)
A detailed study of the annual financial reports of the company Adidas will reveal the
fact that there was only a 2% increase in the annual profit of the company in the year 2015
compared to the 10% increase in the year and 41% in the year 2015 ("Annual Report 2014",
2018).This can be a result of the various changes like the changes in the strategy adopted by
the company, changes in the leadership style and various other international factors. The
following figure provides the financial details of the company Nike Inc for the past three
years-
Figure 5: Financial report of the company Nike Inc
Source: ("NKE Income Statement", 2018)
The above figure clearly shows that there was a decline in the percentage increase in
the annual profit for the year 2017 compared to the year 2016 (Bebbington, Unerman &
O'Dwyer, 2014). This might be the result of the various factors like the change in the
strategic plans of the organization, change in the leadership and several others.
Differences between the two companies
The two companies Adidas and Nike provide the same kind of services to the customers
and operate in the same country. However, a closer look at the two companies will reveal

8CORPORATE SOCIAL RESPONSIBILTY
some fundamental difference between the companies. Some of the social, economic as well
as environmental issues mentioned in the reports of Adidas as follows-
 Adidas was awarded the fifth position in the list of “Global 100 Most Sustainable
Corporations in the World”. Many people even consider the company as the leader in
the concerned sector ("Forbes Welcome", 2018).
 The April, 2016, the company launched its “Sport needs a space” strategy which
accepts the importance of the space that sports holds in the life of the people ("adidas
Official Shop | adidas", 2018).
 As part of its environmental issue, the company dedicated to go “plastic-free” in a bid
to reduce its contribution to the environmental damage ("adidas Official Shop |
adidas", 2018).
 The company even launched a new “Save the Ocean” campaign to save the various
oceans of the world ("adidas Official Shop | adidas", 2018).
Some of the common social, economic as well as environmental issues mentioned in the
reports of Nike are as follows-
 In a bid to reduce the environmental damage, the company now utilizes a technology
for the manufacture of its produce which aims to reduce the carbon dioxide by 3%
from its earlier FY11 baseline ("Forbes Welcome", 2018).
 The environmental attitude of the company is adequately expressed in the words of
the CEO of the company, Mark Parker,” If all we do is to create a single line of green
products, we will have failed sustainability must be a design ethos across all our
products” ("Forbes Welcome", 2018).
 The new Nike Re-Suede products manufactured by the company will utilize 100%
recycled polyester fibres to control the environmental damage ("Nike's Sustainability

9CORPORATE SOCIAL RESPONSIBILTY
Report Shows Company Reducing Environmental Impact while Continuing to Grow",
2018).
 The company also uses various price controlling features to make its relevant
contributions in the field of economic sector.
The style as well as the presentation of the reports by the company Adidas is very direct
and is intended to make the individuals the crisis that the company as well as the world is
facing at large at the moment. The company Nike, on the other hand, focuses much on the
environmental factor and less on the factors like social as well as economic factors. The
company Adidas focus on the sports industry to increase its economic values whereas when
the strategy of Nike is taken into consideration it will be seen that the emphasis is less on the
sports industry and therefore the prices of the products manufactured by the company is much
less than the ones manufactured by Adidas. However, an interesting fact to take into
consideration is that the new environmental plan by which the company intends to lower its
carbon dioxide emission by 3% from its earlier FY11 baseline increased its revenue by 26%
("Nike's Sustainability Report Shows Company Reducing Environmental Impact while
Continuing to Grow", 2018).
The strength of the reports manufactured by the company Adidas is its emphasis on
the various factors of social, economic as well as environmental issues ("adidas Official Shop
| adidas", 2018). The company utilizes the platform provided by the sports industry to
increase its profits as well as market value. The company Nike, on the other hand, puts the
majority of its focus on the environmental factor and the ways by which to control the
damage to the environment. The weakness of the report produced by the company Adidas is
its less emphasis on the environmental factor, whereas the weakness of the report of the
company Nike is the fact that the sole emphasis of the company is on the environmental

10CORPORATE SOCIAL RESPONSIBILTY
factor and not on the capture of the international market, which might actually help the
company to increase its profits.
The reports of the company Adidas, covers a range of topics like social, economical
as well as environmental factors. The company also utilizes the platform offered by the sports
industry to increase its profits as well as sales. The company Nike, on the other hand, focuses
much on the environmental issues and less on the social as well as economic factors, which
can actually increase its profits as well as sales ("Nike's Sustainability Report Shows
Company Reducing Environmental Impact while Continuing to Grow", 2018).
Differences between the two companies on the basis of the reports
The differences between the two countries which influences the social responsibility
approaches of the two companies are as follows-
 Technology: The company Nike utilizes various new innovation like the use of
recycled rubber and other eco-friendly materials for the manufacture of its products
whereas the company Adidas utilizes normal rubber as well as other materials which
are harmful to the environment for the manufacture of their products (Balch, 2018).
 Market maturity: The company Nike intents to capture the market by its price policy
and its aim to capture the domestic market of America (Balch, 2018). The primary
focus of the company is on the soccer industry, whereas the focus of the company
Adidas is on the international market and on the entire sports industry itself, not just
the soccer industry ("adidas Official Shop | adidas", 2018). The following graph
shows the price policy of the three companies Adidas, Puma and Nike-

11CORPORATE SOCIAL RESPONSIBILTY
Figure 6: A comparison of the price of the products of the three companies Adidas,
Puma and Nike
Source: (Created by the Author)
 Attitude: The attitude of the company Adidas is directed more towards the
capture of the world market by providing quality products at affordable prices
whereas the company Nike places the pricing of its products at a level which is on
a par with its domestic market of America (Balch, 2018). Therefore, it can be said
that the sole emphasis of the company is on the creation of a positive brand image
by its association with the famous sports clubs of the world.
Therefore, it can be safely concluded that the following factors have influenced the
reports of the two organizations. The reports of the two companies can thus be said to be a
reflection of these two factors.