Business Value Assessment: Nike and Adidas Social Reports

This report provides a business value assessment of Nike and Adidas, focusing on their social and ethical responsibilities. The report begins with an introduction to business value assessment and outlines the core business activities of both companies, including their global operations. It then evaluates the differences in their social reports, exploring the range and depth of issues covered, and explains these differences based on country-specific factors and other considerations. The analysis includes an assessment of the quality of their social accounting approaches, based on Zadek et al.'s (1997) criteria, and discusses the extent to which their social reports reflect their stated values. The report also reflects on group discussions and conclusions, and applies the findings to the Giving Voice to Values (GVV) framework. The report highlights Nike's focus on sustainable innovation and carbon reduction, while Adidas emphasizes supply chain responsibility and environmental improvements. The report concludes by examining how each company's practices align with their stated values and addresses the implications of their approaches.

Running head: BUSINESS SOCIETY AND THE PLANET
Business Society and the Planet
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Author’s note:

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Table of Contents
Part A: Business Value Assessment Report....................................................................................2
1. Introduction..................................................................................................................................2
2. Identifying and describing the two companies; their core business activities and the countries
and industries in which they operate...............................................................................................2
3. Evaluating the differences evident between the two companies in terms of the range of issues
dealt with in their social reports and the depth of coverage on specific issues...............................4
4. Explaining social activities differences by the country and other explanations..........................5
5. Assess the apparent quality of the social accounting approach utilized by each company
according to Zadek et al.’s (1997) criteria.......................................................................................6
6. Discussing the extent to which the social reports provided by these companies reflect their
stated values.....................................................................................................................................8
7. Reflecting on groups’ discussions and conclusions...................................................................10
Part B: Application to GVV Framework.......................................................................................11
Scenario:........................................................................................................................................11
Reference List................................................................................................................................20
Bibliography..................................................................................................................................22

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Part A: Business Value Assessment Report
1. Introduction
Business value assessment initiative is taken for a business to analyse its business,
techniques and ethics. The organisations make a team in order to assist the organisation to
identify, capture business and measure the business value to recommend for overcoming the
current situation to achieve the benefit-based business goals (Caridi et al., 2014). In this part of
the study, Nike and Adidas have been chosen for assessing the value of the organisations in
social ethics. In addition, issues dealt with social reports of these two organisations have been
evaluated. Furthermore, country-based social differences have also been discussed in this study.
Social accounting approach has also been taken to delineate the quality of social approach of
these two companies.
2. Identifying and describing the two companies; their core business activities and the
countries and industries in which they operate
In this part of the study, Nike and Adidas have been chosen in order to proceed as they
are in the same industry; however, they belong from two different countries.
Nike Inc is an American multinational company and it is engaged in developing,
designing and manufacturing footwear, sports equipment accessories and apparel products.
Headquarter of Nike is located in Washington County, USA and it is served in a worldwide
basis. Nike was established in the year 1964 (Nike.com, 2018). Revenue of Nike in the year 2017
was US$34.35 billion and it was established in the year 1964.

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Nike segments the market into footwear, apparels, equipment and global branding. Nike
has been maintaining the leadership position in competitive sportswear and apparel market.
Core activities of Nike are associated with development, design and marketing (Lu, Liu &
Rahman, 2017). Nike has been outsourcing of non-core activities like contract manufacturing of
the products. Nike does not have any manufacturing site and it produces through independent
contractors. In order to be a leader in the market, Nike focuses on development and design and
they use DyeCoo technology, advance waterless textile dyeing. Nike uses Plant PET
Technology Collaborative (PTC) to accelerate Poly Ethylene Terephthalate materials and fibre.
Adidas is a multinational corporation and it has it headquarter in Herzogenaurach,
Germany. It designs and manufactures accessories, clothing and shoes. Adidas is the largest
manufacturer of sportswear in Europe. This organisation was established in the year 1924 and it
is the sponsor of world's major sports' clubs. It serves worldwide and it collected revenue of
€19.28 billion (Adidas.group.com, 2018).
Adidas believes in creating a new product line for exciting future. Adidas is unique
portfolio brand and it has a strong identity in sports. Adidas mainly appeals to the athletes. The
business activities mainly depend on speed as they try to be fast in satisfying customers' needs
and in internal decision making (Lu, Liu & Rahman, 2017). Adidas identifies six different cities
to grow their business and it is going to be the first sports brand to be part of consumers, athletes
and partners.

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3. Evaluating the differences evident between the two companies in terms of the range of
issues dealt with in their social reports and the depth of coverage on specific issues
Nike believes that it is not enough to adapt to what future may bring and the organisation is
creating the future what they want to see through sustainable innovation (Buckler, 2017). Nike is
accelerating toward a low-carbon growth in the economy. They do not have manufacturing units;
however, Nike gives emphasis to those manufacturers who have less impact on society. As stated
by Suliman et al., (2016), Nike has been using Flyknit technology that has reduced nearly 4
million pounds of waste in the year 2016. Since the year 2010, Nike has converted three billion
plastic bottles to polyester in order to make products like Vapour football and they are using
colour dry technology to save water. Nike has targeted 10% reduction of the average
environmental footprint to increase use of more sustainable materials (Nike.com, 2018). Nike
has been making a contract with manufacturers that uses mainly renewable energy to operate the
manufacturing works. 85% of Nike's manufacturing contract companies reach a performance
rating to demonstrate to value the workers and improve the environmental standard.
Adidas bears responsibility towards the society and environment. Adidas mainly focuses
on the supply chain in order to be a more socially responsible organisation to empower staffs and
promote safe, fair and healthy condition to suppliers' factories. Adidas is trying to improve the
environmental footprint to create the best for the athlete. Most importantly, according to Agan et
al., (2016), Adidas drives innovation in product creation and they have made a partnership with
Parley in order to raise awareness about Oceans. Adidas has taken initiative in order to make
shoes from filament and yarns and recycled from ocean's waste. Adidas has joined UN taken
initiative on Climate Neutral to help the society to have a better understanding of climate change.
As opined by Uhrich, Koenigstorfer & Groeppel-Klein (2014), Adidas always takes, identifies

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and manages human rights in business operation and supply chain partnership. Average resource
consumption of pair of sports shoes shown below:
2015 2016 2017
Energy use 2.93 2.36 2.98
Wastewater 0.34 0.45 0.57
Average VOC 20.3 19.5 20.4
Table 1: Average resource consumption
(Source: Adidas.group.com, 2018)
4. Explaining social activities differences by the country and other explanations
In recent time, climate change is a global issue that needs a global solution. In footwear
and sports industry, resource scarcity, prices of raw materials and issues in supply chain create
concern for Nike. Nike can understand the broader impact of climate issue to foster low-carbon
growth in the economy (Plambeck & Taylor, 2015). In addition, Nike takes innovative
imperative as a systematic change to forecast the rate of emission of carbon and other
greenhouse gas in supply process. In the USA, CSR activities are important as US citizens
expect the organisations to generate a profit and take the business in ethical and socially manner.
In a global financial crisis, the organisations need to ignite the public concern to attract the
customers (Parsa et al. 2015). USA industry is viable and customers' preferences change with
time. The USA is a developed country and the customers' disposable income is high. In addition,
USA based business freely acknowledge their social responsibility and ethical obligation. These
responsibilities of the organisation go beyond political, legal and economic obligations. US

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Sentencing Commissions' provides guidelines to continue the business including socially
responsible, labour unions, unincorporated organisations, partnership and community service.
Adidas identifies that sustainability is beyond the carbon and they want to be helpful for
supporting the labour, operating the business and supply chain to continue to serve the customers
(Russell-Smith et al., 2015). Adidas has been focusing more on making supply chain greener and
they need to fight climate change. In Europe, Adidas ranked first in Corporate Information
Transparency Index, it is recognition of the Environmental and social performance of the
organisations. Adidas is in Germany and in Germany, there are many other multinational
companies' operate their businesses. German-based businesses mainly value water and Adidas
does 20% water saving at strategic water suppliers and 35% water savings for employees at the
own site (Plambeck & Taylor, 2015). German people are aware of social responsibilities of the
businesses as they are literate and they want that businesses must empower them. Adidas try to
improve the health of the employees to participate in sports supporting health, nutrition and
fitness of the people.
5. Assess the apparent quality of the social accounting approach utilized by each company
according to Zadek et al.’s (1997) criteria
Inclusivity:
This principle is about ethical and social accounting that needs to reflect on views of
principal stakeholders. Nike always asks the stakeholders to participate in decision-making
issues. In addition, Adidas makes a committee with stakeholders in market research in order to
make the one-way process to create a single set of objectives.
Comparability:

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It is about the performance of the organisation should be judged in order to compare the
assessment of the value of the other organisation (Zadek, 2004). Nike has set the external
benchmark for largest selling the sportswear. Nike spends a significant amount of money on
social activities. On the other side, Adidas focuses mainly to supply chain to deliver the products
on time in right vehicles. They focus mainly on the wage of the labours.
Completeness:
In this criterion, companies' activities must be systematically checked and no areas will
be missed. In CSR report of Nike, they mainly focus on sustainable business operation and
sustainable product development. In case of Adidas, CSR report of Adidas focuses all aspects of
the business. Adidas follows all essence of the business and stakeholder groups know about
exploration.
Evolution:
It is not possible to cover up the entire company's footprint. Nike tries to reduce the
environmental footprint by taking initiatives of dry watercolour, PET system and other
technologies. Adidas takes the initiatives of supply chain innovation and company's
accountability to the wider public.
Management policy and systems:
Companies need to do both environmental auditing and financial policy. Nike does this
with systematic policy and organisation develops clear policy. In case of Adidas, it allows
accounting process of social responsibility in evaluating the organisational awareness.
Disclosure:

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Companies need to provide the information whether social and ethical accounting is
made for internal and external audiences. Nike uses the management tool to disclose the social
report for the external and internal public. On the other side, Adidas clearly focuses on internal
audiences and also for external audiences in order to strengthen the company's legitimacy.
Externally verified:
External verification is important for strengthening the accountability. Nike takes the
permission of USA based government agency in order to emphasis mainly on professional
quality. Adidas on the other side validates the published material by an external body.
Continuous improvement:
Progress is the ultimate aim of any organisation, not just the retrospective performance
(Zadek, 2004). Nike always strives for better future and it improves values, objectives and
mission. Adidas organisation establishes the measurement of progress to improve the product,
people and profit of the organisation through social and ethical performance.
6. Discussing the extent to which the social reports provided by these companies reflect
their stated values
Nike’s stated values are:
 Nature is there to innovate. Nike seems to innovate as it is there to use core
organisational competence
 Nike uses social responsibility as brand management technique
 Nike is a brand and it uses Swoosh logo
 Consumer decides Nike’s products

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Nike is the largest sportswear brand in the world and it focuses on innovation in order to be
sustainable in the market. Nike helps to the community by reducing the carbon footprint and
reduces environmental impact through the supply chain. Nike is transforming the manufacturing
unit and in the betterment of the people, they unleash human potential through innovation and
inspiration (Lu, Liu, & Rahman, 2017). They make a contract with suppliers and manufacturers
in a correct way. Nike generates revenue through Nike brand stores, online sales and Nike
factory stores.
Adidas has its core values like:
 Adidas believes in performance and it supports athlete in sports
 Adidas supports passion in working and passion is the heart of this organisation
 Integrity is another value for the organisation and Adidas is honest, ethical and open in
operation (Adidas.group.com, 2018)
 Diversity in workplace is another value
 Sustainable business practice and innovation
Adidas believes to continue to enable open collaboration to share the knowledge and
expertise with partners, suppliers and stakeholders. German-based businesses do follow
technological specialisation in order to innovate materials and processes. Adidas drives
innovation in product creation and it makes supply chain greener to fight climate change (Lu, Liu
& Rahman, 2017). Advancing for human rights is the first priority for the business. For product,
Adidas values water, raw materials and conserve energy. For the people, Adidas empower the
staffs, improve the health of the people and inspire action of the staffs and community people.

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7. Reflecting on groups’ discussions and conclusions
Both the organisations Adidas and Nike are world famous for sportswear and apparel.
They are competitors in the global market as they both in the same industry. Being in the same
industry, their social activities are different. Nike is very much engaged in the sustainable
development of the products that would help the organisation in long-term. They engage in
climate change and carbon footprint reduction. Nike publishes social reports with data of the
organisation with sufficient activities related charts. On the other side, Adidas is much focused
on the triple bottom line of the CSR, people, planet and profit. Adidas focuses on people to
improve health, empower and inspire, they are staffs and community. Adidas focuses on the
planet, this is related to the environment. They try to reduce the environmental impact through
giving the value of energy, water and raw material innovation. Adidas in last five years has been
integrating sustainability into core business practices. In product creation, licence management
and supplier and customer-consumer management, Adidas achieved this by establishing
sustainability expertise.
Above all, it has been observed that values of the organisations can be achieved through
embedding functions of social and environmental standards in procedures and policies that can
steer day-to-day business performances.

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Part B: Application to GVV Framework
Scenario:
Adidas perceives that employees are the heart of the business and Adidas offers attractive
work environment. It is very important that people can develop professionally and
professionally. The CEO of Adidas wants the workplace must constantly strive for innovation. In
order to recruit new employees in Adidas headquarter, HR manager needs to take permission of
the CEO. The CEO, Kasper Rorsted (1st Oct 2016 – Present) fosters engagement of the
employees, collaboration and innovation in the workplace. Human resource team in Adidas
recruits the greatest talents anywhere in the world and they search for diversity and uniqueness.
Adidas recently moved into a new office (PITCH) where they are going to test various
workplace concepts. In the new office building, they needed new employees for various posts.
HR manager of Adidas, Karen Parkin went to meet the CEO one day for discussing future
recruitment in headquarter of Adidas, Herzogenaurach. In this meeting, Karen told the CEO
about the new recruitment of Adidas and why it is necessary for Adidas. The new office building
of the Adidas provides an extra feature that employees do not need to work at a designated desk,
they can choose their workstation based on the current task. This extra feature accelerated to
recruit new staffs to the organisation to smooth the work. Karen told that Adidas would roll out
the advertisement in which they would mention the new recruitment policy. Adidas has been
using an external agency to recruit new employees. Karen wanted to provide the responsibility of
recruitment to that external agency. Kasper never disagreed with this before, however, this time,
Kasper denied to Karen. Kasper told Karen that they would be recruiting from offline university
campuses. Karen did not understand what the CEO was trying to convey. Adidas recruits college