Case Study Of Adidas Management Essay

Case Study Of Adidas Management Essay Adidas is a Germany shoe, clothing and apparel company that also own Reebok, Taylor Made and Rockport. Adidas is the largest sportswear company in Europe and is the second only to Nike as the largest sportswear company in the world. The company sports the recognizable logo of three slanted parallel bars of ascending height. Adidas was founded in 1924 by Adolf Dassler, but it did not become a fully registered company until 1940. Its headquarters are located in Herzogenaurach, Germany, the hometown of its founder. Although many believe that Adidas stands for All day I dream about soccer the true origin of the name comes from the amalgamation of Adolfs nickname, Adi, and the first three letter of his last name. Adidas specializes in the design and manufacturing of footwear, sportswear, sports equipment and, yes, even toiletries, most notably, deodorant. However, the company first gained international recognition in 1936 at the Summer Olympic in Berlin, where it outfitted U.S. track star Jesse Owens with its track shoes. Owens won four gold medals in the games. With a specifically stated Corporate Strategy, the company needs to ensure that their organizational structure will allow for and be flexible to this strategy being sought after. Their objectives outlined in the corporate strategy ensure the mission statement will translate into action, while also guiding and coordinating decisions. There is no purpose in having well thought out strategic objectives, but no structure and cohesion to attain these objectives. The Adidas Group comprises of a four person executive board, including one Chief Executive Officer and three board members representing the shareholders and six members representing the staff. The Supervisory Board advices and supervises the executive board in matter concerning the management of the company. It is the role of the supervisory board to ensure that the pathway and vision determine by the executive board is forthrightly followed by the rest of the organization from the top, all the way down to those entrusted with man ufacturing their products. The strengths of ADIDAS are strong management team and good corporate strategy in North American and overseas markets, brand recognition and reputation, diversity and variety in productions offered on the web (footwear, apparel, sporting, equipment, etc.), strong control over its own distribution channel, strong customer base, and strong financial position with minimal long term debts. Weakness of ADIDAS is negative image portrayed by poor working condition in its overseas factories, and E-commerce is limited to USA. 2.0 Management Organisation and the management activities necessary for the functioning of the organisation, management can be defined as the process of planning, organizing, leading and controlling the resources of the organisation to predetermined stated organizational goals as productively as possible. A concise description of each of the fundamental management functions will further explain the concept of management and the nature of the management process. Planning Controlling Leading Organising Resources Human Financial Physical Information Performance Achieve goals Products Services Productivity Profit Figure 1 the four fundamental management functions constituting the management process. 2.1 Planning Planning is the first step of the function of management. Planning involves deciding in advance what has to be done, when, how and whom it has to be done and how the results are to be evaluated. The function of what has to be done involves identification of alternatives and selection of one of them. According to Henri Fayol, it is the plan of action to be followed, the stages to go through and methods to use. It is kinds of future picture wherein proximate events are outlined with some distinctness whist remote events appear progressively less distinct. The term planning has been defined by different management thinkers who laid emphasis on the various features of planning. According to George R. Terry, planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve the desired results. A plan is like a map, when you following a plan, you can always see how much you have progressed towards your project goal and how far you are from your destination. Knowing where you are is essential for making good decisions on where to go or what to do next. The most important is to ensure that everyone is clear of what to accomplish. Planning meaning is how setting goals and defining the actions necessary to achieve the goals, in light of the situation. That is situation must be analyses or understood and the appropriate goals and actions must be determined in order to take advantage of opportunities and how to solve problems. Basic management function involving formulation more than one detailed plans to achieve optimum balance of needs or demands with available resources. First, the planning process is identifies the goals or objectives to be achieved and formulates strategies to achieve them. The Managers throughout the organization must develop goals, strategy, and operational plans for their work groups that contribute to the success of the organizations as a whole. Planning is also crucial for meeting your needs during each action with your time, money, or other resources. With careful planning you often can see if at some point you are likely to face a problem. It is much easier to adjust your plan to avoid overcome crisis, rather than to deal with the crisis when it comes unexpected time. Example Adidas plans to expand their operations in Europe, so they need consultation to the Government of Germany. They have been granted landing rights in Paris and are awaiting further details from authorities. In addition, planning has a different meaning depending on the political or economic context in which it is used. Two attitudes to planning need to be held in tension on the one hand we need to be prepare for what may lie ahead, which may mean contingencies and flexible processes. There is one thing on which every manager can expect to be appraised, the extent to which he or she archives his or her units goals or objectives. Whether its a work team or a giant enterprise, the manager in charge is expected to move the unit ahead, and this means visualizing where the unit must go and helping het there. Organization exits to achieve some purpose, and if they fail to move forward and achieve their aims, to that extent they have failed. On the other hand, our future is shaped by consequences of our own planning and actions. Planning in organization and public policy is both the organizational process of creating and maintaining a program. In the psychological process of thinking about the activities required to set a desired target or goal on some scale. Business planning is like water to a thirsty plant. It keeps our business vital and thriving. Without business planning, business will never improve as it could may even lose or bankrupt. Many small business or stall owners dont have the business planning so they cant earn so much profit when their doing business. Their business unable further progress and stagnant it is, eventually as to close to close shop or behind other competitors. The rapid of change in todays business world and globalization is making it increasingly necessary that mangers keep their plans current. Strategic management is the application of the basic planning process at the highest levels of the organization. Through the strategic management process, top management determines the long-run direction and performance of the organization by ensuring careful formulation and strategies. For example, top management may ask middle and lower-level managers for inputs when formulation top-level plans. Once top-level plans have been finalized, different organizational units may be asked to formulate plans for their respective areas. A proper strategic management process helps ensure that plans throughout the different levels of the organization are coordinated and mutually supportive. The slogan of Adidas is Impossible is Nothing. The mission of Adidas is to be Best Sport Brand in the world. They had achieved the mission but in this strong competitive era, too many company like Nike and Reebok also want to be globally recognized brand, but they will work hard to achieve their goals. Adidas is passionate about all sports. So Adidas Company will try their best for planning new product or equipment for athletes. As part of their End-to-End Planning initiative they have been focusing on implementing an optimized demand planning process and system more than 20 countries in Europe. They standardized or partially automated certain planning functions to increase forecast accuracy. Following the first wave of implementations in 2008, they continued the roll-out to the remaining European countries throughout 2009. Hereafter, they expect to continue the roll-out to other key Adidas Group markets such as Japan. They set up a dedicated Profitability Management department to monitor macroeconomics trends, forecast the impact on product and supplier cost and devises their supply chain profitability strategy. In addition, their development teams also contribute significantly to this initiative by engineering their products with a stronger focus on price. Throughout 2009, they also engaged their supplier with the aim to increase transparency and predictability in costing. Such as, they closely tracked raw material costs and leveraged this information to consolidate volumes. This allowed them to negotiate more effectively and offset cost increase. In addition, their sourcing teams improved their products allocation process to better utilize suppliers capabilities and take into account of total supply chain cost. Moreover, by leveraging consolidated volumes, their Transport and Customs team success negotiated reduced transportation cost and optimized shipment routes with their service providers. In conclusion, planning is very important for the organization to achieve their goals and objectives. Especially, current globalization every organization is using latest technology to do the market analyses and compressive planning. In order for them to survive and growth, for example, in year 2008, financial crisis, many banks in US will decline bankrupt. This is because of their poor planning. 2.2 Organising According to Haimann, Organisation is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them. The study of Haimann mentioned definitions makes it clear that on the one hand organization is a process to define and classify the functions to be performed for the attainment of the objectives of the organization, and on the other hand, it is an art to establish sweet relationship among different persons. There are two concept are prevalent about organisation. In the other word, there are two meaning of organization: Organising as process: According to the first concept of organising, it has been considered as a process. In the other word, organising is not function that can be performed at a single stroke, but it is a chain of various functions. It includes getting information about objectives, deciding various activities and grouping them, determining important activities, allowing authority and responsibility, etc. Organising is related to human being and human conduct is deeply affected by the condition of work, their competency and capability, changes in the internal and external environment of the organisation. The process of organising has also to be changed according these changes. Hence, organising as a process can also be described as dynamic element. Organising s a structure of relationship: according to this concept, organising is treated as a structure of relationship. Under this various posts are created or established and the mutual relationship of employees working on various posts, their authorities and responsibilities are defined. Relationship lays down as to who is the superior and who is the subordinate. Various posts in different department of the organization are mostly permanent. Therefore, organisation as a structure of relationship is called static element. So far as the similarity between both the concepts is concerned, business organisation is looked upon as a group of different parts under both the concepts. These parts are both tangible (like human, material, machine and money) and intangible (like authority, responsibility, function and objective). Both the concepts lay stress upon the establishment of relationship between these two parts. On the contrary, there are certain different between both the concepts. According to the concept of organizing as a process organizing is that function which continues throughout the existence of the enterprise and changes go on taking place in it. Herein man is the central point. In the other words, many factors affect them and changes have to be introduced accordingly. On the other hand, according to the concept of organizing as a structure of relationship, posts are established in the organisation and authorities and responsibilities of each post are determined. Therefore, here under this concept more attention is paid to post which are stable than to men. In order to complete the organisation function of management, there are eight steps had to be taken. First step in the process is to know about the objectives of the enterprise. Although the determination of the objectives of an enterprise is done under the first function of management, i.e., planning but before commencing the process of organizing clear and detailed information about these objectives has to be obtained. On the basis of the information about objectives various function designed to achieve these objectives are determined. For example, it can be the objectives of the enterprise to produce sport shoes. In this respect information about how many types of sport shoes will be manufactured, whether the necessary parts required for manufacturing sport shoes will be manufactured or purchased, how extensive the sales area will be or will it be state, the whole country or international? After having learnt about the objectives of the enterprise, necessary functions to achieve t he objectives are determined. For example, a sport shoes manufacturing company can have different activities like purchase of raw material, purchase of manufactured parts production, advertisement, sales, arrangement of finance, research, accounts, correspondence, keeping stock of material, recruitment of employees, etc.. In order to achieve the objectives of the enterprise grouping of various activities is done. Under the grouping of activities all the similar type of activities are given to one particular department. For example, the activities like the purchase of raw material, purchase of ready-made parts, production, stocking the material, research, etc., are assigned to the production department. Similarly, advertisement and sales activities are given to the marketing department and department of finance take care of finance account and correspondence. Taking into consideration the importance and quantity of the work a department can be further divided into many branches or su b-departments. For example, under the department of production, purchase department, stock department, and research department, etc., can be established to get the benefit of specialization. It makes the optimum utilisation of human and material resources possible. The forth step is to key activities signifies the importance of this activities in the achievement of the objectives of the enterprise. Such an activities needs special attention. It depends on the objectives on the organisation to determine the key activity. Thus, in all the organisations key activity can be different. In the given example of a sport shoes producing company the main problem can be of advertisement because only an effective and large scale advertisement can attract the attention of the consumers toward a new product. Thus, in this case the function of advertisement is the key activity which requires the utmost attention. For this purpose the advertisement activities should be taken from the purview of the marketing department and be handed over to the newly created advertisement department so that the superior officers are in direct touch with this department and they are in a position to pay full attention to it. After dividing the various activities into different departments and sub-departments and having determined the activity that each individual is expected to perform, his responsibility is fixed. In other words, what they are to do for the attainment of the objectives of the organisation. For example, the purchase manager will be given the responsibility for the purchase of goods; the sales manager will be responsible for sales; the advertising manager will be responsible for advertisement and the finance manager will take care of the responsibility of finance. A person who is saddled with a responsibility must be given some authority too. Authority means the freedom of taking decision, guiding the subordinates and the freedom of supervising and controlling. Authority should be in proportion to the work or responsibility. If the responsibility is greater than the authority given and is insufficient to cope with the responsibility, the responsibility cannot be discharged successfully. F or example, if a marketing manager is assigned the responsibility of increasing sales but has not been given the authority to appoint sales representatives needed for the job, the increase in sales cannot be expected. So long as the authority to discharge the responsibility is not given, the person concerned has not accountability. It is only after granting authority to an individual that he can be made accountable. When two or more than two persons work for the attainment o common goals their inter-relationship must be defined very clearly. Everybody should know who is his superior and who is his subordinate? For example, the purchase manager will be the superior for all the employees of the purchase department. They will receive order from him and will also be responsible to him. On the other hand, the purchase manager will get orders from the General Manager and will be responsible to him. Defining clearly the inter-relationship helps in establishing coordination. Organising it i s not only such an activity which includes determination of activities; and the defining of the inter-relationship but it also ensure the optimum utilisation of human resources by providing physical resources and the right environment. For example, the factory and the office should be located at a proper place so that the employees can perform better. 2.3 Leading Leading is influencing people so that they will contribute to the organisation and group goals; it has to do predominantly with the personal aspect of managing. All managers would agree that their most important problems arise from people-their desires and attitudes, their behavior as individuals and in groups-and those effective managers also need to be effective leaders. Since leadership implies followership and people tend to follow those who offer a means of satisfying their own needs, wishes, and desires, it is understandable that leading involves motivation, leadership styles and approaches, and communication. The leading and motivation function is concerned with the human resources within an organisation. Specifically, leading is the process of influencing people to work toward a common goal. Motivation is the process of providing reasons for people to work in the best interest of an organisation. Together, leading and motivation are often referred to as directing. We have already noted the importance of an organisations human resources. Because of this importance, leading and motivation are critical activities. Obviously, different people do thing for different reasons, then they have different motivation. The managerial function of leading is management as the art of getting things done willingly, with and through other individuals. Management is concerned with two key aspects, i.e., material resources or things and human resources or individuals. Material resources are susceptible to scientific or mechanical treatment because they are subject to the laws of mechanics. However, human resources cannot be subject to such treatment. Through the power of leadership and the science of cooperation, managers may evolve n effective method of integrating the interest of individuals and the business organisation. Management can expert its power with or through individuals but never over them. In other words, authority may be imposed by managers from above. However, authority should be supported, nourished and recognized by the subordinates from below for it to be meaningful and for it to work smoothly. The source of the power of management is the medium of leading, motivating, teaching, influencing, counseling, coaxing, delegating, and setting an example. Therefore, a manager plans, organizes, leads and control the employees working with him or her. The master key which leads to successful management of any business enterprise is motivation. It is responsible for ensuring productivity of human resources. It can make an individual carry out a particular activity. Thus, it assumes great importance in modern business management. Employees can be motivated by financial and non-financial incentives. The power of motivation is enhanced by effective communication and participation. Proper informatio n feedback is essential for effective motivation and leading. Leaders are a special breed of individuals who can move people toward the attainment of established goals. Such power does not emanate through the use of force or fear. Only dictators apply force in order to lead people. True leaders inspire and motivate people to perform activities in line with the objectives of the organisation. According to the theory of Fiedler. Fred Fiedler assumes that it is not easy for managers to be flexible in their styles of management, especially if their management style has made them successful as managers. He argues that any attempt to change a managers style of leadership to conform to changing situation that help in determining effective leadership. These are leader-member relation. This is the most important influence on the effectiveness of the manager. A manager who is loved and respected by his subordinate can easily motivate them to accomplish the tasks. He does not have to use formal power on his subordinates. The task structure can clear-cut and step by step procedures or instructions on tasks provide the manager a greater authority. He can measure work performance. On the other hand, if instructions are not clear, subordinates may disagree or question such instructions. Besides that, the position power also important. The power of the person depends on his position. Fo r example, presidents of corporations, comptrollers, or budget officer have high-position power. According to Path-goal theory, this was formulated by Robert House and Martin Evans. This theory is based on the expectation of rewards. The source of reward is the leader. Thus, the manager should reward the good service or performance of his subordinate in order to influence them to work on established objectives. Rewards are in the form of promotion and pays, as well as support, encouragement, security, and respect. However, leadership styles also affected the motivation to the subordinate. A leader using the suitable leadership styles will lead the subordinate makes a best task performance. Leadership was viewed as a combination of personality traits, such as self-confidence, concern for people, intelligence, and dependability. Achieving, a consensus on which traits were most important was difficult, however, and attention turned to styles of leadership behavior. In the last few decades, several styles of leadership have been identified: authoritarian, laissez-faire, and democratic. The authoritarian leader holds all authority and responsibility, with communication usually moving from top to bottom. This leader assigns workers to specific tasks and expects orderly, precise results. At the other extreme is the laissez-faire leader, who gives authority to employees. With the laissez-faire style, subordinate are allowed to work as they choose with a minimum of interference. Communication flows hor izontally among group members. Leader as laissez-faire style gives employees as much freedom as possible to develop new products. The democratic leader holds final responsibility but also delegates authorities to others, who determine work assignments. In this leader styles, communication is active upward and downward. Employee commitment is high because of participation in the decision-making process. This style of leadership use to encourage employees to become more than just rank-and-file workers. The Adidas set up their way to leading the company, to make their brand more famous. They improve their quality of product to make their product become more good and durable. Adidas not only manage their way on production, they also have a good leading in the process of production. Adidas patient to leading and manage their employee from first step process of production to the end process of production, this cause their company can become so success and famous in today. If have a good leader, is the reason that will success in any condition .So that, if need a good team is cant without a good leader. Conclusion, leading is a process that cant less when doing anything. Leading is important to organizing a group of people to achieve a common goal. When have a good leader, the team have the high percentage to complete their work with nicely or perfectly. 2.4 Controlling Controlling is the process of evaluating and regulation ongoing activities to ensure that goal are achieved. To see how controlling works, consider a rocker launched by NASA to place a satellite in orbit. Do NASA personnel simply fire the rocket and then check back in a few days to find out whether the satellite is in place? Of course not. The rocket is monitored constantly and its course is regulated and adjusted as needed to get the satellite to its destination. Controlling is the management function in which performance is measured and corrective action is taken to ensure the accomplishment of organizational goals. It is the policing operation in management, although the manager seeks to create a positive climate so that the process of control is accepted as part of routine activity. Controlling is also a forward- looking process in that the manager seeks to anticipate and prevent it. The manager initiates the control function during the planning phase, when possible deviation is anticipated and policies are developed to help ensure uniformity of practice. During the organizing phase, a manager may consciously introduce the deadly parallel arrangement as a control factor. Close supervision and a tight leadership style reflect an aspect of control. Through reward and positive sanctions, the manager seeks to motivate workers to conform, thus limiting the amount of control that must be imposed. Finally, the manager develops specific control tools, such as inspection, visible control charts, work counts, special reports, and audits. The basic control process involves three phases that are cyclic: establishing standards, measuring performance, and correcting deviation. In the first step, the specific units of measure that delineate acceptable work are determined. Basic standards may be started as staff hours allowed per activity, speed and time limits, quantity that must be produced, and number of errors or rejects permitted. The second step in the control process, measuring performance, involves comparing the work (i.e. the goods produced or the service provided) against the standard. Employee evaluation is one aspect of this measurement. In manufacturing, inspection of goods is a routine part of this process; studies of client satisfaction are key elements when services are involved. Finally, if necessary, remedial action is taken, including retraining employees, repairing equipment, or changing the quality of the raw materials used in a manufacturing process. Several features are necessary to ensure the adequacy of control process and tools: Timeliness: The control device should reflect deviation from the standard promptly, at an early stage, so there is only a small time lag between detection and the beginning of corrective action. Economy: If possible, control devices should involved routine, normal processes rather than special inspection routines at additional expense. The control device must be worth their cost. Comprehensiveness: The controls should be directed at the basic phases of the work rather than later levels or steps in the process; for example, a detective part is best inspected and eliminated before it has been assembled with other parts. Specificity and appropriateness: The control process should reflect the nature of the activity. Proper laboratory inspection methods, for example, differ from the financial audit and machine inspection processes. Objectivity: The process should be grounded in fact, and standards should be known and verifiable. Responsibility: Control should reflect the authority- responsibility pattern. As far as possible, the worker and the immediate supervisor should be involved in the monitoring and correction process. Understandability: Control devices, charts, graphs, and reports that are complicated or cumbersome will not be used readily. Controlling activities require the manager to maintain a mindset that continually looks for ways to improve individual, team, and organizational performance. Performance standards describe a model of excellence for work activities and serve as the basis of comparison between actual and desired work performance. Other important controlling functions are continual employee feedback and employee performance appraisal activities. Employee performance appraisals must be ongoing objective and based on established performance standards. A manager should never wait until the annual performance review to discuss problem or deficiencies with a staff member. Consistent, day-to-day feedback and coaching about job performance clarifies expectations, improves the quality of work, and allows the manager to correct problems before they become serious. Coordination of elements of a system is one aspect of managerial control to reach effective outcomes. Other managerial control elements are financial management, compliance, quality and risk management, feedback mechanisms, performance management, policies and procedures and research and trend analysis. These elements are used by managers to communicate to reach a goal, track activities toward the goal, guide behaviors, and coordinate efforts and decide what to do. Managerial coordination and control are important to the success of any organization (McNamare, 1999a, 1999d). Ongoing, careful review using standardized documents, informatics systems, and standardized measured avoids drift and the waste of time and resources that occur when direction is vague. Well-exercised, managerial control is flexible enough to allow innovation yet present enough to effectively structure groups and organization toward goa