Application of CSR in China by Sports Companies like Nike and Adidas - Essay Example

Application of CSR in China by Sports Companies like Nike and Adidas Introduction Corporate Social Responsibility (CSR) refers to a phenomenon whereby large corporate or business organizations consider the interests of the society and all the stakeholders in general by being accountable over their actions as well as the impacts of their deeds on the stakeholders, workforce, and the consumers. It is regularly seen to extend past the legislative obligations of the company (Segerlund 178). In most cases, business organizations engage into CSR on voluntary basis since they feel obliged in ensuring that interests of the employees, the entire society as well as the environment is well taken care-of. Corporate Social Responsibility has recently become a foremost element of strategic policy of most organizations among them being Nike, Adidas among other major giant companies in the globe (Segerlund 35). This paper is going to discuss the approaches being applied by sport enterprises based in China such as Nike, Adidas among many others in incorporating CSR into their operations in the country. Nike and Adidas are among the global leading manufacturers of shoes (McIntyre and Vanli 29). Nike produces shoes in its various outlets either on regular or on contract basis in places like Vietnam and China among other Asian countries, despite the fact that it does not own the various manufacturing spaces particularly in Asia.The company maintains both the traditional and non-traditional distribution channels up to date. Currently, the company is one of the leading global companies in the fitness and sports industry (Hancock 56). Adidas on the other hand is another leading producer of sportswear products with its brand being known all over. It produces classic products that are appealing and presentable a factor that makes it have a competitive edge in the market (Hancock 40). Corporate social responsibility is one of the aspects that are gaining popularity at a very high rate in China among other Asian countries. Economics are attributing this element to the fact that China has become a leading destination of foreign direct investment because of favorable business environment (Schwalbach 36). As a result, many companies have ended up shifting their operations to china in order to lower their production cost, a factor that has led to influx of business organization thus creating an intense competitive environment in many industries among them being the sports and fitness industry. Nike and Adidas are some of the companies that have adopted the strategy of CSR in order to try and outdo their close rivals, increase its market share and most importantly create a good public image particularly Nike whose image had been ruined because of exploiting workers and harming the environment (Schwalbach 45). In order for Nike to maintain its market share and maybe expand its dominance, the company has adopted the following approaches in incorporating CSR in China. Establishment of grant programs is one of the methods that the company has been using since 2009 (Hawkins 83). Under this program, Nike funds athletics among other sportspersons. At times, the company funds community projects among meeting other society needs that the company’s corporate social responsibility team finds most pressings and require funding and end up making the lives of the society members better. According to Nike’s executive (Andrew Ogilvie) who is in charge of overseeing the corporate social responsibility, Nike’s grant program entails $311 million in expenditure over a period of five years whose first phase ended 2011, marking the beginning of the second phase that will end on 2016. Mr. Andrew explains that a section of the program uses the internet in sponsoring global competitions as one of the ways of finding out how sports can promote human lives. He further explains that communities forward the projects that they would like the company to sponsor to the company’s CSR panel. Then the panel analysis the available projects and pick the ones that are most pressing and are likely to improve people’s lives (Hawkins 83). According to CSR overseer, this strategy has been very effective in strengthening the company’s brand and shareholders highly embrace the move since it is one of the methods that are making the company grow. Some of the CSR activities in China include the famous “Let Me Play” Project that focuses on tapping the potential in young children and promote them through sports. This strategy is a clear indication of the company’s concern over the society and the general society. In a period of two years, Nike had spent over than US$100,000,000 in the “Community Sports Plan”. Other CSR strategies being applied by Nike include the improvement of the supply chain and production methods (Zhao 53). Though the company does much of its production through subcontracts, the company has insisted on the use of environmentally friendly production procedures. This is aimed at reducing emission of harmful substances to the environment particularly the greenhouse gases like carbon. Moreover, the company has been regularly holding Stakeholders Forum which involves representation from all spheres ranging from employees to the environmentalists. The elements discussed in those forums one being the welfare of the workers as well as proper stewardship towards the environment being fully implemented (Zhao 89). The company’s has over time improved working conditions of its workers, increased their remunerations and committed itself towards taking good care of the environment with application of sustainable methods of production being a major approach on this issue (Ehnert, Wes and Klaus 63). Other CSR methods that the company has applied include sponsoring the ‘workers after-hours education program’ mainly to promote equivalence in high schools not only in China but also in other Asian countries (McIntyre and Vanli 78). Development of workers grievances reporting system is another CSR that cannot be overlooked. This has been achieved by partnering with the local NGOs with one of such a program being the one that was started in 2003 in collaboration with Ziao Chen Worker Hotline. The company has been negotiating with institutions that own open-air basketball in order to be allowing people to access them even in weekends so that they can play particularly in Shaghai. Nike Foundation is another key element that cannot be neglected while discussing the company’s CSR IN China (Frisch 32). The foundation was established primarily to give the world’s most needy girls opportunities to attain their dreams. In China, the foundation has partnered with organizations like PATH and the All China Womens Federation in developing pilot projects to reduce the drop-out rate amongst countryside Chinese girls, while still promoting edification within society in general (Frisch 36). The list of Nike’s CSR in China can only be termed as endless. Adidas on the other hand among other sports enterprises have followed suit towards being responsible to the community that has build their brand (Verbeke 95). The company’s achievements towards remaining being socially responsible to the stakeholders have been incredible. In fact, Adidas Group China early last month (February 17th 2014) was named as the best corporate that has been socially responsible for the second consecutive time. The company has remained committed towards doing business in an ethical way that has balanced the business needs with those of the environment and the society in general (Lussier 30). Its efforts have been focused on enduring child development, relief efforts in meeting society’s needs especially after the Wenchuan and YaAn earthquakes as well as Adidas employees’ voluntary activities in making the society better. "Adidas Right to Play Child Development Program” can be termed as the company’s flagship program, a program that targets at developing the rural children of Shaanxi. Up to date, Adidas has helped over 7,000 children who participate in play-based development actions on top of creating numerous jobs to members of the society through these programs (Lussier 41). In conclusion, CSR is one of the brand building strategies that have gained incredible popularity in the past few years in many parts of the world particularly in China. This strategy has proven to be a prudent idea in most industries with companies that are applying it highly outdoing their rivals. A good example of such an industry is the sports and fitness industry with Nike and Adidas among other giant corporate applying using various approaches like setting up a foundation, using sustainable methods of production, supporting community’s projects, giving out relief to the needy people in case of a disaster among other approaches that business organizations are finding effective. Works Cited Ehnert, Ina, Wes Harry, and Klaus J. Zink. “Sustainability and Human Resource Management: Developing Sustainable Business Organizations.” Berlin: Springer, 2014. Internet resource. Frisch, Aaron. “The Story of Nike”. Mankato, Minn: Creative Education, 2013. Print. Hancock, John. “Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the Uks Leading Companies.” London [u.a.: Kogan Page, 2005. Print. Hawkins, David E. “Corporate Social Responsibility: Balancing Tomorrows Sustainability and Todays Profitability.” New York: Palgrave Macmillan, 2006. Internet resource. Lussier, Robert N, and David C. Kimball. “ Applied Sport Management Skills.” 2014. Print. McIntyre, & Vanli, Ivanaj. (2009). “Multinational enterprises and the challenge of sustainable development.” Cheltenham, UK: Edward Elgar. Schwalbach, Joachim. “Corporate Social Responsibility and Stakeholder Dynamics: [... Papers Presented at the 3rd International Conference on Corporate Social Responsibility at Humboldt-Universität Zu Berlin, October 8 - 10, 2008].” Wiesbaden: Gabler, 2010. Print. Segerlund, Lisbeth. “Making Corporate Social Responsibility a Global Concern: Norm Construction in a Globalizing World.” Farnham, Surrey, England: Ashgate, 2010. Internet resource. Verbeke, Alain. “International Business Strategy: Rethinking the Foundations of Global Corporate Success.” Berlin: Springer, 2014. Internet resource. Zhao, Jackson. “Corporate Social Responsibility in Contemporary China.” Cheltenham: Edward Elgar Publishing, 2014. Internet resource. Read More