RADHU RADHAKRISHNAN NAIR
S3734029
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1.1 Introduction
The responsibilities and roles taken by the Human Resource department for the betterment of
strategic management of Adidas is focused in this report. strategy formulation process and
strategy implementation process are the key factors associated with the strategic management,
which is analysed and explained in the following section of the report. This report also deals
with role and importance of the Human Resource Manager within the organisation to establish
a competitive organisation for the 21st century.
1.1.1 Strategic Management
Organisations formulate strategic planning to sustain their position in the global market.
Strategic management is considered as a set of managerial actions and decisions to enable
competitive advantage and better performance over other companies (Powell, 2001). There are
certain crucial steps involved in this process. Information gathering by scanning environment
and choosing appropriate data, interpreting the data, framing strategic model, testing and action
implementation (Cray & Mallory, 1998). There are tremendous changes occurred in the
strategic management field, the knowledge-based economy transformed to industrial based
economy by emphasizing manufacturing of quality product as a requirement for economic
system (Bettis & Hitt, 1995; OECD, 1996). The two phases of strategic management process
include strategy formulation and its implementation.
To achieve the objectives and goals of an organisation, the strategic planning process integrates
the personal practices into strategic planning process of Strategic Human Resource
Management (SHRM). It is a linking of human resources with the organisations mission and
goals to enhance the performance of business and grow culture of organisation by foster
flexibility, competitive advantage and innovation (Truss & Gratton (2006)
1.2 Strategic Formulation
It is process of defining proper action to achieve objectives of organisation and achieving the
organisational goal and it acts as a tool for analysing future plans. Vision, future trends,
purpose are connected with strategy (Harrison and Frank, 1999).
Formulating and executing strategy are core management functions. Vision, Mission, Goals,
Internal and external forces are the five factors, which affects the growth of company
(Lunevich, 2019).
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Vision (Imagination, factor of inspiration, success factor)
Mission (How it is going to achieve)
Goals (what hopes to achieve in future)
External analysis (Investigating the organisation’s operating environment to find the
strategic opportunities and threats. E.g. Technological advancements).
Internal Analysis (To identify the organisations strengths and weakness. The
availability of resources -financial, technological, human and capital). Strategic choice
(How to achieve mission and long-term goals).
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Adidas Vision
Adidas vision statement is “to be the design leaders with a focus on getting the best out of
the athletes with performance guaranteed products in the sports market globally.” The
vision statement can be drawn from the operations and the priorities of the company and it
highlights on the creativity that symbolizes Adidas, making it a topmost brand (Alsbiei, 2015).
Adidas Mission
Adidas mission statement is “The Adidas Group strives to be the global leader in the
sporting goods industry with brands built on a passion for sports and a sporting lifestyle.
We are committed to continuously strengthening our brands and products to improve
our competitive position.” This statement proves the endless capacity to provide the quality
products for athletes to improve their performance. Improvement in sports, customer
expectation and innovative ideas are the three components of its mission statement (Mission
statements, 2019).
Adidas Objective
The main objective of Adidas for next 5 years is to focus on ‘Creating the New’ as per the
strategic business plan. Sporting goods industry is a fastest growing sector, ‘Creating the New’
is targeting at the desirability in branding. The expected net income of Adidas is about 15% on
average by the year 2020. The strategic choices are:
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Speed
Cities
Open source
Adidas plans on fast internal decision making and to satisfy consumer needs. During the
implementation of Neo, Adidas reduced the production lead times. By 2020, the Adidas
company will expand its e-commerce to more than 2 billion by increasing its sales to above
60% through space activities in controlled manner. They are more concerned about customer
satisfaction and to improve this, more customization options will be made available to their
customers. To focus on their customers, market and trend, Adidas focused on 6 cities. Adidas
become the first sports brand creating open source that invites partners, consumers, athletes as
part of Adidas brand. The collaboration-based model aims to build brand advocacy to
customers and provides external access to resources and tools. The next focus of Adidas about
their core brand portfolio, which is Reebok, Adidas and TaylorMade. The three main strategic
initiatives of open source are creative collaborations, Athlete collaborations, partner
collaboration (Adidas, 2018)
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Fig 1: Adidas Strategy- Creating the New
Internal Analysis of Adidas
Table 1: SWOT Analysis (Bhasin, 2019)
The internal analysis of the organisation is analysed by the help of strategic planning tool called
SWOT Analysis, formulated by Albert Humphrey. The analysis includes Strengths of the
organisation, Weakness of the organisation, Opportunities of the organisation and Threats of
the organisation. This analysis helps to identify the attainable goals and formulate new
strategies to accomplish the goal.
External Analysis of Adidas
The international brand Adidas operates in international environment takes various factors The
PESTEL Analysis helps to recognize the significant forces that impact the business.
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1.3 Strategy Implementation Process
The strategy development is effective if it is implemented successfully. The organisation must
understand the marketplace and identify the competition. However, without strategy
implementation, organisation will be of less value. The method for implementing strategy is
called Tactics (Atkinson, 2006). Strategy implementation makes the strategy into action and it
is considered as sum of all choices and activities needed to implement the strategic plan.
(Wheelen, 2012).
There are five variables in strategy implementation (Lunevich, 2019)
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Structure of organisation
Design of job and Tasks based on strategy
Information systems and its types
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Employee skill development programmes, trainings and selection skilled
people.
Reward and Incentives systems
1.3.1 Role of Strategic Human Resource Management (SHRM)
The strategy of HR varies from conventional HR management in 2 significant ways. First,
Strategic HRM emphases on performance of organisation than performance of individual.
Second, it emphasizes on role of HR management system as solutions to problems in business
rather than individual HR management practices in isolation (Becker & Huselid, 2006). SHRM
has 2 types of resources. The first is a human capital of organisation-skills, knowledge and
employee’s ability. The second organisation resource is to support human capital. The costeffective bundle helps employees to perform best with its resource (Walsh et al, 2010). The
model for strategic HRM:
Fig 2: Strategic HRM model (Armstrong, 2014)
Fig 2: HRM model
The strategic level roles of HR professionals:
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Integrated HR strategy development and providing volunteering guidance related to
ethical principles and core values, which improves capability of organisation
(Armstrong, 2014)
The role of HR in dealing with issues of people can be innovative or strategic and they
can be considered as change agents, facilitators. (Tyson & Fell 1986:65)
For the improvement of business system, HR professionals should analyse how the
business can accomplish vital objectives by utilizing its Human Resource by the
talented people with specific commitment (Armstrong, 2014).
The formulated strategies are implemented with the cooperation of other management
colleagues and analyses the new HR strategies based on the goals and need of the
organisation, which deals with the objectives of the business. (Boxall, 2007)
The implementation strategy becomes effective and efficient by grouping and designing
the tasks into jobs (Schneider, 1987).
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HR managers must undergo talent acquisition to attract and retain best people, which
experience a healthy competition over others. (Nasir, 2017).
HR managers should be able to meet challenges of global environment by formulating
strategies for creativity and flexibility, which helps to competes in international markets
and they should anticipate the sudden changes which influences the ongoing business
(Nasir, 2017).
HR managers needs to make framework for competency that defines expertise and
skills required for a specific task effectively. This framework revitalises the employees
leads to excellence.
In order to assess the employees’ satisfaction, HR managers conduct analysis about the
organisation work scheduling using business analytics. HR managers can act as resource for
the implementation of specific strategies and what are qualities and skills required by the
employees for the completion of the specific task. Various skill development programmes,
trainings help the employees to fulfil the need of the organisation (Wheelen, 2012).
1.3.2 Human Resource Management Policy and Procedure
The human resource management policies & procedures are the guidelines for employees. It
deals with the methodologies and behaviours statements for employees to understand how to
interact. The policies help to improve the people’s connection among each other, and it is a
written statement. Policies are guidelines than a rule and it provides more scope in decision
making and build sufficient action flexibility. Procedure is more specific than a policy, it is
about how to implement a policy, what are the activities and tasks to be performed, how the
tasks and activities are performed and who is responsible to perform the tasks.
Human Resource Management Procedures and Polices of Adidas
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Strategic Decision Making- Adidas HR team works on strategic management phase to
keep Adidas to the first position from competitors. It works on four areas such as
leadership, diversity, culture and talent.
Policies in workplace- Adidas policy identifies potential problems, helps to address
issues to the business partners. Wages, benefits, working hours, over time working
hours are detailed in employee’s handbook. The discrimination on gender, cast, race is
described as zero tolerance.
Compliance- Adidas has their own standards and policies for efficient corporate
management to manage the challenges and risks responsibly.
Compensation- This report is a element of the combined report of management and the
compensation system
Staff Recruitment of Adidas
The resourcing strategy of organisation has recruitment and selection process, secures and
identifies the talented people for the organisation. The recruitment process creates a list of
qualified people which helps to select the best from the list. The organisation chooses the right
person to take up various positions. (Gamage, 2014). The workforce quality deliver quality
services through the process of staff recruitment. There are legal requirements related with the
employment, recommended codes of policies required to ensure the work right and fair
working environment for employees (Obikeze, 2004).
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Adidas is a rapidly growing organisation and the implementation of ActiveRecruiter improves
the effectiveness of the recruitment process, which attracts the talented people to enhance the
employer brand. Adidas adapts a difficult hiring process, where they recruit people with higher
grades, skills with smartness and dedication to the sports industry. The company adopts
changing technologies to sustain in global market. Adidas focuses on employee friendly
environment to attract candidates by frequently analysing on the local labour areas where the
company operates. Adidas provides better pay and benefits to encourage employees towards
works and company can provide flexible working hours for instance UK, where more men are
employed. Company can consider women to take up job roles. (Essay, 2017). Adidas receives
more than 1000 resumes every month for 100 vacancies or in new job positions. Adidas utilizes
the online recruitment strategy, ActiveRecruiter for improving the standard of HR process. This
process offers simple, flexible, quality HR process with less duplication. The adidas website
provide career section to register, thus they will be updated about new available positions and
gets notifications regarding the recruitment process. The registered candidates are kept in a
loop based on their application provided. HR manager coordinates the recruitment and
selection process. (Adidas, 2018)
Training of Employees
The staff training is a difficult task for Adidas, as the company operates in different countries.
The company found more sophisticated way to bringing up the global team members together.
Lean training is the term referred by Adidas, all the team members and team leads works
unitedly towards in the production of new model. Adidas recruits the best innovative brains
and employees with efficient skills from its recruitment, selection process across the globe.
They provide equality and unbiased attitude towards colour, race, caste and creed. To stay in
top position in sports industry, adidas takes over the competitors by grabbing efficient
employees from the recruitment and selection process.
Training is a better platform to develop the necessary ability, skills, motivation and self
confidence to the employees. It makes employees to think out of box and prepare for the
unexpected scenarios. The newly selected candidates require training period for understanding
the company’s strategic goals and to upskill their talent and commitment towards the work.
The technologies are changing rapidly, thus the current employees should be keep updated for
continuous improvement and talent acquisition. Training is an inevitable process in human
resource management.
Advantages of Training:
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Training provides better job performance and other constructive changes (e.g., skill
acquisition) (Aguinis, 2009)
Improves procedural knowledge as well as strategic knowledge. (Kozlowski et al, 2001)
Improves the creativity and better decision-making skills by eliminating anxiety and
frustration.
Managing employee performance
Performance management is a future oriented, continuous and participative system as ongoing
monitoring, criteria setting, formal assessment from multiple sources, sourcing for
developmental activities, informal feedback from peers and supervisors (Aguinis & Pierce,
2008).
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Fig 3: Performance management cycle (Shields, 2015).
The figure shows the cycle, the process includes the participants involved in the organisation
i.e., stakeholders such as HR managers, supervisors, workers and other employees should
accepts accountability for their contribution (Shields, 2015). The performance management
consists of different phases of business plan generation, objective settings, performance review.
After the completion of review process, rewards are provided by the HR. For the better tracking
of employees’ performance, HR team arranges monthly or weekly meetings. The HRM should
value each employee’s performance and implement performance appraisal and reward system
to motivate the employees. The happier worker can provide fruitful outcome for the
organisation with less absenteeism as each and every activity they perform is countable towards
rewards and appraisal.
The performance Evaluation and Planning (PEP) is the system of performance management of
Adidas. The company focuses on job tasks and business targets for analysing the performance
of employee. Employees gets their performance feedback once in a year. Talent management
is the other criteria for identifying right employee for next level position. The performance
driven remuneration system of Adidas motivates employees who achieved their allocated tasks.
(Adidas Group, 2012)
Remuneration Management
Remuneration management is the one of the duty of Human Resource Manager, to access
performance and provide payment/ Remunerations based on that. The extra services provided
by the employees’ benefits compensation. During this scenario, HR manager focus on the
human element not about the capital investment. This builds more dedication and job
satisfaction in employees.
Relation between Employer and Employee
It is the duty of HRM to endorse healthy relationship between Employer and Employee. Social
rights, Salaries, training, security are the key elements in human resource strategy. Adidas
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focus on better interactive relationship with their employees to share their innovative ideas,
feedbacks etc.
1.4 Future Challenges of Human Resource Manager to create the competitive
organisation of 21st Century
The crucial activity of HR managers is HR planning. The management of workforce needs
skilled and trained experts and it is a tedious task. Recruitment is not only the task of HR
managers but also, they are responsible for motivation of employees, training, retention and
development in long term (Walker, 1994). This has to be done through soft and hard approach.
The challenges faced by the HRM is to train employees based on global marketplace and ecofriendly factors (Andersen, 2007). After globalization, HR management has new dimension in
21st century requires specialized skills, because the economic crises affected people and their
jobs, thus organisation experiences more pressure to reconstruct the strategies and procedures.
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Recruitment and selection
It is important to select the talented people for managers in 21st century to widen their
assessment of people based on their culture, origin, values, background, ethnicity. The
recruitment process of Adidas is implemented by ActiveRecruiter process, attracts the talented
candidates. The recruitment and selection process of adidas is tough, skilled professionals with
dedication towards sports industry is the prime factor for selection.
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Relationship with employees
The relationship between employees and customers improves customer satisfaction and
enhance direct interaction. Thus, human resource management must work along with
employees and employee satisfaction. To maintain the relationship with employees, HRM must
consider certain factors such as soft model of HRM (appropriate practices), organizational
fairness, additive approach (Yes/No approach), freedom of work and life balance etc.
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Customers Relationship
Customer gratification is the crucial factor for any organisation in 21st century. HRM must
maintain a healthy relationship with their customers by the strategy of Customer Relationship
Management. Adidas focuses on customer satisfaction by providing customization in their
products and promotes health and fitness by advertisements, makes customers positive about
the products. It improves the marketing of their products.
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Career development & growth
The career growth activity of employee refers to steps taken by the managers and workforces
to upgrade their technical knowledge and skills and make them educate about recent tends and
developments. Training and skill development programs focus on overall development of
employees. Adidas focus on training programs to improve their employee skills.
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Promoting organization culture, heterogeneous workforce, Multigenerational
workforce
Diversity in organisation workforce enrich positive ideas and creativity. The different cultural
ideas in workplace guide to new creations with challenging tasks. The tedious task is for HR
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managers to put everything in a systematic way for developing a successful organization
culture. Adidas promotes heterogeneous workforce, irrespective of caste, race, nation, creed
etc. thus, it imparts healthy interaction between employees.
Employees in organization belongs to different generations with various age group. The
classification of generation is Boomers II/ Generation Jones, Baby Boomers I, Generation X &
Y. Employee born in generation X & Y have better knowledge in technology and they are fond
of using technology related tasks and more adaptive to innovative ideas and new philosophies.
Baby boomers I &II wish to stay back in their comfort way of traditional practices. So, it is the
responsibility of HR to train both categories and to respond to their needs with equal
importance for the success of company. Adidas manages this change in age group effectively
and treat them in an efficient way to maintain the quality of organisation and their products
(Nasir, 2017).
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Managing 5 R’s
For the success of any organisation, 5 R’s are becoming crucial with the varying role of HR
managers. It is the responsibility of HR managers to consider 5 R’s such as Recruitment of
skilled people, Resourcing, Retention of talent, Restructuring and Retraining.
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Corporate Social Responsibility (CSR)
The core of CSR consists three factors such as social, financial and environmental. CSR
considered with social relevance for effective marketing policy on sustainability (Bosch-Badia,
2017). Adidas focus on sustainability, manufactured 5 million shoe pairs with plastic waste
after recycling process in 2018. Adidas aims to increase the production by double this year. To
attain this goal the company has collaborated with global network parley for the oceans. Thus,
plastic wastes in beaches is collected before it reaches in ocean. The yarn from those plastic
becomes the main component of adidas footwear. Other materials such as apparel also
produced from the recycled materials, such as outfit for Alexander Zverev for Australian open
and FC Bayern Munich champions League Jerseys. Gil Steyaert, Adidas executive Board
Member stated that “Sustainability at adidas goes far beyond recycled plastic.” The other
concerns of adidas is for the CO2 emission reduction and prevention of waste (Barney, 2019).
Fashion Industry’s climate protection is signed by Adidas recently at the climate change
conference of UN in Poland. By 2030, company will decrease GHS emission by 30%.
Conclusion
The human resource in 21st century must consider many challenges like conflict management,
management change, handling workforce from multi-generation, 5R’s management, diversity
of workforce, succession planning, work life balance, globalization etc. Adding value to the
products and survival from uncertain and complex scenarios are the responsibility of HR,
which increases the quality and effectiveness of organization.
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