PGDM I SEMESTER

Session 2022-23

PGDM101 – Management Principles and Organizational Behaviour

Case Study 1

Date of Assignment: 12/8/2022 Date of Submission: 20/8/2022

Submitted to: Submitted by:

Dr Veenu Arora Nkhil Chaudhary
ABS/PGDM/2022/153
 Case Study 1
Mid Tem

Q1. Describe Adidas organisation culture in brief with example.

A1. Organizational culture of Adidas

The vision statement of Adidas is brief and to the point. This means
that the company has not used long dialects and dialogues to delivers
its opinion ad stance to the public and relevant stakeholders. The
vision statement should be brief and comprehensive – it should
communicate the essence of the business, and its future plans to help
the stakeholders understand its business philosophy and business
strategy.

Three levels of organizational culture

If organizational culture is presented in the form of circle, it will have

three layers. The outermost will be artifacts, middle will be the values
and beliefs and inner most will be the underlying assumptions. Coca-
Cola’s organizational culture is its strongest asset, and can be analyzed
on three levels:

3.1 Artefacts of Adidas’s organizational culture

The artifacts from the outermost layer of the organizational culture
circle. The artifacts are the tangible and visible aspects of the Adidas’s
organizational culture. Some examples of the artifacts are- open door
policy, office layout and official dress code for the employees. The
cultural artifacts of the Adidas are easily observable by the outside
world, however they are hard to interpret.

3.2 Values within the Adidas’s organizational culture

The core values are not easily observable. The Adidas’s core values are
the shared goals, principles and standards. These core values are
accountability, diversity, quality, collaboration, passion, integrity and
leadership. The Adidas management understands the importance of
communicating the core values so that each employee could accept
and modify the behavior accordingly.

3.3 Assumptions within the Adidas’s organizational culture

Assumptions are deeply embedded ideologies and philosophies and
provide the foundation to the Adidas’s organizational culture.
Employees generally remain unaware of these underlying
assumptions, yet they play an important role in formulation of core
values and visible behaviors.

Organizational culture in light of Hofstede model

The organizational culture model proposed by the Hofsetede holds the

seminal importance as it has been frequently applied by analysts to
analyze the organizational culture of any company. Adidas’s
organizational culture can also be analyzed in light of Hofseted’s
cultural model. The model has six dimensions, as listed below:

➢ Means oriented versus goals oriented

➢ Internally driven versus externally driven
➢ Easy going work discipline versus the strict work discipline
➢ Local versus Professional organizational culture
➢ Open system versus the closed system
➢ Employee orientation versus work orientation

The analysis of the Adidas’s organizational culture shows that the

successful business organizations do not adopt an extreme cultural
orientation, but try to find the right equilibrium to develop the
effective culture. Adidas has successfully created a strong
organizational culture that is deeply embedded and widely
accepted by its highly diversified workforce.

When an organization successfully creates the alignment between

its structure, culture and business strategies, and understands the
 complex association between underlying assumptions, core values
and observable behaviors, it can then use the organizational culture
as a tool to gain strategic benefits. Organizations with strong work
culture secure their position in the hypercompetitive market, and
Adidas is an example of it

Q2. Suggest as a management consultant as to what future strategies

Adidas should opt to overcome Post Pandemic crisis.

A2. As a management consultant, I would guide Adidas to opt for the

following strategies:
➢ Adapting technologies like AR size measurement etc.
➢ Entering virtual world in the form of METAVERSE and opening
virtual store which allow customer to have the experience of our
product while being at home.
➢ It should not focus on one section of society.
➢ Should introduce budget product kind of section.
➢ Focusing more on digital mediums of sale and marketing.
The future will be defined by the success of DTC
ecommerce
Perhaps most prominent to the individual buyer, direct-to-
consumer (DTC) channels are unquestionably becoming the
new normal.

More and more of the sportswear market is “cutting out the

middleman,” so to speak, relying on their ecommerce
capabilities instead of physical stores and third-party vendors.
In fact Adidas saw DTC account for a greater share of their
2021 sales than in 2019. (Adidas, at the front of the pack, now
attributes over 40 percent of sales to DTC; that number is
expected to surpass 50 percent by 2025).

Apart from the convenience of shortening the supply chain,

DTC channels benefit these retailers by embracing new -age
technological capabilities. Specifically, access to user data —
both on individuals and demographic groups — enables
smarter recommendations and product assortments. In other
words, DTC opens the door to a newfound level of
personalization. What this means, from a big picture lens, is a
vastly improved user experience from a number of angles. One
of these angles is customer relationship building — DTC
ecommerce literally gives you direct access to communicate
with consumers (and, in turn, fulfill their desires/assuage their
pain points). Another angle: Strategically targeted product
deals, rewards and promotions, and loyalty programs.

Now when we pair this tech-minded DTC movement with the

current commitment to sustainable production, we get
something that every company craves: A brand image that
breeds customer loyalty.

The cutting-edge user experience that DTC channels enable is

essentially a long-term marketing technique. Greater
experience cultivates brand loyalty which, in turn, spawns a
greater ROI per customer in the long term.

As mentioned above, Adidas has put an industry-leading

premium on ecommerce sales. But they’ve also done the extra
leg by investing more in digital marketing. One striking
development is their newfound interest in hosting ads on Snap
chat. Over the past few years, Adidas has committed more and
more ad spending to this social media channel — thanks to
an ROI boost of over 50 percent in European markets. Whether
or not snap chat marketing continues to be so effective long -
term may be uncertain, but it’s safe to expect sportswear
giants to keep expanding their creative digital advertising.

Otherwise, Adidas’ 2020 financial review cites pricing

flexibility as a major factor in weathering the Covid -induced
storm. In their own words, they “exploit growth
opportunities… according to market realities.” Thus: By
committing to dynamic pricing and extensive market analysis,
Adidas puts itself in a position to optimize its profitability with
respect to its competitors.