Adidas: Application of standards of Engagement to Child Labor Dilemma

The following case deals about the concern of child Labor in international business. The Adidas Company founded in 1940 produces shoes, clothing, and sport equipment. Adidas does not manufacture any of these product but deals with a lot of foreign suppliers all over the world. This case raises several questions but the main topic here is the ethical issue in international business regarding the companies’ behavior concerning labor standard while chasing overseas cheap labor. Adidas faced a challenging dilemma when it performed a first time audit of a footwear supplier in Vietnam. Indeed they found out that 2000 workers were under aged according to adidas’s SoE (standard of Engagement).

We can draw three ethical concepts in connection with our case: - Universal Moral Norms Application to International Business - Human Rights Obligations of Multinational Corporation - Sweatshops and Respect for Persons: Labor standards

In today business world, the question of morally right or wrong is very difficult to answer as most of the company goes global. Indeed what’s considered right or acceptable in one country is considered wrong or unacceptable in another.
So is it possible to have any universal moral norms applicable in international business? 1 According to Norman Bowie, when the norms of the home country and the host country are in conflict, a multinational corporation has four options: - Follow the norms of the home country - Follow the norms of the host country - Follow which ever norms is more profitable - Follow whichever norms is morally best Adidas to protect itself from activist and wrong accusations has published in 1998 its Standards of Engagement (SoE) with the aim of ensuring that all of its suppliers’ factories are safe, fair places to work according to western, home country norms.
2 Indeed it seems that they felt they