Social responsibility and ethical practices are vital to make the businesses sustainable as businesses are trying to achieve their goals while improving the society and environment. Consumers nowadays are prioritizing corporate social responsibility (CSR) as they think maintaining high-quality products no longer help the businesses secure their reputation. The idea of CSR simply means the organizations should practice their business in an ethical, legal and philanthropy responsibility which return the benefits back to society. Hence, CSR can be classified into four responsibilities which are economic responsibility, legal responsibility, ethical responsibility and philanthropic responsibility (Bean-Mellinger, 2018). For instance, Under Armour as a socially conscious company, they require their teammates and employees to comply with the Code of Ethics and Business Conduct, in addition to the Supplier Code of Conduct("Under Armour: Sustainability," 2017). These two codes are used to ensure suppliers and their subcontractors practice business in a legal, ethical and equitable manner and provide employees a safe working environment, reasonable work schedule, and etc. Hence, by implementing these codes, Under Armour (UA) believes codes would definitely increase their brand recognition and bring positive impacts to the society.
It is very important for a responsible organization to make sure that their business is profitable to generate long-term value for its shareholders and contribute to a sustainable economy globally. However, UA has not performed well in this aspect as its profits have been declining over the past 3 years and even made losses in 2017 despite increasing revenues (Under Armour, Inc. – Financial History, 2018). With operating at high costs and low profit margin, it has caused UA’s share price to decline especially in 2016. According to Under Armour: Banking on Growth (2017), UA’s share price is ‘undervalued’ because its market capitalization is only twice the net book value, whilst Adidas is 9 times and Nike is 7 times more. This means shareholders have less confidence on UA’s shares. It also reflected UA’s lack of economic moat as it is unable to maintain the competitive edge over its other sports brands such as Nike and Adidas and is susceptible to face rapid macroeconomic changes. UA currently fails in its economic responsibility but hopefully over time with concrete actions undertaken to improve its competitiveness and profitability, UA will be able to be one of the much sought-after brand and shares in the near future.
Next, legal responsibilities can be defined as the business’s obligation towards the laws imposed by the government. All laws imposed regardless in any country should be obeyed by every business including UA. Legal responsibilities include the conformity to different laws such as international law, corporate law and labour law. Based on UA’s Code of Conduct, all employees must conform to the local laws, rules and regulations in the country. For instance, employees are not allowed to give or receive any form of bribery from any party for the benefits of their own or the company ("Under Armour, Inc. – Code of Ethics", 2018). Not only that, UA provides equal opportunity to everyone regardless of their gender, race and religion. This legal responsibility can relate to the theory of justice view as UA implements a fair system to all their employees. Based on Lambooy (2014), law obligation is an important aspect of the corporate social responsibility. Hence, as an international company, UA has adopted the sustainability concept through its legal responsibilities.
Businesses have ethical responsibilities entirely to their workers, customers and society. Ethically responsible companies such as UA are maintained by setting clear ethical standards from the kick-off point of the business. Ethical responsibility includes being transparent in all the company’s dealings with customers, dealers, community and employees. Some ethical responsibilities that can clearly be seen, as UA’s core business provides garment jobs to poor folks in foreign countries, professional jobs to business majors of America’s East Coast colleges and contribution of tax revenues in the land of origin (McAleer, 2018). Not only that, this Baltimore based organization has also launched a temporary employment program to fresh graduates with the name of “Rookie Program” where it is believed to be a great investment within the next generation that consists of numerous talent which will lead the brand in upcoming future (Gay, 2018). Under Armour Foundation also offers resources through a community catalyst program by providing fund supplies to assist positive development of youths. UA also additionally offers UA Well program to improve the teammates’ overall well-being and coverage to shield the health and well-being of employees, as well as their families while contributing security of finance to the team.
Philanthropic responsibilities measure responsibilities that go higher than and on the far side of what's merely needed or what the corporate believes is true. They involve creating an endeavor to profit the society. For instance, donating services to community organizations, partaking in projects that assists and aiding the environment or funding to charitable causes. UA provides children from underserved societies to access sports, outfitting children with sports equipment and use sports to portray life skills through the UA Win program. Apart from that, UA Freedom program is committed to funding minimum amount of $250,000 annually to service members such as Law Enforcement Officers and Veterans who have devoted to keeping the nation safe. UA’s Power in Pink global program is a vision to raise awareness of breast health apart from celebrating women that practice exercises to maintain their well-being. UA is focused on contributing at least $2 million every year to Johns Hopkins to help research and advancement in the field of breast well-being (“Uabiz,”2018).
In conclusion, UA does not able to adopt economy responsibility as their part of CSR due to high costs and low profit margin. However, UA still managed to apply legal, ethical and philanthropy responsibilities inside out the entire business, including employees and suppliers. For instances, obeying the laws, rules and regulations, setting clear ethical standards and creating an endeavor to profit the society. Besides, UA is mainly focusing on the level of philanthropy responsibility by implementing three programs which are “Power in Pink”, “UA Win” and “UA Freedom”. These three programs are used to contributed services, capital and equipment to society based on different situation. By providing services and resources to communities in need around the world, UA could be able to diversify their image, expanding to new markets and get better reputation from public. As UA grows globally, they are required to take action to increase their profitability and contribute to global and sustainable economy in order to adopt economy responsibility as their part of CSR.