Manufacturing in Ethiopia: Decathlon’s Partnership Model

13 Pages Posted: 16 Nov 2020 Last revised: 26 Feb 2021

See all articles by Dorothée Baumann-Pauly

Dorothée Baumann-Pauly

New York University, Center for Business and Human Rights; Geneva Center for Business and Human Rights

Lorenzo Massa

Business School Aalborg University; World Economic Forum; Business Design Lab

Natasja Sheriff

New York University, Center for Business and Human Rights

Date Written: November 3, 2020

Abstract

This teaching case study focuses on Decathlon, Europe’s biggest outdoor and sports retailer. It examines how the company is adjusting its business model to align growth and profits with positive social impact and respect for human rights. It discusses Decathlon’s recent involvement in the nascent Ethiopian garment industry and the company’s efforts to introduce a partnership model, which is based on longer-term business relationships and joint growth strategies with selected suppliers. Beyond Ethiopia, the partnership approach is enabling suppliers in developing countries to organize their work more effectively and helping garment workers acquire new skills and capabilities, thereby improving productivity. At the same time, manufacturers receive support from Decathlon to improve general working conditions and, over time, to increase workers’ wages.

The case introduces the challenges experienced by Anas Tazi, Decathlon’s country manager for Ethiopia. Decathlon’s sourcing strategy, based on a long-term business vision, requires stable demand and investments to unlock the strategy’s true potential. In Ethiopia, recent positive trends, such as greater supply chain transparency and heightened sensitivity to exploitative labor practices in the garment sector are threatened by ethnic and regional conflicts. These conflicts, sometimes violent in nature, could undercut efforts by the Ethiopian government and pioneering brands like Decathlon to develop and diversify the country’s economy. Against this backdrop, the questions are: How can brands source responsibly from developing countries and support their socio-economic development? Can Decathlon’s partnership model overcome a largely transactional business model and create value for foreign corporations and for the communities where the goods are being produced?

The case illustrates what companies can do to promote and uphold human rights through core business processes. But it also shows the complexities of managing global supply chains when crucial factors remain outside the control of individual companies. Establishing longer-term business relationships appears to support improved labor rights at supplier factories over time. Still, a high degree of economic and political stability is needed to support investments in longer-term sourcing relationships. In Ethiopia, the partnership model is put to the test, and students can discuss how brands could best deal with the challenges of the global and local operating context.


Keywords: Ethiopia, manufacturing, Decathlon, sustainable supply chain, garment, supply chain, responsible sourcing

Suggested Citation

Baumann-Pauly, Dorothée and Massa, Lorenzo and Massa, Lorenzo and Sheriff, Natasja, Manufacturing in Ethiopia: Decathlon’s Partnership Model (November 3, 2020). NYU Stern School of Business Forthcoming, Available at SSRN: https://ssrn.com/abstract=3724583 or http://dx.doi.org/10.2139/ssrn.3724583

Dorothée Baumann-Pauly (Contact Author)

New York University, Center for Business and Human Rights ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Geneva Center for Business and Human Rights ( email )

Uni Mail
Bd du Pont-d'Arve 40
Geneva, 1211
Switzerland

Lorenzo Massa

Business School Aalborg University

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

HOME PAGE: http://https://www.business.aau.dk

World Economic Forum

CH - 1223 Cologny/Geneva
Switzerland

Business Design Lab

Fibigerstraede 11
Aalborg East, 9220
Denmark

HOME PAGE: http://www.business-designlab.com

Natasja Sheriff

New York University, Center for Business and Human Rights ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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