Under Armour Enticing Recruits with Shoe Deal
Based on paper written by Nicole Daly
By Nicole Daly
Under Armour is an American sports clothing and
accessories company and was founded in 1996 by CEO Kevin Plank. Under Armour's
global headquarters is located in Baltimore, Maryland and its European offices
are located in Amsterdam's Olympic Stadium. Additional offices are located in Denver,
Colorado, Toronto, Canada, Hong Kong, China, and Guangzhou, China. The company is a supplier of a wide range of
sportswear and casual apparel mainly focusing on hi-tech sportswear for professional
athletes. The company is the originator of performance apparel which is gear
engineered to keep athletes cool, dry and light throughout the course of a
game, practice, or workout. Under Armour
entered the footwear industry in 2006 (Under Armour). “Under Armour's mission is to make all
athletes better through passion, design, and the relentless pursuit of
innovation. Every Under Armour product is doing something for you; it's making
you better (Under Armour).” The "we will" slogan is important as well to
Under Armour. “"Nothing is really
God-given. You have to embrace the things you feel are important and work hard
-- will it to happen. What I do know is that we have not yet built our defining
product at Under Armour. We are not living in the past. Our larger competitors
are 20 times our size. There is running room all over,” says Plank (Knowledge).”
Under
Armour is attempting to expand further into the footwear industry by doing the same
thing Nike and Adidas did 20 years ago and continue to do today. The company is trying to sign conditional
shoe deals with young, impressionable basketball recruits. The hope is that,
after college, the recruits blossom into the next Michael Jordan, the company
sells a ton of shoes, the player gets rich, and everybody's happy. It would be a win-win for Under Armour and
the player. The problem with Under
Armour's approach is that their relationships with colleges are, unlike Nike or
Adidas, very limited. The company only
sponsors one college school, that being the University of Maryland. And as the Washington
Post reported, the
University of Maryland has found itself going off course ethically by enticing
recruits to come play for the Varsity basketball program by offering the
players an Under Armour shoe contract upon graduation (Dime Magazine). The
first such recruit propositioned was Lance Stephenson, who was the subject of
the Washington Post’s story. People
are concerned Under Armour CEO Kevin Plank is discussing footwear contracts
with up and coming Maryland players because he has the ability to guarantee
millions of dollars. It's pretty
questionable and shady of Under Armour and Kevin Plank. This is a violation of NCAA policy because it
is unfair to other colleges and universities that do not have access to these
added benefits and incentives (Rivals).
In business ethics,
Michael Friedman’s Theory of Individualism states that a company’s first goal
is to maximize their total profits specifically for the owner and the stakeholders
within the constraints of the law and human rights (Salazar). For the case of Under Armour, this theory would
say that they are acting unethical because there is a violation of the NCAA
when recruiting players with these types of perks. However, Individualism would allow Under
Armour to entice players to perform at a higher level by offering them a shoe
contract once they decide to attend the University of Maryland. This would potentially increase the player’s
game in a legal way. Also, after
graduation or when they enter the NBA draft, Under Armour’s profits would
increase because of the player’s better abilities. Again, this case does not
follow the guidelines of Individualism because of the specific reason that
Under Armour and the University of Maryland acted illegally through the rules
of the NCAA (Rivals).
The Utilitarianism
theory says that happiness is the only thing of real,
basic value. The main goal is to
maximize happiness and minimize pain for all stakeholders because it increases
the overall well-being of society (Salazar). In the case, Under Armour, the University of
Maryland, and the player are the main three stakeholders. All three of their happiness will be
maximized if and when their plan succeeds.
Under Armour’s profits will increase like stated above in Individualism,
and increased profits equal increased happiness. Maryland will be pleased because they will
have a competitive edge over other colleges and universities in the recruiting
process. This will lead to them
potentially getting better recruits (The Washington). As for the player, they will be thrilled to
have a tentative shoe deal before even entering their collegiate years. Also, it is a motivating factor that would
increase performance of the player, which ultimately increases the happiness of
the player, Under Armour, and the University of Maryland. Using the Theory of Utilitarianism, this case
is ethical (Rivals).
The theory of Kantianism states that companies should do what is right because it is the right thing to do. Motivation and conscious effort for the company to do what is right are the most important parts. Profits and bottom lines are not the ultimate goal in Kantianism. Therefore, companies can’t think solely about themselves and try to take advantage of stakeholders (Salazar).Under Kantianism, the case regarding Under Armour making enticing Maryland University Men’s Basketball recruits with shoe deals is unethical. These two parties are not doing the overall right thing by luring athletes in with added incentives. Student should be choosing their college based on primarily academics/education, location, and environment. Student-athletes add in the specific athletic program and overall athletic department to that decision. Maryland Men’s basketball recruits should be evaluating the University’s program compared to other places they are interested. It is not right that Under Armour is trying to distract recruits with shoe deals (Rivals).
The Virtue theory, the last and finally theory, says that companies should strive to give stakeholders meaningful and fulfilling lives through positive character traits and habits. A virtue is “a moral excellence; goodness; righteousness (Salazar).” Some virtues are loyalty, courage, considerate, and kindheartedness. Companies that demonstrate exploitation, dishonesty, or deceitfulness do not possess virtues. In the case of Under Armour, the theory of virtue would rule them to be unethical. They are deceiving all University of Maryland Men’s Basketball recruits (The Washington). Under Armour is not prepared to hand out shoe contracts to every player that enters the NBA draft upon or before graduation. That is not their intention, but that is what they are portraying to the athletes. Under Armour is not concerned about their stakeholders. Their primary focus is to improve their financial bottom line and overall profits for the long term. Also, they are violating NCAA rules by offering deals to recruits, some of who could potentially be under 18 years old which would violate federal law as well. Breaking rules and laws does not demonstrate righteousness or goodness. Under Armour is being dishonest and acting unethically (Rivals).
There are many different ways that Under
Armour could have prevented this problem.
First, Under Armour, and any other company for that matter doing
business with the NCAA, needs to know their rules. Not only do they need to worry about
following the law and acting legally, but they are under the restraints of the
NCAA guidelines. Another solution would
be to wait until the players have signed their letters of intent, a document outlining the agreement between the player and
school before the agreement is finalized.
Most athletes across the country know that Under Armour is associated
with the University of Maryland.
Therefore, they should concentrate on giving the stand out players, who
already attend Maryland, shoe deals.
Then, when these players enter the NBA draft, they will already be
signed with Under Armour. People will
know and associate them with both Under Armour and the University of
Maryland. This is a win-win for both
parties. Finally, Under Armour will be
able to let history speak for itself. It
would not be unethical to discuss past players successes with recruits looking
at Maryland. The program would be able
to share the continuous development of the players at their school and then to
the NBA. Under Armour would be a part of
their road to the NBA and fame that comes with the title. Solving Under Armour’s ethical issue is
simple; they need to wait out the few days, week, or months until the recruit
has officially signed with the University of Maryland.
Personally,
I think there are a few things that Under Armour needs to do to rectify the
situation. First, they should release a
publicized statement of apologizing. It
is important that they take full responsibility for their actions and
acknowledge that they were in the wrong.
This will help in gaining back credit in their public relations
department. Stakeholders could take a
stance on the positive side and be happy that they realized what they were
doing was not right. They need to earn
back respect from as many stakeholders as possible, and this could be seen as
noble and showing integrity. Under
Armour should also address the recruits and explain how they were in the
wrong. They should have never tried to
taint their decision on what school to attend.
Going along with that, Under Armour needs to pull out of any unethical
deals they are currently in with Maryland recruits. This could be costly depending on what
contracts were signed, but long-term, I believe it will be worth it. Finally, they should put out a statement to
all Under Armour employees saying how they recognize that this was not the
right thing to do, they are deeply sorry for potentially tainting their
reputations, and they want to assure it never happens again. 
Under Armour
needs an action plan going forward in order to make certain a problem like this
never happens again. It should start
with identifying where the problem began if possible. The people responsible, depending on
seniority and importance, should be terminated or suspended. Under Armour needs to reevaluate their “Code
of Conduct” and decide on a more efficient way of enforcing it. Their human resource department will play a
huge role in their attempt at cleaning things up within the company. All employees at Under Armour need to receive
an updated copy of the rules and regulations.
Their mission and vision should be included as well. Also, it would be effective to include
signage in the offices and factories of these things. Employees need to know that ethics is valued,
violations will not be tolerated, and they will be terminated for any infractions. 
References
(5 Jan. 2011). Under Armour's Kevin
Plank: Creating 'the Biggest, Baddest Brand on the Planet'. Knowledge @ Wharton, Retrieved from
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2665
Brennan, Eamonn (2 March 2013). In recruiting,
Under Armour failing to protect its ethics house. Rivals from Yahoo Sports, Retrieved from http://rivals.yahoo.com/ncaa/basketball/blog/the_dagger/post/In-recruiting-Under-Armour-failing-to-protect-i?urn=ncaab,145195
Investor Relations. Under Armour, Retrieved from http://investor.underarmour.com/investors.cfm
New Under Armour Maryland & Boston
College Basketball Uniforms: An Inside Look.
Dime Magazine, Retrieved from http://dimemag.com/2010/10/new-under-armour-maryland-boston-college-basketball-uniforms/
Prisbell, Eric. (2 March 2009). Under
Armour Story. The Washington Post,
Retrieved from
http://voices.washingtonpost.com/terrapins-insider/2009/03/under_armour_story.html
Salazar, Heather. Business Ethics and Virtue.
N.p., Spring 2013. Web. 04April 2013.
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