Nike: A Simplified Model Based On Industry Practice

Unfortunately, the same factor that contributed to Nike’s exponential growth (low-cost labor and production) also contributed to hurting Nike’s public image as a leader in “athleticism, health and fitness, and innovative marketing and design” (Locke, 2002). Nike was criticized for unethical practices by their subcontractors, which included underpaid workers, poor working conditions, child labor, and abuse (Locke, 2002).

Nike is the leading and yet renowned supplier of athletic apparel and shoes. The company controls close to 33% of the global athletic shoe market (Dogiamis & Vijayashanker,2009).Nike was founded by Bill Power and Phil Knight in 1962 as a Blue Ribbon Support and then was later on renamed to Nike in the year 1968 (Patrow,2003).The company supplies very high quality product in close to 100 countries with major markets being located in the U.S,U,K, Asia Pacific as well as in the Americas. The company has managed to attain its lead and legendary position via the application of innovative and yet attractive product design which is backed by quality production as well as well crafted marketing strategies.

Nike’s sweatshops had many positive effects on the developing countries that they were located even though the workers in the sweatshops were mistreated. The company created jobs and this is one of the main reasons that developing countries welcome the formulation of sweatshops. By Nike opening sweatshops in these countries they pay taxes and provide revenue for the host country’s government. In order for Nike to produce more goods in less time the company has to supply the sweat shops with high-tech machinery which improved the production process and raised productivity levels. The countries that allowed Nike to have sweatshops had no restrictions on the sweatshops or any forms of foreign direct investments so they were able to achieve high rates of GDP growth, reduction of the inflation rate and swell up the country’s trade surplus. Although most sweatshops were thought of as whole sale manipulators, human rights violators, and the work conditions were noticeably poor. The workers suffered from the absence of safety procedures and quality equipment because the sweatshops were not

One of the biggest and most popular brands in America, Nike, who targets athletes of all ages to be better athletes engages in unethical behavior by exploiting people from other countries by providing bad working conditions and low wages. Nike produces athletic equipment as well as apparel that is not only appealing to athletes, but also to the general public. However, the people that work for Nike and make these products are people being physically abused by supervisors and have to deal with horrible working conditions. According to an article written by Zaid Jilani, he said that thousands of women in Indonesia are being exploited by companies such as Nike where the wages being paid to these women are not enough to survive. Nike is well aware of what they are doing to these people in Indonesia, but still continue with it because the profits they receive at the end of the day is more valuable to them than the poor working conditions they offer to these Indonesian women. This shows that Nike uses the the Utilitarian approach because the company weighs out the pros and cons of the situation and still decides to produce products in Indonesia where it’s perfectly legal to pay low wages and have bad working conditions even though it is

The company Nike operates in over 50 different companies. This makes them a very large global company. Nike makes all kinds of products including gym shoes, clothing and apparel, equipment and accessories. “In 2004, Nike products were manufactured by more than 800 suppliers, employing over 600,000 workers in 51 countries” (Locke, Kochan, Romis & Qin, 2007, p. 6). Nike came under fire because of their workers that work outside the United States. In other countries, labor laws are unlike those within the United States. Large corporations often exploit the fact that they can pay laborers significantly less outside of the United States. Companies may also provide less than favorable working conditions to its labor force outside of the United States.

If Nike would use all its power to try to give better work conditions and wages and in the end the companies donʼt live up to that, Nike should not be held that responsible although I would strongly suggest to end the contract.

Nike does own many responsibilities, but the main responsibility that Nike has for their conditions of work at their foreign factories that make product for them was to have a safe working environment. Their main tactic for improving and turning a new leaf was to improve their labor conditions by monitoring to check compliance with the Nike Code of Conduct. (Bethel University, 2017) Nike has a self-monitoring program. Labor audits were a part of the improvement process, which requires inspectors to check off boxes in certain areas wages and work hours.

For years, Nike has been sourcing from factories that seek to meet the company 's minimum standards for good labor performance. The policy of Nike is to evaluate potential contracted factories before they enter the supply chain. Throughout their business relationship with Nike to assess compliance with high standards of social and environmental performance, including country-related risk for issues including forced labor, human trafficking and slavery Nike (n.d).

Although Nike may be technically removed from responsibility in some areas, it clearly has the obligation to be certain that exploitation by subcontractors do not occur. Certainly the pay and working conditions that the workers of subcontractors receive is due in large part to the contract that has been negotiated by Nike. If Nike had chosen to make improved working conditions a part of the arrangement, them those benefits may have been passed on to the workers. Still, Nike is a publicly owned firm whose goal is to improve the wealth of its shareholders. The workers in these Asian countries were happy, even eager, to accept the conditions that were provided as a manufacturer of Nike. The reason is that those wages were probably equal or superior to wages available from other sources. If Nike were to leave the country because of the pressures placed upon it, the workers would undoubtedly suffer greatly.

Nike soon realized even though they have attempted to make changes within their subcontracting companies it has not been enough. Nike realized they have an ongoing obligation to the workers, as well to the different cultures that are involved. Nike implemented a process called The Compliance Generation, which involves increasing their business value by establishing the function, fighting fires, building a global team, and establishing partners. Employee management interaction making the work more systematic, building excellence in management audits, building environment, safety, and health global process, creating transparency, and creating ratings. Nike wants to have a transformational focus on building excellence in factory remediation, developing a sustainable sourcing strategy, building business integration and accountability, increasing contract factory ownership of corporate responsibility, and building industry conditions (Nikebiz, 2010).

Time and time again, there are stories of dishonest companies who take advantage of the fact that they have money, try to create more wealth and subsequently forget their workers well being. Although they have more then enough money, greed takes over and good morals are overlooked. Nike, a popular sports brand, makes billions of dollars a year selling various products. To manufacture them, Nike has created many sweatshops throughout the world. Although they can definitely afford to pay their workers fairly, it has been found that these workers,

They should be responsible for the legal, social and philanthropic aspects of its subcontracted factories. They are not paying their employees the legal minimum wage, caring about the working conditions and welfare of these employees and just not taking into consideration the well-being of others. Ten years ago, the company had been subjected to negative press, lawsuits, and demonstrations on college campuses alleging that the firm’s overseas contractors’ subject employees to work in inhumane conditions for low wages. With the introduction of the fair labour association and worker rights consortium, Nike is slowly trying to improve the working conditions on subcontracted factories and hopefully in 10 years, they would be able to re-establish themselves as a morally acceptable company.

Nike took responsibility and created stringent benchmarks for production associations - the Code of Conduct (CoC). While CoC became a need and necessity as it was evident that there still was more to be carried out to direct and deal with the inventory network. Nike constituted the CR Board. It also disclosed the locations of the source factories and manufacturing plants. Nike took measures to match the expectations and published its progress reports. This signalled Nike’s tough stand against these issues and that Nike takes is very seriously to strictly adhere to the best practices and find the solutions. This has resulted into transparency. It has empowered Nike to better fathom the issues and shape more fitting

Another perspective is to analyse based on the amount of good done as compared to the amount of bad. By subcontracting its operations in underdeveloped countries, Nike helps to create job and improve the lives of the employed. Then, we have to consider the poor working conditions, poor wages, and the constant violation of child labour laws. Now, the bad inevitably outweighs the good despite the lack of unit of measurement in the

As a critical tool of Human resource management for lean manufacturing at Nike, it helps to utilize their labor force’s continuous improvement by providing practices. The management at form of standardized CI such as quality award, institute improvement, external benchmarking programs. Additionally, Nike’s scoring card established to ensure all staffs by performing at Nike’s standards. Though this new standard of factory self-governance, Nike is allowed for notifying their essential attention and resource part with operating voluntarily measurement action. The standard of the stage was put the bronze level to provide an award system to third parties. If third parties operation reach above bronze level, Nike provides award audits to third parties. In the case of opposition, the extra audit need to pay by third parties (Kettering, 2016).