Nike Case Study

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Introduction When growing an enterprise that you wish to compete on a global market, what needs to be taken into consideration is scaling. Most importantly for investors, what will it cost to expand this company and offer their products on a global scale? This is what Nike faced in the 1980’s when they expanded by outsourcing their production Asia, 86% of their production housed primarily in Korea and Taiwan by 1986, (Locke, 2002) with only 17% remaining in the US by the end of the 1990’s. By manufacturing off-shores in low-wage countries, Nike garnered the nickname “Sweat Shop” as most people in the 1990’s believed their practices to be unethical. For the ones calling the shots at Nike in the 1980’s and 1990’s, was this just another case of “desperate times call for desperate measures”? Or was there an alternative route they could have taken? How did Nike come to this situation through its expansion strategy? Nike’s negative nickname “Sweat Shop” comes from the bad press it received around 1991 when Jeff Ballinger wrote a report on their Indonesia factories’ poor working conditions and equally poor wages. Furthermore, because of human rights not being as largely fought for as they are currently, Nike was able to take advantage of this ethics loop-hole particularly in their Asian factories. Nike’s code of conduct and code of ethics was fairly broad during the 1980’s and 1990’s whereby upper management ignored and washed their hands of the criticism about their Indonesia

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