Nike Case Study Essay

As such, it applied cultural relativism to justify the use of child labor, unsafe labor practices, and near slave labor in its factories. Since then, Nike has been a driving force to ensure fair labor practices across the apparel industry. In 1999, Nike was a key contributor to the establishment of the Fair Labor Association, an organization that is “…dedicated to protecting workers’ rights around the world” (Fair Labor Association, 2016). Today, Nike continues efforts to ensure that contract factories comply with its Code of Conduct to improve labor standards in overseas factories (Nike, 2016). Because of Nike’s efforts to expand and enforce social responsibility at its factories and given the lessons learned from its sordid past, it is unlikely that Nike would resort to any of the straw men fallacies. However, given the pressure by investors to expect solid returns, one hopes the company continues its altruistic social responsibility efforts while veering away from the Friedman Doctrine and its assertion that “… the only social responsibility of business is to increase profits” (Hill, 2011).

In my point of view Nike was responsible for compensating the workers in Honduras because of corporate social responsibility. Nike should be socially responsible to do the “right thing” before their corporation decided to closed down their factories in Honduras. The right thing such as established proper procedure for employees benefits for post-employment, implement appropriate compensation, and set-up a wide-operational meeting in helping the employees understand the reasons of the closure.

Since the 1990s, Nike has been embroiled in controversy over its use of sweatshops. Including numerous media reports of workers earning very little an hour (14 cents per hour), and even workers abused by sub-contractor (Allarey, 2015). Incidents such as these are ingrained in Nike’s history and not quickly forgotten. However, as CEO I would like to attempt to correct wrongs.

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

The highly recognized name brand—Nike— fails to notice the faults that are happening in factories that are violating a few disturbing rules. The company’s reputation has decreased due to demands and claims Nike; implying that they utilize sweatshops to produce more products at a lower pay. The company has been sued numerous times for abusing and exploiting their employees in factories for years. Another problem that Nike has faced throughout the years was making employees work in poor environments that affected the health of many— which contributed to being abused by the manager for not going to work. Nike distributes and sells merchandise of high quality for a high value. The company is giving the satisfaction of quality service to their

As a company, Nike is extremely profitable; it is the biggest shoe company and has become the fourth biggest industry leader. Nike can easily afford to increase wages of people that do labor work for the company without even the slightest loss but unfortunately chooses not to. According to the SEC, “In 2007, Nike’s advertising budget was $678 million. Realistically, Nike could pay all its individual workers enough to feed and clothe themselves and their families if it would just devote 1% of its advertising budget to workers' salaries each year!” (A background on…) In Nike’s Code of conduct, they state that in the area of human rights and in the communities in which they do their business, they want to do everything required of them as well as what is generally expected of a leader and thus by magnifying on the wrongs an industry leader commits, changes in the entire industry is expected.

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.

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.

During the late 80s and early 90s Nike was faced with a series of labor strike back at home due to unethical labor practices by its independent countries in third world countries. It is well known for Nike to outsource almost all its production from third world countries at cheap prices and sell them in U.S. market at an abnormal profit. The company began outsourcing its products from Japan where labor was competent and wages were very low. The living standards were raised which prompted Nike to outsource its products from Thailand, Pakistan and Indonesia since wages in these countries were extremely low and labor for these products were competent due to rapid development of the Japanese economy. The outsourcing of footwear products from Asian countries enables Nike to earn high profits and enjoy a competitive advantage over its rivals in the footwear industry. The company invests the high profits realized in marketing its products through celebrities. For instance, Michael Jordan was used to advertise the positive image of Nike Company (Lipschutz and James, pp. 87-96).

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.

The Pou Chen factory is located in a place where the minimum wage is far below the national average. It has 10,000 workers who make Converse sneakers. Most of the workers are women, and they earn only 50 cents an hour. The amount that they earn is not even enough to cover their food and very poor housing. In this factory, the women are both physically and verbally abused. Nike’s own investigations have proved these complaints to be true. The company made a statement saying that immediate actions would be taken to deal with the situation. It is interesting to note that, “an internal Nike report, released to the Associated Press after it inquired about the abuse, showed that nearly two-thirds of 168 factories making Converse products worldwide failed to meet Nike’s own standards for contract manufacturers. Twelve are in the most serious category, ranging from illegally long work hours to

Nike took advantage of that and disregarded that the people making their products at an extremely low price were actually humans. It was ethically wrong for Nike to not see those employees as actual people but saw them as a machine that produced products. They did not care to see how being underpaid affected a person’s family. They also did not see that children were working to support families and continued to work in terrible health conditions because they needed the money no matter the environment. The biggest issue was that the company had a total disregard for human life.

With a slogan of “Just Do It,” Nike is known all over the world for its products ranging from apparel to shoes. Receiving recognition and sponsorship from various celebrities and athletes including Michael Jordan, Nike’s brand is generally associated in a positive light. However, the brand itself, variety of products, and numerous sponsors exist as only a few aspects of this continuously expanding brand. Another aspect to consider when addressing the overall existence of a product as well as the constant introduction of new products is the production process itself: how the product came to be, who is involved in creating the product, and where the product is produced.