Nike Controversy

Like other large corporations, Nike looked to expand their operations outside North America. Many companies do this because of the law and wage demands of the United States making overseas operations very appealing. Employment laws are scarce and labor is cheap in most third world countries and can be easily become targeted by giant corporations such as Nike.

Nike is criticized for contracting with factories (known as Nike sweatshops) in third world countries. Vietnam Labor Watch, an labor union group, has documented that contracted factories by Nike have not been following the minimum wage and overtime rules and regulations in Vietnam as late as 1996, Though Nikes claims to have stopped these unfair practices. The Company has been accused of offering poor working conditions for their workers overseas employed in free trade zones where there goods are manufactured. Sources for this criticism are Naomi Klein's book No Logo and Michael Moore documentaries. Other than that, In the 1990s, Nike faced criticism claims for child labor in Cambodia and Pakistan in factories it contracted to produce footballs. Although Nike took action to reduce the practice, they still continue to contract their production to firms in countries with less regulatory checks and child labor laws so that they are not caught in the future. In 2001, a BBC documentary uncovered their practices of child labor and poor working conditions in a Cambodian factory used by Nike. The documentary focused on six girls, who all worked seven days a week, often 16 hours a

The Transnational Corporation (TNC) that I have chosen to research on is Nike. Nike was founded in January of 1964. Their headquarters are located in Beaverton, Oregon. The shoes that are being provided to consumers worldwide, however, are produced in hundreds of factories around the world. Ironically, Nike shoes have never been produced in factories in the United States. The largest producers are the factories located in China, Vietnam and Indonesia. Nike hires factory owners to produce the shoes using the materials and designs provided by Nike. Nike does not directly own any of these factories. The company itself focuses almost solely on designing the shoes, and after they have been produced by the factories, Nike then advertises and markets the shoes in the most appealing way possible.

Producing product overseas puts Nike at risk of overseas sourcing, manufacturing, and financing. Nike buys and sells to different countries using different currencies. The currency rate fluctuates very often and Nike, at times could take a loss. This is a risk most companies cannot take. Nike has the ability to produce materials, import product and sell product in international market during a time of disease outbreaks, terrorist attacks, and military conflict. With these risks there are few companies who can afford to take these risks (aflorzak.com). This also proves no new threat for Nike.

Nike is one of the most well established companies who sponsor famous athletes that impact their buyers in a more inspirational and positive way. Although Nike has been keeping their illegal sweatshops in hiding and not revealing the truth to its consumers. Nike could solve these problems of their illegal sweatshops and fix their business image and still be one of the biggest companies.

In the last couple of years Nike’s sales have decreased which were targeted at 15-19 year olds. This problem has caused Nike to lose customers which means a loss in sales/ profits. Over the past few months competitors have been raising their strategies to bring in customers in which increases their profits. This is having a negative effect on Nike, if Nike carry on the way

Nike began as Phil Knight’s semester-long project to develop a small business, which included a marketing plan. This project was part of Phil Knight’s MBA course at Stanford University in the early 1960s. Phil Knight had been a runner at the University of Oregon in the late 1950s. His idea for his project was to develop high quality running shoes. He thought that high quality/low cost products could be produced in Japan and then shipped to the United States to be sold at a profit. His professor thought that Knight’s idea was interesting, but not much more than a project.

As CEO of Nike, I would continue the current efforts and participation in various organizations to promote safety and ensure environmental and labor practices are continuously monitored. What I will do differently from past CEOs is I would be more transparent and proactive. Although Nike was transparent, they were not proactive, especially with the sweatshop allegations.

Nike was growing rapidly. Consumers enjoyed the quality of the shoes so much that the company decided to branch off and design sporting goods that would also be produced using oversea manufacturers. There are many positive and negative aspects to their

Humm, where to begin? In 1964, Nike started off as dream when founders, Phil Knight and Bill Bowerman, with just $1,200, established Blue Ribbon Sports (O’Reilly, 2014). Originally, they were distributors for Asics, but in 1971 they became known as Nike. Uniquely, they chose the name Nike because it is the name of the Greek goddess of victory (O’Reilly, 2014). Interestingly, the first patented Nike shoe was the Nike Waffle Trainer, which was made using a waffle iron and was patented in 1974 (O’Reilly, 2014). Creatively, the “Just Do It” campaign, in 1988, was featured in an ad with Walt Stack, the 80 year old runner, as he ran across the Golden Gate Bridge (O’Reilly, 2014).

Famous names we hear everyday, sponsor popular brands that we wear everyday. Nike is a very common brand with products being sold at this very moment. What people do not see as they wear the “swoosh” is what work goes on behind the scenes to create it. Lebron James is a sponsor who has a lifetime deal with the company worth over $1 billion (“LeBron James' business partner confirms lifetime deal with Nike is worth over $1 billion” Knowlton). This is an insane amount of money especially when there are Nike employees getting paid $3.50 a day, which can amount to $21 a week (“Nike in Indonesia – employing more than a hundred thousand workers” Sicat). How could someone like Lebron be accepting one BILLION dollars from a company, who chooses to

They have created more sustainable products such as t-shirts made of recycled polyester and recycled plastic bottles. Recycling old shoes into new ones. Nike started numerous charities and has donated millions of dollars to organizations to help repair Nike's image. Nike must continuously work towards the enforcement of their corporate social responsibilities that they have presented to their suppliers at the same time they must remain competitive in the market place.

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.

Instead of spending millions of dollars on their workers, who are the backbones of making the actual shoes, they are spending it on their advertisements to promote their company. I realize that advertisement is essential to the success of a product, but it should not be at the cost of another human being to make a profit. I know that Nike is just one of thousands of companies that have taken their labor overseas, so that the product can be made at a fraction of its cost. Unfortunately the public sees Nike as a company whose product is worn by the rich and famous, therefore it is something that they would want for themselves. We the consumer enable them to continue this kind of business, because we buy the product. Through global media, we the public are becoming more aware of this kind of exploitation of workers. Overall, I think there is no pride to be found in companies that exploit their employees at the cost of a better profit for themselves. Awareness is going to be the key to hopefully fix it in the near

Nike’s management understands how important a relevant strategy is in the global environment, as Don Blair, Nike’s CFO, stated “...we are refocusing our efforts, increasing our investments in innovation, using our voice for stronger advocacy and looking at how we incubate new, scalable business models that enable us to thrive in a sustainable economy.”