Essay Nike- Ethical Issues

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

Bill Bowerman and Phil Knight first started Nike on January 25th, 1964 but the name started out as Blue Ribbon Sports. They worked for a Japanese shoemaker called Onitsuka Tiger as merchandisers. Eventually Bill and Phil changed the name to Nike on May 30th, 1971. The company name Nike came from the ancient Greek goddess of victory (O’Reilly).

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.

Employees are required to annually verify that they have read and understand the standards. There is a confidential, toll-free Alertline that employees can report suspected violations of the law or the code of ethics. Nike expects there suppliers to do the same. This can better help make a positive work environment. Which make the employees more open to working

Companies need to ensure they are practicing according to certain guidelines and so employees need know what these principles are through understanding their rights under the Human Rights Act and the Charter. Standards of companies would be set by treaty and contracts given from the companies to the employee when given the job. The Universal Declaration of Rights gives the fundamentals of freedom that can be used by everyone in society. Setting norms would help sustain and involve and evolve states over time. When having rules set for both private and public companies, governments can easily work around those laws to remedy human rights violations. They can do this by ordering trade associations and partnerships aboard. For example, “The standards may affect the public regulatory process in a number of ways: global and regional trade agreements may explicitly recognize them; government regulations may refer to them for definition of terms; and government procurement rules may adopt them”. This quote shows that standards do impact the public and because of the agreements, they can help guarantee that each company is being fair and not treating a handful of people better in comparison to others. It also shows that the governments need to have rules so that they know what the company's standards are if they were to commit a human rights

One major key component that allowed Nike to get to the elite status they are today would have to be the expectations they have for their employees. In their code of ethics book they clearly state on the fifth page that “every employee must reflect standards of honesty, loyalty, trustworthiness, fairness, concern for others and accountability” (NIKE Code of Ethics). These expectations of their employees shows how much Nike values its company, and it ensures every employee knows what is expected of them. None of these expectations has hindered Nike’s ability to get employees. Most, if not all, of Nike’s employees claim there’s a great work environment at Nike, which all starts with the expectations they put on them in the beginning.

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.

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).

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).

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 should not be allowed to claim they are an ethical company especially when they are still outsourcing to impoverished countries in Asian. The company takes advantage of low living standards and lack of democracy in those countries. There was nonexistence of labor movements in countries like Indonesia. The government never allowed

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.

Nike began as an enterprise in Oregon with its founder, sports enthusiast Phil Knight. In 1962, Nike started under the name Blue Ribbon Sports. During this time, the athletic shoe industry was dominated by the Adidas and Puma companies. Knight recognized there was segment of serious athletes that had specialized needs that were not being addressed by the major companies.

The ethics of businesses are under more scrutiny than ever before (Bones, 2014). Ethics can be considered as following a code of behaviour agreeable with the context of society and can also be defined as the application of moral and ethical considerations in a business environment (Hurn, 2008). Sport businesses have been targeted a lot more in recent years due to the conditions they place their workers in has become more apparent to the outside world. Nike are one of the world’s leading sports brands but have been faced with many allegations in recent years (Daily Mail, 2011) in regards to the conditions they put their workers in and their ethics and morals have been questioned. This report will critically evaluate the impact ethics has on the business operations of Nike and then analyse the reasons for why ethics impact the sport organisation. Finally, recommendations will be made to improve Nike’s business ethics.

This essay’s thesis is that there is currently a lack legal apparatuses that can be used to hold transnational corporations liable for human rights violations; specifically violation of labour rights. This paper seeks to discuss various legal instruments that are applicable to transnational corporations and human rights violations. It will also provide theoretical framework for understanding the nature of human rights and legal framework of labour laws. This essay will address the following questions: What is the legal status of transnational corporations? How can current legal apparatuses be used to hold transnational corporations accountable for human rights violations? This essay will also consider the case of human right violations by Nike Corporation in order to show that external pressures can produce development and accountability.