Nike Promise And Perils Of Globalization Case Study

Nike is the world’s single largest producer of sporting wear, clothing, shoes and accessories. An Oregon based company founded in 1972 by Phillip H. Knight and William J. Bowerman. Nike’s broad range of products is the key to it’s success, it’s range includes Nike Skateboarding, Nike Golf, Nike Pro, Nike +, Nike Air Jordan and owns other big names such as surf brand Hurley; shoe manufacturer Cole Haan; and two large sports companies – Converse and Umbro. Having such huge sponsorship contracts with many of the world’s biggest athletes and sports teams, these huge profiles are simply another outlet for Nike to promote their products. Nike currently employs over 31,000 people

Nike is trying to deal with this through private solutions. Knight authorized the PricewaterhouseCoopers factory monitoring group to give the results on their visits, because he says they have nothing to hide. Students from the University were even permitted to monitor some of the manufacturing sites. Knight is trying to use the Coase theorem in solving this problem. Nike corporation has already paid significant amounts of Pigovian taxes to improve air quality and temperatures in their footwear factories. Since none of the factories had to shut down the taxes were apparently not that horrible for Nike.

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.

Many of the factories that are contracted have workers and management from different countries, causing problems in communication. Some factories have Taiwanese managers while factories in Vietnam have Korean managers. To look into these issues Nike commissioned Andrew Young, a former civil rights leader and United Nations ambassador to do an analysis of how well the code was working. Young and his staff visited four factories in Vietnam, Indonesia and China for three to four hours each led by Nike?s people. When Young?s report came out to the public it proved to be very uninformative. Young said, ?Nike is doing a good job, but could do better.? Another aspect that aggravated the public was that Young chose not to look into the issue of wages, a large component of the Code. The reason for this ?such an exercise was well beyond the technical capacity of our small firm.? (GoodWorks, Executive Summary)

The Asia Pacific region is Nike's third largest in terms of revenue, and the largest in terms of manufacturing. Nike has 13 branch offices and subsidiaries in the Asia Pacific region. China has become both a source country and a vital market for Nike. Asia Pacific region has 3,282 Nike employees approximately. The region also has 252 contract factories located in North Asia, and 238 contract factories located in South Asia. Combined, these factories employ 550,821 workers. Nike's revenues for year 2004 from its Asian operations were about $1.6 billion. Of these revenues, approximately $855 million were from footwear sales, $612 million from apparel sales and $146 million from equipment sales.

Phil Knight - Jake Rakestraw Phil Knight is the Co-Founder and former CEO and chairman of the most successful shoe company in the world, Nike. Knight was a college runner at the University of Oregon, which is where his infatuation with shoes began. Knight’s coach, and another Co-Founder of Nike, Bill Bowerman, was notorious for trying out different pairs of homemade track shoes on his athletes, more specifically Knight himself. After college, Knight feared that he would be your average 9-5 accountant working for some retail agency. The thought of that was enough to keep him up at night.

Nike a global fashion and sport icon to the world is branded as one of if not the best athletic company in the world. Nike produces athletic gear for every sport imaginable. They are known as well for there one of a kind products but as well as the brand that the best athletics wear and advertise for. The founders of Nike Phil Knight and Bill Bowerman meet when Bill Bowerman was the training coach for Phil Knight when he ran track for Oregon. It was there at the University of Oregon where Bill Bowerman always looked for ways to amplify the track shoe to enhance a student’s performance but was unsuccessful. Phil Knight who later went to study at Stanford followed the same mindset of creating a shoe himself. Knight alternated his decision

Around the world, Nike has become synonymous with running shoes. The Nike brand can be recognized by the mere sight of the notorious swoosh or their famous “Just Do It” slogan. However, Nike has been associated with child labor, poor working conditions, and extremely low wages. Nike has set out to change this association and to convey an image of progress and awareness. Nevertheless, some wonder if Nike’s intention is to change its impression on its customers or to better the lives of the workers. The image of Nike as an American company greatly contrasts how Nike began and expanded. Phil Knight established Blue Ribbon Sports in 1964, which sold speciality running shoes in Japan. Shortly after the company started marketing in the United States,

In these sweatshops, worker’s endured very poor working conditions. This paper will discuss the terrible conditions that workers face and how Nike has responded to the criticisms. Late in the 20th century, manufacturers began taking advantage of the cost savings by using Chinese factories where labor is cheap. Athletic shoes are one of the top products manufactured in Asian countries.

The association monitored the factories for human rights abuses, forced overtime abuses and to ensure that the subcontractors were meeting basic minimum wage requirements. Beginning in 2002, the association had begun to perform audits to ensure that the subcontractors were behaving appropriately. As recently as 2013, Nike’s own webpage reports that none of their subcontractors have received a gold rating, many of them are earning bronze or lower scores, and 77 of the subcontractors have not yet been

Nike admits that abuses occurred but insists there was little it could do to stop it.One said a supervisor kicked her after she made a mistake while cutting rubber for soles. “We’re powerless,” the woman said. “Our only choice is to stay and suffer, or speak out and be fired.” Indonesia is Nike’s third-largest base after China and Vietnam, with Nike subcontracting to 38 factories employing 115,000 workers. Of those, 17,000 workers produce its Converse line at four factories. Pou Chen is located in a provincial city where the minimum wage is well below the national average. The 10,000 mostly female workers at the Taiwanese-owned plant make 50 cents an hour, which is barely enough for food and the company’s barracks-style accommodation most are forced to use. “They throw shoes and other things at us,” said a 23-year-old woman in the embroidery division. “They growl and slap us when they get angry… It’s part of our daily bread.” Other workers described being hit or scratched—one man until he bled. Some said they were fired after filing complaints.At the PT Amara Footwear factory located outside Jakarta, where another contractor makes Converse shoes, a supervisor ordered six female workers to stand in the hot sun after they failed to meet their target of 60 dozen pairs of shoes on time. “They were crying and allowed to continue their job only after

Currently, Nike stand as a leading figure in producing high quality sports and fitness equipment and apparels. Bearing just a simple start of selling Japanese imported shoes from a station wagon has transformed

Nike is a worldwide global corporation that has its shoes manufactured on a contract basis in places like Asia, China, and Vietnam. Although it does not actually own any of the manufacturing locations, it has long been accused of having its products manufactured in facilities that exploit workers. Although Nike admits some wrongdoing in the manufacturing facilities of its contractors, it claims to have started a commitment to improve working conditions in those facilities.

The problems seemed to be occurring in the Pou Chen Group Factory in Sukabumi, which is located about 100 kilometers from Jakarta. This factory started making Converse shoes in 2007, which was four years after Nike bought Converse. It has been reported that, “workers making Nike’s Converse brand sneakers in Indonesia said supervisors regularly physically assaulted and verbally abused them. Nike admits that abuses occurred but insists there was little it could do to stop it.” http://www.wsws.org/en/articles/2011/09/nike-s08.html

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.