Nike : The Case Of Nike's Unethical International Expansion

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 started to open up manufacturing factories in countries like Indonesia, Pakistan and Vietnam. Due to the wants of Nike to increase their revenue they tried to outsource the labor of their products since labor work in the US is very high and expensive. This was a bad idea due to that Indonesia pays their workers extremely low wages. Pakistan doesn’t have an age limit for them to be able to legally to work so many children in Pakistan were making

But, omnisciently speaking, both entities faced severe scrutiny and criticism from United States and international citizens for their capitalistic business practices. Furthermore, a vast number of American citizens, mainly teenagers, had been killed over Nike Air Jordan sneakers because of their high price tag, while the cost to produce the shoes were rapidly declining due to Nike’s unprecedented offshore production. Bill Bigelow’s, The Human Lives behind the Labels: The Global Sweatshop, Nike, and the Race to the Bottom accurately portrays this capitalistic mentality when mentioning, “children as young as 6 are ‘sold and resold like furniture, branded, beaten, blinded as punishment for wanting to go home...’ For pennies an hour, these children work in dank sheds, stitching soccer balls with the familiar Nike swoosh and logos of other transnational athletic equipment companies” (Bigelow, 113). What is most disturbing to fans of Nike and Jordan were their comments and proposed remedies on the matter. Essentially, Jordan did nothing to curtail the number of kids being killed for his shoes and, as far as his affiliation with capitalistic Nike, Jordan did not want to cause any kind of rift between himself and the corporation that made him millions

Unfortunately, the same factor that contributed to Nike’s exponential growth (low-cost labor and production) also contributed to hurting Nike’s public image as a leader in “athleticism, health and fitness, and innovative marketing and design” (Locke, 2002). Nike was criticized for unethical practices by their subcontractors, which included underpaid workers, poor working conditions, child labor, and abuse (Locke, 2002).

When people look at Nike they see a well built and established company that provides them with sports gear, sports apparel, sponsorships, and many more. People were always suspicious about Nike and their way of making their products. Rumors about Nike’s sweatshops started spreading around the early 1970’s.

This paper describes the legal, cultural, and ethical challenges that confronted the global business presented in the Nike sweatshop debate case study. It illustrates Nike’s part in the sweatshop scandal and it also takes a look at the ethical issues that surround this touchy subject. This paper

However, Nike has long been eluding allegations of employing people in the developing and under-developed economies, at low wages and poor working conditions for a long time. Nike tried many different measures of correcting

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’s main strategy revolves around product branding. Their brand compromises of a swoosh logo which is accompanied by a message of “just do it”. The logo was imprinted on all of their products with the message developed to express the individuality of their target group. The branding was further promoted by Nike’s relentless approach on the quality of their product as demonstrated when considering overseas business opportunities, quality must not be compromised in order to do so. This ensures consumer satisfaction and loyalty towards Nike.

Nike has suffered attacks from a number of agencies and organizations throughout the world that claim that the workers who manufacture Nike shoes are denied the basic essentials of living—a fair wage and decent benefits. All

The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational challenges that Nike managers face in globalization of the Nike product.

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).

Another perspective is to analyse based on the amount of good done as compared to the amount of bad. By subcontracting its operations in underdeveloped countries, Nike helps to create job and improve the lives of the employed. Then, we have to consider the poor working conditions, poor wages, and the constant violation of child labour laws. Now, the bad inevitably outweighs the good despite the lack of unit of measurement in the

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.

Once information got out on how Nike was treating their overseas employees, the media decided to expose them. Nike received bad press for a few years,