Nike 's Business Model : Nike Inc.

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).

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.

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

I am writing this letter to express my concerns over Nike's labor practices in Asia. There has been much debate and controversy recently concerning Nike's Asian labor practices. It is very difficult to determine which side of the argument to defend, as both acknowledge the problems yet put a completely different spin on the facts. I will try to show that Nike has created a cloud of smoke in Asia that the public cannot see through.

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.

Nike Inc., the sports apparel multinational company has been under suspicion and scrutiny for their practice of the unfair treatment and negligent labor habits in their offshore factories. They have been criticized for human rights abuse, child labor law violations, as well as minimum wages and trade union relations violations within a number of Asian countries. They subsequently misguided the public in an attempt to make one believe there is no substance to the allegations of their involvement. The abusive and exploitative treatment and working conditions in these factories has been touted as inhumane in nature as well as an implored violation of worker’s human rights (Figure 1).

The thing that nike does that is socially irresponsible was how they create their products. Nike has these factories that are located in china, indonesia, vietnam, and other countries as well. Nike’s factories are known to many as “sweatshops”. The reason they are called this is because the work conditions workers/kids are put in.

Nike is the largest shoe company in the world. Much of it ’s success is attributed to its outsourcing of manufacturing which has saved the company a significant amount of money. During the 1990’s, Nike faced harsh criticism for use of sweatshops in China, Indonesia, Vietnam and other countries.

In the world of shoe production by Nike, production mostly happens overseas in third world countries. Nike pays many professional athletes such as LeBron James to endorse their products, while the people who are making the products get paid close to 50 cents per hour. Nike has attempted to take steps toward better workers’ rights, but most of their factories include oppressive work practices(“Ethical Consumer Guide. Shop Ethical!”). With this being said, Nike has been very unfair to the employees that work as hard as they can to barely make it in life.

Nike invested in their brand by getting sports heroes to advertise for their brand such as Michael Jordon, Tiger Woods and the Brazilian football team. This further fuel the products appeal towards the consumers.

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

In conclusion, although Nike Inc. is famous because of its sportswear, the company ignored the inhumane attitude of its suppliers towards workers and did not do more to eradicate child and slave labor in these factories for two main reasons. First, the company did not have responsive strategies to address various criticisms leveled against its contractors because the factories were not directly controlled by Nike’s management. But most importantly, the company refused to take responsibility for the attitude of its suppliers because Nike Inc. wanted the factories to work independently and was therefore harshly criticized for its lack of sensitivity and unethical conduct while amassing profits at the detriment of human

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

Nike does all of their manufacturing in developing or under-developed countries. Because the labor there is cheaper than the ones in developed countries, Nike employs people at a rate that can barely sustain their daily needs. Nike is taking advantage of the cheap labor cost in these countries to gain more profit. First of all, they are using children that are well below the working age to work in huge factories. Secondly, most workers are working in sweatshop conditions, meaning, they are being abused of their human rights because they are working in such unsafe conditions. Finally, the wages that they are earning are very low. According to Daily Mail, “Nike admits that such abuse has occurred among the contractors that make its hip high-tops but says there was little it could do to stop it…. Some workers interviewed by the AP in March and April described

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.”