Sweatshops Outside The United States

Sweatshops have been around for centuries, beginning around the late 1880’s. Sweatshops are classified by three main components, long work hours, very low pay and unsafe and unhealthy working environments. Sweatshops are usually found in manufacturing industries and the most highlighted production is clothing corporations, who take full advantage of the low production costs of their products. Many may think sweatshops are a thing of the past but they are still affecting many lives across the nations. There are many ways sweatshops affect lives, but a recent article titled “New study finds ‘more sweatshops than Starbucks’ in Chicago” explains that there are many low wage industry jobs that are violating labor laws in the United States alone. The article also reports how employees who are working in such conditions won’t speak up in fear of the retaliation employers will implement. Analyzing Sweatshops through the lens of the Sociological perspectives will help us better understand the illegal conditions of workplaces that still exist today.

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

A positive impact of Nike’s offshoring strategy was that it allowed Nike to meet the growing market demand of its customers that resulted from global economic growth. It created convenience so customers in other parts of the world could easily acquire Nike’s products and increased customer satisfaction as a result. Moreover, their strategy had a positive impact on the quality of the products offered in various markets. Since labor in Asian markets was able and very willing to meet the quality standards of Nike’s demands in order to retain production contracts, they could meet the expectations that Nike customers presented (Locke, 2002).

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.

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.

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

First of all, I do not agree with how Nike clothes are made. Working for many hours and not receiving enough money to support a family is not acceptable. The people working in Tangerang, Indonesia lived in terrible conditions that couldn’t support their basic needs. They were paid close to $1.25 a day. That’s not enough to scrape by!

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 subcontracts the production process of its footwear to 900 contract factories located worldwide with Asian developing countries such as China, Indonesia and Vietnam accounting for the bulk of total world production. Production of the footwear is based on a vertically integrated model. In the primary stage, raw materials such as rubber, leather and plastic are extracted from places located in close proximity from the factories. In the secondary stage, the extracted resources are sent to the factories or “Sweatshops” for manufacturing. It should be noted that the whole production process of Nike footwear are being carried out by independent private contractors.

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 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.

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).

Nike’s CEO’s and management made a decision to begin using sweatshop labor in order to save money and begin aggressive marketing. They used this aggressive marketing to have a one up on their competitors, in fact, Nike spent 280 million dollars alone on advertising in 1994 (Schwartz, 2000). Nike would give great athletes million dollar contracts to endorse and wear their clothing. For an example, Andre Agassi received 70 million dollars to endorse Nike's tennis clothing line. The choice to start aggressive marketing is the reason why Nike entered into this crisis and started making unethical decisions. Once the top management of Nike realized the profitability and popularity of hiring professional athletes to wear and endorse their clothes, regular advertising would not suffice. The company became greedy and were willing to use cheap abusive labor so that they could pay professional athletes millions of dollars (Schwartz, 2000).

It is not a secret that many of the products sold in the United States are made in China. However, it may be a surprise to find out what kinds of conditions the workers producing these various products actually have to deal with. Nike products are produced in China in