Nike's Use of Sweatshops Across the Globe Essay

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.

Nike’s sweatshops had many positive effects on the developing countries that they were located even though the workers in the sweatshops were mistreated. The company created jobs and this is one of the main reasons that developing countries welcome the formulation of sweatshops. By Nike opening sweatshops in these countries they pay taxes and provide revenue for the host country’s government. In order for Nike to produce more goods in less time the company has to supply the sweat shops with high-tech machinery which improved the production process and raised productivity levels. The countries that allowed Nike to have sweatshops had no restrictions on the sweatshops or any forms of foreign direct investments so they were able to achieve high rates of GDP growth, reduction of the inflation rate and swell up the country’s trade surplus. Although most sweatshops were thought of as whole sale manipulators, human rights violators, and the work conditions were noticeably poor. The workers suffered from the absence of safety procedures and quality equipment because the sweatshops were not

Therefore, some big companies like Nike move their factories to these poor countries such as Indonesian. People who work for Nike live in a very low level to the extreme of poverty, and they got $1.25 paid a day for the hard labor they do. They live in unhealthy village full of dirt that leads to diseases like cancer. In addition to that, those people cannot afford the medication because they would rather feed their kids than recovering. All these details were derived by Jim Keady, the producer of “Nike Sweatshops: Behind the Swoosh”, who discovered how the workers are treated in the Nike factory in Indonesia.

Sweatshops are factories where workers work for little pay, for long hours and in poor conditions.Sweatshops are usually factories in which companies manufacture their products in underdeveloped countries in which have a less of a strong policy in workers rights, due to how little money they lose and how inexpensive it is for the company and the gain in which they receive from manufacturing in sweatshops. As a group we decided that the social justice issue we would be working on was to be sweatshops. We had chosen this topic because of the impact it has had in the world and how injust sweatshops truly are. Sweatshops can be found all over the world ,although they are most commonly found in Central and South America, China and Asia. In fact, in countries such as El Salvador sweatshop workers earn 1.38 per hour and in honduras they only earn 1.31 per hour.

Nike, one of many shoe companies produce their shoes in sweatshops or factories located in other foreign countries. The globalization of these nike shoes has dehumanized the workers in which they struggle with a destitute society. We as human have to preserve quality of life over anything and it is important to let people know the benefit does not outweigh the costs. Thousands of Nike workers, speak on issues regarding their wages and working conditions. Nike has brought these jobs to Southeast Asia but these workers are being physically abused and untreated.

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 workers are earning as little as $.14 cents per hour, this reveals the impact of slave labor as workers are highly underpaid for the amount of tasks they are required to do, but continue to work there as they can't afford to be unemployed.

If Nike would use all its power to try to give better work conditions and wages and in the end the companies donʼt live up to that, Nike should not be held that responsible although I would strongly suggest to end the contract.

Although Nike may be technically removed from responsibility in some areas, it clearly has the obligation to be certain that exploitation by subcontractors do not occur. Certainly the pay and working conditions that the workers of subcontractors receive is due in large part to the contract that has been negotiated by Nike. If Nike had chosen to make improved working conditions a part of the arrangement, them those benefits may have been passed on to the workers. Still, Nike is a publicly owned firm whose goal is to improve the wealth of its shareholders. The workers in these Asian countries were happy, even eager, to accept the conditions that were provided as a manufacturer of Nike. The reason is that those wages were probably equal or superior to wages available from other sources. If Nike were to leave the country because of the pressures placed upon it, the workers would undoubtedly suffer greatly.

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.

Nike, the world’s largest and leading innovator in athletic footwear, apparel, and equipment, is considered to be the quintessential global corporation. The company was founded in 1972 by Phil Knight, a former track star from the University of Oregon. Their company logo, “Just Do It”, has become one of the most recognizable marketing phrases throughout the world as well as their celebrity sponsors, which include Michael Jordan and Tiger Woods, are also some of the most recognizable athletes. In 2006, Nike employed an estimated 650,000 people in 600 different factories scattered throughout the globe and had an annual revenue of

Apparel and shoe manufacturers continued to offload the more costly yet easily replicated part so their business models to concentrate on brand building, marketing, sales and attaining greater distribution channels globally. These are the pressures all apparel and shoe manufacturers face, and it is particularly challenging in the athletic show industry (Kynge, 2009). Adidas, Converse, Nike and Reebok have been outsourcing production of their shoes for in some cases nearly three decades. Nike was one of the leaders in this strategy, seeing to create a more efficient supply chain and also drop the labor and union costs of manufacturing in the U.S. (Boje, Khan, 2009). Adidas, Converse and Reebok have all followed Nike's lead, with Adidas benefitting from the fall-out generated when investigate reports showed Nike using child labor throughout Pakistan and Vietnam (Boje, Khan, 2009). All four of these companies share a common prioritization of manufacturing operations, yet none of them with the exception of Nike has a comprehensive Corporate Social Responsibility (CSR) program in place to ensure ethical compliance to global standards of outsourcing in their industry (Nike Investor Relations, 2012). The intent of this analysis is to compare and contrast the four companies mentioned and their outsourcing practices. Their reasons for choosing to outsource are very much the same; the industry is shrinking

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).

Although sweatshops get a bad name for their conditions, it has been shown and documented that sweatshops actually benefit people by occupying them with jobs they wouldn't get anywhere else, as well as help boost the economy. Sweatshops have been known to boost economies in areas where poverty is an issue.They offer jobs and shelter from the streets. When someone hears the word sweatshop they think of child labor, Most people are too focused on the negative side of sweatshops that they can’t see the side that benefits and aids the people of its surroundings. In the grand scheme of things, The good of sweatshops outweighs the bad.

With a slogan of “Just Do It,” Nike is known all over the world for its products ranging from apparel to shoes. Receiving recognition and sponsorship from various celebrities and athletes including Michael Jordan, Nike’s brand is generally associated in a positive light. However, the brand itself, variety of products, and numerous sponsors exist as only a few aspects of this continuously expanding brand. Another aspect to consider when addressing the overall existence of a product as well as the constant introduction of new products is the production process itself: how the product came to be, who is involved in creating the product, and where the product is produced.