Nike Global Business and Challenges

Once a company, like Nike, decides to become a global entity, it will often experience an increase in profitability. Unfortunately, companies like Nike must overcome some difficult obstacles before establishing a successful business in a foreign country. Some of the issues of concern are child labor laws, wages, and outsourcing’s effect on sales. Because of this, most widely known companies have presented various cases to defend their positions on conducting business in the foreign country. One such example is a Nike sweatshop labor case that stirred up a large amount of controversy over ethical business practices. Even though Nike has attempted to recover from the bad press it received about the sweatshops, it still struggles to defeat the negative feelings from people across the United States. Thus, a summary of the case, the legal, cultural and ethical challenges, an understanding of the roles the host governments play, and the strategic and operational challenges faced are important to gain a thorough understanding of the issues and case.

Most people could easily define Nike and are familiar with the products offered, like the customized options available in the Nike store online, Nike Sportswear, Nike Women, Nike Basketball, and Nike Football. These products, among others, have led Nike to a profit of $15 billion in 2006 and a catchy “Just Do It!” slogan (Hill, 2009). The company outsourced its manufacturing plants to several countries in order to lessen costs and become more efficient in productivity. The outrage and protests that followed were far from what Nike expected; the company was labeled as forcing “children to slave away in hazardous conditions for below-subsistence wages” (Hill, 2009). As a result, protestors of globalization and human rights activists criticized Nike for taking advantage of the