(i) Identify any THREE (3) unethical issues in your organisation.

Nike (figure 1) is a very well-known company which produce quality shoe and athletic wear around the world. It is founded by an athlete named Philip Knight and his couch Bill Bowerman (Figure 2) in January 1964. Its slogan called ‘Just Do It’. The quality and standard of its products have been strongly recognised by people, even though Nike’s products are considered expensive, yet its performance makes it valuable.

i. Inhumane working conditions.
Although Nike’s products and services are able to satisfy its consumers, there are some invisibly unethical issues which happened between its employers and employees that are intolerable. The first serious case is Nike’s workers faced direct violence in the factory. According to the daily mail reporter, workers announced that they are being mentally and physically abused at the sweatshops. The supervisors often slap them in the face, kick them, throw shoes at them and call them ‘dogs’ and ‘pigs’. With the proofs, one of the workers in Sukabumi mentioned that she was kicked by a supervisor because of making a mistake while cutting rubber for soles. Some workers also described that they were being hit or scratched in the arm until they bled. Besides that, a 30 years old lady named Mira Agustina, was fired in 2009 for taking sick leave even doctor’s note was summited. She said furiously that it was a terrible work and the bosses frequently insult the workers by calling them animals’ name. Ujang Suhendi, 47, also mentioned that they were crying and allowed to precede their job after 2hours under the sun. Salary is a part of workers’ daily bread. Some of the Nike’s workers are fear of filling and reporting their complaints to the top management or public because they will be punished and lost their job immediately. Therefore, in order to stay in the workplace, the only choice for them is to bear with all the unethical treatment.

ii. Undesirable workplace.
According to our research, Nike does not provide sufficient beneficial working conditions to their workers as their employees are not working under a safe and sanitary working conditions. During work shifts, some of the workers may faint due to exhaustion, fumes, heat, and poor nourishment. However, this is a common phenomenon happened in Nike’s sweatshops.
Nike was subjected to a scandal in 1997 regarding the toxic fumes issue. The workers in one of its factory were being revealed to toxic fumes up to 177 times which exceed the Vietnamese legal limit. Later, Nike announced that they have been minimized the emission after the test is conducted, yet they are not willing to show the results of the tests to the public. Furthermore, the health and safety experts have also found that severe risk exists in Nike’s factories such as excessively exposure of toxic chemicals, insufficient personal protective and safety equipment, and lack of adequate guards to keep workers away from dangerous machines.

iii. Unreasonable low wages and long hours.
In addition, Nike offers a very low wages to its workers which are rarely sufficient to cover workers themselves and their families’ basic necessities. Nike controls a lot of “sweatshops”, which means factories in where the workers work for long hours with less pay under inferior conditions. Nike promised public to increase their workers’ salary but they broke their commitment. This issue makes the public and people related feel disappointed and discouraged. Workers are putting their efforts on completing their tasks, yet Nike pays them in an unreasonable low wages which not even able to cover the three meals in a day. At China, the workers only received $1.60 per day but three meals cost about $2.00 in average. In fact, the total of all workers’ salaries only take 4% of Nike’s advertising fees. The workers would not earn any extra bonuses or wages although they forced to work more than the normal working hours. Thus, these workers only earned in average of $0.20 per hour in the sweatshops. The Labor laws stated that the maximum overtime is only 200 hours in every year, but Nike’s workers in sweatshop are forced to work more than 500hours annually. Nike violate their own Code as they ever been prescribed that workers work not excess 60 hours per week, but the workers coerced to work 77-84 hours weekly. If workers refused to work, they will be punished or received warnings. After three warnings have been given, such worker will direct lose his or her job. The ridiculous low-wages and long working hours are seriously violating the human rights and the Code of conduct. In conclusion, the transparency of Nike’s undesirable working conditions through news and articles revealed by workers and people related, does not change Nike’s attitude towards this issue. Thus, people who strongly disagree and intolerable with Nike’s unethical labour practice protest and strike in the public (figure 3).

(ii) Propose THREE (3) activities that can create awareness among your staff regarding the importance of ethics at the workplace,

Nowadays, a strong work ethics is vital for an organization in order for them to achieve its mission, vision and goals. In order to create awareness among the staff regarding the importance of ethics at the workplace, organization might take into consideration by conducting ethics training for their entire workforce. Ethics training is a simple course or activities which help the employees to learn what is not acceptable. For a code of conduct to be successful, an organization is responsible to let the entire workforce to understand it and clearly know why it is important.
Providing a talk during the ethic training is essential. It can enhance the employees’ capability in identify or to analyse ethical dilemmas. In addition to that, it can affect how an employee thinks about ethic and assist them in addressing ethic issues that may arise while performing their job. Moreover, ethic training enhances the skills of decision maker such as top manager to interpret or to apply corporate values in their specific and day-to-day decision making. Not only that, it will strengthen the communication skills of the employees regarding the corporate values and it can promote a shared ethics culture in an organization. Ethics training create teamwork among all the employees. It is important that employees have a high sense of teamwork in order for an organization to meet its long-term goals. It also increases the quantity of production and improves the quality of work when the employees work together and respect their peers.
Training should be considered as a process rather than a one-time event. Therefore, it is good for an organization to conduct multiple training. Multiple ethics training help employees to build employees a good work ethic. Unethical activities such as workplace gossip between employees in an organization can be destructive. Employees usually refuse to get involved in any gossip or even listen it when they have a good work ethic. Besides, the employee will encourage the others employees to mind and concentrate on their own task. By doing this, it can reduced misconduct at work and keep the morale up. Employees with a good work ethic are more willing to cooperate with the others employees. The particular employees will try to solve the problems immediately instead of debating with other employees about the issues. They also respect, hear and accept the others opinion.
Besides that, employees must know the importance of ethics at a workplace irrespective to the size of the organization. An organization must provide a safe environment for their employees to report any unethical behaviour. Nike is one of the world largest athletic brand with good reputation and image, but the employees is been forced to work over sixty hour a week and serious punishment for employees who refused to work overtime. Therefore, it is important for an organization to provide an anonymous way to let all their employees to report or to complaints any unethical behaviour so that necessary action can be taken immediately by the organization. Employees will only contribute more into their work when the organization provides a good working environment. Although all the organization are practicing diversity in their workplace, but employees with good work ethic will understand the important of a diverse workplace for an organization. While working in a diverse workplace, different race of employees may have their own opinion or suggestion. Therefore, when one employee appreciate and value the others employees contribution, regardless of their race, religion, gender or ability, it allows an organization to have more creative ideas and a better solution for the problems.
However, different employees may have their own attitudes and behaviour. Cases such as taking another employee idea and making it your own can occur anytime. It is considered as a dishonesty or unethical behaviour within an organization. Employees with good work ethic will not cheat and make others look bad. They will take responsibility for their own mistakes and be honest while working in an organization. Apart from that, employees who see values such as respect, honesty or trust while working in an organization will reduced their pressure to compromise with the ethics standard, in the same time, increase the employees willingness to report misconduct.
Lastly, an organization must set an example for their workforce. In order for employees within an organization to behave in an ethical manner, it is important for them to know that they are actually lead by a moral leaders. However, Nike employees have claimed that both verbally and physically abused by the employers in an organization. Therefore, organization must create their own company policy that delivery it with ethics and clearly outline what is and is not considered acceptable. Sign of unethical behaviour will be less likely to display by the employees since they know that it will not be tolerated. On the contrary, good discipline will be display by all the employees. Employees who work in an organization with leaders or top management who are modelling ethical behaviour, they are more willing to pay extra effort into their jobs. For violator of the company ethic policy, certain punishment must be taken by the company since one employee in an organization who violates the policy can ruin the image of the entire organization. Punishment such as downgraded can be enforces by the organization for all the violators. Serious punishment such as physically abused are not allow under the Occupational Safety and Health Act.
For employees who comply with the company ethic policy, positive reinforcement can be used as a way to encourage the repetition of the productive behaviour. Employees feel greater satisfaction to their organization when the organization offering them recognition of accomplishment or bonus at the end of every year and will feel values by their organization.

(iii) Identify and discuss the characteristics of the said company’s products/ services that contribute to social responsibility and/ or environmental friendliness.

a) Social Responsibility
Help the adolescent girls Based on our research,The Nike Foundation was created in 2004, it is a non-profit organization. The main purpose of this foundation is to help the adolescent girls develop their growth and potential to escape from poverty. Nike formed Girl Hub in partnership with U.K Department for International Development is also known as DFID in the year 2010. They have been working this program in some of the countries which in Nigeria, Rwanda, Ethiopia and London to transform the adolescent girls’ life and help them to end the poor life. Therefore, they need the global to invest by helping them to realize their ability, potential and providing a lot of useful resources for them to growth in a healthy life-style. In the past few years, the girls were treated invisible in the global. The Nike Foundation organized The Girl Effect in the partnership with NoVo Foundation, Coalition for Adolescent Girls and United Nations Foundation in 2008. The aim of the concepts are giving the opportunity for the adolescent girls to make a voice in the global stage and involving them on the agenda. It will be a good turning point for the adolescent girls and become visible in the global. Besides that, it is agreat way to help them to discover their abilities for lifting themselves out from poverty. It is not only for them, but also for their families, their communities, and their countries. There are millions of adolescent girls lived in poverty and get married at their young age. The Girl Effect concept is also helping the adolescent girl to prevent them from early marriage, pregnancy and HIV or AIDS positive by providing them good educations, medicals care and relevant resources.
Raise funds for the Doernbecher Children’s Hospital In 2004, Nike had team up with Oregon Health & Science University (OHSU) Doernbecher Children’s Hospital to raise funds for the hospital through Doernbecher Freestyle Project. This project is OHSU Doernbecher patients who are fought with their serious illness and worked with Nike designer to create shoes that are unique and make their own stories. The patients took over the shoes process by following their own creativity in creating the style or pattern, choosing the materials and color that representing their own stories and personalities. Through this project, they raised $6 million for the OSHSU Doernbecher Children’s Hospital. All the money that they raised will help the hospital to increase the medical equipments, recruit or train new pediatric specialists, support the clinical care and expand the pediatric research. These are the latest collection of the Doernbecher Freestyle Project which designed by the patients with Nike designer (Refer Appendix).

b) Environmental Friendliness
Using Flyknit technology to reduce waste Nike finds out that the best runner wants a shoe that as light as a feather and fits like a sock. To achieve this mission, all programmers, engineers and designers of Nike was work harder in order to create a shoe with fewer pieces and reduce waste. After four years and over 195 times of research and repeated trials, Nike has successfully created the “Flyknit”. Flyknit is a special technology to make a shoe which cleverly knits the yarns into a one-piece upper. Flyknit also can be defines as a revolution of shoe design because it can benefit to all athletes and also the environment. Nike using micro-level engineering controlled by the computer to knits the yarns into structure and support accurately. Every single stitch they used to make a shoe is important and meaningful. The result finally proved that Flyknit is a technology that used minimizing materials to maximize the performance of the shoes. The shoe is form-fitting upper and becomes amazingly strong and light with significantly reduce waste. The one-piece upper can severely reduce waste of materials and becomes environment friendly because it does not need the stitching and gluing of the similar shoes with an average of 37 pieces.
Reuse a shoe In order to decrease the bad influence on the environment and lessen the amount of shoes headed for landfills, Nike has created a program called “Reuse-A-Shoe”. The purpose of this program is to collects old and worn-out athletic shoes. Then, these shoes will be recycling and converts into Nike Grind which is a material used to creating athletic and playground surfaces and some Nike products. People can put their old athletic shoes at the nearest Nike’s drop-off location. Since 1990, Reuse-A-Shoe program has received 28 million shoes for recycling. In the United States, after Nike has received the old shoes, it will then send to Memphis, TN. Nike will combine the old athletic shoes with its manufacturing waste to develop Nike Grind material at the recycling facility. The recycling center in Memphis will cut each shoe into three parts such as rubber outsole, middle midsole, and fiber upper and then purified it by grinders to become high quality materials to reuse. The shoe’s outsole is become Nike Grind Rubber which can used to build playground surface and new Nike products such as the outsoles of the Nike Pegasus. The shoe’s midsole is become Nike Grind Foam which can used to made a cushion for outdoor basketball courts and futsal fields. The shoe’s fabric upper is become Nike Grind Fiber which is used to create the cushioning pads for facilities such as indoor synthetic courts. Nike is continuously find ways to become more environmental friendly, so Nike is not stop at building sports surfaces but started to use pre-consumer Nike Grind and the scrap material is came from its manufacturing facilities.Moreover, when people buy a new pair of Nike shoes, they can find that the new shoebox is more light and strong then the old box. This is because the materials to make a new shoebox is 23% less than the old box and this will save about 200,000 of trees per year. All of the Nike’s shoebox was using 100% of recycled cardboard since 1995 until now.

(iv) Discuss THREE (3) advantages of proper implementation of the activities as mentioned in part (ii) and (iii).

In today’s competitive world, companies are striving to obtain recognition and competitive advantage in order to become the leader in the market. This caused that company will find numerous ways to heighten their position in people’s sight within different kind of aspects such as social responsibilities, environmental friendliness, and welfare in the workplace. Therefore, in a day-to-day operation, company has to be clear about which kind of actions are suitable to be taken and which kind of activities has to be conduct. The first point that has to be considered in making decision is the advantages that arise by the actions and activities.
In Nike Inc., they carry out ethics training to remind their staff about the importance of ethics in workplace as mentioned in part (ii). The advantages of carrying this activity is the Nike Inc. can reinforce the requirement of behaving ethically and instill a positive working environment. When employees are familiar with the organization’s ethical code and apply the code on their day-to-day work, they will simply develop a positive relationship with coworkers and superiors. They will always be alerted that all of their behaviors should be aligned with moral values. These help Nike Inc. to raise the spirit of cooperation and morality between workers in the workplace. Based on our studies, an organization with strong ethical cultures is having employees who are more committed and loyal. They tend to reduce turnover rate and improve workers’ productivity when employees are satisfied with the ethical working environment. When Nike Inc. working environment is fair and ethic enough, it is easier for them to attract good-quality workers. These will lead the company to a better performance in the aspect of products and services.
Besides that, Nike Inc. also committed their social responsibilities in the society. In the past, financial performance is the main criterion in judging a company’s value. In this decade, however, corporate social responsibilities had become one of the important criteria to measure a company’s successful. Of course, Nike Inc. also did their effort in contributing to society. As mentioned in part (iii), Nike’s had formed Nike Foundation to help adolescent girl in developing their ability to run away from poverty and also raise funds for Doernbecher Children’s Hospital. By fact, conducting corporate social responsibilities will always benefits an organization. For Nike Inc., conducting corporate social responsibilities help them to gain a better reputation and favorability in people’s sight. Having good reputation towards their ethical behavior can strongly portrayed a good image in the marketplace. Based on a survey done by Cone Communication, a public relation and marketing agency, regarding about the level of engagement of 1,019 American to an organization which will conduct corporate social responsibilities, 82% of them will be more likely to purchase products and services from firms that perform corporate social responsibilities in society over those that didn’t and 40% them will not purchase from these firms at all. Therefore, having good image is a way and opportunity for Nike Inc. to build a long-term relationship with their customer. They can attract more potential customers when people see Nike Inc. as valuing people more than profit. In another hand, showing corporate social responsibilities also help retain their available customer for continuous supporting their products. When Nike Inc. obtains a large loyal customer base, they will achieve a long-range business success.
Apart from these, Nike Inc. also well implemented in environmental friendliness. In the answers of part (iii), Nike Inc. is using Flyknit technology in producing their sport shoes and also transforms old shoes to become useful materials in creating athletic and playground surfaces and some Nike products. Both of these activities benefit both the environment and Nike Inc. themselves. George Mason University researcher Nicole Darnall had conducted a study on 2,600 manufacturing facilities operating in 7 countries. This study showed that companies actually making benefits by producing environment friendly products. Therefore, Nike Inc. could generate profit in long run because reusing old shoes and Flyknit technology probably helps to reduce waste and lower down production cost. Not only that, become environmental friendly also help Nike Inc. to enhance brand differentiation. Indeed, promoting Flyknit technology and reuse old shoes had become one of the competitive advantages that help Nike Inc. to differentiate themselves apart from their competitor that does not obtain the similar technology. Furthermore, consumers nowadays are more interest in brands that are more environmentally involved. This is another advantage or opportunity for Nike Inc. to generate profit because the willingness of consumer in paying for green products had increased. The financial and investment opportunity also become greater because environmental friendly products tend to attract more investors. Regardless of investors or consumers, their involvement in Nike’s product is an indirect way for them to contribute on environment. That is why environmental friendly products become one of the way for Nike Inc. to generates profits.