...working conditions in a plant making Nike footwear. In 1994, an accounting firm, Ernst and Young, were hired to audit code compliance by making spot checks at Nike factories. In that audit was information concerning Nike factory conditions and how the workers were being mistreated. The audit claimed that Nike workers in Southeast Asia were exposed to toxic chemicals, subjected to physical, verbal, and sexual abuse, forced to work an illegal excess overtime at minimum wage, and suffered poor hygiene. Nike, trying to save their company spent many years claiming that these accusations were false. However, when people compared claims from Nike to the audit, they found some of the details to be inaccurate and/or misleading. Marc Kasky, a California resident and activist, sued Nike for unfair and deceptive practices under California's Unfair Competition Law. Kasky alleged that Nike made "false statements and/or material omissions of fact" concerning the working conditions under which its products are manufactured. Nike filed a demurrer, contending that Kasky's suit was absolutely prohibited by the First Amendment. The California Supreme Court dismissed the case as “improvidently granted.” However, late in 2003 Kasky and Nike announced a settlement. In return for Kasky dropping the case, Nike agreed to give $1.5 million to an industry-friendly factory monitoring group. Analysis Kasky, in my opinion, was correct and had good intentions when he sued Nike. He wasn’t in it for the money...
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...Running Head: Nike, Inc. Nike, Inc. Case Study Adelaide A. Odoteye FIN 586 – Dr. Cullers Fall 2006 The brand name “Nike” is one of the most readily recognized around the globe. The name is synonymous with high-quality athletic shoes, apparel, and accessories in the minds of many people worldwide. Perhaps it is the ubiquitous Nike “swoosh” and compelling marketing that commands attention. Or maybe it is the association between the brand name and its famous endorsers, such as Tiger Woods and Michael Jordan. Alternatively, it may be Nike’s cutting-edge sporting vision and technology that entrances multitudes of consumers. Quite conceivably, it is a combination of these factors that has propelled Nike to the top of its industry. However, not all of Nike’s story is ideal. In recent years, the company has faced criticism in connection with its use of contract labor in developing nations. The purpose of this case is to provide an understanding of the company’s background, its general business strategy, and its use of contract labor. The Athletic Apparel and Footwear Industry The athletic apparel and footwear industry experienced steady growth for more than two decades, beginning in the early 1980’s. For example, in the U.S.A. alone, consumer spending on athletic footwear increased by 10 percent during the first six months of 2005 (Quinn, 2006). Consumers were not just professional athletes, but ordinary men, women, and...
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...Nike Dilemma: Still waiting for them to "do it"! Another corporate giant having its fare share of controversies over the years is Nike. Nike employs approximately 26,000 people worldwide. In addition, approximately 650,000 workers are employed in Nike contracted factories around the globe. More than 75% of these work in Asia, predominantly in China, Thailand, Indonesia, Vietnam, Korea and Malaysia (Nike 2006). In 1998 Nike came under fire for the sweatshop conditions of the workers in the Nike factories in China and other third world countries. The evidence showed that the workers were regularly subject to physical punishment and sexual abuse and exposed to dangerous chemicals. (Nike Accused of Lying About Asian Factories 1998). Sub standard working facilities, bare minimum wages and risks to health of labourers mark NIKE factories in Asia. The firm was also accused of practicing child labour in Pakistan. So the question now is, why did it happen, and more importantly, has anything been done since to correct it. So why did it happen? Well that is quite clear. The reason why most firms outsource their activities to lesser developed countries is to exploit cheaper labour and production costs. Nike has a brand reputation worldwide, and in-fact is a market leader in the sales of athletic shoes. The constant focus is to formulate ways and strategies to reduce production costs, and one way of that is fewer wages to the workers. The high unemployment levels in the third world countries...
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...is a type of legal term that a company or individual is intended to make a profit from the audience. It is usually to convince the audience to take a certain action or buy a particular product. The first commercial speech court case was in 1942 called the Valentine v. Chrestensen and it provided the foundation of the commercial speech doctrine. Chrestensen was an owner of world war one submarine and it was located on the state pier on East River in NYC. He created pamphlets to advertise his exhibit and charged an admission fee. The Police warned him that it was violating the Sanitary Code and he could only use handbills for only information or public protest use only. Chrestensen protested against the City Dock by going around...
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...easier to start seeing alterations from this. In Kaplan and Langdon’s article “Chinese fandom and potential marketing strategies for expanding the market for American professional sports into China” (Kaplan & Langdon 2012). Marketing strategies are reviewed as one of the main topics. “One strategy of the NBA was to partner with established Chinese brands” (Kaplan & Langdon, 2012). This allowed the NBA to have an easy avenue for expansion as the market had already been developed. Take Nike for instance from the example. In Kaplan and Langdon’s article it is stated “China’s biggest seller of athletic shoes, Li Ning, recently surrendered its top position to Nike, even though Nike’s shoes – upwards of $100 a pair – cost twice as much. The new middle class ‘seeks Western culture’, says Zhang Wanli, a social scientist at the Chinese Academy of Social Sciences. ‘Nike was smart because it didn’t enter China selling usefulness, but selling status” (Kaplan, Langdon 2012). Basically when Nike came in, they did not say that they had the best product. They did not say they had the cheapest product. They said they had their product. Because of the interest by these Chinese consumers that was created by their interest or “Fandom” associated with the sport of basketball where consumers were familiar with the specific brands because of their favorite athletes or teams, they were able to establish themselves as a reputable brand with little to no opposition. Technology Technology has...
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...NIKE From Sweatshops to Leadership HRM 522 June 12, 2011 Global businesses can sometimes be difficult due to the different cultures. Not all cultures carry the same value, law and ethical standard. Nike is an international brand that has many retail accounts in over 160 countries. Being an international company can cause business ethical and legal issues. Integrity is important and sometimes a challenge when a corporation must respond to criticism or hold back on certain company details. Nike dealt with criticism from right activist, media, and face labor rights violations. However, over a period of time and after making some important adjustments; Nike is working on improving its company image. Nike used traditional advertising methods to broadcast its product. Nike public relations tactics dealt with the wage policy, visiting campuses on universities, personal letters, corporate responsibility and using celebrities as spoke person for its product. Nike launch campaigns regarding child labor, low and non- existent wages. Nike believes that the U.S dollars were meaningless because the cost of living was different in other countries. Nike held press conferences for newspaper staff at colleges. These were ways for Nike to make proactive efforts to address the concerns of activists protesting against their products. Nike made a few mistakes in handling the negative publicity. Three...
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...In 2003, the United States Supreme Court remanded (sent back to the lower courts) the case of Nike v. Kasky on procedural grounds, thus leaving open the debate on what exactly constitutes commercial speech. The case arose from Nike’s making of “allegedly” false and misleading statements when responding to critics of its overseas labor practices. The Nike Corporation claimed that its public statements defending allegations of “sweatshop” practices in their overseas operations should be accorded First Amendment protection. The plaintiff, Kasky, claimed that these statements were “commercial speech,” which can be regulated (in California, where the case was brought, commercial speech can be found to be false advertising if it is deceptive). Do you think Nike’s statements fall into the category of commercial speech or unfettered (pure) political speech? What does the lack of a definitive answer from the Supreme Court tells businesses about future public statements or claims by them regarding their operations? Do you believe the Supreme Court’s remand, without a decision on the merits, will have any type of “chilling effect” on businesses? Should companies' public-relations campaigns be protected under the First Amendment? Discuss and debate! So first off, what exactly is commercial speech? According to Cornell’s University Legal Information Institute, the Supreme Court defines commercial speech as “speech where the speaker is more likely to be engaged in commerce, where the intended...
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...Identify a global organization with a multinational presence. *Nike Identify and research a cultural issue that affects this organization's interactions outside the United States. Define the issue and provide an overview of how became an issue in the organization. Prepare an analysis of the ethical and social responsibility issues your organization must deal with as a result of being global. Write a 1,050- to 1,400-word paper summarizing the results of the analysis. Include the following: • Identify ethical perspectives in the global organization. • Compare these perspectives across cultures involved in the organization. • Describe a viable solution for this issue that could be acceptable by all stakeholders. Introduction: The Nike Corporation In today’s economy, there are several corporation that use multinational tactics in order to make their business strive and successful. A great benefit of multinational corporations is that it helps create wealth and jobs around the world. These corporations also offer much needed foreign currency for developing economies. However, there are many disadvantages such as multinational companies have monopoly power which enables them to make excess profit and pushing local shops off the map. A global multinational company that is very recognized and popular around the world is The Nike Corporation. The Nike Corporation was originally known as Blue Ribbon Sports (BRS). It was founded in January 1964 by Philip Knight...
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...Strengths: y Nike is a globally recognized for being the number one sportswear brand in the World. Nike being a competitive organization has a healthy aver sion towards its competitors i.e. during Atlanta Olympics, Reebok expensed on sponsoring the games; Nike however sponsored the top athletes and due to this step, it gained valuable coverage. Nike has no factories; rather it uses contract factories to get the work done which makes it quite a lean organization. It has contracts with above 700 shops globally in about 45 different countries. Nike is quite strong regarding its research and development; quite evident regarding its evolving and innovative product range. They manufacture high quality at the lowest possible price, if prices rise due to price hike then the production process is made cheaper by changing the place of produ ction. It has a strong sense of marketing campaign by sponsoring top athletes. It uses lunarlite foam and flywire materials in order to make the manufactured shoes lighter and more controllable. Nike, Inc is listed in NYSE and positioned as a US headquartered worldwide sportswear trader and supplier that: Contracts with about 700 shops worldwide, runs offices in 45 countries, and manages factories in China, Indonesia, Taiwan, Thailand, India, Vietnam, Philippines, Pakistan, and Malaysia. Belongs to Fortune 500 companies which 2007 total re venue exceeded 16 b. USD Employs more than 30.000 people worldwide; Owns strong marketing strategy under Nike brand that...
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...taking jobs away from our country. Controversy will arise either way it is looked at so it makes it almost unfair” Nike, Inc. is highly recognized name and logo not only in the U.S, but also around the entire world. This is because Nike is an American multinational corporation that is highly engaged in the design, development, and manufacturing. They are also responsible for being the world's largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment because of the proper worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike the Greek goddess of victory. Now that we have a brief history lesson of Nike let’s get into some of the culture issues they have faced and face since they have globalized. When a contract factory wishes to do business with Nike or one its many subsidiaries, it is critical that the owners and/or managers in the supply chain understand the cultural differences across the globe. Failure to understand the cultural norms can result in communication failure, lack of respect, negotiation breakdowns, and a loss of current and future business opportunities. On the contrary, it is critical for Nike managers to understand the culture differences of their international supply chain as well. Failure to grasp the...
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...Business Environmental Audit Critically assess the strategic Direction of the Nike brand William Hanrahan (060953199) ACE1004 Introduction to Management Contents 1.0 Executive Summary 2.0 Introduction 3.0 Nike 3.1 History 3.2 The Market 3.3 Industry Analysis 3.4 Trouble Ahead for Nike? 3.5 Nike Advertising 3.6 Brands of Choice 3.7 Nikes other Brands 3.8 Targeting New Markets 3.9 Financial Performance 4.0 External Market Drivers 4.1 Political Drivers 4.2 Economic Drivers 4.3 Socio-Cultural Drivers 4.4 Technological Drivers 4.5 Environmental Drivers 4.6 Legal Drivers 4.7 Charity Work 5.0 Competitive Environment 5.1 Porter’s Five Forces 5.2 Competitor Analysis 5.3 Nike vs. Fake Goods 5.4 Stakeholders 5.5 Stakeholder Mapping 6.0 The Brand 6.1 Competitive Advantage 6.2 The Swoosh 6.3 Routes to Competitive Advantage 6.4 Ansoff Matrix 7.0 Conclusions 7.1 Swot Analysis 8.0 Recommendations 8.1 Reflection 9.0 Portfolio of Information Sources 9.1 Primary Sources 9.2 Secondary Sources 1.0 Executive Summary Nike was founded in 1972 by Philip Knight and Bill Bowerman. Bowerman is well known in America as the University of Oregon coach. He brought jogging to America, built an unrivalled track and field program at that university, and taught his athletes to seek the competitive advantage everywhere - in their bodies, their gear and their passion. The Marketing men at Nike would like us believe that the brand is more than a product, it is an experience that we are buying into. Wherever...
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...Rights, Responsibilities and Regulation of International Business Sol Picciotto* This essay discusses the paradox of the emergence of corporate codes of conduct in the 1990s, following pressures from consumer and labor activism, in a period of more general liberalization of international investment leading to deregulation. It suggests that the advantages of flexibility and adaptability to specific circumstances offered by such codes are counterbalanced by their self-selected content and inadequate enforcement. Rejecting the assumption that there is a sharp distinction between voluntary standards and binding law, the essay analyzes various ways of grounding codes in legal obligations. It proposes that a safer and more dependable environment for international investment could be provided by a framework agreement, which would link binding standards for corporate social responsibility in key areas, such as combating bribery and cooperation in tax enforcement, with traditional investor rights based on investor protection and liberalization rules. I. Introduction Over the past decade, there has been an intriguing dual movement in the development of the forms of regulation of business in the global economy. Since the 1980s the dominant trend has been liberalization, i.e., the relaxation or removal of national controls on international capital movements. It seemed to many that business firms and investors were close to attaining the goal of a world market...
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...This page intentionally left blank Lut12575_fm_i-xxvi.indd Page i 2/10/11 2:28 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles International Management Culture, Strategy, and Behavior Eighth Edition Fred Luthans University of Nebraska–Lincoln Jonathan P. Doh Villanova University Lut12575_fm_i-xxvi.indd Page ii 2/11/11 2:35 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, EIGHTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on recycled, acid-free paper containing 10% postconsumer waste. 1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811257-7 MHID 0-07-811257-5 Vice President & Editor-in-Chief: Brent Gordon Vice President, EDP/Central Publishing...
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