...NIKE AND ITS FACTORIES IN VIETNAM THE CONTEXT OF THE ISSUE In order to offer competitive prices, a lot of Western companies relocate in low-wages countries. Nike is not unique in that respect: in fact the company choose to use subcontracted factories in Asia, especially in Vietnam. It is important to put this trend in context: this particular industry (the footwear industry) know a significant growth since two decades. Vietnam has a very high unemployment rate, which reflects the poor economic situation of the country. In this perspective it can be said that Nike factories are essential for Vietnam’s economy, because it offers plenty of jobs. In the 1990s some allegations were made that accused Nike of mistreating its Vietnamese workers. Nike tried to justify these local problems by the fact that cultural differences in South-East Asia make American management more difficult for the company. This was part of its explanation justifying its unethical behavior. WHAT IS IN STAKE AND AT WHICH LEVEL The problem was raised when people started to criticize Nike’s behavior. They acted publicly: college students asked their sport teams to drop Nike’s products, politicians signed petitions, web-sites against Nike were created… What enabled them to act what the researches done about Nike behavior: reports published had revealed information. Here we can notice different values in conflict. Profit, represented by big firms, would be one value, and the importance of ethical...
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...Labor Practices Factory workers endure abuse on the job lacking a voice or ablility to do anything about it. Since Nike contracts out for their factory managers, it has been hard for Nike to regulate what goes on when they are not on their tour or walk through. “A Korean supervisor in a Vietnam factory was found guilty of beating 15 Vietnamese about the head with a shoe “upper”, and another Korean supervisor was charged with sexual molestation.” (Saporito 3) In this instance it was not an U.S. supervisor, nor was it a military officer but someone of a different nationality. The hard part is that there are no independent unions and meaningful corporate codes of conduct to discipline management. So workers must turn to the courts for help which is a long fought battle that no one wants to attempt. In one case that made it to, a Vietnamese court recently found a Korean supervisor guilty of beating workers and extradition may be sought for the accused sexual molester who fled. In Indonesia 24 discharged Nike workers are challenging the legality of their dismissal before the country’s Supreme Court (Saporito 3). These are major breakthroughs in the court systems to have someone tried and convicted in these distant countries whose courts are often corrupted. Factory conditions are consistently getting press here in the U.S., as many are angry with Nike for not providing for their overseas employees. The following account is of the conditions in a Chiniese factory: Twelve hour...
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...1. Corporate Social Responsibility (CSR) and its Importance: 1.1 Definition of CSR: What does Corporate Social Responsibility or CSR mean? The World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts, used the following definition: Corporate Social Responsibility is the continuing commitment by business to behave ethically and to contribute to economic development while improving the quality of life of the workforce and their families, as well as of the local community and society at large. Traditionally in the United States, CSR has been defined much more in terms of a philanthropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities. This model tends to be more sustainable because : • Social responsibility becomes an integral part of the wealth creation process - which if managed properly should enhance the competitiveness of business and maximise the value of wealth creation to society. • When times get hard, there is the incentive to practice CSR more and better - if it is a philanthropic exercise that is peripheral to the main business, it will always be the first thing to go when push comes to shove. Different organisations have...
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...Chuck Thompson Cross Cultural Perspectives The Nike Corporation is a well known global organization. From the very beginning the company has turned to other countries as a means of cheap labor. Nike was started in 1964 as Blue Ribbon Sports. Over the years Nike have had a few challenges with cultural issues. Nike has been criticized for using some factories that are located in China, Vietnam, Indonesia and Mexico. The factories that they were using in Vietnam was documented for violating minimum wage and overtime laws, they have made the changes to correct these mistakes. During the 1990s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used. A July 2008 investigation by Australian Channel 7 News found a large number of cases involving forced labor in one of the largest Nike apparel factories. The factory located in Malaysia was filmed by an undercover crew who found instances of squalid living conditions and forced labor. Nike has since stated that they will take corrective action to ensure the abuse does not continue with in any of the factories that they are contracted with. The remedy for Nike, other global brands, and various agencies, implemented...
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...Running head: Nike: A SWEATSHOP DEBATE Nike: A Sweatshop Debate University of Phoenix MGT/448 Instructor J. Ryan April 17, 2012 Nike: A sweatshop debate. Nike, a multi-billion dollar corporation, is the world’s primary supplier of athletic shoes and attire. Over the past several years, Nike has been involved in much controversy over its possible sweatshops. The following will address the legal, cultural, ethical, strategic and operational challenges Nike faces because of this controversy, as well as their roles in resolving this issue. Legal, Cultural, and Ethical Challenges Even though Nike may subcontract its companies to foreign countries, it is still Nike’s responsibility to ensure the manufacturing sites are operated with integrity. With all of the negative press, and investigations that took place to prove Nike was guilty of running sweat shops, Nike had to take corrective actions overseas and consider the effect the negative press had on its financial stand as well the effect it had from an ethical point of view. They developed a code of conduct and terminated contracts with suppliers who did not comply. According to Hill (2009, p 154), Nike has “signaled a commitment to improving working conditions. It requires that foreign subcontractors meet minimum thresholds for working conditions and pay. It has arranged for factories to be examined by independent auditors.” Nike has also created minimum age requirements for factory workers as well as enforcing OSHA...
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...Perspectives: Nike Student UoP Ethics 316 June 18, 2012 Week Five Dr. No Instructor Cross-Cultural Perspectives: Nike Nike Corporation grew from a local United States-based footwear distributor to a global marketing giant of athletic footwear, apparel, and equipment. This paper will provide an analysis of the ethical and social responsibility issues Nike must deal with as a global organization. Additionally, the paper will identify Nike’s ethical perspectives and present the exploration of these perspectives across cultures. Ethical and Social Responsibility Issues Nike began globalization through industrializing in countries, such as Vietnam, Malaysia, Indonesia, and Cambodia. The contracting by Nike of suppliers within these regions instantly began providing jobs, which at the time was just good enough to these improvised areas. However, by the end of the 90s Nike’s use of offshore manufacturing suppliers brought revelations of the sweatshop working conditions prevalent in these nations. The ethical responsibility issues Nike had as a challenge because of these sweatshop conditions ran the full gamut. For example Vietnam factories were violating the minimum wage and overtime laws, Cambodia was using child labor, and Malaysia even went as far as employing forced labor to ensure manufacturing requirements were met. Nike was quick to...
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...Nike: The Sweatshop Debate Nike is a well-known global corporation. Recognized for its catchy “Just Do It!” slogan and the world-class athletes that represent the brand. Nike was established in 1972 by Phil Knight a former collegiate track star whom enthusiasm has lead the company to become the leading provider of athletic shoes and apparel in the world. Although, Nike is a multiple billion-dollar company they have faced several challenges in the way they conduct international business. Nike produces their products in factories all over the world. Many of these factories are located in the world’s poorest countries with low minimum wage standards and poor employee rights. Nike has been criticized for the selection of their factory locations; some people even refer to these outsourced places as “sweatshops.” This has caused legal, cultural and ethical challenges for Nike. Critics have protested that Nike has failed to follow the child labor laws in the countries they have entered, hiring under age children and making them work for long hours with little pay. For example a Korean subcontractor hired by Nike was hiring children as young as 13 years old, paying them 10 cents an hour and working them 17 hours a day. The countries that Nike subcontracts to such as the Vietnams, China and Indonesia are cultural poor. Most people are just happy to have a job and Nike is thought to have taken advantage of this fact. “Nike’s wealth, its detractors claimed, was built upon the backs...
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...1. Should Nike be held responsible for working conditions in foreign factories that it does not won, but where sub-contractors make products for Nike? Nike should be held responsible for the working conditions in foreign factories where subcontractors make products the company sells. Although Nike may be technically removed from responsibility in some areas, it clearly has the obligation to contract with subcontractors that uphold the rights and wages of their workers. The pay and working conditions that the workers of subcontractors receive is a direct result from the contract that has been negotiated by Nike. If Nike had chosen to make improved working conditions a part of the arrangement, or ensured the conditions of those workplaces met some form of human right standards those benefits may have been passed on to the workers. Since the workers are there to produce the products for Nike, the fact that the company does not actually own the facilities is irrelevant. Nike is the beneficiary of the work done in the factory and as a publicly owned firm should be accountable for the way its products are created. 2. What labor standards regarding safety, working conditions, overtime, and the like, should Nike hold foreign factories to: those prevailing in that country, or those prevailing in the United States. Nike should require all factories regardless of their location to maintain the same standards when it comes to working conditions, overtime, and any other standards. It...
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...Working rights Charter Nike Sweat shops: Since the 1970s, Nike has been accused of using sweatshops to produce their products. They found cheaper labor in under-developed countries, such as Vietnam, China etc. After workers there asked for higher wages, more rights and other benefits. The factories moved to different locations to continue giving workers the minimum wage and operate at a low cost. Nike denied the criticism throughout the 1990s. In 2001, Nike director Todd McKean quoted in an interview that technically they did ‘not own’ the factories and that they have ‘no control’ of what happens in those factories. These accusations went so far when Nike pulled out of contracts when Activist groups wanted to place a code of conduct. So Nike would monitor their working conditions in factories where the products are made. There are currently many activist groups protesting against Nike. Causing much anger through students, teachers, investors and workers etc. The man behind the committing of ending Nike’s injustice is Jim Keady. Jim Keady was the founder of an activist group called ‘Team Sweat’. It is initially one of the largest groups that protest against Nike. He himself travelled to Indonesia to live among Nike Factory workers. Surviving on just $1.25 per day. The employees were poor people looking for any income. The global alliance for workers and communities showed survey results saying, 70% of the workers in Thailand were satisfied with their supervisors 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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...Unethical Companies: McDonald’s May 14, 2010 — ethicalfootprint Mostly everyone will enjoy McDonald’s every once in a while, even if you aren’t a fan of fast food. While the food may be cheap, it may come at more of a cost to the environment and the global economy than one might think. McDonald’s has a negative impact on the environment in more ways than one. Aside from the pollution from factories where the food is produced, the unusable waste from nearly all the food they sell, and the massive amounts of power and energy that are required to keep all of the branches up and running, this corporation is destroying natural rain forests. According to http://www.dmoz.org/Society/Issues/Business/Allegedly_Unethical_Firms/McDonald’s/, McDonald’s likes to purchase their meat from privatised farms, which is not a problem in and of itself. The conflict arises when these privatised farmlands are built on the land where a lush rainforest once resided. So not only is McDonald’s polluting our air, but they are destroying a large part of what would help to clean it out. The trees that are levelled do more than just clean the air, though. They are also homes to thousands of animals that are likely killed or made homeless as the trees are torn down. This is not exactly a healthy step in making our world a better place. The people at McDonald’s treat their employees no better than they treat our environment. McDonald’s staff are frequently underpaid for the amount of time that they...
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...Application Report 1 “Nike Faces New Worker Abuse Claims in Indonesia” The article, “Nike Faces New Worker Abuse in Indonesia” by Stephen Wright, explores the terrible sweatshop conditions and unfair treatment of employees in Nike’s Indonesia factory. In 2003, Nike bought Converse for $309 million and Nike started to make Converse products in two-thirds of their factories. In 2007, one of the Nike factories in Indonesia started to produce Converse products. Ever since the merger, factory workers started to speak out against unfair working conditions, physical abuse, name calling, low wages and working long hours. According to the article, one employee stated that, “We're powerless…Our only choice is to stay and suffer, or speak out and be fired.” (Wright) Employees were also being punished if they did not meet their target goals for the day, one of the punishments being standing in the sun for several hours. According to the article, “an internal report Nike released to the AP (Associate Press) after it inquired about the abuse show that nearly two-thirds of 168 factories making Converse products worldwide fail to meet Nike's own standards for contract manufacturers… twelve are in the most serious category, indicating problems that could range from illegally long work hours to denying access to Nike inspectors” (Wright) The report also stated that Nike had failed to follow their Code of Ethics. (The ethical implications of outsourcing of production in developing countries...
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...Ethics Sheldon Martin MGT/498 Wednesday, July 2, 2014 Donshea Williams Ethics refer to the primary principles of a single or a group. Social responsibility is how a business operates its activities to reach its wider requirements toward the society and environment, such as by dodging activities which may be damaging. Strategic planning is a necessary initial step in the corporate world in which senior management defines the organization's strategy, direction and decision-making. Ethical values and social responsibility serve a considerable role in the strategic planning process. Social Responsibility To the Stakeholders Management must confirms that strategic decisions are accomplished after taking into justifying the possibility impact on the stakeholders. Stakeholders are suppliers, customers, societies and anybody who is self-conscious by the activities of the business. A socially responsible company treats stakeholders the fairly. Wider viewpoints also have to be considered in circumstances of environmental and social impact of planned activities. Transparency Members of management should accommodate info that is straightforward and trustworthy to help all tangled discuss, debate and accomplish better decision-making. This makes the team to point out and evaluate any possible risks which may about and find a different solution. In an understanding of social responsibility, clarity also strengthens the company's worthiness toward the outside of the stakeholders...
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...Management Planning and Ethics BY: Missy Peterson UOP / MGT330 Management Planning and Ethics Nike is one of the most competitive fitness and sports businesses out there in today’s world. Their motto is “If you have a body, you are an athlete”. The quote means as long as there are athletes there will always be a Nike. Nikes products consist of footwear, clothing, sports equipment and accessories for the athlete market. Nike’s targets people of all ages, but sell their items to the majority of athletes. Everyone who wears shoes is considered their target. Nikes mission is to bring inspiration and originality to all athletes in the world. By doing this, Nike needs to have a plan in mind to keep this company in full force in the next 20 – 30 years. Their only real competitor is Reebok since 1990. However, since Nike is such a big company Reebok are the ones’ that are trying keep up with Nike’s operation. In the past, Nike has had legal issues, ethics and corporate social responsibilities that have an effect on the management planning. With the legal issues, Nike had a problem with their Asia Corporation where they were using child labor to create soccer balls. In the United States, constitution states that child labor is an illegal and inhumane practice. In 1996, Nike characterized of making its equipments in countries, such as Asia, that are in the developing phase, having very cheap labor, authoritarian government and lack of human rights appeal and...
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...hours. This would then increase the wealth of these families making the poverty rates lower and the average income of the common family go up. But every good thing comes with the bad. With families wanting to be apart of the big industries, food production was decreasing. And many families were hungry. Thankfully farmers started selling their surplus of food at markets which turned into grocery stores that we know today. Just like these grocery stores many families started family businesses that would sell clothes, toys, shoes, or cars added a brand or logo to their export to bring customers coming back to them and creating the brands we know today as common household names such as Nike, Adidas, Tikes, coca cola, Pepsi, Wrigley gum and so on. These companies had major FActories and these factories needed a lot of workers working them. People wanted to live close to their place of work so their daily commute...
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