...Nike: Sweatshops and Business Ethics (Adapted/summarised from original) By Charles Hill*, University of Washington Introduction: Nike is a global corporation, founded 1972, and now one of the leading marketers of athletic shoes and apparel. It has a turnover of $10bn and operates in some 140 countries. Nike does not manufacture anything. It focuses on design and marketing and contracts out (outsources) its manufacturing to some 600 factories worldwide, employing over half a million people. For over a decade, Nike has been dogged by bad publicity and persistent accusations that that its products are made in “sweatshops” where workers, many of them children, slave away in hazardous conditions for below subsistence wages. Nike’s wealth, its detractors claim, has been built on the backs of the world’s poor. To many, Nike is a symbol of the evils of globalisation. Nike has taken many steps to remedy the situation but admits there are still problems in overseas factories, despite laying down minimum standards of working conditions and pay, and having their standards independently audited. But the accusations, protests and bad press continue. The Case against Nike: In 1996 a CBS 48 Hours news reported from a factory near Ho Chi Min City (formerly Saigon, Vietnam) … The signs are everywhere of an American invasion in search of cheap labour. Millions of people who are literate, disciplined, are desperate for jobs. This is Niketown near what used to...
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...work2012-3-31, Guest Today women and men from UK Feminista took to the high street to protest against the exploitation uncovered in factories supplying Nike. The actions, taking place outside Nike stores in London and Glasgow, will see campaigners “cheat” their way through a series of races and hold a medal ceremony where Nike will be awarded the title of “biggest cheat”. The demonstrations are a response to new reasearch(pdf) published by War on Want which has uncovered the systematic violations of workers’ rights in Bangladeshi factories supplying garments for Nike, Puma and Adidas. Their findings, while depressingly familiar, are still shocking: all factories visited were illegally employing staff for more than 60 hours a week, and five of the six failed to pay the legal minimal wage. But UK Feminista's protest demands that we rethink Nike’s exploitative practices as an explicitly feminist issue. Eighty five per cent of Bangladesh’s garment workers are women, and as such they experience distinct rights abuses as factory workers; 1 in 10 women workers are threatened with being made to undress, with 1 in 10 workers experiencing other sexual harassment. Many are refused maternity rights or simply fired when discovered to be pregnant, an indication of the profound disregard by firms like Nike for women’s reproductive labour. These statistics are enough to send any feminist out onto the street in protest. But an interrogation of the reasons why these low paid jobs are consistently...
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...CASE STUDY – Nike and the University of Oregon The next case study is case study 22, (“Nike and the University of Oregon”) on Pages 933-940 of your key text, De Wit & Meyer. Below is the case synopsis: Case Synopsis Philipp H. Knight founded Nike’s predecessor company in 1963. The basic business formula of the company has not changed much since then. Nike is designing and marketing high quality sports shoes and sports apparel around the world. It builds its brand appeal through savvy marketing and sophisticated product R&D. The company has never owned production of the goods it sells, instead from the very beginning has been importing the products from the Asian Far East. In 2000, Nike enjoyed 45% global market share, had close to $9 billion of sales and put Knight among the top ten richest individuals in United States. The company directly employed 20,000 people, but had a workforce of an estimated half a million labouring for them in 565 contract factories in 46 countries – making it one of the largest private company de facto employers in the world. Labour conditions in Nike’s contract factories were not even close to any labour laws and compensation practices in the industrialised countries, let alone the US. Work there meant 70-hour workweeks performing hazardous and/or monotonous routines under abusive supervision and with appalling equipment. Until the early l990s, Nike never felt that to be its responsibility. Ever since the early 19th century in England, industrial...
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...Nike - Social and Ethical Issues http://www.writework.com/essay/nike-social-and-ethical-issues Nike has become one of those global companies targeted by a broad range of campaigning pressure groups and journalists as a symbolic representation of the business in society. In Nikes case, the issues are those of human rights and conditions for workers in factories in developing countries. In the face of constant accusations, Nike has developed a considered response but the criticism of Nike still continues. Nike produces footwear, clothing, equipment and accessory products for the sports and athletic market. It is the largest seller of such garments in the world. It sells to approximately 19,000 retail accounts in the US, and then in approximately 140 countries around the world. Just about all of its products are manufactured by independent contractors with footwear products in particular being manufactured in developing countries. The company manufactures in China, Taiwan, Korea, and Mexico as well as in the US and in Italy. The Global Alliance report on the factories in Indonesia gave the following workforce profile: 58% of them are young adults between 20 and 24 years old, and 83% are women. Few have work-related skills when they arrive at the factory. Nike has around 700 contract factories, within which around 20% of the workers are creating Nike products. Conditions for these workers have been a source of heated debate, with allegations made by campaigns of poor conditions...
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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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...1. What ethical issues faced by MNCs in their treatment of foreign workers could bring allegations of misconduct in their operations? • Ethical issues may include the violation of fundamental human rights of ‘sweatshop’ workers such as freedom, speech and discrimination. The treatment of their workers could be deemed ‘unethical’ by media who construe this view to consumers. Such allegations can and will have damaging effects with Nike having been taken to court already in the past. 2. Would the use of third-party independent contractors insulate MNCs from being attacked? Would that practice offer MNCs a good defensive shield against charges of abuse of “their employees”? • Not necessarily, as Nike will be using labour which is just managed by another party. They would just be shifting the blame of abusing “their employees” to hiring someone else’s. The connection of the brand to any unethical labour will still be damaging regardless of whether they are directly related or not. 3. Do you think that statements by companies that describe good social and moral conduct in the treatment of their workers are part of the image those companies create and therefore are part of their advertising message? Do consumers judge companies and base their buying decision on their perceptions of corporate behaviour and values? Is the historic “made in” question (e.g., “Made in the USA”) now being replaced by a “made by” inquiry (e.g., “Made by Company X” or “Made for Company X by Company...
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...Nike Inc. Nike’s Unethical Business Practices Nike’s Unethical Business Practices Love those Nike shoes your wearing? Have you ever thought how they were made, who made them, and at what price they were made at? I bet you probably don’t. I bet that you see those Nike shoes at the store, and think to yourself, “oh I like those shoes, I have to have them,” and then buy them. What you don’t know is that those pair of shoes you just bought were probably made in a third world factory by employees who are probably working in harsh working conditions. These factories are not owned and operated by Nike, but contracted by Nike. Nike chooses to locate the majority of their production in such countries because of the abundance of cheap labor. Nike contracts factories around the world in effort to get the best product for the cheapest price made, without concern for contracted factory employee. Nike has not been concerned about what goes on in these factories only that the product is made, because Nike is not in the business for Human Rights, they’re in the business of athletic shoes sales. The Ethical Dilemma Nike has been accused with human rights violations. The charges that were made against Nike include the following: the use of child labor in factories, unsafe working conditions including exposure to toxic chemicals and the use of machinery without the proper safety precautions, pay below minimum wage and forced overtime hours. The contracted factories Nike uses to produce...
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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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...5 3 Cultural Environment Page 7 4 Political Environment Page 9 5 Conclusion Page 11 6 References Page 12 EXECUTIVE SUMMARY The following essay interrogates Nike, Inc., in the Indian market. The context of the paper lies within the framework of an environmental analysis for the groundwork of a future marketing plan. The central argument is that; (A) the economic environment offers an overall attractive outlook, (B) the cultural environment requires Nike, Inc., to change their core product portfolio while continuously learning to customize and localise to the needs of the Indian consumer, (C) The political environment does not have a substantial risk impact in both its historical and current outlook, and the government is heavily involved in reforms that promote foreign direct investment. The extent of the analysis highlights relevant international marketing issues that Nike, Inc., faces in India in the context of country attractiveness, market segmentation, market positioning, and the marketing strategy in the context of the four P’s. 1 INTRODUCTION The aim of this essay is to select a consumer product and country market and undertake an in-depth and extensive environmental analysis as groundwork for a marketing plan. The selected consumer product will be sports apparel by Nike, Inc., while the selected target market is India. Currently, more than half of the Fortune 500 companies are involved in some form of outsourcing operation to India, with the...
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...act include Nike, Reebok, Adidas, Puma, Hi-Tec, and many others. All of these companies stick to their own advertising, product development, and distribution while contracting Third World factories to produce their products. No company is paying or treating their workers better than another. This is because in an Asian factory you will see the rival brands rolling off parallel conveyor belts in the same factory. I have chosen to concentrate on Nike instead of other brands because Nike is the leader in its industry, not only in terms of market share, but in design, comfort, and advertising. Where Nike goes, other companies tend to follow. In 1984 the $5.2 billion dollar Nike Corp. closed its last U.S. factory and moved its entire production to the cheap labor in Asia. Some 65,000 Nike U.S. shoe workers lost their jobs because of the move over seas (Putnam, Internet). Making these sport shoes does benefit developing countries. It brings money, jobs, and some skills are shared. However, Nike's target is not so. As Taiwan and South Korea democratized, unions became legal, and wages began to rise, Nike immediately began to look for new undeveloped havens of low wages. New operations were set up in Indonesia, China, Vietnam, Pakistan, and Thailand. Nike now has a work force of only 8,000 employees. The 350,000 people who make their shoes in Asia (Hua, "Nike Protest Charges Abuses of Employees.") are employed by subcontractors, not Nike. In the past couple of years Nike has taken...
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...competitive tax arrangements, stable government and trade regulations by the Federal Reserve (Whitehead, 2012). Moreover, Nike is able to receive tax benefits as it is highly recognised for its business strategies that are environmental-friendly. Economic factors -Fluctuation of profit margins International markets are major contributions to Nike’s profit margin. Thus, the stability of international interest rates and...
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...ase Study: Nike, Inc. International Business and Trade Unit II (Prof. Sosland) Vera Tillmanns 1. Company Ethics: Nike Inc. in Cooperation with its suppliers Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing. Nike does not merely sell products these days. They spend billions of dollars for advertising contracts with famous athletes like Tiger Woods to increase the value of the brand by associating the factor of lifestyle to their products. The company's image has been damaged many times by press releases as well as a variety of NGOs who have long pointed out the inhumane working conditions in the production facilities of sporting goods manufacturers. This leads to the question whether should Nike orientate the regulations of the suppliers to the labor standards in their respective countries or those in the United States? The labor conditions are so inhumane that Nike at least should try to converse to the US standard to improve the situation. The following analysis of an abstract of Nikes’ Responsibility...
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...Outsourcing : Outsourcing is the process of contracting with another company or person to do a particular service/job. Compared to 1998, in 2005 manufacturing employment was 19 percent lower in The United States, even though manufacturing output was 10 percent higher . The drop in manufacturing employment coincided with an increase in outsourcing to domestic contractors, including staffing services and an increase in outsourcing of materials and services inputs to foreign companies or affiliates which is also known as offshoring. A number of companies had recently signed or were expected to sign billion-dollar outsourcing deals. Topping the list were Xerox Corp. with a $4 billion plus outsourcing deal, and McDonnell Douglas and General Dynamics,with $3 billion deals. Advantage of Outsourcing to Other Countries : China Over the years China has become the choice of destination for manufacturing and supply chain outsourcing and material supply for many organization in America, Europe and Asia. Companies continue to receive several key benefits when outsourcing current business processes to China, such as: Gowth in Economy - China is the fastest-growing major economy in the world, and has had the fastest growing major economy for the past 30 years with an average annual GDP growth rate over 10%. Cost: The main reason U.S. businesses give for outsourcing is to remain competitive by cutting costs, especially wages. With China’s population well over one billion, the...
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...to positively impact their communications with their stakeholders many companies like Nike and Goldman Sachs are continuously seeking new ways of carrying out corporate social responsibility Reeves (2012). The re-developments of corporate social responsibility often derive from responding actively to emerging and current issues in society (REFERENCE). (REFERENCE) describes current issues such as, human rights, labour, and environmental practices that Nike and Goldman...
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...Yen Ngo Tafara Dube Julia Morena ! ! ! Kira Gottlieb Business Communications: Disney Report ! Table of Contents ! 1. Introduction.....................................................................................................................................2 2. Market analysis...............................................................................................................................3 3. Product analysis..............................................................................................................................5 4. Problem: Ethical issues regarding the working conditions.............................................................6 5. The Chinese Government..............................................................................................................10 6. Proposal using SWOT analysis......................................................................................................10 7. Stakeholder Analysis.....................................................................................................................12 7.1. Supply Chain..........................................................................................................................12 7.2. Return on Investment.............................................................................................................12 7.3. Employees.................................................................
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