...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...
Words: 1640 - Pages: 7
...Nike Case Study Tracy Weispfenning Nike Case Study #1 MGMT 310 Jason Cussler January 31, 2014 Nike Falters in Ethical Practices Nike has faced many ethical dilemmas such as human rights abuses, labor violations, and negative impact on the environment where manufacturing plants are located. Their responses have varied from improving labor standards in each facility to implementing a recycling program for worn out shoes for the consumer, and creating a no waste recycling program at all levels of the Nike operations. In my opinion, Nike is on the right track but could do more in their response to these ethical challenges. Nike has responded to these ethical dilemmas in various ways. They’ve done a good job in anticipating the potential consequences, yet they have not involved enough people in the decision making process. For example, Nike did not take the allegations of human rights abuses and labor violations seriously in their overseas manufacturing plants until nongovernment organizations like Life magazine and The New York Times published articles on these violations. These articles created public awareness and exposed the lack of oversight and policies to ensure the human rights and labor guidelines were fair and enforced. After these articles were published, Nike obtained and implemented a new course of action for protecting workers rights, safety, and competitive wages. Nike should have been aware of these practices, monitoring and reviewing their...
Words: 437 - Pages: 2
...JUST DO IT RIGHT MGMT591 December 15, 2013 Introduction I am a track and field athlete that markets for Nike. They are my sponsor. Nike Inc. produces footwear, clothing, equipment and accessory products for the sports and athletic market. It is the largest seller of sports 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. Nike developed a strong working relationship with Japanese shoe manufacturers, but Nike moved on to other countries seeking after alternative, lower-cost producers. Today the company manufactures in China, Taiwan, Korea, Pakistan, Vietnam, Indonesia, and Mexico as well as in the US and in Italy. 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, with commonplace harassment and abuse. As its founder and Chief Executive Officer, Phil Knight lamented in a May 1998 speech to the National Press Club, “the Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse.”(HBS Case # 9-700-047) “Hitting the Wall: Nike and International Labor Practices,” HBS Case # 9-700-047 Problem Statement ...
Words: 2203 - Pages: 9
...Nike, Inc. was founded in 1964 by Phil Knight and Bill Bowerman through an investment of $500 by each individual. Nike, Inc. was then called Blue Ribbon Sports and has evolved from being an importer and distributor of Japanese specialty running shoes to becoming the world leader in the design, marketing, and distribution of athletic footwear. Nike's business model was developed by Knight while attending Stanford Business School in the early 1960's. Knight realized that the United States' consumer appliance and electronic markets were beginning to be dominated by the lower-cost, higher quality Japanese producers. Most of the leading footwear companies were still producing their own shoes in higher-costing companies such as the United States and Germany, and Knight believed that by outsourcing shoe production to lower-cost Japanese producers, Blue Ribbon Sports could undersell its competitors and break into this market. As a result of this model, Blue Ribbon Sports began to import sports shoes from Japan and sales increased to almost $2 million in the early 1970's. Nike employers approximately 25,000 people on worldwide. In addition, approximately 650,000 workers are employed in Nike contracted factories around the globe . Nike owned over 200 Nike Factory Stores and over 100 sales and administrative offices. Many people these days are angered by the steps that corporations take simply to make money, and it is quite disgusting in some of the ways a corporation operates. Rallies...
Words: 2105 - Pages: 9
...compared with the human rights standards and independent monitoring practices labor rights organizations have demanded of the company. Knight's May 12 Promises: What Have They Meant for Workers? Knight made six commitments: 1st Promise: All Nike shoe factories will meet the U.S. Occupational Safety and Health Administration's (OSHA) standards in indoor air quality. Nike was the subject of considerable scandal in 1997 when it was revealed that workers in one of its contract factories were being exposed to toxic fumes at up to 177 times the Vietnamese legal limit. Although Nike claims that its factories now meet OSHA standards, it gives factory managers advance notice of testing, giving them considerable scope to change chemical use to minimize emissions on the day the test is conducted. Nike is also not yet willing to regularly make the results of those tests available to the interested public. Rights groups have challenged Nike to put in place a transparent system of monitoring factory safety standards involving unannounced monitoring visits by trained industrial hygienists. 2nd Promise: The minimum age for Nike factory workers will be raised to 18 for footwear factories and 16 for apparel factories. Nike was severely embarrassed on the child labor issue in 1996 when a major story in Life magazine featured a photograph of a very young Pakistani boy sewing a Nike soccer ball. Evidence continues to emerge of young persons under the age of 16 employed in Nike contract factories...
Words: 2205 - Pages: 9
...Nike was established in 1972 by former University of Oregon track star Phil Knight. Nike has $10 billion in annual revenues and sells its products in 140 countries. Nike has been dogged for more than a decade by repeated accusations that its products are made in sweatshops where workers, many of them children, slave away in hazardous conditions for less than subsistence wages. Many reporters, TV shows, companies and organizations have repeatedly exposed negative comments towards Nike. For example, a “48 Hours” news report aired on October 17, 1996 regarding a Nike factory in Vietnam, which was visited by reporter Roberta Baskin. The reporter discovered that Nike hired millions of workers who are literate, disciplined, and desperate for jobs at wages lower than minimum wage. Another example of the criticism against Nike came from a newsletter published by Global Exchange. The newsletter uncovered that the majority of Nike shoes were made in Indonesia and China, countries with governments that prohibit independent unions and set the minimum wage at rock bottom. Nike formulated a number of strategies and tactics to deal with the problems of working conditions and pay in subcontractors. In early 1997, Nike also began to commission independent organizations such as Ernst & Young to audit the factories of its subcontractors. Finally, on May 12, 1998 Nike founder Phil Knight spelled out a series of initiatives designed...
Words: 1638 - Pages: 7
...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...
Words: 1725 - Pages: 7
...Will Nike “Just Do It”? Name: Huzefa Poonawala Class: GM 675MC Instructor: Eric Baker Date: December 12, 2012 As one of the leading brands in athletic wear, it would seem that Nike would be in the frontlines promoting human rights in the factories where their products are made. There have been many reports of workers in Nike factories facing poverty, harassment, dismissal and violent intimidation (Wazir, 2001). The motto of “Just Do It” does not seem applicable to the company itself. Despite numerous reports and audits, Nike has yet to take action against human rights violations by their suppliers. In 1998, the CEO of Nike, Phil Knight promised six main improvements in conditions at Nike factories around the world. These were: all Nike factories would meet US air quality standards, the minimum age would be raised to 18 for workers in Nike shoe factories and 16 for those in clothing factories, Nike would include non-governmental organizations in factory monitoring, and the company would make inspection results public, Nike would expand its worker education program, with free secondary-school equivalent courses, a loan program would be expanded to benefit 4,000 families in Vietnam, Indonesia, Pakistan and Thailand and research on responsible business practices would be funded at four universities (Wazir, 2001). Despite such high aims by the company, there are still reports of human rights violations in factories manufacturing Nike products. In 2005, the company sent auditors...
Words: 2116 - Pages: 9
...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...
Words: 1400 - Pages: 6
...Tracy Weispfenning Nike Case Study #1 MGMT 310 Jason Cussler January 31, 2014 Nike Falters in Ethical Practices Nike has faced many ethical dilemmas such as human rights abuses, labor violations, and negative impact on the environment where manufacturing plants are located. Their responses have varied from improving labor standards in each facility to implementing a recycling program for worn out shoes for the consumer, and creating a no waste recycling program at all levels of the Nike operations. In my opinion, Nike is on the right track but could do more in their response to these ethical challenges. Nike has responded to these ethical dilemmas in various ways. They’ve done a good job in anticipating the potential consequences, yet they have not involved enough people in the decision making process. For example, Nike did not take the allegations of human rights abuses and labor violations seriously in their overseas manufacturing plants until nongovernment organizations like Life magazine and The New York Times published articles on these violations. These articles created public awareness and exposed the lack of oversight and policies to ensure the human rights and labor guidelines were fair and enforced. After these articles were published, Nike obtained and implemented a new course of action for protecting workers rights, safety, and competitive wages. Nike should have been aware of these practices, monitoring and reviewing their manufacturing plants...
Words: 604 - Pages: 3
...Course Case No 12 Nike: From Sweatshops to Leadership in Empoyment Praticses Group’ name: 1. Huynh, Tram : ID#: 179105 2. Nguyen, Uyen : ID#: 179119 3. Tran, Xuan : ID# 179128 4. Dinh Tran, Ngoc : ID#: 179139 5. Nguyen, Phuc : ID#: 179150 6. Kim Nguyen : I- Summary: Nike Company was founded in 1964, Nike officially changed its name to Nike, Inc. in 1978. After being launched into public, Nike began its rise in the 1980's and the Nike brand was considered as one of the famous companies specialized in sports shoes all over the world. The lower cost of production and innovation advertising and marketing policies helped Nike to get success and big growth. However, in the mid-1990's, labor rights activists, the media accsused Nike for violations of human rights in their factories in the third-world countries such as Korea, Taiwan, Indonesia, China, and Vietnam. The bad health and safety working conditions, low wages, and discrimination in hiring and firing practices in Nike’s factories were accusations of Nike company. Ernst and Young company audited one of Nike’s factories and discovered that extreme, unacceptable standards of chemicals in Nike’s factories are main reasons caused employee’s health problems. The code of conduct was violated. Protestors, Universities against Nike refused and canceled...
Words: 453 - Pages: 2
...Nike's CSR Challenge This article discusses the challenges facing Nike in overcoming the stigma of poor human rights practices in their past, and how that has affected their overall business in the current decade. Social responsibility has always been an important factor to a company’s long term performance and sustainability. If you compare the stock performance of the top 50 most socially responsible companies, as published by Boston College’s Institute for Corporate Responsibility, to the S&P 500, the companies perceived as having the most ethical corporate governance consistently outperforms the competition in the long-run. This has become particularly important within the apparel industry, which has developed a stigma due its use of sweatshops over the last several decades. As many industries have become more and more automated, the apparel industry still requires an incredible amount of human capital to produce its products. Because of this, the industry has traditionally outsourced its production facilities to nations with low minimum wages and even lower working standards. There is little that can be done to avoid the nature of profit maximization and outsourcing, but companies like Nike have since realized that if they allow their products to be produced under horrible working conditions, or conditions that the company’s consumer base deems unethical and immoral, then your consumer base will not purchase their products. The Sweatshop Code of Conduct is...
Words: 915 - Pages: 4
...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...
Words: 338 - Pages: 2
...The Social Disadvantage of being a Child Labourer: The Case of Nike Social disadvantages manifest over periods of time into social issues, benefiting particular groups of people while marginalizing others. The case of child labourers that are being exploited by Western-born fashion companies is a complex issue that has been occurring for many years as a result of multiple circumstances, specifically capitalism. To generalize, the companies that use child labour to create their products are the group that benefit, while the workers themselves that work in poor conditions for very little money, and in horrifying conditions, are the ones that are being disadvantaged. Because these people live in poorer countries and need jobs, they are at...
Words: 2310 - Pages: 10
...Attn Vice President of International Operations at Nike, Nike is currently in a situation that every company would like to avoid. The name Nike is now associated with an ongoing list of labor issues. Nike has had over three decades of corporate success, but this success is slowing and could continue to slow if changes are not made. Nike’s strategy has always been to outsource all manufacturing to cut costs and allow for a higher marketing budget. While this strategy is successful in keeping costs low, it fails to address human rights. Nike has been publicly scrutinized for having poor working conditions and unfair wages in their manufacturing facilities in Indonesia and Taiwan. Jeff Ballinger has continually criticized Nike’s practices and once his publication’s gained traction; the issue had quickly become one of national concern. Changes have to be made in order for Nike to reestablish themselves as a company that concerns itself with all stakeholders. Nike currently has a matrix approach to organizational design. This configuration combines the positive attributes from other organizational structures. In a matrix structure there are both divisional and structural managers that employees report to. This structure allows for better communication and coordination between divisions. This structure allowed for the creation of a team of employees whose sole focus is corporate responsibility. Even though Nike has attempted to take responsibility for their actions by...
Words: 810 - Pages: 4
