...once again become synonymous with labor rights violations. This phenomenon is largely due to globalization, a movement that has led multinational corporations (MNCs) to invest in cheap labor available in emerging economies. The possibility of this investment has spurred local government to ease regulatory measures on labor rights to lure MNCs as well as pitted local manufacturers against each other in the spirit of competitive pricing. These actions have led to diminished standards in factories that have translated to issues like insufficient wages, forced overtime, suppression of free speech and a hazardous working environment. Some proponents of sweatshop labor argue that sweatshops bring about economic prosperity, even going so far as to say that the “simplest way to help the poorest Asians would be to buy more from sweatshops, not less” (Kershner). Increasingly, however, the consensus has shifted in support of the fact that employing the poor for “near subsistence wages...generates little self-sustaining economic development” (Moberg). The light that has been shed on cases of abuse and mistreatment of laborers in Indonesia, Vietnam and Pakistan has mobilized various labor rights organizations and university student groups to take a stance against the exploitation of third world citizens. Groups like Campaign for Labor Rights and...
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...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...
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...sponsor for the highest paid names in the sports industry. Michael Jordan and Tiger Woods are two of many that benefit from the Nike endorsements. Analytically speaking large corporations like Nike Inc. tend to contract a large portion of factories overseas to avoid the strict working regulations in the United States. These third world countries like Cambodia, Vietnam, Pakistan, China, Korea, and Taiwan provide access to readily abundant cheap labor. Nike believed investing in developing countries to manufacture their products which led them to their current multi-billion dollar success. The exploitation scandal of Nike’s success includes labor issues, under age child labor, and wages. People may summarize this in one word, sweatshop. Sweatshop is defined as a factory or workshop where workers are paid at a very low wage and work under very poor conditions. Nike’s poor working conditions led to some critical incidents such as death and labor abuse. Nike would move from one country to another to avoid paying higher manufacturing prices. Institutions such...
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...Q2. Talking about Nike contracting with factories, known as “sweatshops”, which is the worst inhumane form of workshop in East Asian context, across developing countries in Asia since 1990s, what is stunning is the recurrent of such saga. Sources of criticism ranging from publications (Naomi Klein’s book “No Logo”) to international broadcasted documentaries (by Michael Moore, and by BBC), and news agency articles (Associated Press) and numerous academic research. The BBC documentary and the AP article were published as recent as in 2011. Though Nike took swift action against each crisis and claimed to curb the practices following each uncovered occurrence, people are in doubt of its social conscience. The Manager’s Notebook is quite right quoting Nike’s founder Phil Knight acknowledging that the “Nike products has become synonymous with slave wages, forced overtime, and arbitrary abuse.” Does the violation of human rights cost Nike’s reputation in an increasingly globalized market? Certainly it does though it does not show in its revenue. Do not take the harsh criticism from the media against “Nike sweatshops” and anti-globalization campaigns rallied by concern groups lightly. The recurrent reports of uncovered stories shows that Nike is being watched by an international market. Just because the Nike kingdom is growing swiftly in the context of consumerism and overconsumption, enlisted one of the Fortune 500 companies with a revenue up to US$24.1 billion (as at May...
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...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 Concept, including SHAPE and their Code of Conduct, should give an insight into the difficulties of the Sweatshops. 1.1 Nike Responsibility Concept: Explanation and Critical Analysis Since the pressure of the NGOs on the company has been growing, Nike developed a concept that promises to improve the monitoring of social and environmental standards for their contractors. According to Nike’s...
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...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...
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...1. Nike: From Sweatshops to Leadership in Employment Practices 2. Starbuck’ mission: Social responsibility and brand strength 3. New Belgium Breweries: Ethical and Environmental Responsibilities You will be required to answer to the end of case questions. I expect personal opinion, don’t try to copy from a template somewhere Test 2: StarBuck Case 2 Starbucks’ Mission: Social Responsibility and Brand Strength Case Notes for Instructors: Students will likely have strong opinions regarding Starbucks. Many may be committed patrons who view Starbucks as a socially responsible company committed to green practices and free-trade coffee. Others might dislike Starbucks because it is a large chain that pushes out smaller local competitors. Another possible reason students may be opposed to Starbucks are its prices, which are higher than many of its competitors. Starbucks seems to be able to justify its higher prices because the company sells more than just coffee—it sells an experience. Starbucks patrons can order specialty drinks and hang out in what founder Howard Schultz envisioned to be the “third place” to be after home and work. Love it or hate it, Starbucks has been very successful at branding. Starbucks has had a profound influence on the U.S. coffee market. Before Starbucks came onto the scene, people perceived coffee as an uninteresting product largely consumed by older people in the United States. It did not have the “cool” factor or the cache that it does...
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...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 Concept, including SHAPE and their Code of Conduct, should give an insight into the difficulties of the Sweatshops. 1.1 Nike Responsibility Concept: Explanation and Critical Analysis Since the pressure of the NGOs on the company has been growing, Nike developed a concept that promises to improve the monitoring of social and environmental standards for their contractors. According to Nike’s principle “Nike was founded on...
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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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...provide an action plan for each of the legal/ethical issues along with recommendations that company can take to help prevent these issues in the future. Nike is one of the famous franchises in the world that sells sportswear for all ages. But is mostly famous for their athlete shoes and apparel and Nike is also one of the major manufacturers of sport equipment as well. The slogan for Nike is “Just Do It”. Nike was founded in January 1962 in Oregon, United States by Philip Knight and Bill Bowerman. Nike has somewhere around 700 or more retail outlets spread all over the world, and has approximately 45 offices only outside the United States. And it employs 30,000 people all over the world. Nike had a revenue excess of $16 billion in 2007. Nike’s factories are mostly located in Asian countries like Pakistan, India, Malaysia, China, Indonesia, Philippines, Taiwan, Vietnam and Thailand. In 1980 the company had a 50% market share only in the United States shoe market and then the company decided to go public and it did by the end of that 1980’s December. Through the 80’s Nike decided to expand its product line so that the line would include many other sports like tennis, golf, baseball, cricket, badminton etc. all over the world. Stakeholders If we view...
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...Stakeholder Analysis.....................................................................................................................12 7.1. Supply Chain..........................................................................................................................12 7.2. Return on Investment.............................................................................................................12 7.3. Employees..............................................................................................................................13 7.4. Customer Profile.....................................................................................................................15 8. Marketing Activities using NIKE's example...................................................................................16 9....
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...Do It” By Adam Fernald ETH/316 John Bevell In the past Nike has been accused of using child labor in the production of its soccer balls and sweatshop conditions in suppliers’ overseas factories. Nike has about 28,000 employees globally and over 800,000 workers who are employed by its suppliers in 52 countries and create sports and fitness footwear, apparel, equipment, and accessories for worldwide distribution (Trevino, L.K. & Nelson, K.A., 2011). Nike has worked to improve labor conditions in their footwear, apparel and equipment supply chains for more than 15 years. Key issues in which they have engaged include the health and safety of the workers who make their products, excessive overtime, the ability of workers to freely associate, and child labor and forced labor (Nike Inc., Labor, 2013). Since these accusations were brought to the publics attentions Nike has been focused on improving the monitoring of the organizations supply chain, sent auditors to evaluate conditions and enforce the company code. About a decade after Nike was first targeted they released factory names and locations of their suppliers. A MIT professor was brought in to assess Nikes audit data and the results were disappointing. Most suppliers’ factories had not improved, and some even got worse (Trevino, L.K. & Nelson, K.A., 2011). Nike's entrance into the Pakistani markets was the part of its long term strategic planning. Although Pakistan has laws against child labor and slavery...
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...9-700-047 REV: SEPTEMBER 6, 2002 DEBORA L. SPAR Hitting the Wall: Nike and International Labor Practices Moore: Twelve year olds working in [Indonesian] factories? That’s O.K. with you? Knight: They’re not 12-year-olds working in factories... the minimum age is 14. Moore: How about 14 then? Does that bother you? Knight: No. — Phil Knight, Nike CEO, talking to Director Michael Moore in a scene from documentary film The Big One, 1997. Nike is raising the minimum age of footwear factory workers to 18… Nike has zero tolerance for underage workers. 1 — Phil Knight, 1998 In 1997, Nguyen Thi Thu Phuong died while making sneakers. As she was trimming synthetic soles in a Nike contracting factory, a co-worker’s machine broke, spraying metal parts across the factory floor and into Phuong’s heart. The 23 year-old Vietnamese woman died instantly.2 Although it may have been the most dramatic, Phuong’s death was hardly the first misfortune to hit Nike’s far-flung manufacturing empire. Indeed, in the 1980s and 1990s, the corporation had been plagued by a series of labor incidents and public relations nightmares: underage workers in Indonesian plants, allegations of coerced overtime in China, dangerous working conditions in Vietnam. For a while, the stories had been largely confined to labor circles and activist publications. By the time of Phuong’s death, however, labor conditions at Nike had hit the mainstream. Stories of reported abuse at Nike plants had been carried in publications...
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...Child Labor: Threatening the economy and well-being of children Child labor has existed throughout American history and throughout the world for many years. A quote from Lewis Hine in 1980 states: "There is work that profits children, and there is work that brings profits only to employers. The object of employing children is not to train them, but to get high profits from their work.” As factories started to assemble, most owners preferred children as their workers because the owners thought them as “more manageable, cheaper and less likely to strike.” The industries children usually worked for were mines, glass factories, textiles, agriculture, canneries, home industries, newsboys, messengers, bootblack and peddlers. During the Industrial Revolution, children at four years old were employed and dealing with dangerous and sometimes fatal working conditions. Now, because of new child labor laws in the United States, industries are going overseas to produce their product in countries that still use child labor. Developed countries consider these actions to be human rights violations and are illegal, while some undeveloped countries will allow or tolerate child labor. These children who are in these factories in different countries are costing the company less because of their wages, when they could have their factories in the States, producing jobs and cash flow in our economy. Child labor violates the common good by threatening the long-term growth of the economy and the well-being...
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...__________HAMILTON, DAVID______ _________5322750___ Name, Capital letters Student number _______________________________ ________11/29/2011_____ Signature Date Ethics in business must start at the top of a company and work its way down to every employee involved in an organization. In today’s world, corporations feel a moral obligation to practice business fairly while treating their employees with respect, so shouldn’t a company keep the same ethical approach if they expand their operations abroad? Over the last century or so, the global economy has changed drastically, with less barriers and a greater flow of goods and services between countries. A multinational corporation is any business that has productive activities in two or more countries. Although there are many benefits to the changing world economy, a majority of these multinational corporations are harming their host countries in a variety of ways. The three main ethical issues that multinational corporations are involved in when operating in host countries include environmental pollution, unethical employment practices, and even corruption. The purpose of this paper will be to analyze these three...
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