...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, with harassment and abuse. Nike has sought to respond to these allegations by putting into place a code of conduct for all of its suppliers, and working with the Global Alliance to review around 21 of these factories, and to pick up and respond to issues. The main concerns expressed...
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...Thus, a summary of the case, the legal, cultural and ethical challenges, an understanding of the roles the host governments play, and the strategic and operational challenges faced are important to gain a thorough understanding of the issues and case. Most people could easily define Nike and are familiar with the products offered, like the customized options available in the Nike store online, Nike Sportswear, Nike Women, Nike Basketball, and Nike Football. These products, among others, have led Nike to a profit of $15 billion in 2006 and a catchy “Just Do It!” slogan (Hill, 2009). The company outsourced its manufacturing plants to several countries in order to lessen costs and become more efficient in productivity. The outrage and protests that followed were far from what Nike expected; the company was labeled as forcing “children to slave away in hazardous conditions for below-subsistence wages” (Hill, 2009). As a result, protestors of globalization and human rights activists criticized Nike for taking advantage of the...
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...Case Study "Nike: The Sweatshop Debate" Sarah Martin MGT 448 July 27, 2011 Kenneth Peter Case Study "Nike: The Sweatshop Debate" “We’ve run the course – from establishing codes of conduct and pulling together an internal team to enforce it, to working external bodies to monitor factories and engaging with stakeholders” (Nikebiz, para. 2). The creation of this code of conduct came after serious allegations of using sweatshops with women and children working in hazardous conditions for less than minimum wage in overseas factories scattered across the globe to make their product. This paper uses the case study entitled, “Nike: The Sweatshop Debate,” to describe the legal, cultural, and ethical challenges that confront Nike’s global business. This paper will also determine the various roles that host governments have played as well as summarize the strategic and operational challenges that face global management for the Nike Corporation. Bill Bowerman, a track and field coach at the University of Oregon, and Phil Knight, a talented middle-distance runner from Portland, “shook hands to form Blue Ribbon Sports, pledged $500 each, and placed their first order of 300 pairs of shoes in January 1964” (Nikebiz, para. 1). In 1965, they hired their first employee, Jeff Johnson, to manage the growing requirements. In 1971, he conjured up the name Nike. According to the case study, the profits and success that the Nike Corporation has gained has affected hundreds of thousands of workers...
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...ethical challenges that were revealed in the case study, as well as the roles the host government played, and operational challenges faced by global managers. Legal, Cultural, and Ethical Challenges There were several legal issues surrounding the Nike scandal. One of the concerns was the wages or the lack thereof that was being paid to the workers while working numerous hours six days a week and making less than the living wage requirement per day to survive within the country. Another issue was that some foreign factories had children working in them and poor working conditions where workers were surrounded by hazardous chemicals and not utilizing protective gloves or masks. The cultural and ethical challenges were the fact that these factories were located in other countries which have different ways of conducting business and different values on operations, unlike U.S. owned businesses located in the United States. Although Nike does not own the factories located in the foreign locations, the Nike subcontractors should have been responsible from the beginning for upholding policies and regulations in regards to code of conduct, safety, and ethical principles that met Western business standards. Nike and its subcontractors were...
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...not the only method to successfully produce the results it was looking for but instead marketing and designing its products and contracting the manufacturing out to global factories 600 throughout the country. With the company’s success come painful lessons learned along the way. This paper will describe the legal, cultural, and ethical challenges that Nike Corporation faced as a result of its global business ventures. In addition, it will touch on the roles the host governments played in manufacturing Nike’s products and will summarize the strategic and operational challenges that Nike Managers face in dealing with the interworking of global business. Nike as well as other global companies in the industry has the option to manufacture their products domestically or internationally in either situation there are challenges. If a company chose to the domestic approach it could potentially be more expensive, however, the organization and its manufacturing facility contractors would have to adhere to U.S. labor and safety laws in the areas of wages, code of conduct, working conditions, and would be able to monitor these conditions. If the business decision is to operate overseas by outsourcing its manufacturing facilities then Nike can benefit from lower wage earners based on the wages the factories would agree to pay their workers. However, it would be difficult to properly monitor working conditions, wages and code of conduct policies and would have to...
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...University of Phoenix Nana Offei MGT/448 Global Business Strategies Case Study Nike: The Sweatshop Debate July 5, 2012 Professor, Marc Mosko Nike, the sweatshop debate Nike Inc. was started by Bill Bowerman and Phil Knight, who met each other in 1957 Before going into business, Knight became a certified public Accountant (CPA) the original Nike Inc. was founded in 1964 by Phil Knight and his friend Bill Bowerman with a collective investment of 1000 to fund the business tries (Nike repository, 2010) The company began with Bill and Phil being local distributors for the Onitsuka Tiger footwear brand now own by Asics footwear, Bill and Phil did business out of their cars at local track meet and sporting event to athletes in the vicinity of the University of Oregon, the first sport retail store open in California in 1966 as where the company profit began to grow they realized that their financial limits imposed by Onitsuka Tiger would limited their long team profits (Nike repository, 2010) This paper will describe the legal culture ,and ethical challenge that confront the global business as personated on the case study, in addition the paper will determine the various roles that the host government played in global business operation .at the end it will summarize the strategic and operational challenges facing global managers illustration in Nike organization Global business doesn’t come without challenges Nike organization plan to...
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...is to minimize the cost of distributing a product from a number of sources (e.g. factories) to a number of destinations (e.g. warehouses) while satisfying both the supply limits and the demand requirement. Because of the special structure of the Transportation Problem the Simplex Method of solving is unsuitable for the Transportation Problem. The model assumes that the distributing cost on a given rout is directly proportional to the number of units distributed on that route. Generally, the transportation model can be extended to areas other than the direct transportation of a commodity, including among others, inventory control, employment scheduling, and personnel assignment. Transportation was one of the earliest application areas of operations research, and important transportation problems, such as the traveling salesman problem, vehicle routing problem, and traffic assignment problem, contributed to fundamental knowledge in operations research. Transportation remains one of the most important and vibrant areas of operations research. The transportation model has some rigid characteristic, which are: * A product is transported from a number of sources to a number of destinations at the minimum possible cost * Each source is able to supply a fixed number of units of the product, and each destination has a fixed demand for the product. Origin Points (or sources) can be factories, warehouses, car rental...
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...held responsible for where subcontractors produce their products. The companies should investigate where they are outsourcing their products and the labor conditions of that area. Also, they need to consider what companies they are outsourcing too, and how they handle their employees. I do not think it is their responsibility to manage the companies that they do not own. Instead the U.S. companies should be conscious in what is happening in foreign factories, and base their decision off what factory to choose on working conditions there. I know a lot of companies choose foreign factories because people that work in them are extremely cheap labor. However, that is not a significant enough reason to choose that factory when it comes to an ethics standpoint. In the U.S if people were treated like factory workers in other countries most likely that company would get shut down. The majority of Americans couldn’t imagine working for 12 hours, living in dorm, bathing with a small bucket, and earning less than 50 cents per hour (Hill, 2015. The U.S. companies should consider making changes to their current policies. I think they should put in place requirements that anyone who works for their company is treated fairly....
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... 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 standards for chemicals that workers are using in the factories. Roles Nike is responsible for being compliant as well as the host governments who have a responsibility to protect the citizens who live and work in these countries. The enforcement of labor laws and the protection of the employee must be a priority. By ensuring that the contracted factories are regularly monitored for...
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...000) Manufacturing overhead is allocated to products using a single plantwide overhead rate based on machine hours. McGraw-Hill/Irwin Slide 14 Define Activities, Activity Cost Pools, and Activity Measures At Baxter Battery, the ABC team, selected the following activity cost pools and activity measures: McGraw-Hill/Irwin Slide 15 Define Activities, Activity Cost Pools, and Activity Measures Customer Orders - assigned all costs of resources that are consumed by taking and processing customer orders. Design Changes - assigned all costs of resources consumed by customer requested design changes. Order Size - assigned all costs of resources consumed as a consequence of the number of units produced. Customer Relations – assigned all costs associated with maintaining relations with customers. Other – assigned all organization-sustaining costs and unused capacity costs McGraw-Hill/Irwin Slide 16 Learning Objective 2 Assign costs to cost pools using a first-stage allocation. firstallocation. McGraw-Hill/Irwin Slide 17 Assign Overhead Costs to Activity Cost Pools McGraw-Hill/Irwin Slide 18 Assign Overhead Costs to Activity Cost Pools Direct materials, direct labor, and shipping are excluded because Baxter Battery’s existing cost system can directly trace these costs to products or customer orders. McGraw-Hill/Irwin Slide 19 Assign Overhead Costs to Activity Cost Pools At...
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...include; delays in manufacturing parts, factories having to move or close, costs of resources in different parts of the world can fluctuate, and taxes and tariffs can change during the course of manufacturing. If the company can produce the 787 cheaper by outsourcing then, yes the benefits do outweigh the risk. However, from the scenario there are several drawbacks of the foreign companies and the risk is too high. Boeing should do the work themselves. Question 2 Boeing failed to ensure that the other nations brought onboard to manufacture certain components of their aircraft were properly set up and prepared to start manufacturing. Boeing should have had more oversight of Italy’s issues with building a factory and they should have required proof that Italy already had adequate property to build the factory. Boeing also should have verified that there would be no local government interference that would hinder the ability to meet delivery deadlines. The other issue was one of their suppliers, Vought, outsourced to a different nation. Boeing should have had a clause in their contract with Vought, stating that if they outsourced some of their obligations, it would be vetted through Boeing first. This would allow Boeing to assess the sub-contracted nation’s ability to meet Boeing’s quality of standards. Boeing should have also had a penalty clause for outsourced components that held manufacturers financially responsible should their factory cause Boeing to deliver an aircraft...
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...Case Study Frank Torres MGT/448 May 6, 2016 Professor Louise M. Lozada-Sorcia Nike must overturn problematic problems in order to establish a successful commerce in a foreign country. Some of the legal, cultural, and ethical challenges that confront Nike’s global business are child labor laws, wages, and outsourcings of manufacturing. Nike sweatshop labor case like those described in “Nike: The Sweatshop Debate” has agitated a large sum of controversy over business ethics. The first case illustrates how Nike has inadvertly managed to oversee that those companies they subcontract do not follow international labor laws, including those pertinent to the country the employees are working from. An example is the employee Lap, interviewed in the article. The employee is exploited, “Her basic wage, even as sewing team leader, still doesn’t amount to the minimum wage . . . . She’s down to 85 pounds. Like most of the young women who make shoes, she has little choice but to accept the low wages and long hours. Nike says that it requires all subcontractors to obey local laws; but Lap has already put in much more overtime than the annual legal limit: 200 hours.” Another evident situation that challenges business ethics is the cultural depreciation in the countries where Nike contracts with manufacturer subcontractors. Countries like China and Indonesia close to non-existent labor laws, “The majority of Nike shoes are made in Indonesia and China, countries with governments that...
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...Managing Like a Man at SilkQueen? by Kate Hutchings Queensland University of Technology Brisbane, Australia This case may be used by current adopters of: S. L. McShane Canadian Organizational Behaviour, 5th ed. (Toronto: McGraw-Hill Ryerson, 2004); S. L. McShane & M. A. von Glinow, Organizational Behavior, 3rd ed. (Boston: McGraw-Hill, 2005); S. L. McShane & T. Travaglione, Organisational Behaviour on the Pacific Rim, 1st ed. (Sydney: McGraw-Hill Australia, 2003) Copyright © 2004 McGraw-Hill Australia Pty Limited SilkQueen Managing Like a Man at SilkQueen? By Kate Hutchings, School of Management, Queensland University of Technology, Australia Sally Dawson works for SilkQueen, an Australian company that imports and manufactures high quality fabrics for retail sale. The company manufactures at a plant in Sydney as well as in several locations throughout Asia. It began as a family-owned company in 1910 and became a publicly-listed company when it started international operations in 1979. It has always had a female-dominated workforce yet management has been largely male. Sally has just returned to Australia to work as a line manager in the Sydney manufacturing operations after spending ten years working in the company’s operations in Asia. While overseas, she completed several posts including stints in Malaysia, Indonesia and China. While in Asia she worked as senior HR manager and had responsibility for all of the HR functions of the subsidiary operations in addition...
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...Richmond came into being during the 17th century, during the time of colonization. As colonizers invaded the land, they began to build up an economy around the trading and exchanging of cash crops, one being tobacco. From that point on, tobacco began to influence and shape Richmond and what later came to be known as Church Hill. Throughout the 17th, 18th, and 19th, the tobacco industry was the main source of income and after the Great Depression, the importance of the industry, as a whole, only increased. From then to present day, the tobacco industry has been able to remain a prominent source of income and continues to influence companies around Richmond and play a large role in the current problems present in Church Hill. With the presence...
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...BANGLADESHFIN 621 (EXECUTIVE MBA PROGRAM) Finance & Economic Analysis Section E1Dr. Amitava ChatterjeeJune 30, 2016 | TEAM 7James JohnsonSarah KorpitaMichael McClureRandy Milton | | | | | | | Bangladesh’s Textile Industry Theoretically, free trade eliminates imposed governmental barriers to international trade. Expressively, free trade is a Pandora box of confusing issues addressing basic rights, international fiscal development, ecological principles and global employment formations (Chmielewski and Media, 2016). Chmielewski and Media (2016) implied that free trade was the best thing that could happen to Bangladesh’s textile industry. Free trade is an attempt to improve the international economy on the principle of “comparative advantage”. Bangladesh prospered by using their abundance of textile to trade for products that other countries have abundance. The main purpose of the “free trade” was to improve the global economy using the principle of “comparative advantage”. The shift to a free trade regime in the textile industry was good for Bangladesh’s employment and economic growth. Initially, textile products were exported through a preferential quota system from poor markets to rich markets but the shift accounted for lower labor cost, support from other industries, and increased business with western importers. Labor costs decreased to a level lower than China. Lower labor cost was due to low hourly wages and the use of technology. The use of technology...
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