...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 Is Nike doing just enough to clear bad publicity or are they really fixing their factory issues? How can Nike work toward fixing the issues they have been having with their overseas factories for good? Literature Review When Nike was founded in 1972, the company contracted with factories in Taiwan and South Korea to manufacturer shoes and related goods. Over the next two decades,...
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...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 prohibit independent unions and set the minimum wage at rock bottom. The Indonesian government admits that the minimum...
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... 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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...Wrongful Beneficence: Exploitation and Third World Sweatshops Chris Meyers Much of the merchandise produced by U.S. companies and sold to U.S. consumers is manufactured by workers in third world countries who earn as little as 12 cents per hour drudging away in harsh and even dangerous work environments. Such workplaces are referred to as sweatshops and are especially common in the apparel and shoe industries and in toy making. Many critics object to sweatshops on the grounds that they harm the workers or violate basic human rights. These moral objections are aimed at certain sweatshop practices such as coercion, unsafe working conditions, deception, paying workers less than promised, etc. These practices are not seriously defended by many people, if any. But the “sweatshop” label can still apply to jobs that do not involve any of these more obvious moral atrocities. A difficult job with long hours that pays very little may still be referred to as a sweatshop job and, I will argue, may still be morally objectionable. The question I want to consider is whether it is morally justifiable to pay the very low sweatshop wages for the very arduous sweatshop labor even if there is no coercion, deception, or direct causing of harm. Some defenders of capitalism and supporters of free-market economics have defended sweatshop wages on the grounds that they benefit the desperately poor workers of these impoverished countries who are very glad to get the work. In an important and widely reprinted...
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...universal. But the reality is that children and adults are bought and sold, rights and freedoms are routinely ignored, the pharmaceutical patents system rides roughshod over the principles of fairness, and injustice reigns everywhere. In her article, Professor Adela Cortina examines a new framework that international organizations are attempting to establish, guided by the three ideals: protect, respect, and remedy. The discourse of human rights breached the walls of the business establishment years ago, and has had a following wind since 2003, when the United Nations introduced its Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights, and 2005, when the UN Commission on Human Rights requested that a Special Representative be appointed for this field of concern. Though opposed by the United States, the resolution was carried by a vote in favor by 49 out of 53 countries, and, in August 2005, John Ruggie was confirmed in that new office. Why was it necessary to open up a forum expressly engaging in thought and action on human rights in the business world? Past experience ─such as the Union Carbide Disaster in Bhopal, India, in 1984, where a poisonous leak killed thousands and afflicted close to 200,000 with permanent serious illness; exploitative sweatshops and plantations around the world; the effects of drug patents on the death figures for AIDS and other diseases; violations of the freedom of expression and assembly...
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... 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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...understanding of intercultural communication in an effective management strategy. It is important that managers proactively engage in communication skills assessment and make necessary adjustments in order to address the current needs of today’s increasingly diverse workforce. When assessing intercultural communication, it is important to have a plan in place and keep these points in mind like knowing your team and doing your homework. While getting to know as many cultures as possible is a noble endeavor, in reality managers are strapped for time like everyone else. If your functional outsourcing group is diverse, or you have recently hired a new group of employees, or your company is reaching out to more overseas investors, then you have a great opportunity to develop more effective intercultural communication skills that will be most applicable to your team. Just as in any group, there are differences among individuals, and understanding general distinctions within a cultural group is important. Do your homework without singling out individuals. One major area is religious beliefs. After honing their own intercultural skills, managers should be able to lead effective training sessions to explain nuances of several cultural beliefs that may impact work related situations. If a team member’s religion requires prayer during the day, remember not to schedule essential meetings at that time; this will convey the message that the team member is important. Allowing flexibility around...
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...and Perils of Globalization: The Case of Nike1 Richard M. Locke Alvin J. Siteman Professor of Entrepreneurship and Political Science MIT 1 This case was prepared for the Sloan School of Management’s 50th Anniversary celebration and should be read in conjunction with “A Note on Corporate Citizenship.” This case was prepared with the active involvement and research assistance of the following Sloan MBA students: Vanessa Chammah, Brian Curtis, Elizabeth Fosnight, Archana Kalegaonkar, and Adnan Qadir. I would also like to thank Miguel Alexander, Maria Eitel, Dusty Kidd, Joseph Tomasselli and Dara O’Rourke for their helpful comments and assistance during this project. 1 1. Introduction How should global corporations behave in the new international world order? What constitutes good corporate citizenship in a world where the stakeholders are diverse and dispersed around the globe and where no clear or consensual rules and standards exist? These questions shape the behavior of most multinational corporations (MNCs) today. Although multinationals are eager to pursue the opportunities of increased global integration, they are increasingly aware of the reactions which their strategies induce – both at home and abroad. Thus, they tread warily, lacking clear and agreed-upon definitions of good corporate citizenship. Through a case study of Nike, Inc. – a company that has come to symbolize both the benefits and the risks inherent in globalization – this paper examines the various difficulties...
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...with constructive action rather than just more talk.” In WEIGHING THE PROS AND CONS OF GLOBALIZATION this presentation, Weidenbaum makes five key recommendations: • Make the World Trade Organization More Transparent • Ease the transition of people hurt by globalization • Strengthen the International Labor Organization • Use the Internet to give consumers an educated voice on overseas production • Welcome voluntary business standards Murray Weidenbaum holds the Mallinckrodt Distinguished University Professorship at Washington University in St. Louis, where he is also honorary chairman of the Weidenbaum Center on the Economy, Government, and Public Policy. Dr. Weidenbaum served as Assistant Secretary of Treasury for Economic Policy in the Nixon Administration and as President Reagan’s first Chair of the Council of Economic Advisers. 1300 Pennsylvania Avenue, NW Washington, D.C. 20004-3027 www.wilsoncenter.org MURRAY WEIDENBAUM WEIGHING THE PROS AND CONS OF GLOBALIZATION Remarks by MURRAY WEIDENBAUM A Presentation to the Woodrow Wilson International Center for Scholars Washington, D.C. March 5, 2003 WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS LEE H. HAMILTON, DIRECTOR PROJECT ON AMERICA AND THE GLOBAL ECONOMY SERIES ON GLOBALIZATION BOARD OF TRUSTEES Joseph B. Gildenhorn, Chair; David A. Metzner, Vice Chair. Public Members: James H. Billington, Librarian of Congress; John W. Carlin, Archivist of the United...
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...This page intentionally left blank Lut12575_fm_i-xxvi.indd Page i 2/10/11 2:28 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles International Management Culture, Strategy, and Behavior Eighth Edition Fred Luthans University of Nebraska–Lincoln Jonathan P. Doh Villanova University Lut12575_fm_i-xxvi.indd Page ii 2/11/11 2:35 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, EIGHTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on recycled, acid-free paper containing 10% postconsumer waste. 1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811257-7 MHID 0-07-811257-5 Vice President & Editor-in-Chief: Brent Gordon Vice President, EDP/Central Publishing...
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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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...Introduction “In the past the man has been first; in the future the system must be first.” Frederick Winslow Taylor. In the late 19th century, Frederick Winslow Taylor, known to many the forefather of scientific management, sparked the automation revolution, the third great transition in the history of humanity (after the Neolithic Revolution, a result of the development of agriculture around 6,000 B.C and the industrial revolution in the 18th century) (Souza, 1999, p.1). However, it can be argued that Taylor’s greatest contribution to capitalism was not the revolution itself, but how Taylorism brought about the era of competition and syncretism with contrasting or corresponding concepts on organisational management and workplace practices, particularly Fordism, which arguably extended the dynamics of Taylorism centered on the use of assembly line. This essay will examine how Fordism developed organisational management and modified workplace practices by exploring known historical application of its principles and theories. Thereupon, it will further analyse how elements of Fordism still exist in modern management sciences, taking example from Nike’s organizational system and Bangladesh sweatshops. How Fordism changed Organisational Management and Workplace Practices First of all, it is essential to explore the pre-Ford era to understand the changes Ford instilled in workplace practices. The pre-Ford era mainly involved skilled craft workers operating...
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...region, reduce and remove tariff and non-tariff barriers to the free flow of goods, services and production between each other (Hill, 2005). On the 1 January, 1994, such a trade agreement came into affect between America, Mexico and Canada. This was known as the North American Free Trade Agreement (NAFTA). This removed all barriers to the trade of goods and services within the member countries, the protection of intellectual property rights, application of national environmental standards and the establishment of two commissions with power to impose fines and remove trade privileges when such standards are ignored involving the environment, health and safety, wages and child labour (Hill, 2005). There is a belief that agreements designed to promote free trade within regions will benefit trade for all the countries involved, and also the rest of the world (Abbott and Moran, 2002). While regional economic integration, or foreign direct investment, is seen as a good thing, some observers worry that it could lead to a world in which regional trade blocs compete against each other. We are seeing the formation of many trading blocs continuing today as the need for it has become essential for countries and their firms to compete in the global market place (Seid, 2002). Although this is the case, each bloc will also protect its market from outside competition with high tariffs, with each member determining its own trade policies to non-members (Gereffi et. al, 2002). With...
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...Globalisation describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and exchange. The term is sometimes used to refer specifically to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. However, globalization is usually recognized as being driven by a combination of economic, technological, sociocultural, political, and biological factors. The term can also refer to the transnational circulation of ideas, languages, or popular culture. Definitions An early description of globalization was penned by the American entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897. However, it was not until the 1960s that the term began to be widely used by economists and other social scientists. It had achieved widespread use in the mainstream press by the later half of the 1980s. Since its inception, the concept of globalization has inspired numerous competing definitions and interpretations. The United Nations ESCWA has written that globalization "is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour... although considerable...
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...true that immigrants contributed to America’s economic prosperity. Does this remain true today? Today is a very different time than the aftermath of the Civil War. Or is it? Now, the U.S. is also reeling back from wars, albeit of very different sorts: the Cold War and the latest series of riots in the cities. The U.S. is turning inwards, wanting to rebuild its infrastructure and inner cities. Pre-eminence in various scientific areas and the education of its citizens, who are, by world standards, lagging educationally, are again prime national goals—much as they were following the Civil War. Skills and labor are needed. Although not as powerfully delineated as in a North-South segregation, the American population is still bitterly divided over many issues—one of which is immigration. Would immigration aggravate our problems, especially unemployment and social tension, or benefit us, as it did before and following the Civil War? Throughout the 1800s, conservative politicians were adamant that immigration would compromise political security; and native Californian miners, laborers, and farmers feared that the Chinese would drain America’s resources and take away jobs. The tragic results of such fears were the trial of Sacco and Vanzetti, ending in the execution of two...
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