...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...
Words: 1153 - Pages: 5
...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...
Words: 853 - Pages: 4
...Nike Global Business and Challenges Once a company, like Nike, decides to become a global entity, it will often experience an increase in profitability. Unfortunately, companies like Nike must overcome some difficult obstacles before establishing a successful business in a foreign country. Some of the issues of concern are child labor laws, wages, and outsourcing’s effect on sales. Because of this, most widely known companies have presented various cases to defend their positions on conducting business in the foreign country. One such example is a Nike sweatshop labor case that stirred up a large amount of controversy over ethical business practices. Even though Nike has attempted to recover from the bad press it received about the sweatshops, it still struggles to defeat the negative feelings from people across the United States. 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...
Words: 1167 - Pages: 5
...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 become a global body and...
Words: 1070 - Pages: 5
...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...
Words: 1737 - Pages: 7
...Global Organization and Cultural Perspective (Nike) Once an organization, like Nike, becomes a global organization, and the business goes to other countries to gain more profits, it will encounter challenges and ethical issues. Some of the challenges for a global organization are child labor laws, wages, and outsourcing. An example is a Nike sweatshop labor case that stirred up a big controversy over ethical business practices. Because of this issue the organization has to deal with the negative perception, and the organization needed to solve this ethical issue to remain profitable and ethical in the eyes of the consumers and stakeholders. The Nike Corporation is one of those global organizations which brought their business to other countries to provide economic opportunity to the host country, and in turn obtain more profits due to cheap labor cost. The organization 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). Because of this issue, a wide protest of globalization and human rights activists accused the Nike organization for taking advantage of the workers overseas and exposing their workers in unsafe working environment. Although Nike was making billions of dollars in profit, however, it has...
Words: 1009 - Pages: 5
...successful as NIKE, Inc. It all started with two men, two men with a passion for track and field and the desire to innovate running shoes. Bill Bowerman, a track and field coach at Oregon University, and Phil Knight, a track and field athlete at Oregon University, teamed together to form “Blue Ribbon Sports” in 1964 which later became “Nike” in 1971. Since they began, they have expanded their products from solely running shoes into athletic shoes for a variety of sports as well as fan gear, workout gear, athletic equipment, and athletic gear for sports teams. Nike has grown from their World Headquarters in Oregon to several branches located in the Netherlands, Shanghai, and Japan. Each headquarter is focused on innovating their products to fit the consumers’ needs in their respected demographic and ultimately grow in those markets. With Nike’s success comes a high demand for their products. As a result of the high demand there are 774 factories located in 42 different countries in North and South America, Australia, Europe, and Asia. A large percentage of the factories are based in the emerging markets like Korea, Indonesia, Vietnam, Brazil, and Argentina. China claims a large percentage of the factories with over 213 compared to the United States with only 65. With the theme of inspiration and innovation, Nike has been able to significantly expand across the globe and affect every country it touches. Nike made headlines after several instances of documented child labor violations...
Words: 1998 - Pages: 8
...exploitation of children in the labor force are some of the common problems that are faced by organizations at the local and international. Despite the problems, nothing or very little has been done to prevent the labor related problem until it’s too late. Like in the event of a tragedy, it is then when the public takes and interest and protest against child labor. These are the same conditions that the United States faced during the Industrial Revolution. Such work conditions have currently been effectively dealt with in the United States apart from some small areas in the agricultural sector. However, in the third world countries the problem of poor work conditions and the use of children as part of the work force is still a problem. Corporations in the United States have moved their factories abroad as a way of saving money while receiving cheap labor. In third world countries such as South Korea, China, Vietnam, Taiwan, and China among others provide cheap labor. US based companies view availability of cheap labor to be a great benefit. They are able fulfil consumers needs while maintaining low costs of production in offshore production. The malpractices of these corporations have been highlighted by the media and one of them is Nike Corporation which has been highly criticized based on its organizational culture. Nike’s cultural issue Nike Corporation is a company known all round the world. Since the beginning, Nike has ventured into other countries...
Words: 1026 - Pages: 5
...Nike: The Sweatshop Debate Nike is a well-known global corporation. Recognized for its catchy “Just Do It!” slogan and the world-class athletes that represent the brand. Nike was established in 1972 by Phil Knight a former collegiate track star whom enthusiasm has lead the company to become the leading provider of athletic shoes and apparel in the world. Although, Nike is a multiple billion-dollar company they have faced several challenges in the way they conduct international business. Nike produces their products in factories all over the world. Many of these factories are located in the world’s poorest countries with low minimum wage standards and poor employee rights. Nike has been criticized for the selection of their factory locations; some people even refer to these outsourced places as “sweatshops.” This has caused legal, cultural and ethical challenges for Nike. Critics have protested that Nike has failed to follow the child labor laws in the countries they have entered, hiring under age children and making them work for long hours with little pay. For example a Korean subcontractor hired by Nike was hiring children as young as 13 years old, paying them 10 cents an hour and working them 17 hours a day. The countries that Nike subcontracts to such as the Vietnams, China and Indonesia are cultural poor. Most people are just happy to have a job and Nike is thought to have taken advantage of this fact. “Nike’s wealth, its detractors claimed, was built upon the backs...
Words: 637 - Pages: 3
...ETHICS AND STAKEHOLDER MANAGEMENT MGMT 703 CASE STUDY Nike, Inc. and Sweatshops NAME- | Harmanjeet kaur | STUDENT ID- | 300830553 | PROFESSOR- | Michael Cooksey | DATE- | 09/02/2016 | 1. a) The ethical issues in the above case are under age labor, working hours of work, no overtime pay and amount of remuneration paid to workers. Most of the workers hired by the company were minor that means below 18. Workers were required to work 20 hours a day with the page of 31 cents per hour. On one side, company was giving economic opportunities for other nations but on other side it was taking advantage of overseas workers working at cheap labor cost. b) Social issues in this case are Safety, Health and poor working environment. Nike was the first company to join a World Wildlife Fund program to reduce greenhouse admissions. 2. Nike should be responsible for what happens in factories that it does not own to keep and protect reputation name of Nike because it pay wages to the workers working in the subcontracted factories. Yes, Nike has the responsibility to ensure that factory workers should receive a “living wage” because according to law, it is the responsibility of the company to respect and follow the labor and employment rights of workers, to consider of impact of its functioning on environment, provide a good working environment to workers, follow the code of conduct and certain moral and ethical standards. As it is the responsibility of local government...
Words: 1135 - Pages: 5
...CASE ANALYSIS NIKE THE SWEATSHOP DEBATE Summary of the Facts 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 Nike: The Sweatshop Debate The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational...
Words: 934 - Pages: 4
...larger-scale production. When factories are founded in developing countries, these firms take advantage of the cheap labor、low-priced land and abundant natural resources to reduce the cost greatly, thereby, they can chase a higher profit. Besides, this kind of plant relocation brings low-cost countries much needed jobs and assists them developing manufacture. However, the working conditions it provides and wages it pays to workers are not very satisfactory. The phenomenon that employees suffer a bad working condition but only get a little wage still exists. In current world situation, companies and industries are becoming increasingly globalized, then both benefits and problems can appear, moving factories to developing nations is due to it. That firms move factories to developing nations is a win-win event, which can not only bring firms a higher profit but also help poor countries develop many-sided abilities and ease job problems, while a deficiency that cannot be ignored is the poor conditions and low wages majority corporations provide to their cheap labor, and it may affect a harmonious and benignant cooperation. First of all, this report will reveal the worldwide financial situation and describe the background information of typical developed and developing countries, studying the relationship between these and factories’ moving, and then take Boeing company and Nike company as examples to clarify the benefits that both foreign firms and low-cost countries could get from the...
Words: 2681 - Pages: 11
...Introduction Nike is the world leading manufacturer of athletic shoes, apparel and equipment. Nike is one of the most popular companies all over the globe. Nike also experienced some problems that affect their companies, which are usually experienced even in other companies. As one of the biggest brands in the business, Nike became the center of the eyes of people across the United States, because of the criticism about the sweatshop labor case. Facing this kind of criticism, Nike tried to cover the malicious issue from the bad press, but they cannot defeat the negative feelings from the people. Nike also faced majority challenge involving ethical issues and debates. One of the ethical issues involved “Nike did not pay the living wage of every worker and more than half of the workers who did not wear protective masks or gloves who dealt with dangerous chemicals”. The debate was over the unsafe conditions that Nike was the responsible of providing all the needs of its factory workers while them increasing their profits. Nike also criticized for hiring children who were not allowed to work and forcing them to work overtime for below minimal pay. They failed to follow the labor child laws by hiring children as young as 13 and paying them at 10 cents an hour up to 17 hours. They hired firm to monitor and to ensure accurate accounting reports. Nike faces several challenges; however, it can achieve continual success by applying effective operational and strategic plan. Despite...
Words: 456 - Pages: 2
...CASE ANALYSIS NIKE THE SWEATSHOP DEBATE Summary of the Facts 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 Nike: The Sweatshop Debate The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational...
Words: 934 - Pages: 4
...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
