...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 that...
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...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...
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...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 prohibit...
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...Running head: Nike: A SWEATSHOP DEBATE Nike: A Sweatshop Debate University of Phoenix MGT/448 Instructor J. Ryan April 17, 2012 Nike: A sweatshop debate. Nike, a multi-billion dollar corporation, is the world’s primary supplier of athletic shoes and attire. Over the past several years, Nike has been involved in much controversy over its possible sweatshops. The following will address the legal, cultural, ethical, strategic and operational challenges Nike faces because of this controversy, as well as their roles in resolving this issue. Legal, Cultural, and Ethical Challenges Even though Nike may subcontract its companies to foreign countries, it is still Nike’s responsibility to ensure the manufacturing sites are operated with integrity. 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...
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...Nike is an iconic sportswear brand, with its very recognizable swoosh logo decorating the attire of many of the globe’s most famous sports teams, and has established a long-lasting brand legacy both with its ability to adjust to trends, as well as to build a profitable business model. Naomi Klein’s famous book, No Logo – Taking Aim at the Brand Bullies, first published in 1999, attacked many big brands accusing them of violating labor laws and using dirty tactics to dominate the changing markets. One of the brands that took a heavy hit in the book was Nike. In the case study Nike: The Sweatshop Debate, the author of this article continues on Klein’s theme, addressing accusations made against Nike for child labor usage through their suppliers as well as dubious sponsorship agreements. These accusations focus around the poor and hostile working conditions of Asian factories, the below-minimum wages and suppressive employee treatment. Nike, in many ways, became the evil representation of the entire sweatshop issue, then a surfacing theme and in many ways a new corporate territory in big scale, and opportunism had its price. Nike would be seen as a brand that would mercilessly exploit the labor opportunities of poorer countries, caring little of the origins of their products. It is fair to say, that changing this stigma would become a globally relevant issue for the entire corporation, and fixing the damaged brand image would be a challenge for the entire company for years to...
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...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...
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...Nike Corporation is one of the largest marketers of athletic apparel and sportswear equipment in the world and was founded in Beaverton, Oregon, in 1964 by Phil Knight and Bill Bowerman. According to Nike.com (2009) it had record earnings of 19.2 billion dollars and continues to grow at a steady pace. Nike sold its products in a 140 countries and successfully discovered that manufacturing its products was 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...
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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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...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...
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...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 holy days when possible builds an appreciation of management. Gender balance in groups is important to those who...
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...Trapp Case Study Nike is a company that is known to be a global corporation. Nike is a corporation that advertises and designs its merchandise over several countries. Nike is known for are famous logos and swoosh that is located on the merchandise. In 1972 Nike was established and founded by Phil Knight a former tack star of Oregon University. Nike is the planets leading athletic shoe and apparel manufacture in the world. Michael Jordan and Tiger Woods are the main attractions for sponsoring this product. Legal, Cultural, and Ethical Challenges The biggest legal issues that Nike has to worry about are the age limited of their workers. It has been said that Nike has underage children working in the sweatshop slaving and not making enough money to survive. Not only are the children working in the company legally, but they are working under hazardous conditions that are affecting the children and other workers health. To assure safe and healthful working conditions for working men and women; by authorizing enforcement of the standards developed under the Act; by assisting and encouraging the States in their efforts to assure safe and healthful working conditions; by providing for research, information, education, and training in the field of occupational safety and health; and for other purposes. ”That this Act may be cited as the "Occupational Safety and Health Act of 1970." Nikes cultural challenge that they will affect the company is making sure...
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...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...
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...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...
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...NIKE‘s CSR Challenge 1-In referring the opening profile and the closing case for this chapter, discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world? 2005 Nike reports the followings social and environmental problems in their factories located in Asia: -Abuse treatment to their employees for example: they prohibited their employees to use the toilet and drink water. -denied days off. -Force to work more than sixty hours a week and those who refused accomplish this were punished. - 25% of the employees of the factories were paid less than minimum wage. 2-Discuss the meaning and implications of the statement by a NIKE representative that “consumers are not rewarding us for investments in improve social performance in supply chains.” One of the most important changes Nike should make in their working conditions should be based on “The responsibility of one is to work toward the accountability of all.” all business should respect the rights of their workers such as paid time off, paid overtime, time for lunch, and also breaks ; When the working conditions are good and the rights of the employees are respected this will increase productivity. 3-What does it means to have an industry open-system approach to social responsibility? What parties are involved? Who are the stakeholders? The fact that business organizations are open systems means that although businesses must make a...
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...some of the challenges and benefits associated with being the market leader in so many categories? Answer: Nike brand success depends on its strategy design , manufacturing and mainly worldwide marketing. Nike was one amongst the few company that shifted its branding image from product focus to Attitude focus making it appeal to everyone in this entire world. They build something so amazingly great that it became a lifestyle for virtually everyone. They started a company to make product better for runners. But soon their focus changed and they started advertising themselves as a company that's trying to "bring inspiration and innovation to every athlete in the world". When creating a marketing plan for a new product or positioning a brand, Nike is has proven to be the best. There are many countries in the world where sports is consider religion and that's what Nike focuses on. They made themselves part of the sports that world cared most about "Soccer" and their world cup became their journey. We all aspire to become like someone we appreciate and that's what Nike is focused on. Their slogan being "Go out and Make the difference. Write your future, it's up to you as it was for these athletes". Nike has covered everything on sports categories and that a lot to be associated with. Once a company, like Nike decides to become a global entity, before gaining increase in profitability it must overcome some difficult obstacles. Some of the challenges that Nike is facing is...
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