“Nike: The Sweatshop Debate”

Daryl Williams

MGT/448

June 28, 2015
Timothy Mills

“Nike: The Sweatshop Debate” – Introduction

When you think Nike the only thing that comes to mind is Michael Jordan. One of many sports hero's that changes the world and how we feel about the product they represent. What is not mentioned is how this product are created. Imagine, a pair of the limited addition Air Jordan can cost anywhere between $140.00 to over $200.00. The price to make the shoe include material less than half. Sound like a great business practice but it has been an ongoing debate that requires business owners to rethink the way they conduct business. This paper will highlight the "Nike: The Sweatshop Debate," covering but, not limited to describing the legal, cultural, and ethical challenges that confront the global business. Defining the various roles host governments played and operational challenges facing global managers. Nike has been under fire since “Nike was a CBS-TV 48 Hours news report that aired October 17, 1996” (Hill, 2013). The report details the internal operation of how the mega-corporation created a product for cheap labor. Working six days for $40.00 a month, one can clearly make an assumption that this does not seem fair. To add insult to an already growing concern the United Students Against Sweatshops (USAS) made its case informing all that "the Fair Labor Association (FLA), which grew out of the presidential task force on sweatshops, was an industry tool and not a truly independent auditor of foreign factories" (Hill, 2013). Nike case represents the struggle that many corporation deals with on a daily basis. “The Friedman doctrine states that the only social responsibility of business is to increase profits, as long as the company stays within the rules of law” (Hill, 2013). Ensuring laws, rule and regulation are adhered too is a must to avoid negative attention. “As the Nike case demonstrates, a strong argument can be made that it is not OK for a multinational firm to tolerate poor working conditions in its foreign operations or those of subcontractors” (Hill, 2013). A culturally corporation has to extend their services to ensure workers are been well cared for, and ethics will always play a part to ensure the rules are being followed. Host nation illustrated in the selected case allowed such action to take place. The subcontractors could have easily made significant changes, but chose to do otherwise. Nike manages felt the pressure to do something that will minimize the negative attention that was created. One area Nike managers focus on was clearing the misunderstood assumptions that have been televised. Andrew Young, a former US ambassador to the UN, took charge and made some positive changes to how business was being conducted in the host nation. One of his notable act was taking steps against their subcontractors who did not adhere to the labor laws. Also to the changes being made, Nike ensures that their code of conduct was being followed.
Conclusion
Business owners will always seek to find ways to make more money. Outsourcing to other countries is a good way to conduct business. This is pretty much a win-win for both the buyer and seller. The one thing that business owner have to keep in mind is that their brand represent their nation. References
Hill, C. W. L. (2013). International Business: Competing in the Global Marketplace (9th ed.).
Case study taken from: “Nike: The Sweatshop Debate” Hill, C.W.L. (2013). International business: Competing in the global marketplace (9th ed.). New York, NY: McGraw-Hill.