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 come. According to the article, Nike’s approach has been to gradually better the conditions of the workers through adopting programs to promote labor rights in the manufacturer countries, and to adopt better surveillance and reporting practices, along with hiring external consultants to assess the improvements.
From a legal point of view, continuing with the case study source, the central challenge would be to ensure the legality of the working conditions from a local perspective. Here, the authenticity of the organization monitoring labor condition improvements would be questioned, and the reports of factory working conditions would not be legally accurate or free of bias according to many critics. Nike’s strategy was to publicly comply to local government labor legislation, and to establish new government cooperatives, that again would be questionable from an objectivity point of view. The governments would, in many ways, play very important roles in the sweatshop culture creation. Many of these countries would not have a legally functioning structure to protect labor rights, and according to the case study, for example labor unions would sometimes even be banned by law. This becomes a challenging legal issue for a company to fix on behalf of a government, and one could also argue that it is one of the reasons why the sweatshop manufacturing became such as massive global phenomena, initiated by the Western companies themselves. The lack of labor legislation combined with the financial potential that multinational corporations bring, makes the local governments more vulnerable to corporate manipulation and more willing to cooperate in cover-ups, rather than standing up against the mighty brand giants.
The issue with legislation is just one angle in a complex scenario, as both cultural and ethical controversy are also important in the overall equation. Cultural differences, deeply dividing Western and Eastern world, could not be so easily overcome, as approaches to establishing and running a business, as well as dealing with authorities, would be completely different. Also, it should be expected that a Western company obeys Western business ethics, but from this point of view, simply maximizing the profit could be argued even as an ethical point. But, the welfare of the workforce, and the clear shortcoming is working conditions, are ethical points that cannot be overlooked. The ethical challenge of Nike is to find a way that truly looks beyond the revenue margins, and to commit into operating with suppliers that do obey the local laws and policies regarding minimum wages and working hours. This can be considered as one of the main operational and ethical challenge of Nike, as according to the case study, the company would still continue to struggle with humane and sufficient maintenance policies of labor conditions.
In overall, both the strategic and operational challenges faced by Nike are rooted into the company culture itself, and it should be the management’s priority to oversee the execution of unbiased and fully legal subcontracts in the manufacturing countries, as well as to carefully look into the co-operational partners in local levels. According to a recent Business Insider article from 2013, Nike has been continuing the improvements of factory conditions and in some way act as the corporate world benchmakr case of the sweatshop phenomena, but unfortunately, they do still make the headlines also due to dangerous worker conditions.
Naturally, change takes time, but the main motivation should be to create a brand image that not only promotes “smokescreens” and superficial improvements, as the case study article expresses the accusations made by the Nike critics, but to become a company that truly looks into ethically sustainable and lasting operating principles. After all, that does matter more and more to the aware and critical, well-informed contemporary consumer.