Case Study: “Nike: The Sweatshop Debate”

Global Business Strategies - MGT 448

Introduction

This document will explain the difficulties in the legal, social, as well as ethical area which the Nike Corporation had encountered because of carrying out international business in Vietnam government. This document prosecutes the strategically as well as operational problems which make part of Nike and equally demonstrates the part of Nike in the scandal of the operation plant and the moral problems which surround this sensitive case.

Nike has encountered a lot of legal, social as well as moral problems above of when the example of the plant of the operation was encountered. “Nike is a global corporation that was established back in 1972 by the preceding University of Oregon track star Phil Knight, (Hill, 2009).” Nike is among the key sellers of tennis shoes and garments at low prices. The organization has more than $10 billion in annual incomes and sells its items in over a hundred and forty countries throughout the world. Nike is not associated with any one of its proper manufacturer. Nike doesn't get involved in their own production process. Nike designs and creates their own marketing plans. They also produce to more than six hundred international plants throughout the world. As per (Hill, 2009) by using these types of producers Nike is hiring 550,000.

With regards to the legal repercussions this organization is experiencing include the rumor of operating sweatshops in which they hire kids at reduced salaries but no proof has been found. This organization has been ridiculed with this rumor for over ten years. The organization takes its name from the Greek goddess of the victory, and meets its status to be successful in the good industry which amuses one decade superficially. Nike gathered production numbers of as an independent organization of the United States of America to make this kind of item. Nike sold about 280 million tennis shoes during 2006. Production employees have doubled in China making Nike’s profits substantially to increase for more than $14 billion. Today’s international economic system has been described as fast technological modifications. Nike should take into account the huge significance of the production as well as the distribution of their services and products still been taken by human organizations. Nike has production factories in Indonesia, China, as well as Vietnam. Nike doesn't have the complete property of these plants being that they are subcontracted to independent companies that use local residents to operate them.

Nike even now uses the energy to operate on complying with the government rules so far as the organization gets into these countries. The globalization is a type of the development for the organization since the ones that can offer to the good incentives for the established community local during 1972. For very much Nike has been an icon of globalization when it turn into the organization that destroyed a target for the allegations that the items had been produced in the plants operation which use the labor of kids working excessive hours in risky conditions. Various other operational problems which Nike international managers encounter, incorporate international programs of the training and the development; conditions supervision politics in local governments where the organization has grown internationally and to apply itself of the work to improve the right of the employees. The main reason for these issues are usually the desperate steps some households in these ethnicities need to take so as to supply foodstuff for their kids, one more reason could be a single mom who must send their children to work so as to provide housing. One more reason for this scenario could be Nike searching for inexpensive labor in these countries without having care of the legal repercussions it would have. Irrespective of the reason, Nike doesn't hire kids because of the legal repercussions this caused in the past; also rules have turned more stringent while carrying out business internationally.

Conclusion

Nike, a reputation which earlier when heard meant to people a similar thing like a sweatshop of plant of operation now is widely known as a leader in the commercial world which helps ethical a commercial program well resourced. Nike has been capable to modify the bad imagination of the organization and changed it into a mission of accomplishment. Considering the fact that no organization can freely assure a series of the provision of the problem, Nike has proven to have a tremendous growth in the last ten years which guarantees instances of a safer work place, the better safekeeping of the register, and to focus itself in the corporative responsibility.