...Global Business Ethics-Nike’s Sweatshops Ann T. Dale MGT/216 Global Business Ethics-Nike’s Sweatshops Nike is a worldwide sports name in wear and equipment. So, why is Nike’s ethics in question? Has greed and publicity become their motto at any costs? Nike spends multimillion dollars a year hiring well-known athletes to advertise their products yet cannot seem to stay out of the media’s eye of their contracting or subcontracting techniques of their products to be built in third world countries. In 1996, Nike has been charged by critics with engaging in a variety of unethical employment practices in countries that exercise little or no control over the conditions of labor or whose governments are corrupt and can be bought off (De George, 2006, chap. 20). In dealing with business issues, a company needs to be aware (what are the issues), articulate (justify and express decisions), and application (reach a decision, train and explain ethics to employees). Ethical behavior has to start at the top of a company and work its way down. Here we will compare ethical perceptions across cultures about the ethical situation, discuss the ethical issues that became evident due to globalization, and discuss the risks and consequences associated with the Nike ethical dilemma. Compare Ethical Perceptions Across Cultures About the Ethical Situation Trevino and Nelson (2007) defines business best stating the “definition of ethics—the principles, norms, and standards of conduct governing...
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...Durrell Simms Nike: Managing Ethical Missteps The Nike Corporation is a huge brand that targets athletes, colleges, and product manufacturing. The company was founded by Phil Knight and his track coach, Bill Bowerman, in 1964. “The company was renamed Nike in 1978, and has grown to be the largest worldwide seller of athletic goods, with approximately 19,000 retail accounts in the United States and about 160 countries around the world” (386). Nike built its “good quality” reputation from popular athletic sponsors. Although the brand was growing into a successful sports oriented company, high demand for the product led to thought on how to manufacture more apparel. The founders of the company devised a plan on how to increase manufacture while not completely blowing their accounts on laboring. The company agreed to take their manufacturing overseas to third-world countries where the cost of laboring is cheaper. “In the late 1980s after going public, the late 1990s began a period composed of combating allegations about labor and human rights violations” (386). Nike was accused of over working their foreign employees, and providing them poor, unsanitary work environments. Subcontracting was mainly the reason why this situation occurred. Subcontracting is the process of reducing cost to allow projects or manufacturing to take place. This action basically allows companies to take advantage of the workers they hire for cheaper service. Children were also hired...
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...How is the impact of using ethical business for Nike increases its production more than other sports brands? Nike Inc takes pride in being an ethical company. Nike places their responsibility to their stakeholders, internal and external, at the top of their priority list. They expend great of time, money, and resources to ensure that they are fulfilling their ethical duty, and achieving the highest standards of ethical responsibility. Because of Nike’s efforts to maintain their ethical integrity, Nike is a good corporate citizen. Nike’s motto says that Nike Inc was founded on a handshake. Their goal from the beginning was to build business with their partners based on trust, teamwork, honestly, and mutual respect. “Nike has a commitment to management practices that respect the rights of all employees, including the right to free association and collective bargaining, a commitment to minimizing their impact on the environment, providing a safe and healthy work place, and promoting the health and well-being of all employees.” This is Nike’s code of conduct; which is translated and posted in all major Nike workplaces across the world, which exemplifies the commitment to ethics and the Nike stakeholders ("Nike's Labor Practices." , ICMR. 2002). Nike views all of its stakeholders as important components to the success and sustainability of Nike Inc. According to the Stanford Research Institute in 1963, a stakeholder is a member of a group whose support is necessary for the...
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...Huddleston Human Resource Management 522 Ethics and Advocacy for HR Pro March 13, 2012 Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike Nike leads the world in the manufacturing and distributing of its athletic footwear and accessories. Nike is the brain child of Phil Knight and his former track coach, Bill Bowerman. The duo formed a company that would eventually become the leader in the athletic industry with the sales and manufacturing of athletic wear. The Nike brand is widely recognized by its catch phrase and its logo. Their marketing campaigns specially “just do it” helped it revive its brand image. The swoosh sign is recognizable across most of the world. This alone attributes for Nike's worldwide success. Overall, Nike keeps improving its product which helps to keep the population engaged with its brand. If Nike had a more effective ethics program and viable code of conduct, ethical issues could have been avoided by Nike. In the early 1990s, sports shoe giant Nike became the target of arguably the most intensive and widely publicized of these anticorporate campaigns up to that time (Conaway, 2011). According to Ferrell, ethics programs that provide guidelines outlining board responsibilities encourage compliance encourage compliance at the highest levels of the organization. Some of the minimum requirements for ethics and compliance programs are standards and...
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...the employees f. Women discrimination g. Unfair business with minorities such as older worker, religious minorities h. Unlawful business practice Would the use of the third party independent contractors insulate MNC's from being attacked? Would that practice offer MNC's a good defensive shield against charges of abuse of “their employees”? Answer: Human rights issues is one of the most important issues in this globalization era. There are no universal or International Standard of what is right or wrong because of the cultural differences among the countries. For example, some country appreciate child labor but some country has a strict law of child labor. So when a business organization conducts business in another country, they are trying to take advantage of that country. The reason for an organization to do business beyond the border is to maximize their profit. Sometimes some MNC does offshore or outsourcing to get the job done. So some MNC goes to the third world country to gain economies of scale. For example Apple Inc. Products are produced by a third party independent manufacturer Foxconn, which situated in China. They have some controversies about some unethical human rights issues which brings public attention. Even though Foxconn produce apple inc. products. But Apple Inc. Face any loss for that. So Yes, the use of third party independent contractors insulate MNC from being attacked by the customer for ethics. Yes, this practice would offer MNCs a good defensive...
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...Management Planning and Ethics BY: Missy Peterson UOP / MGT330 Management Planning and Ethics Nike is one of the most competitive fitness and sports businesses out there in today’s world. Their motto is “If you have a body, you are an athlete”. The quote means as long as there are athletes there will always be a Nike. Nikes products consist of footwear, clothing, sports equipment and accessories for the athlete market. Nike’s targets people of all ages, but sell their items to the majority of athletes. Everyone who wears shoes is considered their target. Nikes mission is to bring inspiration and originality to all athletes in the world. By doing this, Nike needs to have a plan in mind to keep this company in full force in the next 20 – 30 years. Their only real competitor is Reebok since 1990. However, since Nike is such a big company Reebok are the ones’ that are trying keep up with Nike’s operation. In the past, Nike has had legal issues, ethics and corporate social responsibilities that have an effect on the management planning. With the legal issues, Nike had a problem with their Asia Corporation where they were using child labor to create soccer balls. In the United States, constitution states that child labor is an illegal and inhumane practice. In 1996, Nike characterized of making its equipments in countries, such as Asia, that are in the developing phase, having very cheap labor, authoritarian government and lack of human rights appeal and...
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...competition for Adidas and Puma. Nike started distributing for a shoe company out of Japan but soon came up with its own brand (Ferrell, 2013). The common issue of supply and demand took over the company and Nike began using overseas manufacturing companies in Third World countries. This raised an eye for many labor and human rights activist which put Nike under many legal issues. “Nike’s response to the issue has been considered by critics to be more focused on damage control than on a sincere attempt at labor reform” (Ferrell, 2013, p. 495). Nike’s Failure to Address Corporate Social Responsibility Early Ferrell (2013) discuss what a senior from Harvard University referred to as the five stages of corporate responsibility. They are as follows: 1. Defensive: “It’s not our fault.” 2. Compliance: “We’ll do only what we have to do.” 3. Managerial: “It’s the business.” 4. Strategic: “It gives us a competitive edge.” 5. Civil: “We need to make sure everybody does it” (Ferrell, 2013). In the beginning, Nike was in the defensive stage. In an article from the Journal of Business Ethics (2005), author Kristen Bell DeTienne discusses how Nike responded to their first sweatshop allegations. Nike claimed “that the factory conditions were equitable, the laborers were fairly paid, and that a clear code of conduct ensured companywide consistency” (DeTienne, 2005, p. 361). Many times when a company has never dealt with...
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...HRM522 Ethical & Advocacy for HR Professionals Dr. Jeanette Horner-Smith December 14th, 2014 “Nike: From Sweatshops to Leadership in Employment Practices” The Nike Corporation is a huge brand that targets athletes, colleges, and product manufacturing. The company was founded by Phil Knight and his track coach, Bill Bowerman, in 1964. “The company was renamed Nike in 1978, and has grown to be the largest worldwide seller of athletic goods, with approximately 19,000 retail accounts in the United States and about 160 countries around the world” (Ferrell, Fraedrich, Ferrell, 2011). Nike built its “good quality” reputation from popular athletic sponsors. Although the brand was growing into a successful sports oriented company, high demand for the product led to thought on how to manufacture more apparel. The founders of the company devised a plan on how to increase manufacturing while not completely blowing their accounts on laboring. The company agreed to take their manufacturing overseas to third-world countries where the cost of laboring is cheaper. “In the late 1980s after going public, the late 1990s began a period composed of combating allegations about labor and human rights violations” (Ferrell, Fraedrich, Ferrell, 2011). Nike was accused of over working their foreign employees, and providing them poor, unsanitary work environments. It can be said that subcontracting was mainly the reason why the scandals occurred. Subcontracting is the process of reducing cost to allow...
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...It’. The quality and standard of its products have been strongly recognised by people, even though Nike’s products are considered expensive, yet its performance makes it valuable. i. Inhumane working conditions. Although Nike’s products and services are able to satisfy its consumers, there are some invisibly unethical issues which happened between its employers and employees that are intolerable. The first serious case is Nike’s workers faced direct violence in the factory. According to the daily mail reporter, workers announced that they are being mentally and physically abused at the sweatshops. The supervisors often slap them in the face, kick them, throw shoes at them and call them ‘dogs’ and ‘pigs’. With the proofs, one of the workers in Sukabumi mentioned that she was kicked by a supervisor because of making a mistake while cutting rubber for soles. Some workers also described that they were being hit or scratched in the arm until they bled. Besides that, a 30 years old lady named Mira Agustina, was fired in 2009 for taking sick leave even doctor’s note was summited. She said furiously that it was a terrible work and the bosses frequently insult the workers by calling them animals’ name. Ujang Suhendi, 47, also mentioned that they were crying and allowed to precede their job after 2hours under the sun. Salary is a part of workers’ daily bread. Some of the Nike’s workers are fear of filling and reporting their complaints to the top management or public because...
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...NIKE From Sweatshops to Leadership HRM 522 June 12, 2011 Global businesses can sometimes be difficult due to the different cultures. Not all cultures carry the same value, law and ethical standard. Nike is an international brand that has many retail accounts in over 160 countries. Being an international company can cause business ethical and legal issues. Integrity is important and sometimes a challenge when a corporation must respond to criticism or hold back on certain company details. Nike dealt with criticism from right activist, media, and face labor rights violations. However, over a period of time and after making some important adjustments; Nike is working on improving its company image. Nike used traditional advertising methods to broadcast its product. Nike public relations tactics dealt with the wage policy, visiting campuses on universities, personal letters, corporate responsibility and using celebrities as spoke person for its product. Nike launch campaigns regarding child labor, low and non- existent wages. Nike believes that the U.S dollars were meaningless because the cost of living was different in other countries. Nike held press conferences for newspaper staff at colleges. These were ways for Nike to make proactive efforts to address the concerns of activists protesting against their products. Nike made a few mistakes in handling the negative publicity. Three...
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...hazardous chemicals, and water shortages. These negative effects on the community are some of the challenges of manufacturing. Also the high inquiry of cheap labor tends to lead to unsafe working practices for employees. Such as underage workers, and abuse, these are all unsafe working practices and unethical business decisions. With the public refusing to purchase their products and revenues and stocks declining Nike needed to regain the public’s interest. In efforts to do so Nike launched numerous campaigns to address the public’s concern. One was trying to improve the standards of its factories Nike has issued a code of conduct, joined various organizations to help improve labor standards, and encourages contractors to promote safe working conditions. Because of the many allegations Nike wanted to protect its name so they launched the reputation management campaign. This proved that the acquisitions against them were false. Although the campaign served its purpose Marc Kasky felt that it was misguiding. Marc argued that their “commercial speech” was simply “false advertising” (Ferrell, Fraedrich, Ferrell, 2008, p.390) and sued Nike for $2 million. Nike’s corporate social responsibility has improved since the early 1990’s but they still have a...
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...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...
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...worldwide sports name in wear and equipment. So, why is Nike’s ethics in question? Has greed and publicity become their motto at any costs? Nike spends multimillion dollars a year hiring well-known athletes to advertise their products yet cannot seem to stay out of the media’s eye of their contracting or subcontracting techniques of their products to be built in third world countries. In 1996, Nike has been charged by critics with engaging in a variety of unethical employment practices in countries that exercise little or no control over the conditions of labor or whose governments are corrupt and can be bought off (De George, 2006, chap. 20). In dealing with business issues, a company needs to be aware (what are the issues), articulate (justify and express decisions), and application (reach a decision, train and explain ethics to employees). Ethical behavior has to start at the top of a company and work its way down. Here we will compare ethical perceptions across cultures about the ethical situation, discuss the ethical issues that became evident due to globalization, and discuss the risks and consequences associated with the Nike ethical dilemma. Compare Ethical Perceptions Across Cultures About the Ethical Situation Trevino and Nelson (2007) defines business best stating the “definition of ethics—the principles, norms, and standards of conduct governing an individual or group—focuses on conduct.” (p. 13). Business ethics vary in different parts of the world. Several countries...
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...potential in the world: adolescent girls.” (Nike, 2013). The Nike Foundation is funded by Nike, Inc, but is also collaborates with United Nations Foundation, Coalition for Adolescent Girls and the NoVo Foundation. This foundation helps girls receive support and resources to overcome poverty and help guide them in establishing goals and dreams. Another way Nike gives back is by focusing on their long-term goals that can change and help support communities. Nike’s approach focuses on four key areas. 1. Expanding access to sports to break and prevent intergenerational cycles of inactivity. 2. Engaging employees and consumers to aid in creating innovative solutions to social and environmental issues. 3. Investing in the influence of adolescent girls through the Nike Foundation. 4. Using sports to reconstruct and reinforce communities devastated by natural disasters. These four key areas set a foundation of where to start in their supportive efforts for communities all around. These key focuses illustrate Nike’s initiative to help children with being active not only physically, but mentally as well and...
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...since to correct it. So why did it happen? Well that is quite clear. The reason why most firms outsource their activities to lesser developed countries is to exploit cheaper labour and production costs. Nike has a brand reputation worldwide, and in-fact is a market leader in the sales of athletic shoes. The constant focus is to formulate ways and strategies to reduce production costs, and one way of that is fewer wages to the workers. The high unemployment levels in the third world countries, as well as the desperation for people to be employed, in any kind of work, allows multinationals like Nike , the perfect platform to indulge in malpractices without getting into too much trouble. A look at some of the ethical issues concerned with Nike's human (or inhuman!) right violations would give a better understanding of the concern. Ethical Dilemma: Any firm which expands its...
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