In today’s business world, a company’s ethical behavior is constantly under the microscope; and more specifically, the larger the company, the more intense the magnification. Unethical behavior and what some even characterize as evil behavior, has been witnessed as a practice of some global companies. Surprisingly, one of the most recognizable companies in the world was once at the forefront of scrutiny and judgment for its unethical practices. Established in 1972, Nike, one of the leading marketers of athletic shoes and apparel on the planet, has brought in billions of dollars in revenues and sold its products in some 140 countries (Hill, 2009).
American companies have sought to outsource their manufacturing through cheap labor, and Nike has been accused of for abusing its overseas workforce in sweatshops.
The fight against Nike still continues and a film documentary entitled “Sweat,” which follows a team as they learn and document from first-hand experience, Nike’s operations, is scheduled to be released later this year (Educating for Justice Films [EJF], 2009).
In this paper, I will evaluate and discuss the case study about the Nike sweatshops as written by author Charles W. L. Hill in his book International Business: Competing in the Global Marketplace. I will analyze the legal, cultural, and ethical challenges presented, the roles that governments played in the global operation, and finally, I will summarize the strategic and operational challenges facing global managers as illustrated in the case.
The Essay on Nike Company
History Nike in 1962, started as Blue Ribbon Sports, as its Founder member, Phil Knight thought there was a market for athletic shoes designed by athletes for athletes. In the year 1964, Bill Bowerman, Knight’s track coach & Phil Knight joined hands together & NIKE Inc. was co-founded with headquarters in Beaverton, Oregon. Nike’s grassroots strategy was born of low capital and ...
As previously mentioned, ethical issues surrounding Nike have been, in my opinion, the foundation and catalyst for the entire debate and the building block for the legal and cultural challenges that were examined thereafter. In regard to legal and cultural challenges, Nike was found to have had major labor practice issues, including hazardous working conditions, violations of overtime laws, and violation of wage laws. The company has to make sure to hold foreign factories to appropriate labor standards regarding these issues. Nike has contracted its manufacturing to countries such as Indonesia, China, South Korea, Vietnam, and Taiwan, taking advantage of low-cost labor, and as some of its opposition has claimed, building itself on the backs of the world’s poor (p. 154).
The company is accused of exploiting the world’s poor, including children, to provide expensive apparel that will go to pamper consumers in the developed world. Some surprising legal issues presented in the case study by reporter Roberta Basin were alarming. She shared that a young woman named Lap, who worked at one of the Nike factories has put in much more overtime than the annual legal limit of 200 hours. In addition, if she is sick or had to take care of a sick relative, she would not be able to leave the factory until she would meet the quota of making enough shoes.
Ethically, multiple countries throughout the world would disagree with the conduct and practices of Nike, not only with the alleged child labor, but with the existing working condition and wage issues. In Indonesia, for example, workers are paid $2.28 per day, which is double the income of over half of the working population (p. 157).
Since literate and disciplined workers are desperate for jobs, and even to work an unbelievable amount of hours, Nike has taken advantage of the demand and allowed its factories to force workers like Lap, to become slaves to the product and to put Nike above their own health and their family. I believe that these issues are sort of basics of business ethical practices and are viewed as unethical by the majority of the world.
The Essay on Third World Countries
World' Countries today? Who should be held responsible for these problems? Why? What has Canada done to help 'Third World Countries'? There has always been a dominant country in the world that sets the economic standard throughout powerful countries. Canada has always been a top rated economic country, usually behind the United States and other large Commonwealth countries. Starting back in the ...
In regard to the role that governments played in this global operation, it was said thatafter workers in South Korea and Taiwan gained new freedom to organize and experienced a rise in wages, Nike sought out other countries where low-cost labor could once again be found. The Indonesian and China government prohibits independent unions and controls the minimum wage to be set at rock bottom, but these are the countries where the majority of Nike shoes are now made. In 1997, Global Exchange, in conjunction with two Hong Kong human rights groups, found that a factory owned by a Korean subcontractor for Nike had workers as young as 13 earning as little as 10 cents and hour and working up to 17 hours in forced silence (p.155).
The strategic and operational challenges facing global managers as illustrated in the case can be numerous, depending on the industry and line of products or services. However, global managers can learn some key lessons from Nike and be aware of the challenges that they may face. Obviously, contracting with foreign countries may have some serious consequences if controls are not in place to govern or manage the day-to-day operations at global locations, including working conditions, wages, and distribution of products. A firm cannot wait until the public begins to wonder about working conditions in the global company’s locations, but should instead include, within its strategic plan, a quarterly assessment of working conditions in subcontractor’s plants around the world. Global managers may escape the possibility of accusations, whether true or false, by planning ahead with pre-established controls. Ethically, global managers should also ensure that the company’s international hubs preserve the Code of Ethics established and practiced at the firm’s originating country.
In summary, I examined the case study and discussed the more obvious legal, cultural, and ethical challenges that Nike has faced, the roles that the Chinese and Indonesian governments played in the global operation, and summarized some strategic and operational challenges facing global managers today. Although the case presents past data about the controversy surrounding Nike’s so-called sweatshops, one cannot ignore nor avoid the fact that the accusations and campaigns against the athletic giant are still going strong. The internet features a number of websites and groups dedicated to shedding a negative light on the Nike corporation. Nike is a successful global giant, therefore, such scrutiny has not yet been able to reach a level powerful enough to bring down the company. However, global managers today need to take warning and realize the importance of precise and careful strategic planning, in which a strong ethical foundation and controls are established and set to be governed throughout the future of the firm’s growth.
The Essay on Onsite Managers Laundry People Countries
1. What Managerial roles is Jack Welch most likely to play in creating a culture that values continuous improvement? The role Jack Welch played was allowing the creation of the "Quick Response Program." Allowing his employees to take over. This is a risky role to take, but at the same time, it has the possibility of being a successful move. 2. When the Louisville facility was turned over to its ...
References
Educating for Justice Films (2009).
SWEAT. Retrieved March 4, 2009, from http://www.sweatthefilm.org/story.htmHill, C. W. (2009).
International Business: Competing in the Global Marketplace (7th ed.).
: McGraw-Hill.
