Corporate Social Responsibility Nike

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INTRODUCTION:

_"There is a big disconnect between the vast potential of the global economy and what it does for ordinary workers. Finding solutions to these new global realities is very difficult but not impossible; it just requires some hard thinking and some hard decisions. Where are the leaders with the vision to take up the challenge?"1_

The keywords in the above excerpt are "workers", "solutions", "leaders" and "challenge". Nike Inc., the world _LEADER_ in the athletic footwear, apparel, equipment and accessories for sports and accessories for sports and fitness enthusiasts2, faces today the _CHALLENGE_ of finding appropriate _SOLUTIONS_ to the sweatshop conditions for the _WORKERS_ in its aligned factories in Southeast Asia, specially Indonesia and Vietnam.

This paper examines Nike's attempts to improve the working conditions in its operations and its sphere of influence and has been treated as being a snapshot in time (mid 1990's). The paper evaluates Nike's CSR strategy under four main headings. Part I links Nike's CSR strategy and the issues faced by it to the UNGC Ten Principles. Part II identifies the major stakeholders of Nike and further discusses the management of the identified stakeholders with recommendations for alternative courses of action. Part III attempts to further evaluate the alternative courses of action in detail following which Part IV talks about what success at Nike would look like. Also, the paper contains my recommendations on behalf of the management to what Nike should do in order to effectively tackle the primary CSR issues it faces today.

PART I - NIKE'S CSR ISSUES AND THE UNGC TEN PRINCIPLES

According to a New York Times article on November 8, 19972,

_The Ernst and Young report painted a dismal picture of thousands of young women, most under age 25, labouring 10.5 hours a day, six-days-a-week, in excessive heat and noise and foul air, for slightly more than 10$ a week._

While Nike's differentiation strategy of outsourcing and intense marketing has allowed it gain competitive advantage over its competitors3, making Nike the leader in the athletic footwear industry, it has also brought Nike into the limelight with the management facing allegations from the media and social activist groups that Nike-aligned factories in China and Indonesia are forcing employees to work long hours for low pay under harsh working conditions, and that it utilizes physically and verbally abusive managers.2 THIS BRINGS TO FRONT THE PRIMARY CSR ISSUE OF TACKLING THE SWEATSHOP CONDITIONS IN THE NIKE-ALIGNED FACTORIES AND ALSO TO CONFRONT THE MEDIA'S ALLEGATIONS IN ORDER TO IMPROVE NIKE'S IMAGE AS BEING GOOD A CORPORATE CITIZEN. _As one of the most visible brands in the world, and the dominant player in its market, revelations such as these brought Nike into the centre of unprecedented controversy over labour rights in a globalized economy6._ Furthermore, the deeply embedded historical animosity between Korean and Taiwanese managers and Vietnamese workers has added a cultural sensitivity to the entire issue.

Working conditions are both a Human Rights and a Labour issue addressed by both international human rights and labour instruments.3 For example, Article 23 of the Universal Declaration of Human Rights highlights just and favourable conditions of work, non-discrimination, just and favourable remuneration, equal pay for equal work and freedom of association for the protection of interests.4 Nike's position today surfaces some of the major UNGC principles. The CSR issues that Nike has to navigate through involve the following UNGC principles5:

HUMAN RIGHTS

_PRINCIPLE 1_: Businesses should support and respect the protection of internationally proclaimed human rights _PRINCIPLE 2:_ Make sure that they are not complicit in human rights abuses.

LABOUR STANDARDS

_PRINCIPLE 3_: Businesses should uphold the freedom of association and the effective recognition of the right to...
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