Nike. Inc., and Sweatshops

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Case Study: Nike, Inc., and Sweatshops
Summary:
As a company, Nike has been the dominant presence in the athletic apparel industry globally. Although they were not the only company known to practice unethical manufacturing processes, they were the major target of criticism because of their leadership role.   To fight back against the negative publicity, Nike changed many working conditions and practices, arranged for independent audits by very reputable individuals in the industry to rate these improvements and grade the working conditions. Nike has become one of those global companies targeted by a broad range of campaigning pressure groups and journalists as a symbolic representation of the business in society. In Nike’s case, the issues are those of human rights and conditions for workers in factories in developing countries. In the face of constant accusations, Nike has developed a considered response but the criticism of Nike still continues. Nike produces footwear, clothing, equipment and accessory products for the sports and athletic market. It is the largest seller of such garments in the world. It sells to approximately 19,000 retail accounts in the US, and then in approximately 140 countries around the world. Just about all of its products are manufactured by independent contractors with footwear products in particular being manufactured in developing countries. The company manufactures in China, Taiwan, Korea, and Mexico as well as in the US and in Italy. The Global Alliance report on the factories in Indonesia gave the following workforce profile: 58% of them are young adults between 20 and 24 years old, and 83% are women. Few have work-related skills when they arrive at the factory. Nike has around 700 contract factories, within which around 20% of the workers are creating Nike products. Conditions for these workers have been a source of heated debate, with allegations made by campaigns of poor conditions, with harassment and abuse. Nike has sought to respond to these allegations by putting into place a code of conduct for all of its suppliers, and working with the Global Alliance to review around 21 of these factories, and to pick up and respond to issues. The main concerns expressed by workers relate to their physical working environment. A further report has been produced relating to a site in Mexico, which has experienced serious problems leading to labor disputes. In both cases, Nike responded to the audit reports with a detailed remediation plan. Nike should make changes in its policy in response to the negative criticism, but should not hinder the ability of the company to compete in the market place. Many of other companies, such as Wal-mart, do have the same business model, and they also hold corporate responsibilities to the society. Nike could comply with its competitors' policy on low-cost supply chains overseas so that civil activists will not be able to point out Nike's responsibility

1. For this particular case Nike face lots of ethical ad social issues. Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing. Nike does not merely sell products these days. They spend billions of dollars for advertising contracts with famous athletes like Tiger Woods to increase the value of the brand by associating the factor of lifestyle to their products. The company's image has been damaged many times by press releases as well as a variety of NGOs who have long pointed out the inhumane working conditions in the production facilities of...
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