Title of Assignment: Integrating Business Values: The Legality, Morality, and Social Responsibility of Nike’s Overseas Labor Practices and Misleading Statements to the Media.
CERTIFICATION OF AUTHORSHIP:I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student's Signature: Pete Saunders
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Integrating Business Values: The Legality, Morality, and Social Responsibility of Nike’s Overseas Labor Practices and Misleading Statements to the Media Pete A. J. Saunders
Nike Inc., is one of the largest and most successful manufacturers of athletic apparel. The company’s successes were not without failure in handling important legal, ethical and societal issues. Nike was accused of unfair overseas labor practices in its factories and for making misleading claims about its involvement. Nike’s unethical practices in these overseas territories were not illegal. In contrast, it was illegal when Nike used the media to make false statements regarding its overseas labor practices. Nike was acting socially irresponsible to allow unfair labor practices in affiliated factories and when the company deliberately attempted to mislead its customers and society in general. The allegations against Nike were confirmed by the Courts and the company took important admirable steps to improve its overall operations. Keywords: Nike, overseas labor practices, media, misleading
I. Introductory Section
Integrating Business Values: The Legality, Morality, and Social Responsibility of Nike’s Overseas Labor Practices and Misleading Statements to the Media
In 1997, Nguyen Thi Thu Phuong died while making sneakers. As she was trimming synthetic soles in a Nike contracting factory, a co-worker’s machine broke, spraying metal parts across the factory floor and into Phuong’s heart. The 23 year-old Vietnamese woman died instantly (Spar, 2002). A worker at the Pratama Abadi Industrial Factory producing Nike shoes said "the only rest you get is after you collapse at your machine (Worked). "If I don't work overtime, I can't survive," says Baltazar at PT Hasi Nike factory in Jakarta. He works an average of 40 overtime hours a week (Nike). “Today is my 17th birthday. I came here when I was 16, right after junior high,” said one girl (Juma, 2009). These are just some of the shared experiences of workers in many of Nike’s overseas factories.
This paper will examine the ethical, legal and social issues concerning Nike’s overseas labor practices and its subsequent marketing campaign to explain its practices. Nike begun in 1964 as Blue Ribbon Sports (BRS); the name was changed to Nike in 1978. It was the company Phil Knight (an MBA candidate at the time), and legendary track coach Bill Bowerman created to provide athletes with better shoes. The first year sales for BRS totaled around $8,000. It wasn’t until 1971 that BRS introduced the concept of the Greek winged Goddess of victory—Nike. In December 1980 the company went public. The company built its reputation on its technological breakthroughs in athletic shoes, and helped to introduce specialized shoes for different sports. II. Legal Section
Nike is considered one of the most successful manufacturers of athletic footwear, competing with Reebok, L.A. Gear and Adidas, as well as with manufacturers of casual footwear. By 1998, Nike controlled over 40% of the $14.7 billion U.S. athletic footwear market. It was also a growing force in the $64 billion sports apparel market, selling a...