Nike Report on Being Ethically Correct

Topics: Business ethics, Ethics, Sweatshop Pages: 7 (2565 words) Published: May 10, 2010
[Executive summary]
Nike Inc was involved in several controversies during the mid 1990’s which were revived in early 2000’s. The allegations have had the potential to adversely affect the brand image of the company. The company was criticized for operating factories in poor working conditions in low cost countries such as China, Vietnam, Mexico and Indonesia. Before these allegations were voiced, the following theories were applicable; a view that was noted by (Shaw, W, Barry, V & Sansbury, G 2009) was utilitarianism which was relevant to the individuals as the factory workers were given employment and a steady income, this was not offered in remote and poverty stricken parts of Asia. The egoism theory (Shaw, W, etal, 2009) which can be connected to both the organization, Nike Inc, and a western society. The has been adopted to these two parties due to their self-interests for one another, when concerning Nike is was about increasing revenue and nothing else. While the western society saw this as a direct attack towards them as their jobs were taken from them and that these new employees in Asia didn’t even have the same benefits as the western workers. This lead to worldwide dispute among communities in the western world, ranging from protests to destruction of a factory. Following these allegations, reports found that Nike had been violating minimum wage and overtime laws in countries like Vietnam. Post investigation, recommendations such as the use of the utilitarianism theory to the individuals as they knew no other and were happy to continue to work as long as they had a stable income to provide for their families. The duty of care (Shaw, W, etal, 2009) approach has been applied by Nike; as a business they have seen that they have a moral duty to its stakeholders [employees] which consists of being ethical and treating them with respect. The virtue theory allows a win-win outcome for all stakeholders in the Nike Inc case. This theory can be used when discussing the western society. With society knowing of Nike improvements towards employees within its Asian factories has lead to an increase in profits over the years and a strengthening of customer loyalty and satisfaction towards the company. The report firstly looks at Nike's situation pre investigation and the theories which applied to the society, organization and individuals. [Introduction]

Nike Inc. is a clothing manufacturer, which has come under fire in recent years due to working conditions within its sweatshops in low-cost countries. The allegations included: Nike was also criticized for using child labour in its contracted soccer ball factories in countries such as Pakistan and Cambodia. Such allegations have unstoppably undermined the company's corporate social responsibility and adversely affect its brand image. Not meeting wage minimums "the 35 workers... interviewed told us that they cannot live on the basic factory wage". This however made it possible for Nike to meet their financial objectives, with the added help of long working hours. Women in the work force, for example women were forced to work "considerable overtime and long working hours" it had been reported [Vietnam Labour Watch], also it has been admitted by Nike that "they have either suffered or have witnessed sexual and verbal abuse" at factories in both Indonesia and Korea. Toxic waste including waste production, and the emission of Toluene which has been seen as a significant concern in "that many areas of the factory have a high concentration of toluene, reaching a level of 180 mg per sq. meter when the legal limit is 100 mg per sq. meter". Up to three workers were fainting each day and "they attributed them to stress, exhaustion, heat, the smell of chemicals (glue, paint) in the factory" OH&S [working conditions [toilet and lunch breaks], clear floors, and proper protective equipment]. Noise problems are also of concern as "in several areas [they] were found to be much higher than...
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