Nike: the Sweatshop Debate

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Introduction

Nike, one of the globally established companies representing the perfect example of a class or quality in global corporation was established in 1972 by Mr. Phil Knight, an athlete met who met track coach at the University of Oregon. Both of them together formed Blue Ribbon Sports in 1962 and later launched Nike brand. Nike is one of the leading marketers of American athletic shoes and apparels and in 1978 it was officially known as Nike Inc. after 1978 its sales started expanding all over South America and Europe. In the early 1990's despite a major economic recession, Nike's turnover surged from US$750 million in 1987 to $4 billion in 1993. Later in 1997 its stock had hit $76, but after the Asian economic crisis 1998, its profits went down by 37%.Still Nike had an annual turnover of $9 billion and net profits of $571 million. Nike has an international headquarter in Beaverton, Oregon which directly employs more than 22,000 people worldwide.

Like many other companies, Nike's majority of its supply chain is owned by other companies; i.e's subcontracted in almost 50 countries with 700 factories and 550,000 working for Nike.

The following case study outlines the controversy against Nike and its responses. The case study is based upon publicly-available material, Information provided by Nike and interviews with selected Nike staff and external stakeholders. This information is gathered from Nongovernmental organizations such as San Francisco-based Global exchange, a leading human rights organisation and other social justice organisations and also a visit by reporter of the CBSNews, 48 hours to one of the factories in Vietnam Order a Custom Essay

The case study does not argue the readers to ban the products of Nike, but instead it offers the readers and the students the insights of the working condition of Nike and the developed policies. Although Nike admits about some problem in the overseas factories, it has taken many steps to the improving working conditions

The Power of the Swoosh The ‘swoosh' logo is one of the worlds known trade mark which has many Sponsorship deals with great athletes from Michael Jordan and Tiger woods. We live in a cultural economy of signs and Nike's swoosh is currently the most recognizable brand icon in that economy. The Nike swoosh is a commercial symbol that has come to stand for athletic excellence, hip authenticity, and playful self-awareness.While the logo carries the weight of currency, Nike's .Just do it. slogan has become part of the language of everyday life.3

The Swoosh logo or the power of the swoosh has made Nike as one the major target of using child labour as a source of production and upon that low wages. The anti-Nike movement has tarnished the reputation of Nike in recent years. There were many criticism following Nike that its products were made in the “sweatshop” where workers mostly children were paid below- subsistence wages. Industry Background

There are many important differences between producing footwear and apparel, as both have their own standards to be maintained be with the factory or the workers. Nike's production of shoes and apparels have been divided like out of 700 factories, 40 factories make shoes in 8 countries, as the other manufacture apparels and equipments. There were import quotas brought out by the U.S in the middle of 1980's and as a result nike came down to around 8 countries from 16 countries, but the trend in the apparels sector were entirely different as U.S current legislation import quota are established for all the production countries. This quota has an end in 2005 as the WTO brings new Agreement on Textile and Clothing.

Dusty Kidd however explained that Today the most important item Nike may have on its inventory may be a knit sweater; tomorrow it might be a woven shirt. Tastes change. However, the factory those made our sweater, cant make our shirts. They are totally different processes, different equipment,...
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