Nike the Sweatshop Debate

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Running head: Nike and the Sweatshop Debate

Nike the Sweatshop Debate
Shelia D. Marshall
Global Strategies MGT 448
Shabbir Karim
October 12, 2009
Nike the Sweatshop Debate
Beneath all the hoopla and controversy about Nike being a successful company in the United States in which its earnings in 2009 according to Hoovers Inc., 2009, Nike’s revenue for 2009 was $19, 176.1 million and their gross profit was $8,604.4 million, made possible by the hands of women and underage workers who work long hours and in unsafe conditions in those sweatshops in foreign factories located in foreign countries as Indonesia, China, and more recently in Vietnam. Nike is a US sports company based in Beaverton, Oregon, Nike’s original name was Blue Ribbon Sports and its mission was and is today to be the world’s leading sports and fitness company (International Directory of Companies History). Nike has continued to soar in its market, being ahead of Reebok, Adidas, Fila, Converse, and New Balance however they are also ahead in the limelight with negative views on how their manufacturing companies are failing in their workplace ethics. There are two basic options for footwear companies in the manufacturing of their products, the first option is that the company can own and operate the factories in which their product is being made and the second option is to subcontract their products out to secondary manufactures. In either case the facilities can be located domestically or internationally and the company can have an innumerable amount of issues within its systems and processes. Companies that stay within the domestic territory have a better opportunity to manage the workplace such as the benefit of being able to evaluate and monitor workplace processes, skilled workers, job creation, government stability, and the ability to reinforce well understood labor practices. However, when using this option the company may suffer in paying higher wages to their workers. For companies choosing to operate overseas the process of monitoring the workplace has a lesser chance of being effective and the workplace may just as well be monitored but for the wrong reasons. This is one of those debates that could go on forever; however at the end of the day someone should be responsible enough to admit and correct the wrong if indeed a wrong is being committed. I believe in fair wages for the work that is being done in the manufacturing factories that produce shoes and apparel. I do not believe in the rich getting richer at the hands of the less privileged, unskilled, or less fortunate. Several issues arise when the discussion about sweat shops come up in companies like Nike make the decision to go abroad. For more than a decade Nike has been accused of having workers who were under aged, and who slaved away under hazardous conditions for below subsistence wages, Nike’s wealth, according to their detractors claim has been on the backs of the world’s poor (U of P readings). In the eye of the reader Nike had become a figure of the evils of globalization. In other words, a wealthy Western corporation exploiting the world’s poor to provide pricey shoes and apparel to the fortunate customers of the developed world. Challenges for Nike are the legal, cultural, and ethical points of view of this case study. Even though Nike may subcontract its companies overseas, Nike still has a responsibility to make sure the manufacturing sites are ran with integrity. After the negative press, and investigations that took place to prove Nike was guilty of running sweat shops, Nike had to rethink their position overseas and they had to begin to think about the effect the negative press had on its financial stand as well the effect it had from an ethical point of view. In the 90’s Nike began to take steps to rectify the implications such as the implementation of a code of social responsibility throughout its supply chain that would make an...
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