Case Study 1: Nike
April, 11, 2013
Nike (originally named Blue Ribbon Sports) was founded in 1964 by Phil Knight and his University of Oregon track Coach Bill Bowerman. It was born as a business project of Knights while he was in Stanford. The idea was to import shoes from Japan into the U.S. Up until this point the majority of shoes were imported from Germany. By importing the shoes from Japan the cost would drastically be improved because of labor savings. Nike, with the ingenious incorporation of famous sponsors, quickly grew to 168 stores in the United States and a presence in over 160 Countries.
In the early 1990’s Nike came into the spotlight over allegations of human rights and labor violations in the third-world countries it was manufacturing in. Some of the allegations included child labor breaches which were already in the spotlight at the time from manufacturing of other product lines. Other stories were of beating, horrid work conditions, and abuse.
Nike initially chose to address the scandal with a “damage control” attitude. This led to public outcry and the protesting of its stores. Sports figures, which were the source of the majority of Nike’s publicity, began to separate themselves from the company. Retail stores also began to stop carrying the brand and separating themselves from the horrid stories. As a result of the bad publicity, and with shrinking sales, the company decided to take a new approach. The company started many new projects to bring about change in its factories and even took it a step forward and started to try and become an environmentally friendly company at the same time.
1. Why did Nike fail to address corporate social responsibility early on?
Nike subcontracted many of its manufacturing jobs to local overseas companies. These companies did not have any means of discloser over its workers environment or age. Nike also had a “don’t ask don’t tell” mentality. As long as the...
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