Nike Case Study

Topics: Minimum wage, Wage, Politics of Indonesia Pages: 5 (1958 words) Published: October 29, 2012

Jeff Ballinger is a labor activist since high school who believes that any company should have a significant obligation towards even its lowliest workers. While being assigned to run AAFLI (Asian-American Free Labor Association) he was charged to investigate labor conditions in Indonesia plants and study minimum wage compliance by American companies. He chose Nike as his main target in effort to change labor conditions in manufacturing companies in Asia. Ballinger argued that Nike was responsible for working conditions of manufacturing workers in Indonesia that violate human rights even though all the factories were owned by third parties as Nike was outsourcing its manufacturing needs. Ballinger also believed that Nike encouraged its contractors to mistreat their workers to achieve unrealistic production quotas. Moreover, he pointed out that in 1988 out of 17,000 violations reported, only 12 prosecutions were ever made. Mainly due to bribery. In my opinion, Jeff Ballinger did bring out an important issue to a spotlight but did not provide solid arguments specific to Nike case. To achieve his goal, I think it was smart of him to put a rising star company in the spotlight. However, it was unfair. From the article it appears that even though Nike was paying minimum wages set by the government of Indonesia, it would not have lived up to Ballinger’s standards as his calculations were based on how much Nike was making in profits compared to the amount of money spent on labor. In addition he suggests, that the same marketing and branding power that drove Nike’s bottom line could also be used to drive moral outrage against exploitation of Asian workers. To make his point stronger, Ballinger published an annotated pay-stub from an Indonesian factory, making soon-to-be famous comparison between workers’ wages and Michael Jordan’s endorsement contract. I think this is a week argument. Ballinger tries to put 100% blame on corporations rather than facing the bottom of the issue – lack of Indonesia government regulations. Corporations like Nike make business decisions where to invest and where to run their manufacturing based on the rules defined by governments and what makes the best business sense. Also, if company didn’t do well, nobody would care.  After all, corporations run businesses to grow profits.  If current rules are not in tact with human rights, the rules should be fixed first and then enforced to make sure that corporations do follow them. In addition, research has shown most of the income that comes from work in manufacturing sector by workers is spent not on necessity items. Having said that, if having Michael Jordan promote Nike brand provides more employment in Indonesia, we could say that this helps people in Indonesia to improve their quality of life compared to what they would have without manufacturers like Nike as increased volume of sales means increased number of workplaces in manufacturing. Another point that Ballinger argues about is working conditions and safety that were below the standard as well as under-aged employees. I think it is important that corporations like Nike are considerate about working environment and age of their employees. On the contrary, we cannot make easy judgments without looking into a bigger picture of the country. I think companies like Nike do have moral responsibility but not obligation to provide the best working environment possible. However, it would be unfair to expect corporations to fix problems of countries like Indonesia. I think that corporations should do their best to provide better than average conditions and wages to the employees overseas but it would be unrealistic and unreasonable to expect to match working conditions that are provided to their employees in the US.   Overall, I think Ballinger brings out good points but I don’t think his arguments are strong or specific enough to Nike. Nike was a...
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