Nike and the reality of corporate social responsibility.
Written by William Scarff, module leader, Corporate Social Responsibility and Ethics. Answer the following questions, using the case study.
1 Identify the different stakeholder groups for Nike. Can some stakeholder groups be ignored? Explain and justify your views 2 Examine and justify actions Nike could take to improve the labour conditions of its workers in developing countries. 3 Assume you are the Chief Executive Officer (CEO). Discuss whether or not you should carry any personal responsibility for alleged misdeeds in the multinational company. 4 Is it reasonable, or fair, to expect a large company in one part of the world to be responsible for the activities of a supplier in another part of the world? (This question is linked to question 2) The case study
This case study is based on an article by Simon Zadek in the Harvard Business Review for 2004. The case study has however been adapted and supported by academic commentary from other noted authors. There is one appendix. It gives more detail to the activities taken by Nike. Here are some ideas and debates from those authors. The quotations are given to highlight some of the issues in the subject areas of business ethics and corporate social responsibility. Not all comments from these authors can be used directly in the answers to the case study, but they are included to encourage thinking around company behaviour and practice, and to illustrate some of the very real dilemmas faced by managers and policy makers in large organisations. Here are some sources to help you develop your thinking and understanding of the subject areas.
1 ‘It is being increasingly recognized by managers, policy-makers and researchers that business ethics in the global economy is simply too important to be left merely to chance. Global corporations such as McDonalds’s, Shell, Nike, Nestle and others have realized to their cost the threat that perceived ethical violations can pose to their zealously guarded reputations’. (Crane and Matten 2010:184) 2 ‘No issue has been more consistently evident in the global business ethics debate than the MNCs’ (Multinational Corporations’) use and abuse of women and children in cheap labor factories in developing countries. The major players in this controversy , large corporations, have highly recognizable names –Nike, Walmart, Reebok…..The countries and regions of the world that have been involved are also recognizable – Southeast Asia, Pakistan, Indonesia, ….’ (Buchholtz and Carroll 2012: 358) 3 Nike like ‘Many companies have discovered (or their critics have discovered for them) that in their suppliers’ factories, workers have been paid below a living wage, subjected to physical and verbal abuse, worked compulsory overtime, failed to have time off recognized, and even engaged in child labour.’ (Crane and Matten 2010:416) 4 ‘Nike’s problems with global outsourcing became an international scandal as pictures of children working in deplorable conditions reached mainstream newspapers…Boycotts, started on University campuses, prompted changes in policy for Nike’s outsourcing strategy. Eventually, Nike changed many of its policies and is now a leader in disclosing the conditions of its factories. Nike now performs many of the tasks that had previously been left to the factories or outside monitoring agencies.’ (Wicks et al 2010:378-379) 5 ‘Nike was heavily criticized in the 1990s for buying footballs from companies that used child labour in Pakistan…In 2006 Nike reacted to the concerns (over the continuing use of child labour) by shifting its football production to China and Thailand. This however had a harmful effect on employment in the area where football production takes place in Pakistan. A local newspaper commented on the decision as follows: “By severing its contract with the local company, Nike scored moral points with its customers in the West at the expense of 20,000...
Bibliography: Buchholtz A and Carroll A (2012) Business and society, Ethics and Stakeholder Management, 8th edition, South Western, Cengage Learning
Crane A and Matten D (2010), Business ethics, 3rd edition, Oxford, Oxford University Press
Griseri P and Seppala N, (2010) Business ethics and corporate social responsibility, South Western, Cengage Learning
Wicks A C, Freeman R E, Werhane P H, Martin K E, (2010) Business ethics, a managerial approach, Boston, Prentice Hall
Zadek S (2004) The path to corporate social responsibility, Harvard Business Review 82, December 125-32
Appendix: the five stages of organisational learning
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