A Natural Step Case Study
RUNNING A CLEANER RACE
With annual revenues of $18.6 billion, Nike, Inc. is the world's leading manufacturer of athletic shoes, apparel and equipment. Nike directly employs 30,000 people around the world, 6,000 of whom work at Nike World Headquarters near Beaverton, Oregon. As of 2006, Nike products were manufactured by nearly 800,000 workers in 700 contract factories located in 52 different countries.
As one of the biggest brands in the business, Nike became a lightening rod for criticism in the 1990s when activists began to publicly denounce labor conditions in its overseas contract factories. Like others in the industry, Nike‟s initial responses were defensive and reactive. In the years that followed, however, the company‟s policies and practices reveal a marked shift toward proactive responsibility and engagement with stakeholders.
In 1998, The Natural Step began to work with Nike to help it apply the principles of sustainability to its business operations, and the company formalized its commitment to sustainable commerce with an official policy statement later that year. Hundreds of Nike employees were trained to use The Natural Step Framework between 1998 and 2001, leading to numerous innovative programs to further its sustainability goals. In 2008, Nike partnered with The Natural Step again to help assess and further develop its approach to product innovation by defining a long-term vision for sustainable products. The resulting North Star vision and innovation goals position Nike to become a leader in sustainable product innovation and navigate toward a sustainable future.
FROM HUMBLE BEGINNINGS TO GLOBAL PLAYER
Nike began as a partnership between University of Oregon
track coach Bill Bowerman and one of his runners, Phil
Knight. Bowerman thought he could improve runners‟
performance with better equipment, while Knight, a
graduate student at Stanford Business School, wanted to
test out his plan to import high-tech, low-priced athletic
shoes from Japan. Calling themselves Blue Ribbon Sports,
the pair invested $500 each for their first shipment of
Japanese shoes to Oregon in 1962. Less than a decade
later, the company‟s revenue had grown from $8000 to
nearly $2 million and its staff had increased to 45.
Bill Bowerman – Olympian, Olympic
coach, and co-founder of Nike coaching
track at the University of Oregon.
the Nike story
Re-named Nike, after the winged goddess of victory, the company went public in 1980, by then representing 50% of the US running shoe market. By the end of 1982, every world record in men‟s track was being set by athletes wearing Nike shoes, establishing the company as the dominant global force in athletic shoes and apparel.
RESPONDING TO CHANGING EXPECTATIONS
In practice, sports apparel and footwear production is rarely managed directly by brand owners, but is contracted out to supplier factories, many of whom further sub-contract the work to other factories and to home-workers. By the early 1990s, it became clear that the rights of many contracted workers were not adequately protected by the state or contract factory. Nike drew heavy criticism for contracting to factories which allegedly violated minimum wage and overtime laws and used child labor.
As one of the most visible brands in the world, and the dominant player in its market, revelations such as these brought Nike into the centre of unprecedented controversy over labor rights in a globalized economy. In an article by the Clean Clothes Campaign about Nike‟s labor and environmental practices, US activist Max White explained the reasons many activists were focusing their efforts on Nike. "Nike is not the worst company on the planet. Reebok and others use the same workers and contractors in the same countries. Nike is, however, the largest such company…If Nike reforms, they will trumpet the change and other manufacturers will have to follow.”1
The controversy of the 1990s...
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