[NIKE: MANAGING ETHICAL MISSTEPS-SWEATSHOPS TO

LEADERSHIP IN EMPLOYMENT PRACTICES] CASE STUDY

I.

TIME CONTEXT
The late 1990s began a period of combating allegations about labor and human
rights violations in Third World countries in which manufacturing had been
subcontracted.

II.

VIEWPOINT
Conflict between economic performance and social
organizations/special interest groups in creating awareness of
case the issues are those of human rights and conditions for
developing countries. In the face of constants accusations
considered response.

obligations, non-profit
malpractices. In Nikes
workers in factories in
Nike has developed a

Nike had been in hot sit regarding with their global supply chain. The operations
of their sub-contractor in different areas around the world was the problem of Nike.
Which this sub-contractor was accused of many issues regarding human rights, labor
conduct, child labor, factories condition, and the effect of this factories in the
environment.

III.

STATEMENT OF THE PROBLEM

Nike is one of the global companies targeted of different issues about their management.
The problem is that the percentage of Nikes overseas factories have their employees working in
terrible environments for low pay and in unsanitary health conditions. The company was also
criticized of child labor and there were also problems about the effect of their factory to the
environment.
The problem lies on how they can recover from issues of their sub-contractors operation.
Their reputation had been in danger many times because of those issues.

NIKE COMPANY

[NIKE: MANAGING ETHICAL MISSTEPS-SWEATSHOPS TO

LEADERSHIP IN EMPLOYMENT PRACTICES] CASE STUDY

IV.

CENTRAL PROBLEM
Nike had been in lot of controversies and issues about labor pay,
environmental sustainability, and transparency and about their Corporate Social
Responsibility. Their problem lies in major parts of their operation. The Labor cost
which became a big deal to the right of the workers. The environmental sustainability
which the company did not considered the effect to the environment of their materials
if they did not did the proper way of disposing and using it. The disclosure of CSR,
which shows the location of the their factories and the factory condition. The
Nike should focus on improving their facilities, where there are safety
measures and right tools and human friendly factory environment. The fair labor pay
to the employees of the company also needs attention. The labor of an employee
should be right and just in return to the service or to the time, effort, knowledge and
force they rendered to the company. Though the fact that their strategy is abandoning
the country when they are growing and developing and look for another country
where the demand for labor is cheap is not right way to expand their business and
providing low labor cost product.
There should also a proper segregation of the factory waste materials that
affects the environment. The child labor should also be eliminated and prevent. The
fact that Nike was characterized of being insufficient and generally lacking in any
forms of regulation and implementation throughout its global supply chain. Nike
should be particular and be well aware of their CSR because it is the main stream of
their operation.

V.

STATEMENT OF OBJECTIVES
Generally Nike had to take rapid measures not only to redeem its reputation, but
also to rectify problematic policies and lack of international oversight of its
operation. Nikes priorities became to make certain that its factories were not
taking advantage of its workers and to ensure that each worker had a safe work
environment and competitive wage. Nike must take extra measures to ensure that
the independent subcontractors used to supply the workforce in their factories do
not engage in any illegal activities such as child labor, excessive work hours,
hostile work environments, or inappropriate payments. The company is to build
and improve its relationships with consumers, to achieve a high quality supply
chain, and to create top-quality, innovative products.

NIKE COMPANY

[NIKE: MANAGING ETHICAL MISSTEPS-SWEATSHOPS TO

LEADERSHIP IN EMPLOYMENT PRACTICES] CASE STUDY

VI.

AREAS OF CONSIDERATION
The companys reputation was damaged because of the different issues of
the company. The disclosure of the CSR of the company that showed that they are
not aware of its proper and fair regulation and implementation to its global chain.
The different areas includes labor pay to the employees, proper and healthy
factory environment which affects the health of the employees, the safety hazard
during work, the effects of the factory to the environment, laying off many
workers and the issue about sweatshop.

VII.

ALTERNATIVE COURSES OF ACTION

The company in concern with different issues should respond with the best action
to undertake its undertakings. The courses of action of the company are stated below:
Declaring the disclosure of the companys CSR that shows the regulations
and implementations of the company.
Focusing on companys CSR
Improving the company workplace
Providing safety measures for the employee
Proper and right pay for the labor the employee rendered
Promoting eco-friendly product
Company should be particular in disposing their waste materials
Consistent visitation to the factory of its global supply chain
Continuing in applying Balance Scorecard

VIII.

RECOMMENDATION
I recommend the proper management to its global supply chain by
providing safe and right place for labor force. Paying the right compensation to
the employees and elimination of child labor. Promoting an eco-friendly products
will also contributes to the name of the company. Instead of abandoning
developing countries, the company should focus on expanding its chain all over
the world without terminating other sub-contractors.
Projects that promote eco-friendly products will also help to the
companys name. Proper disclosure of the location of legitimate Nike branch can
also help to the consumer to determine who sells legitimate products. And sustain
inspection to the subcontractor of the Nike for sustain production of high quality
product.

NIKE COMPANY

[NIKE: MANAGING ETHICAL MISSTEPS-SWEATSHOPS TO

LEADERSHIP IN EMPLOYMENT PRACTICES] CASE STUDY

IX.

FINAL DECISION
The company should apply the entire alternative course of action. Because
any one of those actions is missing the company could be in danger again,
its reputation and its name will on controversies again that affects the
company. The company should focus on their corporate social
responsibility, its transparency and environmental responsibility. Applying
this action will determine Nikes future success.

X.

DETAILED ACTION PLAN

Behind the fact that Nike showed its development and progress to the
industry, which the company is being feature on Fortunes 2010 list of
The world Most Admired Companies as the number one most admired
apparel company and was ranked 24 overall and listed at number 23 in CR
(Corporate Responsibility) magazines Best Corporate Citizens in 2010,
Nike is still reported of different problems.
Generally the best way to sustain its name lies in their global supply chain.
Sustain Over sighting to their suppliers operation, maintaining the fair
labor practices in different sub-contractors of Nike, and the continuance
promoting their advocacy of their product as eco-friendly should be the
action of Nike.

Fair labor practice

Continuance promoting as pro-environment company
Consistent to inspection to their global supply chain
Focusing on the sub-contractor operation
Proper audit to identify issues related to work hours, wages, benefits, and
freedom of association, and grievance system.
Yearly disclosing the names and locations of their sub-contractors that
produced licensed collegiate products.
Expansion of target markets to different genders, age of the customers.

NIKE COMPANY