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An Organizational Ethical Dilemma of NIKE - Essay Example

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This reserach is about a well known athletic footwear and apparel brand, Nike, a multinational corporation, established in 1964 in Beaverton, USA. The brand has come across a crisis last year 1998, scores of pressure groups protested against Nike’s labor practices in overseas factories. …
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An Organizational Ethical Dilemma of NIKE
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Download file to see previous pages According to the research findings Nike’s supply chain has flaws in contract negotiations and supplier oversight. The company’s dispersed nature of operations has created opportunities as well as posed challenges to the corporate reputation, to the brand and most importantly to the stakeholders at large. The dilemma that arose from Nike’s internationally disbanded manufacturing factories mainly focus on the poor labor practices, child labor, unsafe and inhumane working environment, discriminating wages, environmental hazardous operations and processes etc. All of these issues point towards Nike’s unconcerned social and corporate behavior. This indicates the absence of business ethics at Nike.
1. Nike was negligent towards its own factories and their practices.
2. There was neither established labor employment and working standards nor a code of ethics for conducting business overseas.
3. Nike not only failed to control overseas production activities but it was also failed to provide and maintain compliance of its international operations with the law.
The ethical issues at Nike points out the company’s irresponsible business conduct towards its major stakeholders. The employees at Nike’s outsourced Asian factories were confronted with bad working conditions which were not only unsafe but also immoral and unethical to a great extent. These factories were using child labor, withholding due wages, extended working hours, harmful working conditions, no health and environmental concerns. All of this was done to keep the operating cost of Nike products as low as possible which was the primary goal of Nike’s production outsourcing.

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The company was only focusing its own management interest for low cost and profitability; and on the other hand it was ignoring even the basic rights and interests of rest of all its stakeholders. The internal customers i.e. the employees of Nike were confronted with malpractices and substandard working conditions. The company is so irresponsibly uninformed and unconcerned about what is going on in the overseas factories (DeTienne, and Lewis, 2005). Moreover, the company is pioneering the consumer market for its competitive products across the globe but it has no intentions or motivations to serve labor market the same leader’s way. It shows that the company was more concerned about cash inflow resources than about cash outflow sources. ENVIRONMENTAL ISSUE Nike’s environment unfriendly business practices were responsible for deteriorating surroundings in the localities where Nike’s apparel and textile industries were established. Nike was not taking any notice of these environmental losses to the local community (DeTienne, and Lewis, 2005). In this way Nike became critics’ prime target for unethical business attitude. Relevant Individuals and Groups (Stakeholders) Are Affected By the Dilemma? The main victims of Nike’s unethical business conduct were its own employees. Generally called as human assets; employees were being exploited by Nike. The customers and the consumers were also affected by Nike’s unethical practices, because they had trusted Nike products and the brand has established deep consumer connections (Williams, 2006). The consumer confidence over Nike was shattered. There was disappointment and distrust in consumer imagery for Nike. The community at large was also influenced by the negative externalities ...Download file to see next pagesRead More
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