Effect of Nike Questionable Manufacturing Practices in Asia on Their Brand Image - Dissertation Example

However, at the same time, the company has come across severe criticism for its poor labor practices. Nike has been criticized for producing highly expensive products by giving very low wages and poor working conditions to its workers. Critics accuse Nike of malpractices and gaining fame and success without any Foreign Direct Investment (FDI) in its own manufacturing plants. Instead of improving the working conditions in its manufacturing plants the company spends more on marketing by using faces of high profile celebrities such as Michael Jordan to popularize its brand and attract customers (Mujtaba et al. pg. 1, 2005). With Jordan, the company’s sales went through the roof. After him, several celebrities were heavily paid to endorse the brand. These included Tiger Woods, Ken Griffey Jr., Pete Sampras, and Andre Agassi (Sporting Goods Companies: Nike, n.d.).
The issue of malpractices by Nike was disclosed in the 90s decade. The issue of low-paid foreign factory workers first became prominent when the world-renowned celebrity, Kathy Lee Gifford, was accused of endorsing garments that were manufactured by low wages workers in developing countries. Gifford promised to participate in improving the condition of the workers. The famous brand, Nike, also became a subject of similar controversy. Nike was accused of having sweatshops in developing countries where workers were paid even below the minimum wages standard (Mujtaba et al. pg. 1, 2005). The audit report by Ernst & Young and assigned by Nike was secretly disclosed to the public. The report disclosed that Nike manufactured its products in Asia where workers were forced to work hard, paid below minimum wages in poor and unacceptable conditions. The negative publicity of the company had severe repercussions on the sales and the brand image of the firm. The social activists criticized the unethical practices of the firm in public and exerted pressure on the firm to take a look at their corporate responsibility. Nike customers all over the world criticized the malpractice by the firm. Social activists called on the customers to boycott Nike products until necessary actions were taken by the firm to improve the working conditions of the workers all over the world, especially in Asia (Mesarosch, pg. 1. 2008).
While these charges might be true or simple perceptions, the accusations did affect the brand image of Nike in a negative way as not being a socially responsible firm. Since then Nike has been battling with such charges and trying to improve its image as a socially responsible firm (Mujtaba et al. pg. 1, 2005).
Nike is a massive billion-dollar firm that produces sports products. Its factories are situated all over the world and likewise, its products are sold all over the world. Since the 1990’s Nike has expanded its product range and has started producing clothes, watches, bags, and golf gear. It has also gained a partnership with an electronic company to produce Nike electronics.