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Good Citizenship - Research Paper Example

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This paper "Good Citizenship" touches upon the phenomenon of corporate governance. It is stated that corporate governance encompasses market and regulatory mechanisms as well as the roles and relations between an organization’s management board, its shareholders, etc…
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Good Citizenship
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Download file to see previous pages Organizations such as Nike Inc. continue to demonstrate how corporations are the classics of the good citizenship test in their pursuit of financial gain. Since 1971, the organization has developed from a US-based distributor of footwear to the globe’s most preeminent marketer of athletic apparel, equipment, and footwear. This has come with massive financial gains, for instance, in the 2007 financial year, Nike earned $16.3 billion, which was an increase of $1.3 billion from 2006. Some prominent components instrumental in this growth include the company’s strategy to outsource manufacture to low-cost countries such as China, Indonesia, and Vietnam. Nike does not own any factory which produces its items. The second factor of Nike’s success is its extensive public relations strategy, which entails sponsoring renowned athletes such as Lance Armstrong, Tiger Woods and Michel Jordan. However, Nike has been surrounded by controversy with anti-globalization activists accusing it of exploiting sweatshop conditions as well as child labor in factories that manufacture its products in order to enhance its financial gain (Carty, 2002). Sweatshops are essentially workplaces, which violate laws and where workers are subjected to poor working conditions, extreme exploitation, arbitrary discipline, and fear.
The issue of sweatshops raises controversies, for instance: Should organizations manufacture its products in sweatshops because of the benefit of lower labor costs, which enhance financial gain?...
in the organization to deter the principal-agent problem, also focuses on the effect of corporate governance systems on economic efficiency, laying strong emphasis on the welfare of shareholders (Goodwin, 2000). There has been new interest in the practices of corporate governance by modern corporations since 2001, especially following high-profile collapses of massive US firms such as WorldCom and Enron Corporation. As a consequence, the US federal government established the Sarbanes-Oxley Act aimed at restoring public confidence in the area of corporate governance. Organizations such as Nike Inc. continue to demonstrate how corporations are the classics of the good citizenship test in their pursuit of financial gain. Since 1971, the organization has developed from a US-based distributor of footwear to the globe’s most preeminent marketer of athletic apparel, equipment and footwear (Sytse & Schreuder, 2013). This has come with massive financial gains, for instance, in the 2007 financial year, Nike earned $16.3 billion, which was an increase of $1.3 billion from 2006. Some prominent components instrumental in this growth include the company’s strategy to outsource manufacture to low cost countries such as China, Indonesia and Vietnam. Nike does not own any factory which produces its items. The second factor of Nike’s success is its extensive public relations strategy, which entails sponsoring renowned athletes such as Lance Armstrong, Tiger Woods and Michel Jordan. However, Nike has been surrounded by controversy with anti-globalization activists accusing it of exploiting sweatshop conditions as well as child labor in factories that manufacture its products in order to enhance its financial gain (Carty, 2002). Sweatshops are essentially workplaces, which violate ...Download file to see next pagesRead More
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