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The Sweatshop Scandal Involving Nike in the Discussion of Impropriety in Overseas Factories - Coursework Example

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This paper will focus on the Sweatshop scandal involving Nike in the discussion of impropriety in overseas factories while also examining the situation from different stakeholders’ points of view. The ethical problem is also highlighted in the paper…
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The Sweatshop Scandal Involving Nike in the Discussion of Impropriety in Overseas Factories
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Download file to see previous pages The sweatshop scandal involving Nike involves perceived wrongdoings in the organization’s labor practices for a period between 1991 and 2005. The scandal went public tarnishing Nike’s image build on offering high-quality products in the sportswear and apparel industry. As an organization that aims to be the best in the industry, Nike’s strategy involves outsourcing various functions and manufacturing capabilities in order to reduce cost and focus on effective marketing strategy for organizational products (Vogel, 2006). Therefore, their outsourcing strategy led to the sweatshop scandal as a number of contractors in countries such as Bangladesh, China, Indonesia, and Vietnam.
The sweatshop scandal started when the company, reacting to increased costs of operations in countries such as Taiwan and Korea, which had seen an increase in agitation by the labor union, recommended contractors to explore further opportunities in countries such as Vietnam, Indonesia, and China. In early 1991, media reports emerged on the treatment of employees in many of the factories in Indonesia with the main whistleblower, Ballinger reporting about low wages earned by workers. It was alleged that apart from workers receiving only 19 cents per hour, female employees were locked inside their dormitories until Sunday with permission from management (Verbeke, 2013). The management of these factories has also been accused of encouraging abusing of workers by calling them names, slapping and kicking them (Huffington Post, 2011). Apart from the working conditions in these factories, there were also issues related to child labor with many of the factories breaking regulations on acceptable age for employment. When these allegations become public, various groups become concerned with the abuse taking place in the factories. ...Download file to see next pagesRead More
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