Ethics and Social Codes of Conduct - Case Study Example

NIKE Company- Ethics and Social Codes of Conduct Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Executive summary The following paper offers a brief discussion of the relationship between ethical issues in a company, the social codes of ethics and the impact they have on the working atmosphere in the organization. It also shows how workers react to the ethical issues that affect them in one way or another. This has been brought out through a discussion of a subsidiary of Nike Company operating from an overseas factory. It will be observed that the Nike Company has been accused of having a number of unethical practices such as employing minors in its factories. The company, as shall be observed, has also breached social codes of conduct where it fails to acknowledge these unethical issues that it is being accused of. The deplorable working conditions of the workers in the overseas Nike factories and the poor payments to these workers have also raised concerns to the workers as shall be found out here. It will be observed that the best way for Nike Company to solve these issues affecting it as accused would be by the embracement of social codes of conduct and observation of work ethics. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Brief introduction of the case 5 Question 1: Ethical decision making practice: Identify and explain 4 key performance indicators that could be used to measure the ethical operations of a business such a Nike 6 Question 2. Nike is a company that have been criticized for unethical business practices in the past. Contrast the different response of Nike to this criticism. 8 Question 5. Breach of code of conduct of Nike- Nike actual social code of conduct 8 Question 6.Nike’s unethical issues 9 Conclusion 10 References 11 Introduction The success of every business depends largely upon how it conducts its operations based upon the goals and objectives that it outlines in the early stages of the business set-up. However, in the process of trying to achieve these goals, sometimes businesses and companies may find themselves entangled in activities that would be highly criticized as being unethical. The primary objective of many businesses is the attainment of a certain profit margin that they set out for themselves (Kizgin & Benli, 2013, p. 4). In a bid to hit this margin, the businesses may become involved in affairs that would be well appreciated by the community in which they operate. Different businesses have different ways to measure how well they have succeeded or failed in the attainment of the objectives that they had laid out for themselves at the beginning of the project. The measures that they use are referred to as performance indicators. The performance indicators vary from one company to another because of the variation in the companies’ parameters such as size, market scope, and product differentiation among others (Iveta, 2012, p. 118). The major aim of these key indicators is to weigh whether the company or business has been capable of hitting the goals and objectives it had set out for itself in the initial stages. This paper will take a look at how these performance indicators are applied by taking a case example of a renowned company, Nike. The paper will identify the key performance indicators that would be used to measure the ethical practices of the company, contrast the different responses of the company to the criticisms it has received, investigate how the company has breached the codes of conduct and lastly take a look at the company’s unethical issues such as working conditions, and poor pay among others. The format of this discussion will be broken down in different sections with each section aiming at answering the aforementioned issues. Brief introduction of the case NIKE company is a renowned transnational corporation operating in a number of countries and having its headquarters in Oregon, USA (Nike company website, 2012). The company manufactures designs and sells sporting goods, facilities and other sports apparels. Of late, the company has been experiencing problems in its factories in foreign countries where they are accused of owning and using factories that employ children, poor working conditions and low payment of their workers. After the protests, the company came up with new policies but after some time, it was accused of not being in a position of implementing these policies it had developed. These accusations have evolved into a discussion revolving around the ethical issues and considerations that the company should be having towards its employees and the society where it operates from. Nike management avoided the accusations and when they escalated, that is when the company came in to address these issues by coming up with new policies. It should be noted that for a company of a magnitude as that of Nike, implementation of policies is a very difficult process and can take a long time, mostly due to the bureaucratic effect. Companies whose parent companies are in other nations are the hardest hit because they have to wait from the parent company and this may take a considerably long period (Takeda & Helms, 2006, p. 400). This is a typical case of the Nike Company whose factories are abroad since they have to get instructions from the parent company in USA (Nike company website, 2012). Question 1: Ethical decision making practice: Identify and explain 4 key performance indicators that could be used to measure the ethical operations of a business such a Nike As stated in the introductory part of this paper, there are a number of indicators that are applied for the measurement of performance of companies. The key performance indicators that would be suitable for this company linking to the ethical practices are outlined in the following paragraphs. The first key performance indicator (KPI) would be a directional indicator. According to Churilov & Gospodarevskaya (2011, p. 1012), a directional indicator shows whether a certain company or organization is getting better or worse in its performance. In this context and using this indicator, Nike company situation does not seem to be improving at all. Matter of fact, the situation keeps on getting worse. There are complaints about the company coming from almost all angles. Accusations have arisen from workers and the society about how poorly these workers are being paid. There is also the issue of the company employing children to work in their factories. Even though the company vowed to address these issues, no much headway has been made and as such the company has failed. Another KPI would be the actionable indicators. Actionable indicators are those indicators that are in the organizations’ or business’s capacity to affect changes in the organization (Ibrahim, 2001, p. 431). Nike Company has also failed to deliver on this level as measured by this indicator. The company has come up with policies but has consistently failed to deliver on them. When the company was accused of breaching ethics in the conduct of its business, the management developed policies aimed at ironing out this issue. However, they have not succeeded in implementing these policies. Financial indicators are another form of KPIs that could be applied to measure the performance of a company in terms of financial strength, profit generation and revenue flow (Alrawashdeh, Salameh & Zuriekat, 2011, p. 160). Using this indicator, Nike Company could be said to have succeeded. This is because the company registers a good financial strength and stable profit growth. However, this success has come about as a result of the company breaching ethics by employing children and paying its workers very poorly. As such, the indicator cannot be wholly applied to measure the success of this company without balancing out with ethics issue. Another equally important KPI that would be applied to measure the performance of Nike Company would be the practical indicator. The practical indicator measures how the company designs its operations to achieve its goals and objectives. It shows how the different sections and segments of the company come together for the fulfillment of the objectives of the company (Groote, 1995, p.5). Nike Company has failed considerably in this aspect because in its quest for the maintenance of its objectives, it has breached a number of ethics issues. The employment of children is unethical and the poor payment of its workers is similarly not attractive. The company has failed to perform adequately using this practical indicator measure. Question 2. Nike is a company that have been criticized for unethical business practices in the past. Contrast the different response of Nike to this criticism. Nike Company has been under pressure from many areas after having been criticized of having unethical business practices in the past. One of the unethical practices that have solicited much criticism has been identified as owning and employing children in their factories. Paying their workers very poorly has also been another unethical practice the company has been accused of. Lastly, having very poor working conditions for their workers in the factories and lack of governance in addressing these issues has also been highly criticized. In its defense, Nike Company at first did not want to address these accusations. They tried to be callous and avoided the issues as much as it could. However, the persistent accusations forced the company to act. The company management came up with a responsive strategy to deal with all the unethical accusations facing the company. The management promised to implement new policies that would do away with all these issues facing this company in its factories in foreign nations. However, the company never implemented these new policies. This lack of implementation has prompted another criticism from the workers and concerned parties alike accusing the management of Nike Company of failure to implement them. Question 5. Breach of code of conduct of Nike- Nike actual social code of conduct According to Markus & Shimshack (2012, p. 54), a company is supposed to observe a number of social codes of conduct and have a sense of respect for the community in which it serves. The bigger the company, the more the codes the company should have and vice versa (Caroll, 1999, p. 270). The Nike Company has breached these codes of conduct in the following ways. The company denies at first that it has presented its workers with conditions of work that are deplorable. Here, the company has breached the ethics of honesty to its employees. The company does not want to be viewed as being cruel to its workers and when the accusations are made, it takes a defensive stance. Later, when the accusations persist, the company management accepts its faults and promises to implement new policies. However, it does not implement the policies and the accusations start all over again. Nike’s actual social code of conduct could be summarized in a number of forms as shall be outlined in the following sentences. The company is wholly obligated to provide open channels of communication between the management and the employees. This conduct will allow the employees to air their grievances to the management with ease and without fear of intimidation. The company is also obligated to accept its weaknesses as pointed out by the workers. And after accepting them, the company management should then go ahead and try to ensure that it has dealt with these issues to the satisfaction of the employees. This is where the concept of mutual trust and honesty comes in. Nike Company is obligated by the social code of conduct to provide correct information to its employees and act upon the grievances that these employees have. Question 6.Nike’s unethical issues In its operations, Nike company has breached a number of ethical codes through operating in unethical ways. Nike company has been accused of breaching these ethics on a number of platforms. Firstly, the company has been accused of employing minors in these overseas factories and paying them very poorly. According to the ethics codes, a company is not supposed by law, to have in its employment a minor who has not reached the employment age. Another accusation is that the workers of this company are paid very lowly despite the financial success of the company. Poor working conditions of the workers in these overseas factories is also another avenue of accusation. Lastly, the company’s failure to implement the new policies it had promised to has also become another avenue of discontent for the workers of this company. The ethics that Nike Company is supposed to be following are outlined in the ensuing sentences. As a service to the community, and as required by law, the Nike company is supposed to ensure that it does not employ minors and children in its factories as this will deprive the minors the chance to develop in other fields such as education. The company is also obligated to ensure that it provides its workers with a good working environment in its factories. Upgrading of these environments to meet the required standards is crucial. Staffs who work in a nice environment are often highly motivated as opposed to those who work in oppressing environments (Jamali & Mirshak, 2007, p. 244). It is therefore, the obligation of the company to ensure that it implements the policies that it comes up with so as to create an environment that would be conducive for working. Conclusion It has been observed from the discussion above that ethics and social codes of conduct are very vital in ensuring that there is harmony between the workers and the management of a company. From the Nike’s case study, the importances of the codes of ethics have been outlined. It has been observed that the workers of a company such as Nike in this case play a very great role in ensuring that the objectives of the company are met. However, it has also been noted that it is quite possible for the affairs of a company to stall if the management of the company does not observe the welfare of the workers ranging from their remuneration to their working conditions. In conclusion, the paper brings out the close, clear and vital connection between the ethical issues in the management and the impact they have on the working atmosphere in the company. References Alrawashdeh, S, Salameh, R & Zuriekat, M., 2011, ‘Participation in Performance Measurement Systems and Level of Satisfaction,’ International Journal of Business and Social Science Vol. 2, No. 8, pp. 159-168. Caroll, A.B., 1999,‘Corporate Social Responsibility: Evolution of a Definitional Construct’, Business & Society journals, Vol.38, No. 3, pp. 268-295. Churilov, L & Gospodarevskaya , E., 2011,’Process performance indicators in redesigning the patient care process’, Business Process Management Journal, Vol. 17 No. 6, pp.1012 – 1038. Groote, P, D., 1995, ‘Maintenance performance analysis: a practical approach’, Journal of Quality in Maintenance Engineering, Vol. 1, No. 2, pp.4 – 24. Ibrahim, J. E., 2001, ‘Performance indicators from all perspectives’, International journal for quality in healthcare, Vol. 13, No. 6, pp. 431-432. Iveta, G., 2012, ‘Human Resources Key Performance Indicators’, Journal of competitiveness, Vol. 4, No.1, pp. 117-128. Jamali, D & Mirshak, R., 2007, ‘Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context,’ Journal of Business Ethics, Vol.72, pp.243–262 Kizgin,Y & Benli, T., 2013, ‘The Examining of GSM Operators’ Customer Complaint Management (CCM) Applications in Turkey with Discriminant Analysis’, International Journal of Business and Management, Vol. 8, No. 3, pp. 1-15. Markus, K & Shimshack, J., 2012, Economic Perspectives on Corporate Social Responsibility,’ Journal of Economic Literature, Vol.50, No.1, pp. 51-84. Takeda, M. B & Helms, M. M., 2006, ‘Bureaucracy, meet catastrophe: Analysis of Hurricane Katrina relief efforts and their implications for emergency response governance’, International Journal of Public Sector Management, Vol. 19 No. 4, pp.397 – 411. Read More

Brief introduction of the case NIKE company is a renowned transnational corporation operating in a number of countries and having its headquarters in Oregon, USA (Nike company website, 2012). The company manufactures designs and sells sporting goods, facilities and other sports apparels. Of late, the company has been experiencing problems in its factories in foreign countries where they are accused of owning and using factories that employ children, poor working conditions and low payment of their workers.

After the protests, the company came up with new policies but after some time, it was accused of not being in a position of implementing these policies it had developed. These accusations have evolved into a discussion revolving around the ethical issues and considerations that the company should be having towards its employees and the society where it operates from. Nike management avoided the accusations and when they escalated, that is when the company came in to address these issues by coming up with new policies.

It should be noted that for a company of a magnitude as that of Nike, implementation of policies is a very difficult process and can take a long time, mostly due to the bureaucratic effect. Companies whose parent companies are in other nations are the hardest hit because they have to wait from the parent company and this may take a considerably long period (Takeda & Helms, 2006, p. 400). This is a typical case of the Nike Company whose factories are abroad since they have to get instructions from the parent company in USA (Nike company website, 2012).

Question 1: Ethical decision making practice: Identify and explain 4 key performance indicators that could be used to measure the ethical operations of a business such a Nike As stated in the introductory part of this paper, there are a number of indicators that are applied for the measurement of performance of companies. The key performance indicators that would be suitable for this company linking to the ethical practices are outlined in the following paragraphs. The first key performance indicator (KPI) would be a directional indicator.

According to Churilov & Gospodarevskaya (2011, p. 1012), a directional indicator shows whether a certain company or organization is getting better or worse in its performance. In this context and using this indicator, Nike company situation does not seem to be improving at all. Matter of fact, the situation keeps on getting worse. There are complaints about the company coming from almost all angles. Accusations have arisen from workers and the society about how poorly these workers are being paid.

There is also the issue of the company employing children to work in their factories. Even though the company vowed to address these issues, no much headway has been made and as such the company has failed. Another KPI would be the actionable indicators. Actionable indicators are those indicators that are in the organizations’ or business’s capacity to affect changes in the organization (Ibrahim, 2001, p. 431). Nike Company has also failed to deliver on this level as measured by this indicator.

The company has come up with policies but has consistently failed to deliver on them. When the company was accused of breaching ethics in the conduct of its business, the management developed policies aimed at ironing out this issue. However, they have not succeeded in implementing these policies. Financial indicators are another form of KPIs that could be applied to measure the performance of a company in terms of financial strength, profit generation and revenue flow (Alrawashdeh, Salameh & Zuriekat, 2011, p. 160). Using this indicator, Nike Company could be said to have succeeded.

This is because the company registers a good financial strength and stable profit growth. However, this success has come about as a result of the company breaching ethics by employing children and paying its workers very poorly. As such, the indicator cannot be wholly applied to measure the success of this company without balancing out with ethics issue.

Read More