Nike: Managing Ethical Missteps-Sweatshops to Leadership in Employment Practices - Essay Example

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This paper discusses the practices carried out by Nike that led to its bad reputation. As Nike did not step in the market as a leader, but other companies like Puma and Adidas already existed and had a prominent market share. …
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Nike: Managing Ethical Missteps-Sweatshops to Leadership in Employment Practices
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Download file to see previous pages Korea and Taiwan in the early 1980s and by the mid 80s they started their manufacturing units in Southern China (Ferrell, Fraedrich, and Ferrell, 386-395). Within a few years, Nike had almost 700 independent factories, mostly located in the poor Asian nations (Ferrell, Fraedrich, and Ferrell, 386-395). The main reason of outsourcing the manufacturing factories to the third world Asian countries was cheap labor which led to low manufacturing and production costs. But this also led to a major criticism on the human rights that were violated. Extremely bad working condition at the factories, lower wages, harassment and abuse and lastly child labor became major issues to deal with for the company. Sweatshop labor aroused the consciousness of general public and the media, human and labor right activists and non-governmental organizations criticized over the policies that Nike was following most important of which were unhygienic and poor health and safety situation in the work place, low wages and discriminated hiring and firing of labor. The mass media highlighted these issues which grabbed the public attention implicating a bad reputation for the company lowering its image and profits. Another hit on the company’s reputation came in 1993 when a magazine published the real life pictures of children working in the factories of Nike and other companies stitching soccer balls instead of being in school. This led to protests and demonstrations against human rights violation all over the USA (Ferrell, Fraedrich, and Ferrell, 386-395). A discovery made by a firm auditing a factory of Nike in Vietnam was leaked to the media that added more a bad insight about Nike’s already building horrific reputation. The report indicated that the employees are exposed to a chemical which...
Regardless of the challenges and criticism that Nike had to face in the past few years, it has proved itself to be a competitive and successful business in recent times making good profit. The corporate social responsibility practices of Nike have evolved since its doom days and now customers and corporate clients seem to have their faith restored. Nike’s main focus now to maintain the developed code of conduct based on the ability of employees to perform the job perfectly and not on the basis of biasness or discrimination of any sort. Nike also disclosed its supply chain and the factory locations where the production is carried out. This way they can monitor their own standards and performance. Adopting the strategic management strategies such as balanced score card etc, Nike has developed a standard of measuring its own growth and performance. Now in order to stay competitive with the prospects of new market entrants in the future, Nike has to maintain its standards and be sure to strictly adhere to the CSR so that they do not have to face the allegations that cost them their reputation a decade ago.
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