Approaches of Nike towards Corporate Responsibility - Case Study Example

?Nike and its Approach to Corporate Responsibility Table of Contents Introduction 3 A Brief Overview of Nike 4 Approaches of Nike towards Corporate Responsibility 4 Discussion 6 Leadership Corporate Responsibility 7 Structure of Corporate Responsibility 8 Hiring Process 9 Centralizing and Decentralizing 10 Conclusion 11 References 12 Introduction The perception of corporate responsibility is fundamentally described as the activities of different organizations that depict the inclusion of both environmental and social concerns while performing different operational functions and making interactions with the chief stakeholders (Amato & et. al., 2009). Moreover, the notion of corporate responsibility which is also acknowledged as corporate sustainability represents the commitment of the business towards behaving morally and contributing in making financial advancement while enhancing the living standard of the personnel along with their families and the local communities by a greater degree (Daft & et. al., 2010). It has been apparently observed that the significance of corporate responsibility has been rising considerably in the modern day context. This can be justified with reference to the fact that the business corporations or firms possessing superior level of corporate responsibility ultimately help them towards attracting its entire workforce through lessening the turnover rates of the personnel and recruitment expenses among others (Cramer & Bergmans, 2003). In this paper, a critical evaluation about the approach of Nike towards corporate responsibility will be taken into concern. Various aspects like how Nike could best manage the situation and move towards corporate responsibility emphasizing upon certain important aspects will also be discussed in this paper. The aspects comprise leadership as well as structure of corporate responsibility, hiring procedure and centralization along with the process of decentralization. A Brief Overview of Nike Nike, Inc is regarded as one of the foremost innovators especially in the business segment of athletic footwear, equipments, accessories and clothing. The company is typically an American based multinational business corporation that deals with the design and the marketing of sports utensils, athletic footwear and various other recreational brands. The mission of the company has been viewed to inspire the athletes across the globe with incessant innovation (Nike, 2013). Conversely, the vision of the company is to become worldwide leader especially in the aforementioned business segment in the entire world. In this similar context, the company has been noted to develop its business by focusing more upon the significant aspects of sustainability along with innovation (Nike, 2013). It is worth mentioning that according to the performance rankings in the Climate Counts, Nike has acquired topmost position particularly in the business segment of footwear, clothing as well as accessories (Nike, 2013). Approaches of Nike towards Corporate Responsibility Nike undertook several approaches concerning corporate responsibility with the motive of becoming the worldwide leader particularly in the business segment of sporting footwear, clothing and accessories among others. The different approaches of Nike towards corporate responsibility have been noted while designing and manufacturing its broad array of products. In relation to designing products, it has been apparently observed that Nike has outlined and developed restricted substances lists (RSLs) in order to safeguard its entire workforce, suppliers and most importantly the consumers. The lists ultimately support the company towards effectively directing its different suppliers in the making of the brands which are safe and lawfully compliant. Moreover, apart from preparing and developing RSLs, the company executes environmentally preferred materials (EPMs) while designing its different products. According to the company, EPMs are principally described as the materials that extensively lessen the adverse environmental impact upon a particular product through decreasing wastes, decreasing resource intensity and diminishing recyclability. EPMs comprise those materials that are chemically optimized, recycled and bio-based or in a simpler term ‘renewable’. With regard to manufacturing products, the approaches of Nike towards corporate responsibility have been identified as the developing procedure of its supply chain and establishing effectual Code of Conduct for safeguarding its entire workforce (Nike, 2013). In order to determine the approaches of Nike towards corporate responsibility, it has been viewed that effective strategies need to be adopted and implemented for the purpose of accomplishing predetermined business targets. In this regard, Nike strongly realized that innovation towards generating new and better solutions rather than conducting trade-offs can support the company to develop its corporate responsibilities by a considerable level. According to the company, a particular eco-friendly product that is produced under poor labor conditions is often regarded as a hollow success. Conversely, a specific product that is produced under better labor conditions but proves to be bad for the planet is usually considered to be a missed opportunity. In this similar concern, it has been apparently observed in the year 2004 that Nike began to perform an intensive and large-scale review of its long-range goals along with the strategies relating to corporate responsibility on the basis of four indispensable premises. The four premises include creating system change through conducting effective collaboration along with partnership with the stakeholders, understanding business growth and innovating strategies, building systematic changes aligning with corporate responsibility and determining approaches towards problem-solving with the external stakeholders. In the year 2006, Nike adopted and executed a redesigned as well as a fully integrated approach towards developing its corporate responsibility. In this regard, the approaches comprise leveraging its organizational structure, reorganizing different functions relating to corporate responsibility and increasing comprehensive understanding about its global footprint by recognizing the areas pertaining to superior social and environmental impact. One of the significant approaches made by the company towards enhancing and developing its corporate responsibility is focusing upon the significant concern of return on investment (ROI). In this similar context, it has been viewed that Nike has formed an exclusive monetary formula named “ROI-squared” with the motive of evaluating the exponential return while incorporating corporate responsibility into its business as chief sources of financial augmentation as well as innovation (Wirtenberg, 2008). Discussion After acquiring a brief idea about the significant approaches of Nike towards corporate responsibility, it can be stated that there are certain imperative aspects that need to be considered by the company in order to manage its business position and move towards performing corporate responsibilities more effectually. In this regard, the aspects comprise leadership corporate responsibility, structure of corporate responsibility, hiring procedure and focusing upon centralization along with the decentralization of facets. The different aspects have been explicitly described hereunder. Leadership Corporate Responsibility In order to manage the business position by executing the approaches made by Nike towards corporate responsibility, the business or the strategic leaders of the company should focus upon assessing and aligning the requirements, interests and the values of the suppliers, communities, employees and most significantly the consumers. One of the chief practices of leadership corporate responsibility that can assist the company to better handle its business situation is partnering or forming clear communication with its key stakeholders. Moreover, the business leaders would have to emphasize upon certain important factors so that the company can successfully execute the approaches or strategies towards developing its corporate responsibilities. The factors encompass lessening energy costs along with the emissions that generates from the greenhouse gases, strictly following the regulations linked with the usage of materials for designing and manufacturing products, labor practices and other complex problems shaping the business environment. Moreover, the company can perform leadership corporate responsibility in terms of decreasing wastes particularly during the design along with the manufacturing of products, enhance packaging of products and raise reusage or recycling of wastes (Nike, Inc., n.d.). Structure of Corporate Responsibility In order to manage business position and move towards corporate responsibility effectively, Nike could follow cognitive structure of corporate responsibility by a significant level. In this similar context, the aspect of cognitive structure associated with corporate responsibility refers to the management of social responsibility emphasizing upon social value, product quality and job security rather than concentrating upon wealth accumulation, profits, stakeholders’ interests and productivity among others. It is the business managers or the strategic leaders of Nike who need to make future attempts towards supporting cultural values, environmental conservatism and employee rights through the execution of cognitive structure of corporate responsibility. It has been apparently observed in this particular context that the cognitive structure of corporate responsibility is mainly concerned about developing the interests of the stakeholders and appropriately recognizing the participants involved in performing corporate responsibilities. Furthermore, it has been viewed that the cognitive structure of corporate responsibility also concerns about covering broader communal interests that comprise cultural activities, justice and the environmental factors (Boal, 1985). In order to determine the structure of corporate responsibility relating to Nike, it has been viewed that the company established the Corporate Responsibility Committee of the Board of Directors in the year 2001 for the purpose of reassessing decisive policies , activities and making valuable suggestions regarding certain important aspects. These aspects include labor along with environment related practices, diversity and equal opportunity, community affairs and sustainability initiatives among others. It has been apparently observed that the aforesaid committee which was formed by the company is held liable for designing an effectual code of ethics especially for its employees that is known as ‘Inside the Lines’. This particular code of ethics describe the standards of ethical conducts that are expected to follow by the entire workforce involved with the company and comprises broad array of important topics like ethical behaviors, legal compliance, execution of valuable resources, activities of the employees relating to corporate responsibility and product safety. The company expects that the suppliers would share the standards linked with ethical conducts and perform their respective operational functions in a lawful and ethical manner so that it can help the company to develop its corporate responsibilities by a greater level (Nike, Inc., 2009). Hiring Process The aspect of hiring process of the employees can also be regarded as one of the imperative factors that might support Nike to manage its business situation in a better way and move towards corporate responsibility in an effective manner. It has been apparently observed in this particular circumstance that the company delivers a comfortable and a safe working environment for its entire workforce. Moreover, it has also been viewed that the company offers flexible work schedules and ensures that any sort of report regarding mistreatments are scrutinized and handled instantly within the company. By taking into concern the significant approaches or strategies that are designed and executed by Nike towards the imperative concern of corporate responsibility, it can broadly be stated that the hiring procedure of the company must be typically based upon the legal guidelines of corporate responsibility. In this regard, the hiring process of Nike can be based upon the facets like transparency, cost-effective as well as timely, equitable and most importantly free form any sort of conflict of interest. The recruitment procedure of the company can be conducted on the basis of person specifications and settled job descriptions (Scribd Inc., 2013). This framework of hiring process can eventually support the company to better manage its business situation and move towards corporate responsibility in an effectual manner. Centralizing and Decentralizing The conception of centralization is fundamentally described as the concentration or the retention of full control or authority at the higher or the top level management level of any organization for making any sort of valuable decision (Tulsian, 2002). Conversely, the notion of decentralization represents organized allocation or dispersion of authority at every level of management as well as each department of a specific organization (Needham, 1999). After acquiring a brief idea about the facets of centralization and decentralization, it can broadly be affirmed that Nike can focus mainly upon the aspects of centralization with the intention of managing its business position along with moving towards developing its corporate responsibilities in an effective manner by a considerable level. This is owing to the reason that the facets of centralization would eventually assist the company in enhancing job satisfaction along with the raising morale of the employees and most significantly increasing the chances of treating its workforce equally (Murugan, 2007). Conclusion After having considerable idea about the conception of corporate responsibility, it can be affirmed that it is quite indispensable for different companies to adopt and implement effective practices relating to corporate responsibility in order to survive in this competitive financial market. Similarly, in this context, Nike has been viewed to make significant approaches towards corporate responsibility with the intention of accomplishing its predetermined business targets. Relating to this particular aspect, Nike focuses upon designing and manufacturing its broad assortment of products through developing RSLs and executing EPMs. By taking into concern the aforementioned factors that are undertaken by Nike towards the vision of developing its corporate responsibilities, it can broadly be affirmed that certain imperative aspects are needed to be considered by the company with the motive of managing its business situation along with moving towards corporate responsibility in an effective manner. These aspects include centralization of authority, hiring procedure, structure of corporate responsibility and leadership corporate responsibility. These particular aspects would certainly assist the company towards accomplishing superior competitive position over its chief business market contenders in terms of corporate responsibility. References Amato, A. D. & et. al., 2009. Introduction. Corporate Social Responsibility and Sustainable Business. 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