From Sweatshop to Leadership in Employment Practice - Essay Example

From Sweatshop to Leadership in Employment Practice INTRODUCTION Nike has convincingly taken the leadership in sport shoes, employing popular advertisers such as Michael Jordan. Nike has been the favorite shoe especially of the basketball fans who finds association with the most popular basketball superstar whenever they wear the shoe in. The popularity and excellent image of Nike was however tarnished with the issue of unfair labor practice. In this paper, we shall see how Nike has failed to take care of its manpower and corporate responsibility resulting to poor public image and the things that it can do to recover from this. MAIN BODY Background A Stakeholder is a “person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organizations actions, objectives, and policies” (BusinessDIctionary.com). Stakeholders can be internal and external. Internal stakeholders are those who work directly under the company. This includes the owners, the management group and the employees (Wikimedia Foundations, Inc, 2009). Of all these, the employees are the least powerful in coursing the direction of the company. Outside the company, there are also people who can be affected by its decisions: these include the suppliers and the customers, its shareholders and creditors, up to the government and the whole society (Wikimedia Foundations, Inc, 2009). This can be depicted by the graph below. Source: (Wikimedia Foundations, Inc, 2009) Legal Analysis “At the end of the Second World War, the International Labour Conference adopted in May 1944, in Philadelphia, a Declaration (Philadelphia Declaration), which defined again the aims and purposes of the Organization. This Declaration reaffirmed in particular, (a) that labor is not a commodity, (b) that freedom of expression and of association are essential to sustained progress, (c) that poverty anywhere constitutes a danger to prosperity everywhere and (d) that the war against want requires to be carried on with unrelenting vigor within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join them in free discussion and democratic decision with a view to the promotion of the common welfare. Source: (International Labour Organization) The core convention as stated in the deaclaration states the following specific conventions which the Nike Company has apparently violated: Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87) Establishes the right of all workers and employers to form and join organizations of their own choosing without prior authorization, and lays down a series of guarantees for the free functioning of organizations without interference by the public authorities. In December 1997, 121 countries had ratified this convention. Right to Organize and Collective Bargaining Convention, 1949 (No. 98) Provides for protection against anti-union discrimination, for protection of workers and employers organizations against acts of interference by each other, and for measures to promote collective bargaining. In December 1997, 137 countries had ratified this convention. Forced Labor Convention, 1930 (No. 29) Requires the suppression of forced or compulsory labor in all its forms. Certain exceptions are permitted, such as military service, convict labor properly supervised, emergencies such as wars, fires, earthquakes, etc. In December 1997, 145 countries had ratified this convention. Abolition of Forced Labor Convention, 1957 (No. 105) Prohibits the use of any form of forced or compulsory labor as a means of political coercion or education, punishment for the expression of political or ideological views, workforce mobilization, labor discipline, punishment for participation in strikes, or discrimination. In December 1997, 130 countries had ratified this convention. Source: (International Labour Organization) The American Federal Law also has a specific rule on the proper exit of employees. This is particularly included in the Worker Adjustment & Retaining Notification Act. This act “requires that covered employers provide notification 60 calendar days in advance of plant closings and mass layoffs. WARN also requires notice to State dislocated worker units so that dislocated worker assistance can be promptly provided” (Employment Law Information Network). Subsequent research regarding the whole event reveals that “workers were not allowed to form trade unions, were kept on short-term contracts, and were forced to do overtime” (Helen Yanacopulos, 2004). This issues shows that Nike violates even the international law on labour. This raises ethical questions which we shall subsequently discuss. The inability of Nike to supervise the foreign sub-contractors plus the inherent desire to cut on labor cost have together caused these violations. ETHICAL ANALYSIS There are known ethical theories formulated by popular philosophers such as Aristotle and others. This includes the virtue ethics which says that “values are the standards by which we judge human behavior. They are, in other words, moral rules, promoting those things thought of as good and minimizing or avoiding those things thought of as bad” the Utilitarianism which “promotes good or valued ends, rather than using the right means” and the deontology which is composed of the belief that “the most important aspects of our lives are governed by certain unbreakable moral rules” (Med India). The discussion of Aristotle on the human natural law is more tied up with the religious belief of the individual. The ineherent human nature includes love and compassion, especially to the poor. The practice of Nike then which exploits the workers, divesting them of the right to stand for what is proper is clearly unethical. This is a deviation to the inherent nature of man. The supplier of labor (in this example the sub-contractor) are the ones responsible for this. The utilitarianism can be used by the company to justify their actions. With the “maximum profit” in mind, Nike can employe undesirble means for this goal. The means of both the management and the owners may be justified but the means employed are not necessarily correct. The utilitrianism ethical theory supports this. The justification of Nike that “their pay is actually better than having no work at all” is actually absurd but can again be supported by this theory. On the other hand, the deontology belief contrasts the ways of Nike and its sub-contractors. The unwrittern moral laws were certainly violated by both, and this does not bring out the most important aspect of life. This is of course because the owners and the management has “profit” as their primary purpose, in this case even more than an obedience to what is moral. The virtue ethics says that er judge human behavior based on our values. What is the relevance of this in the Nike case. First, it must be recalled that the public had taken a stand against Nike- this includes the media and other private individuals. The reason why such as large crowds of people were able to voice their opposition against Nike is that the practice of Nike is obviously against the inherent human values. It was not vague or unclear, it was clearly “immoral” for most of the people. This is the reason why those that run against Nike increased to such a huge number. This is where the ethics embedded in the deontology principle stands. There is simply an unbreakable rules of morality. The effect of violation to this would be an opposition from those who are holding on to this. CONTRIBUTING FACTORS: CORPORATE CULTURE AND CORPORATE GOVERNANCE "Our stories are not about extraordinary business plans or financial manipulations," explains Nelson Farris, 57, Nikes director of corporate education and the companys chief storyteller. "Theyre about people getting things done." (Ransdell, 2007). Nike’s coporate history began when Phil Knight was just trying to innovate on shoe and selling them out of his car trunk. Indeed, it was simple guts and persevrance that brought success to Nike. The number 1 brand in shoes cannot be where it is now without the Just Do It! culture.This famous tag line has is not just addresses to the Nike fans, but is an actual representation of what is inside the company. The just do it! attitude is very positive, but it can have serious repercussions if done outside what is ethical, in the words of Aristotle beyong the law of human nature, so that it violates fairness and justice. One thing that we want to point out is that the quest of Nike for growth and for leadership in terms of market scope may come at the expense of this morals. The corporate culture may mean sacrificing the things which may at first run in contrast to the success attitude of Nike, but will definitely have a positive reward in the long-run. “And like all great stories, the ones about Nike offer archetypes that people can learn from. When Nikes leaders tell the story of how Coach Bowerman, after deciding that his team needed better running shoes, went out to his workshop and poured rubber into the family waffle iron, theyre not just talking about how Nikes famous "waffle sole" was born. Theyre talking about the spirit of innovation. Likewise, when new hires hear tales of Prefontaines battles to make running a professional sport and to attain better-performing equipment, they hear stories of Nikes commitment to helping athletes” (Ransdell, 2007). Two striking characters of Nike that surfaced in the labor situation are openness to growth and innovation. Nike has proven that they are not only innovative in the production of apparels and shoes, but they are also innovative in the management of their people. This innovation and openness came out when Nike has opened its doors to its critics and has opened ties with other aspects of the society such as the schools. Management innovation indeed came from Nike’s openness to its critics. The corporate and responsible governance of Phil Knight, who later admitted his responsibility in the situation has helped reduce the unethical inside the company. He might have the excuse that the sub-contractors are the ones responsible, but if he does not take the lead against unfair practice, it might have serious repercussions on the health especially in the image of the company. His responsbility has triumphed in the end, espeically when corporate responsibility became a very important part of how Nike does business. ETHICAL FACTORS TO CONSIDER The ethical theories discusses in the class highlights morality, not an written code but as unwritten and inherent in human. Both the virtue theory and deontology posists that man should be foremost governed by the law of morals, even more than the written civil law. This concept is highly associated with one’s faith and religion but it is accepted to be universal. Man has the responsibility to oversee his fellow men so as to take care of him. The unethical issues raised against Nike are associated with morality. Although, the profit-making motive is highly acceptable especially when someone is in business, but it does not give a person the right to trample on the rights of others. Nike’s actions through its sub-contractors are divested of love and compassion and even morality. They are in simple words “taking advantage” of the weaknesses of the workers. The statement of Nike that the workers are earning more than those who are unemployed and that their condition is still better than the unemployed is really off. The standard to be used in measuring is the standard of morality, of what is just to the workers. The workers remain to be human beings, who have the right to safety and fariness. This things the company has failed to maintain. In summary the ethical and leagal standards that Nike should consider are the following: (a) The moral standards that command companies to provide a safe and decent working condition to their employees, (b), the salaries should be in accordance to the minimum required by the government and can even be higher, (c) workers should not be foreced to do overtime. This is particularly included in the Forced Labour convention, (d) Nike employees should be free to organize even if this means a collective action to bargain or to go against the management of the company, (e) Workers should be given enough time before they should be fired. RECOMMENDED CORRECTIVE ACTION The recommended corrective action are the following: (a) Safe and Decent Working Condition – The most cost effective way of securing that workers are in safe and decent environment is to involve the employees themselves in identifyng potential hazards to health. This will allow the company to make corrective actions and would make the employees feel that they are important, (b) Salaries – One way to attract the best employees would be to increase the salary beyond the minimum. This will eb a good strategy for Nike, knowing that they also take care of an image of being “classy” and “upright”, (c) The company can attract employees to do overtime by giving company perks such as apparels and shoes which are not sold to those who frequently do overtime. This will make the workers enjoy doing over time and at the same time improve brand popularity, (d) Allow labourers to organize into union but make sure that the management has a good communication and working relationship with the union. This is also done by some of the most successful international companies such as the HSBC. The union can actually a good channel of information from the employees to the management and (e) There should be a written law on employee recruitment. This should be explained to the workers clearly and they should adhere to them to earn the trust of the employees. The rationale behind this is clarity and trust. In addition, Nike can search for the proven employment practices that it may employ in their current situation. It is important to learn from other organizations as well so as not to commit mistakes. The U.S. Equal Employment Opportunity Commission had a study on employment that Nike can make use of. “Commissioner Reginald E. Jones was appointed by Chairman Gilbert F. Casellas to head the Task Force to study "best" equal employment opportunity policies, programs, and practices of private sector employers. (The U.S. Equal Employment Opportunity Commission, 1997). The findings of the study say that the best practices are the following: (1) STUDY -- Since one cannot solve problems that one doesnt know exists, know the law, the standards that define ones obligations, and the various barriers to EEO and diversity. Assistance can be obtained from EEOC, professional consultants, associations or groups, etc. (2) PLAN -- Know ones own circumstances (workforce and demographics - locally, nationally, and globally). Define ones problem(s); propose solutions; and develop strategies for achieving them. (3) LEAD -- Senior, middle, and lower management must champion the cause of diversity as a business imperative, and provide leadership for successful attainment of the vision of a diverse workforce at all levels of management. (4) ENCOURAGE -- Companies should encourage the attainment of diversity by all managers, supervisors, and employees, and structure their business practices and reward systems to reinforce those corporate objectives. Link pay and performance not only for technical competencies, but also for how employees interact, support and respect each other. (5) NOTICE --Take notice of the impact of your practices, after monitoring and assessing company progress. Self-analysis is a key part of this process. Ensure that a corrective strategy does not cause or result in unfairness. (6) DISCUSSION -- Communicate and reinforce the message that diversity is a business asset and a key element of business success in a national and global market. (7) INCLUSION -- Bring everyone into this process, including white males. Help them understand that EEO initiatives are good for the company and, thus, good for everyone in the company. Include them in the analysis, planning, and implementation. (8) DEDICATION -- Stay persistent in your quest. Long term gains from these practices may cost in the short term. Invest the needed human and capital resources. Source: (The U.S. Equal Employment Opportunity Commission, 1997) RECOMMENDED POLICIES There should a gradual but a series of changes that the company should enact so as to achieve leadership in employment practices.It is said that Nike has been learning a lot from its experiences. Particularly, Niek now has an open mind in doing things, learning that “it is better than denial” (.C. Ferell, 2008). Below are other ways of improving employment practices: (1) Make use of technology in monitoring employees. As much as possible use the latest technologies which makes the company save on unneccesary steps and processes such as the evaluating employee performance. This will also provide an unbiased performace evaluation as these are directly gained from observable outputs. Also, use the technology to monitor the management teams in far geographic locations. (2) A policy providing for open communcation with employees should be enacted. This can also be done through the use of technology. CONCLUSION The rationale for all this are: the company will be inching closer to the employees in order to convey their concern for their employees and at the same time to easily monitor them. This will cghane the image of Nike from an irresponsible to a caring and responsible employer and at the same time these policies will make a cost effective way of monitoring the employees. Works Cited BusinessDIctionary.com. (n.d.). Retrieved August 29, 2009, from http://www.businessdictionary.com: http://www.businessdictionary.com/definition/stakeholder.html Employment Law Information Network. (n.d.). Retrieved August 29, 2009, from http://www.elinfonet.com: http://www.elinfonet.com/WARNsum.php Helen Yanacopulos, G. M. (2004). The global network society and transnational networks of dissent. In s. B. William Brown, Ordering the International: History, Change and Transformation (pp. 417-452). London: Pluto Press. International Labour Organization. (n.d.). Retrieved August 29, 2009, from http://actrav.itcilo.org: http://actrav.itcilo.org/actrav-english/telearn/global/ilo/law/lablaw.htm#Birth_of_the_international_labour_law Med India. (n.d.). Retrieved August 29, 2009, from http://www.medindia.net: http://www.medindia.net/education/familymedicine/biomedical-ethics-theories.htm O.C. Ferell, J. F. (2008). Business Ethics – Ethical Decision Making and Cases. Houghton Mifflin Company. Ransdell, E. (2007, December 19). The Nike Story? Just Tell It! Fast Company . The U.S. Equal Employment Opportunity Commission. (1997, December 22). Best Practices of Private Sector Employers. Retrieved September 4, 2009, from http://www.eeoc.gov: http://www.eeoc.gov/abouteeoc/task_reports/prac2.html Wikimedia Foundations, Inc. (2009, January 16). Retrieved August 29, 2009, from http://en.wikipedia.org: http://en.wikipedia.org/wiki/File:Stakeholder_(en).png Read More