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