Assignment 5: Nike: From Sweatshops to Leadership in Employment Practices



Assignment 5: Nike: From Sweatshops to Leadership in Employment Practices

Question 1: Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike.

Nike is the world's leading manufacturer, marketer and distributor of the athletic footwear and sports' wear accessories. It primarily operates in Asia Pacific, Middle East, Africa, Americas and Europe. In the past decade, the brand has become widely recognized and financially strong. A strong brand allows expansion in the market share and prolonged consumer satisfaction. The same has been the case with Nike. No doubt, the brand came across hard times in the forms of social allegations but, their marketing campaigns specially “just do it” helped it revive its brand image. Eventually, Nike keeps on improving its product lines which helps keeping the target segment engaged with the brand. The swoosh sign is recognizable in almost the entire world. This alone accounts for Nike's worldwide success.

While on the other hand, Nike also faces internal and external threats. Nike face internals threats from the employees and customers who are more reluctant some times; similarly, the external threats are linked to the loss of financial resources if the company loses its loyal customers and employees due to uneven company practices. In this high competitive world, Nike cannot afford to afford to make mistake like those of Sweat Shops in Asia and repeat child labor issues (John, 2008).

Nike had a significant setback due to some litigation. In 2007, the company settled a lawsuit in the matter of racial discrimination. This suit was filed by black employees, which questioned Nike's managerial practices as against the black community. However, the litigation was settled but, it established a negative reputation against Nike. In some of the third-world countries, Nike is considered as an expensive brand. Majority of the people cannot afford Nike products in these countries. Nike can overcome this weakness by developing the price segmentation in these countries. Under this segmentation, a particular product line will cater only the segment which finds Nike's products as expensive (The story of Nike, 2011).

Globally, due to legal, ethical and social challenges, Nike face a great number of challenges. Nike has been blamed for producing its good in the third world sweatshops. Due to the availability of the cheap labor in the third world countries, Nike chooses to locate the majority of their production in such countries. Some of the human rights ethical and legal issues faced by the Nike in such countries include the use of child labor in factories, physical, verbal and sexual abuse from superiors, unsafe working conditions which contains exposure to toxic chemicals, pay below the minimum wage and forced overtime hours (Frisch, 2011).

Question 2: Describe an ethics training and communications program that may have kept

Nike from encountering the ethical issues it did in this scenario.

Nike should adopt an ethical stance and issue policies on company's ethical business ...