Case 3
GEB 4434
Case Study 3
Case 19- Nike: Managing Ethical Missteps
July 12, 2015
Why did Nike fail to address corporate social responsibility early on?
Manufacturers in foreign locations were only concerned with the minimal contract requirements and overlooking fair labor practices in order to perform as low-cost suppliers. The foreign locations also subcontracted the work so Nike did was adequately track the working conditions and wages being paid and the ages of the workers. They failed to address these issues earlier because they wanted to maintain lower cost and there was not a focus on how they were able to accomplish this. Organizations such as National Labor Committee helped make the public aware of the poor conditions and public outrage made Nike and others more transparent and accountable.
Evaluate Nike's response to societal and consumer concerns about its contract manufacturing.
Nike has spent large amounts of money to raise the standard of work conditions in its foreign factories. It has implemented a code of conduct for all suppliers. They have joined with Apparel Industry Partnership and allow Global Alliance to inspect its factories. Nike has also implemented several audit tools, MAV, ESH and SHAPE, to allow for greater transparency in its operations.
What are the challenges facing Nike in the future?
The Honduras incident showed that Nike still needs a greater insight into its suppliers. Nike wants to continue to expand its international and to be successful needs to have greater control of all aspects of the company. In today’s world a company needs to have a strong CSR if it wants to be profitable and survive.
Case Study 3
Case 19- Nike: Managing Ethical Missteps
July 12, 2015
Why did Nike fail to address corporate social responsibility early on?
Manufacturers in foreign locations were only concerned with the minimal contract requirements and overlooking fair labor practices in order to perform as low-cost suppliers. The foreign locations also subcontracted the work so Nike did was adequately track the working conditions and wages being paid and the ages of the workers. They failed to address these issues earlier because they wanted to maintain lower cost and there was not a focus on how they were able to accomplish this. Organizations such as National Labor Committee helped make the public aware of the poor conditions and public outrage made Nike and others more transparent and accountable.
Evaluate Nike's response to societal and consumer concerns about its contract manufacturing.
Nike has spent large amounts of money to raise the standard of work conditions in its foreign factories. It has implemented a code of conduct for all suppliers. They have joined with Apparel Industry Partnership and allow Global Alliance to inspect its factories. Nike has also implemented several audit tools, MAV, ESH and SHAPE, to allow for greater transparency in its operations.
What are the challenges facing Nike in the future?
The Honduras incident showed that Nike still needs a greater insight into its suppliers. Nike wants to continue to expand its international and to be successful needs to have greater control of all aspects of the company. In today’s world a company needs to have a strong CSR if it wants to be profitable and survive.