Labor Laws and Reebok and Nike

Reebok and Nike are the two largest athletic footwear companies in the world. Much of their work is focused on product design and marketing, not on production of the shoes. Starting in the 1970s, Nike and Reebok really began using Asian contractors (mainly in Taiwan and South Korea) to manufacture their shoes because this offered the advantages of lowered costs and flexibility in terms of how many different kinds of shoes could be produced, but many questions have been raised in regards to the treatment of workers in the Asian countries and corporate responsibility for these human rights. With worldwide sales revenues at $25.33B for the 2013 fiscal year (June-May), Nike would rank higher than many countries, including Honduras, Nicaragua, Jamaica, and Afghanistan, in national GDP according to the 2014 IMF World Economic Outlook. As a result, companies like Nike, Apple, and Sony dominate not only their own industries but also dominate the world economy and as a result have more actual power, even abroad, than the governments of all but the largest countries. As the profits of these companies rise, the world economy grows, and as they fall, the world economy suffers. Any policy changes they implement internally have a huge impact on the economy as a whole.

Domination as a result of globalization (the process of internationalizing all aspects of an institution or company) is not a good thing as it can have disastrous effects. First off, domination eliminates competition and therefore takes away from the experience of the consumer. As the case study indicates, in 1993, Nike and Reebok combined had 52.9% of the athletic footwear market share. Companies like Nike and Reebok that dominate the world markets even have the capacity to purc...

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...sively thinking about the bottom line rather than thinking about the betterment of the world as whole. Low costs and high profitability are important, but no company wants to be labeled as “THAT company that exploits 12 year old child laborers” or “THAT company that fired a single mom who now can’t support her own son” because that destroys brand loyalty and reputation and ultimately decreases sales and revenue. Instead, companies must find a balance, whether it be cutting work hours to make a detrimental part of the workforce temporarily no longer a key figure to moving production back on-shore or even tightening individual corporation labor laws and conducting inspections more often to demonstrate that a positive effort is in fact being made. In business, image is everything, and today more than ever ethics are playing a key role in determining business practices.