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Ethics and business performance
Nike unethical practice
Child Labour Consequences, Causes And Solutions
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“80% of the world soccer balls are made by Nike in Sialkot (Pakistan), a city of 3 million people”, according to David Montero in Is Doing The Right Thing Wrong ?( page 108). Nike’s contract with Saga Sports in March of 2007. Nike fears that Saga hiring children will violate laws,so Nike will not have Saga work for them. This will cost about 4,000 pakistani jobs. Also affects more than just the workers but their families.Although some say children are working in dangerous environments, people should buy products manufactured by child labor because children work so hard to make that product. In a city of 3 million people, Sialkot has “45,000 people that work for Saga sports for less than a $100 a month,is the the way of life”
(Montero 109). Nike has Saga sports make soccer balls hand stitched. Due to “Saga’s poor management styles exposes Nike to the threat of child labor”(Montero 108). Many children work because of their financial problems. According to the picture on page 85 in the close reader , it shows children working in cotton fields, “Many were orphans or children of migrants” Some children get paid , very little , but paid. Many work for their families. 20,000 families will be affected if Nike does not renew their contract with Saga
Places like Pakistan, places with high percentage of poverty, children are being forced to work extreme numbers of hours making soccer balls for the rest of the world. It is ironic that almost all around the world children are playing with soccer balls but in high poverty areas like Pakistan children are not going to school but rather making soccer balls all day long. “About 7,000 children between the ages of 5 and 14 have no time for school because they work full-time manufacturing soccer balls, earning about 50 cents for each ball they produce” (CNN). A child does not wake up excited to make soccer balls every day. They are forced to do it because the family with those children belong to are generally poor and that is why they have every person in the family working to help each other bring food to their table. During the 1998 world cup sales for soccer balls increased “25 percent” (CNN) because of the hype that is drawing attention to the upcoming World Cup. Even though the world cup games were held in France and a lot of money was generated by FIFA not much was passed down to the families who worked on the equipment that was essential for a soccer game to be conducted. From the player’s outfit to the footwear everything was being generated by poor families that are getting paid less than minimum wage. This kind of situation spreads like wildfire. “Efforts in the 1990’s to expose abuses in the assembly of soccer balls in Pakistan pushed businesses into India, where children continue to work in this industry. The report shows that industry initiatives have failed to improve the lives of thousands of children forced to work in Meerut, India to pay off the debt of their parents. For years, companies have said that they have extensive monitoring programs to make sure child labor is not used in the production
Nike publicizes itself as one of the leading industries in corporate responsibility. However, they do not comply with several human rights obligations overseas in countries like Thailand, Pakistan, China, Vietnam and Indonesia. In these countries, production facilities called sweatshops have been running for almost 35 years employing workers as young as 13 years of age. The conditions of these factories are adverse to say the least and deprive workers of the moral human rights they should be entitled to. Sweatshops are unethical, immoral and demonstrate Nike’s ignorance towards their social responsibilities abroad. Within these facilities, workers endure stressfully long days under undesirable conditions, often with no breaks and very little pay. While this is going on overseas, sponsored athletes are being paid million dollar salaries here in North America. Although Nike’s reputation has been foiled through the tabloids regarding this issue, they have been making a substantial effort to “clean up” production messes in the East.
The current manufacturing practices of the sneaker industry, in particular companies such as Nike, Reebok, Adidas, Converse, and New Balance, takes place throughout the globe. With the industry experiencing severe competition, and the product requiring intensive labour, firms are facing extreme pressure to increase their profit margins through their sourcing practices. The following paper will analyse the sneaker industry, while examining the multitude of viable manufacturing options, and critiquing their current manufacturing structure.
Pakistan has a per-capita income of $1,900 per year, so in essence, a typical person survives barely on $5 per day, and with the high rate of inflation it becomes difficult for a low-income population to survive. Nike’s child labor is spread all over Pakistan but has the greatest impact in the northwest of punjab province, that is Sialkot. Pakistan has a population of approximately 1 million and is an important center for the production of Nike’s goods for export to international markets, particularly sporting goods and shoes. Sialkot is one of the world’s most important centers for production of Nike’s sporting goods.
Nike does not merely sell products these days. They spend billions of dollars for advertising contracts with famous athletes like Tiger Woods to increase the value of the brand by associating the factor of lifestyle to their products. The company's image has been damaged many times by press releases as well as a variety of NGOs who have long pointed out the inhumane working conditions in the production facilities of sporting goods manufacturers. This leads to the question whether should Nike orientate the regulations of the suppliers to the labor standards in their respective countries or those in the United States? The labor conditions are so inhumane that Nike at least should try to converse to the US standard to improve the situation. The following analysis of an abstract of Nikes’ Responsibility Concept, including SHAPE and their Code of Conduct, should give an insight into the difficulties of the Sweatshops.
Nike is not responsible, technically, for the conditions in the factories that manufacture their products; however, deliberately and selfishly subcontracting to factories that exploit their workers is of questionable ethics. From an ethical standpoint, Nike should be sure to only contract with factories which are in compliance with the laws of their respective country. Ideally, Nike would employ full-time field representatives at all factories who manufacture their products to oversee the operations and ensure laws are abided by. In the event that a contracted factory is not in compliance with local laws, and refuses to make the necessary changes within a reasonable amount of time, Nike would be obligated to terminate the partnership.
Phil Knight started his shoe company by selling shoes from the back of his car. As he became more successful in 1972 he branded the name Nike. In the 1980’s Nike Corporation quickly grew and established itself as a world leader in manufacturing and distributing athletic footwear and sports' attire. The Nike manufacturing model has followed is to outsource its manufacturing to developing nations in the Asia Pacific, Africa, South and Latin Americas; where labor is inexpensive. It quickly became known for its iconic “swoosh” and “Just do it” advertisements and products. Its highly successful advertising campaigns and brand developed its strong market share and consumer base. But, the road has not always been easy for Nike; in the late 1990’s they went through some challenging times when their brand become synonymous with slave wages and child labor abuses. During this period, Nike learned that it paramount that the company understands its stakeholders’ opinions and ensures their values are congruent with their stakeholders. Nike learned that their stakeholders were concerned with more than buying low cost products; their customers were also concerned with ethical and fair treatment of their workers. Because Nike was unwilling to face the ethical treatment of its employees, the company lost its loyal customers and damaged its reputation. Nike has bounced back since the late 1990’s and revived its reputation by focusing on its internal shortfalls and attacking its issues head on. Nike nearly collapsed from its missteps in the late 1990’s. They have learned from their mistakes and taken steps to quickly identify ethical issues before they become a crisis through ethics audits. This paper is based on the case study of Nike: From Sweatsh...
As we can see in the essay, “The Noble Feat of Nike” by Johan Norberg, the globalization of companies like Nike isn’t all bad. There is some positive light to it, for example, the fact that workers are finally making enough money to live a decent life and send their children to school. In addition to this, workers are guaranteed jobs and don’t have to endure the tough labor of working on farms in the harsh weather conditions. So from these effects we can conclude that the globalization of Nike in third world countries like Nike isn’t a disadvantage to these workers, in fact it serves as an advantage.
With the increasing awareness and publicity of poor working conditions in subcontracted factories in East Asia, Nike has stimulated an uprising of activist and watchdog groups working toward seeing these conditions changed. With Nike in the negative spotlight, various organizations have revolved around generating a negative outlook on Nike’s practices of social irresponsibility. Certain campaigns such as the “National Days of Consciousness” and “International Day of Protest” were organized to educate people on the deplorable working conditions in Nike’s Asian manufacturing plants, and were designed to get more people involved in global employment issues.
Nike has responsibility for the working conditions of their employees who produce Nike products. In cases of multinational companies, the question of whose ethics and standards to follow is often disputed. Best judgement and reasoning and a combination of the countries’ standards combine to decide on appropriate treatment. In Nike’s case, as part of their strategy, they moved work overseas to save on labor costs. However, the employees still work in Nike factories making Nike products, and Nike has responsibility to protect their working conditions and workers’ rights. They should guarantee workers are being paid fairly according to the minimum wage, ensure their overseas factories comply with child labor laws, and certify the working conditions are clean and safe. In the cases of minimum wage pay and child labor laws of the country, Nike should allow itself to go above and beyond and raise their own factories’ standards if standards for pay and child labor are low in any country. Nike customers
...5% of the workers were Vietnamese mostly young women. The legal working age at the factory was 16 years, but they were willing to accept to change it to 18 because they were well aware of the criticism against Nike and they did not want this problems to continue. This only confirms that the accusations against Nike did not have any impact on the relationships between them and their suppliers. According to (Lynn R. Kahle, David M. Boush, and Mark Phelps) Meetings are held every Month to discuss any issues or improvements needed and about 87% of the employees belong to the union. Meaning that employees have rights and make formal complaints against their employer. Nike exceeded the legal minimum wage of $35 a month to $45, even though the wages are low, the workers get other benefits, such as social security, free health care and one free subsidized meal per day.
When a customer purchases Nike equipment they are supporting child labor, long work hours, forced overtime, and abusive work environments (Russell). Millions of people know about Nike because it is the largest supplier and manufacturer of sports apparel, but not many people think about how Nike employees are being treated in factories (Sanders, Kaptur). The inhumane working conditions that workers face in Nike can be analyzed through its background/history, the current issue, and the solution.
“There is an immutable conflict at work in life and in business, a constant battle between peace and chaos. Neither can be mastered, but both can be influenced. How you go about that is the key to success.” - Phil Knight. Phil Knight’s come up story is one of the best of all time. He started out by selling shoes out of the back of his car at track meets and went on to own a billion dollar company. Whether it be their many unique shoe designs, their fashionable clothing lines, or their early struggles, Nike is always making an impact in the sports and economic world.
Nike was founded in 1964 as Blue Ribbon Sports and initially operated as a distributor for the Japanese shoemaker Onitsuka Tiger (now known as Asics). It officially became Nike Inc. in 1971.The company was founded with just $1,200 in the bank. It was created by Bill Bowerman — a track-and-field coach — and Phil Knight, a middle-distance runner from Portland who was enrolled in the University of Oregon.
Through Adidas’ globalizing structure and their outsourcing to different countries, the company’s influence over labor rights has weakened and the standards have diminished, especially in Asian countries. While the company has the power over these issues, Adidas is not seen to be mending issues until public forces shed light and put pressure on them.