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Business Ethics in Today's Corporate World
ethics within corporations
ethics within corporations
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Case Study: Nike, Inc. International Business and Trade Unit II (Prof. Sosland) Vera Tillmanns 1. Company Ethics: Nike Inc. in Cooperation with its suppliers Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing. 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. 1.1 Nike Responsibility Concept: Explanation and Critical Analysis Since the pressure of the NGOs on the company has been growing, Nike developed a concept that promises to improve the monitoring of social and environmental standards for their contractors. According to Nike’s principle “Nike was founded on a handshake” , the company wants to work together and bind their business partners on the Responsibility Concept. Nike presents a symbiotic relationship of all parties based on their stated values of “trust, teamwork, honesty and mutual respect.” SHAPE stands for Safety, Health, Attitude, People and Environment and is combined with the Code of Conduct. The Responsibility Concept has been distributed to the manufactures since 1992. Nike introduced a new version of the Code of Conduct in 1997 which is oriented on the basis of human rights. According to article 23, a person has a right to work, which will remunerate him/her to such a degree that he/she will be able to live humanely.
The first reason why it should be a matter of a concern to Green Plc is that the workers are underpaid and are forced to be in a harsh working condition. To illustrate this issue, Nike factory workers in Tangerang, Indonesia were paid basic wage of 1,250,000 rupiah (73.94 pounds) and this
Corporations in the United States have proved time and time again that they are all about profit and not about what is good for America. One example of this is the fact that many corporations have factories in other countries, or buy from other corporations that do. Nike (an athletic shoe and clothing company) produces most of their shoes and apparel in factories in other countries, including Japan, South Korea, Indonesia, China, Vietnam and Malaysia. According to Nike’s factory disclosure list released May 2011, only 49 of it’s over 700 factories are located in the U.S. (Nike, Inc.) This means that thousands of jobs that could be filled by needy Americans are instead being filled by workers in other countries. This reason that Nike and other corporations outsource is very simple, it is very cheap to do so. In an excerpt from Jeffrey St. Clair's book “Born Under a Bad Sky” the author describes the vast differences between Nike’s production costs and retail prices. “In Vietnam, it costs Nike only $1.50 to manufactu...
Nike has been under a great deal of pressure to correct the misdoings that have been done regarding production facilities in the East. As Nike is responsible for these plants, their reputation has been tainted with increasing public debate about ethical matters. While Nike still promotes itself as one of the industry leaders in corporate social responsibility, workers in Asia are still forced to work excessively long hours in substandard environments and are not paid enough to meet the basic needs for themselves or their families. They are faced to a life of poverty and are unfortunate subjects to harassment and violent threats if they make any attempt to form unions or tell journalists about labour abuses in their factories. Phil Knight’s speech regarding Nike’s steps to improving human rights in Asian countries was a step in the right direction for Nike, but it would have been much more effective had Nike fully followed through with these initiatives.
“At NIKE, we are on the offense, always. We play hard, we play to win, but we play by the rules of the game. This Code of Ethics is vitally important. It contains the rules of the game for NIKE, the rules we live by and what we stand for. Please read it. And if you've read it before, read it again. Then take some t...
First, we want Nike to play a role in effecting positive, systemic change in working conditions within our industries. If our efforts lead to a workplace oasis -- one solitary and shining example in a desert of poor conditions -- then we’ve not succeeded. Even if that single shining example were to exist (and we’re not claiming it does), we’ve learned that positive changes won’t last unless the landscape changes. Our challenge is to work with the industry and our contract manufacturers to collectively address these systemic non-compliance issues that our data so highlight. This is one of the key reasons we made the decision to disclose our supply base; we believe this could encourage other companies to do the same. Our belief is that in disclosing, the industry will find ways to better share knowledge and learnings. This, in turn, will facilitate the building of further partnership approaches that are built on best practice and gradually lead us to standard codes, standard approaches to monitoring, standard reporting and standard parameters for transparency. It’s our belief that for market forces to enable responsible competitiveness, consumers must be able to reward brands and suppliers using fact-based information. Compliance efforts need to be optimized, made affordable and demonstrate real return if better working conditions are to become widespread. Disclosure of our supply chain is done in an effort to jump-start disclosure and collaboration throughout the industry and support efforts towards that final goal of market forces, providing the tipping point for the mainstreaming of best practice.
These corporations are both large franchise companies and smaller independent companies. One corporation that has been under fire has been Nike. Nike is an American company that was started in 1964 by Phil Knight and Bill Bowerman. Originally founded as an apparel outlet in the sports industry, Nike has grown to be one of the biggest sponsors for athletes worldwide. Throughout its many years in production, Nike has proven to be beneficial for the developed world. Nike has offered a resource for athletes as well as an array of cheap athletic wear for all people. However, with cheap production costs come hard labor and poor worker rights for those in developing countries. Nike has been known to say that they have worked very hard to create jobs overseas, but what they fail to mention is the jobs they have created are sweatshops, where the workers are treated in less than acceptable environments. These workers are also being paid little to nothing, which makes it extremely hard for them to provide for themselves let along their
Nike has suffered attacks from a number of agencies and organizations throughout the world that claim that the workers who manufacture Nike shoes are denied the basic essentials of living—a fair wage and decent benefits. All that occurs while several sport megastars are reaping in multimillion dollar contracts to promote Nike shoes. Over the years, Nike formulated tactics to deal with the problems of working conditions and compensation in subcontractors. It hired a strong consultant (Andrew Young), commissioned an independent audit of its subcontractors, and spelled out initiatives to improve those working conditions. Still, Nike’s critics were not satisfied. They protested on university campuses and accused Nike of continuing to hide the conditions of workers.
Spar, D.L., 2002. Hitting the Wall: Nike and International Labor Practices. Available from: http://www.homeworkmarket.com/sites/default/files/q/17/11/700047-pdf-eng.pdf [Accessed 24 April 2014].
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.
The reason that I reach these judgments, for the most unethical decision, Nike lacks of social responsibilities in term of both legal and ethical responsibilities. Although, there were some people agree with sweatshops because it was better than the firm leaves the workers, it was the best of the workers’ only bad options or it was a path from poverty to greater wealth, but if at least Nike improved their workers working standards, it would help to better increase their quality of lives.
Adidas comply with International Labor Organization, and follow the code of conduct of the World Federation of Sporting Goods Industry. Adidas`s workplace standards applies to its sites globally, and to their supplier factories across the world. The standards cover health, safety, labor rights and environment protection. They revise the standards from time to time to meet the changing environmental requirements. (Adidas11, 2015).They made sure that their suppliers are following the standards properly by conducting audits from time to time across all of their facilities across the world. This shows their consistent effort and drive to maintain the sustainability efforts within their control. Adidas being a member
This paper will give a brief introduction about the history of Nike Sweatshops which will shed the light on their public image and their manufacturing process. It will further move to the suggested alternatives, what facts impact them, their stakeholder and their impact on the economic as well as social basis. In the end, it will discuss if the given choices are legal and ethical or not.
Materialistic things consume today’s society, whether it is cars, clothing, or jewelry, in a sense we rely on these objects for our happiness. Companies such as Nike, Gap, and Toms, have all had major success do to their loyal customers, who seek the name brand logo of their company. These companies have continued to grow tremendously, making billions of dollars; the companies strive to find ways to outsourcing its manufacturing, in hopes of making more and more profit. Profit is not the only thing that rises, many questions and investigations have occurred, exposing the poor ethical choices these businesses have made. Nike, one of the most well- known and profitable companies have experienced this heavy scrutiny first hand. Throughout this essay the reader will gain a better understanding of Nike’s poor ethical business decisions and what actions they took in order to repair their image.
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.
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...