Nike Case Study Essay

This essay analytically evaluates Nike and the company’s recovery from its ethical and strategic missteps to its progressive practices in becoming a socially responsible leader in its industry. In spite of Nike’s efforts in striving to develop a better reputation, the company has room for improvement in achieving higher ethical standards. The first section of this paper supplies a brief company background of Nike and the accusations against the company, establishing the context for its ethical and strategic errors. The second section assesses Nike’s response to societal and consumer concerns regarding its contract manufacturing. The third section explores the challenges Nike faces in the future. This paper closes by reviewing Nike’s current

However, in analyzing the leadership role and corporate governance of its external supply system, Nike’s “excessive concern with maximizing profits permitted and even encouraged practices that were injurious and destructive” (Hosmer, 2011, p. 36), resulting in the failure in establishing control over its supply chain. It left Nike with the inability to monitor the workplace decisions or provide system checks with its contractors in order to ensure control over policies and employment practices in these foreign markets. The disconnect between management and contractors left gaps in the supply chain that senior leadership should have recognized and been made aware. Nike essentially minimized their contract requirements, overlooking fair labor practices in order to preserve low production costs. With each consecutive outsource in Nike’s production line, control and attentiveness to its supply chain steadily decreased. The sweatshop workers were technically employees of subcontractors hired by the contractors Nike retained for the production of its goods. Therefore, from Nike’s perspective, since Nike did not hire the subcontractors, they were not Nike’s problem. Thus, Nike took the defensive stance, the first stage in corporate responsibility (Zadek, 2004, p. 126), claiming

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Ferrell, O. C., Fraedrich, J., Ferrell, L. (2013). Business ethics: Ethical decision making and cases. (9th ed.). Mason, OH: South-Western/Cengage Learning.

Greenberg, J., & Knight, G. (2004). Framing sweatshops: Nike, global production, and the American news media. Communication & Critical/Cultural Studies, 1(2), 151-175. doi:10.1080/14791420410001685368

Hosmer, L. T. (2011). The ethics of management: A multidisciplinary approach. (7th ed.). New York, NY: McGraw-Hill/Irwin.
Nike. (n.d.). Supply chain disclosure. Retrieved from the Nike web site