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ethics in modern business life
ethics in modern business life
ethics in modern business life
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Social Responsibility is not new to the human race, it has been there for decades. Businesses were more concerned mainly with their economics results “Today, however, businesses must also reflect on the legal, ethical, moral and social consequences of their decisions” (Anderson, 1989, 15). Organizations worldwide consider the society’s interests by taking responsibilities for their activities on customers, employees, shareholders and the communities. This article will be concentrating on the strengths, limitations and challenges of businesses applying ethics and social responsibilities within their supplier networks. It will cover Nikes productions practices and its corporate social responsibility. Corporate Social Responsibility (CSR) is there for organizations to comply with its practices. It’s responsibility is to improve the quality of people’s lives, by following the ethical business conduct, employment practices and health and safety only to name a few. Before, companies were more concerned with how much money they were making but now they need to follow these practices. Auditors monitor Organizations to make sure that they are following the CSR guidelines. However not every organization seem to be inhering to follow such practices and many are under pressure by media, activists, competitors and other organizations such as NGO’s. Nike products are manufactured by more than 800 suppliers in about 51 countries. Including Asia, South America, Australia, Italy, Turkey, Canada and the US. But reports state that the problems were in the Asian factories. According to the article done by (Richard LOCKE, Thomas KOCHAN, Monica ROMIS and Fei OIN). Nike is the world’s largest athletics shoe company. Their main duty is to keep ... ... middle of paper ... ...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.
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...
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
In June of 1996, Life magazine published a article about Nike’s child labor that was occurring in Pakistan. The article showed a little boy who was surrounded by pieces of Nike sports gear. The articles were shoes and soccer balls. Nike then knew then that they had to make some major changes in the way they were producing their items.
Nike failed to address corporate social responsibility early on because in the 1990’s corporate responsibility was not that important to corporations yet. Nike failed to communicate with top management. The move to manufacture their products to Vietnam, China and Indonesia provided cheap labor. The manufacturing plants in ...
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.
Nike is a worldwide global corporation that has its shoes manufactured on a contract basis in places like Asia, China, and Vietnam. Although it does not actually own any of the manufacturing locations, it has long been accused of having its products manufactured in facilities that exploit workers. Although Nike admits some wrongdoing in the manufacturing facilities of its contractors, it claims to have started a commitment to improve working conditions in those facilities.
The essay, “The Noble Feat of Nike” by Johan Norberg basically talks about the effects of Nike going into third world countries, particularly Vietnam. Norberg explains how Nike’s factory gains from being in its desired location, Vietnam. Vietnam being a communist country comes to Nike’s advantage, because if they were located elsewhere they would have to pay workers higher wages and use more of their machines. Workers in these countries are provided with an air conditioned building with regular wages, free meal plans, free medical service, and training/education to operate the machinery within the factory. The workers find all of this beneficial and in their own favor because of the fact their earning double to five times the amount in wages than if they were working outdoors on a farm. This great deal, blinds them to notice the meaning behind the company’s location in Vietnam. The Nike factory was rather clever in making their location in that specific area to gain benefits for Western owners. The catch Nike gains from is simple. The owners pay factory workers only a small monthly sum from what they make selling the shoes to customers. Globalists state that the company doesn’t pull this fast one on the Western population because of our advancements compared to the Eastern countries. Western people would protest and strike to demand better wages for their work, but the people in Eastern countries have no choice but to deal with the injustice in order to support their families and educate their children.
In addition, Nike is a worldwide known company and it is among the top empires just as Adidas and Puma. It has more than 900 factories which are located in an estimated 50 countries, they also have more than 660 000 workers which most of them are women. However, although they have a lot of factories around the world, their main manufacture factories are located in China, Indonesia, and Vietnam which are basically countries with the most minimum salaries rate given to the workers. Nike chooses these locations for their production of their merchandise because of the cheap ...
Nike’s Asian operations had previously continued to soar generating US$300 million in 1994 in revenues to a whopping US$1.2 billion in 1997. However based on the Asian economic crisis, this had adversely affected revenues, while regional layoffs were inevitable. Nike also performed well in the European market generating about US$2 billion in sales and a good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic downturn. In the Americas (Canada and the U.S.A.), Nike experienced a growth rate for several quarters. The U.S. alone generated approximately US$5 billion in sales. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with “great potential for the future”.
Nike has not created and implemented an effective approach to social responsibility. When Nike published a Corporate Responsibility Report in 2005, they realized its business processes and production pressures often clashed with the code policies and led to violations and employees and managers cutting corners. Nike also designed a self-run monitoring program to rate factories on a letter scale based on the requirements in areas such as work hours, wages, grievance systems, chemical management, fire safety, and protective equipment. However, the results failed to end any of the significant problems. Reports of a factory in Bangladesh stated management punished employees for learning about labor rights, and reports of a factory in Malaysia discovered workers paying an outrageous recruitment fee and being denied their passports until it was paid off. While Nike has made attempts to improve conditions in these sweatshops, there has been little proof of any serious
manufacturing products overseas, specifically in Bangladesh. The focal point of the article was how Nike was attempting to achieve the lowest possible manufacturing costs while still maintaining worker safety and producing high-quality products. Both consequences and benefits of manufacturing in foreign companies was discussed in the article. In addition to how manufacturing costs affect the financial outlook of the company, the article addressed how having factories in less-developed countries has an impact on public opinion of Nike.
A company has an economic obligation. It must earn a favorable return for its stockholders in the restrictions of the law. But, corporate social responsibility means that organizations have also ethical and societal responsibilities that go past their economic responsibilities. CSR needs organizations to develop their documentations of their responsibilities to include other stakeholders such as workers, customers, suppliers, local societies, state governments, international organizations, etc. Ethics could be seen as a fundamental component of individual and group activities at the heart of organizations’ errands.
The Nike Company is a manufacturing as well as retailer type company. There are 800 worldwide factories for Nike brand and products. It is true that most of the Nike brand apparel is manufactured out of the United States. It’s all happen due to independent contract manufactures those are situated in different 34 countries. Nike is the one of the largest seller of athlete footwear and athlete apparel in the modern world.