Nike Supply Chain Case Study

Oversight of Supply Chains

In addition to MNCs, domestic corporations often outsource manufacturing and purchase supplies from foreign countries. These corporations have come to realize they cannot dismiss their responsibility for unethical practices of these suppliers. Nike suffered reputational damage and a drop in stock value when the unethical practices of factories in Indonesia and unhealthy working conditions in factories in Vietnam which produced goods for Nike became public knowledge (Locke, 2005). This led Nike to change its oversight of the factories which produce its merchandise (Gerardin, n.d.). To avoid the fallout from unethical behaviors of suppliers, corporations should educate their supply and manufacturing partners about

1, 2010). Incorporating sustainability into business goals and culture has become more than just the ethical thing to do, it can give a company a competitive advantage and increase their bottom line returns (Oppenheim & Stuchtey, 2015). Additionally, businesses that practice environmental ethics such as reducing emissions, efficient allocation of scarce resources, recycling, and reducing energy consumption benefit from increased trust and brand loyalty (Ewing-Chow & Soh, 2009). Some ethical activities, such as reduced energy consumption, have obvious benefits for a company because they reduce the cost of production. For a financial institution, electronic banking channels can decrease labor costs while electronic statements reduce cost of production. Both of these are environmentally beneficial as electronic banking channels allow customers to conduct business without driving to a brick-and-mortar branch and electronic statements reduce paper consumption. An added soft benefit is as customers enjoy the convenience of these services brand loyalty is expanded for the bank. Corporations that do not demonstrate environmental ethics may suffer adverse consequences. For example, a company that is caught illegally dumping toxic waste will not only face fines and potential criminal charges, but public fallout as consumers may boycott the company’s product to show such behavior will not be tolerated. For all these reasons, it is vital that companies address environmental concerns in their ethics