Nowadays, it has been acknowledged that having an ethical business could determine the future business success. According to the 2015 Edelman Trust Barometer, consumers purchase a particular product because of their trust on the company produced it (Edelman Berland, 2015). Therefore, more company has instilled their ethical values to operate their business. Nike’s corporate as one of multinational enterprises (MNEs) has also implemented its code of conduct and code of leadership standard. The purpose of this policy is to ensure the ethical practices in their business. The company has revised these conducts since Herbert’s 1996 (cited in DeTienne & Lewis, p.361) criticized Nike as a giant pyramid which repress its labours. This critique was …show more content…
These continuing pressure impacted on the negative image and decreasing revenue of the company. Consequently, the ethical practices of Nike’s corporate have argued until now. Thus, this essay will discuss whether Nike has transformed as an ethical company or not by evaluating sweatshop utilization, environment and corruption issues in this company. The use of sweatshop in multinational companies has become a common practice around the world. The main reason is because it could maximize profit by overseas manufacturing with lower labour costs. According to Skarbek et al (2012, p.556),the sweatshop is a factory in the developing country which employ the low wage labors in the poor working environment to produce goods for multinational enterprises. The proponent of sweatshop claimed that based on consequentialist approach, sweatshop has given a positive impact on the welfare of developing countries included workers and even future generations …show more content…
They underlie their opinion by a deontological approach which supports the equal treatment towards others as a response of our behaviour. In order to fulfil the dignity of workers in Nike supply chain, the company established code of conduct in 1992 and their amendments in 1997 and 1998. These ethical values were included recommendations for minimum wages, maximum working hours of 60 hours per week, minimum age for workers of 16 years old and 18 years old to work in a hazardous environment, prohibition on forced labor and minimum safety and environmental standards. However, some reports of sweatshop misconducts are still continued. For example, in 2011, there was a report of sweatshop abuse in Indonesia, where employees were still getting harsh treatment from their supervisors. This condition was also backed up by military power and lacked of monitoring from Nike. The use of regime power could also be seen in Russia, Vietnam, Sri Lanka, Thailand and
The controversial issue of sweatshops is one often over looked by The United States. In the Social Issues Encyclopedia, entry # 167, Matt Zwolinski tackles the issues of sweatshops. In this article Matt raises a question I have not been able to get out of my head since I have begun researching this topic, “ are companies who contract with sweatshops doing anything wrong?” this article goes on to argue that the people who work in the sweatshops willingly choose to work there, despite the poor environment. Many people in third world countries depend on the sweatshops to earn what they can to have any hopes of surviving. If the sweatshops were to shut down many people would lose their jobs, and therefore have no source of income. This may lead people to steal and prostitution as well. this article is suggesting that sweatshops will better the economy by giving people a better job than what they may have had. Due to this the companies contracting with sweatshops are not acting wrong in any way. This was a deductive article it had a lot of good examples to show how sweatshops are beneficial to third world countries. Radly Balko seemed to have the same view point as Matt Zwolinski. Many people believe the richer countries should not support the sweatshops Balko believes if people stopped buying products made in sweatshops the companies will have to shut down and relocate, firing all of the present workers. Rasing the fact that again the worker will have no source of income, the workers need the sweatshop to survive. Balko also uses the argument that the workers willingly work in the current environments.
Is it only a sweatshop to earn more money for the multinational company? Second, what is the present status of workers in developing countries? Then the most important one is the wages that multinational companies pay employees and the multinational companies’ relationship with workers in developing countries.
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.
Sweatshops are factories that violate two or more human rights. Sweatshops are known in the media and politically as dangerous places for workers to work in and are infamous for paying minimum wages for long hours of labour. The first source is a quote that states that Nike has helped improve Vietnamese’s’ workers lives by helping them be able to afford luxuries they did not have access to before such as scooters, bicycles and even cars. The source is showing sweatshops in a positive light stating how before sweatshops were established in developing countries, Vietnamese citizens were very poor and underprivileged. The source continues to say that the moment when sweatshops came to Vietnam, workers started to get more profit and their lives eventually went uphill from their due to being able to afford more necessities and luxuries; one of them being a vehicle, which makes their commute to work much faster which in turn increases their quality of life. The source demonstrates this point by mentioning that this is all due to globalization. Because of globalization, multinationals are able to make investments in developing countries which in turn offers the sweatshops and the employees better technology, better working skills and an improvement in their education which overall helps raise the sweatshops’ productivity which results in an increase
I. Introduction A sweatshop is a workplace where individuals work with no benefits, inadequate living wages, and poor working conditions (Dictionary.com). Sweatshops can be found all around the world, especially in developing nations where local laws are easily corrupted: Central America, South America, Asia, and in certain places in Europe (Background on Sweatshops). China, Honduras, Nicaragua, the Philippines and Bangladesh are the main places where most sweatshop products are made (McAllister). Often, sweatshop workers are individuals who have immigrated and are working in other countries.
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.
Ethics is the moral principle by which people conduct themselves personally, socially and professionally. “The perceived conflict between the traditional corporate objective of profit maximization and the overall desire for increased social welfare.” (Georgades, 2013) Although ethically responsible business practices are generally desired, opinions about what these practices are and how they should be encouraged are diverse, but the complexity of the current business environment complicates the development and implementation of resolutions to ethical issues towards the industry, and this is what is happening with Nike. Nike has been one of the biggest sports companies in the whole world, this makes this company really powerful, and they have been gaining more power over the years.
According to Consumer Finance, a U.S. government website, informs that, “companies spend about seventeen billion dollars each year on marketing”(ConsumerFinance).This means that companies are spending billions of dollars on billboards, commercials, and ads to get consumer’s attention. Nike alone spends, “a whopping $3 billion on demand creation”(ABC News). Nike is a well-respected shoe company since 1964 that has faced controversy since 1991’s scandal regarding their sweatshops in third world countries. Sweatshops are factories where manual workers are to endure low wages, long hours, and work under poor environmental conditions. Since then, consumers have question Nike’s ethics and truth to their empowerment signature “Just Do It”. Throughout
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.
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...
Nicholas D. Kristof and Sheryl Wudunn are Pulitzer Prize-winning New York Times journalists who spent fourteen years in Asia doing research on the country as well as the sweatshops of that country. In their article "Two Cheers for Sweatshops" they sum up clearly the misunderstanding of sweatshops by most of the modern world. "Yet sweatshops that seem brutal from the vantage point of an American sitting in his living room can appear tantalizing to a Thai laborer getting by on beetles." The fact of the matter is that sweatshops in the eyes of the actual workers are not as bad as they are made out to be, by many activists. Though many organizations that oppose sweatshops and their labor practices try to make the point that sweatshops do not have to exist. But one must consider the fact that, the companies that use sweatshops are creating at least some type of jobs for people that gladly accept them.
Nike, a billion dollar company, is notorious for hiring laborers from other countries like Vietnam and Indonesia to make their shoes. Workers are abused
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.
The response is meek, it’s all about the dough. Owners of clothing lines, shoe products, toy shops, electronic businesses and many more see the poor, stranded, unschooled children as a way to censored production costs and rise their incomes. Right now, agreeing to COOP America, “sweatshop workers earn as little as ½ to ¼ of what they need to provide for basic nutrition, shelter, energy, clothing, education and transportation”. Still, for a smaller amount than 1% of Nike’s yearly marketing budget, the salaries of all their employees could be doubled. Unfortunately, the health and well-being of their employees is not what they are fascinated in. As the Maquila Solidarity Network, a work and women's privileges organization has said, corporations hire youngsters for the humble reason that they are less probable to complain about illegal and unjust circumstances. And more significantly, they are less expected to form unions. They are uninformed of their human rights and also will naively have faith in all the falsehoods employers tell them about the cash they will be making. Once they are employed, it is nearly difficult for them to
Peter Robinson, CEO of Mountain Equipment Co-op, was correct when he said that “Ethics is the new competitive environment.1” Honesty, integrity, and transparency consistently rank at the top of qualities that employees and the public desire from corporate entities1. Matters of integrity and responsibility in multinational corporations are often complicated and, when poorly implemented, can be potentially damaging to a firm. Practically applying ethics and corporate social responsibility to business practices is a multifaceted challenge that requires both awareness and vigilance. Execution of ethical and responsible business practices necessitates consideration of international standards such as the UN Global Compact as well as structuring of company policy in order to best address the most pressing issues and violations. However, the application of the Compact can often be complicated and confusing. Expectations for firms emphasize attention to four major areas: human rights, the environment, labor practices, and corruption. I will be outlining business’ responsibility in these four areas, as well as analyzing the most important human rights, environmental, labor, and corruption issues and the potential challenges to implementing responsible practices in these areas. In order to look at these theories in practice, I will be considering how these issues apply to the diamond industry.