Nike Case 1
1. Should Nike be held responsible for working conditions and foreign factories that it does not own, but where subcontractors make products for Nike?
Yes, Although Nike may have their responsibilities removed from some areas technically; it clearly has an obligation to be certain that the exploitation by the subcontractors do not occur. Different wages and the working conditions are negotiated by Nike. If Nike decide that they are going to make some improvement in the working condition of their workers, then the changes implemented in the working conditions should be helpful to the workers. Nike is a public owned firm that has a goal on increasing the wealth of the shareholders. Factories that were located in Asian countries were very happy, because they felt that the working conditions that were provided by the manufacturer of Nike and the wages were the same from other sources.
2. Do you wear Nike Products? If so why? If no then why and what brand do you prefer? What would you do if you were in a position at Nike to decide whether to continue or review your labor practices in a foreign country?
I wear Nike products because they are dedicated to sports, fitness, performance and they impose their core belief that anyone can be an athlete and be on the top level performance if they “just do it” If I was in a position to decide on reviewing the labor practices in the foreign countries, I would be honest and transparent about the labor issues the firm is facing. It is true that the American consumer would not buy products that are made under abusive conditions. Raising the minimum wage that is paid to workers, improve oversight of the labor practices, and make sure that the factories have clean air at all times.
3. An income of $2.28 a day, the base pay of Nike factory workers in Indonesia, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given this, is it correct to criticize Nike for low pay rates for subcontractors in Indonesia?
No, it is not fair to criticize Nike. I strongly believe that it is the local economy of a country that determines whether the wage is too low or not. Nike factories in Indonesia are allocating income double of that of about half of the working population in Indonesia. For this, Nike should be applauded for giving the locals the working opportunities. As much as the Nike factories are improving the unemployment condition for the locals, the local government would not help in improving the community so that they can improve their economy. Then, the Nike will be seen as the greedy corporation because the locals will be dependent on the factory no matter how bad the company treats their workers; this will not boost their economy.
4. Could Nike have handled the negative publicity over sweatshops better? If you were in charge, what would you have done differently? Not just from the public relations perspective, but also from a policy perspective?
I think that Nike could have done a great job by not only addressing the issue of age and poor working conditions, but also the pay rate as well. Nike chooses to address certain critics and leaving the main issue behind which was the pay rate.
Charging premiums for their products, Nike can afford to be more accurate when selecting subcontractors and promoting the working conditions in their factories. Nike hired Andrew Young so that he could assess the working conditions of the factors around the world that were operated by the subcontractors. He spent two weeks and being able to visit 15 factories only. He made a mildly critical report. It is so obvious that the report he made while on his tour was subjective and this led to even more critics from the human rights and the labor groups. Instead, Nike should have been more objective to show that there are opportunities for improvement while at the same time making more positive publicity from eliminating trouble issues.
5. Do you think Nike needs to make any changes to its current policy? If so, what? Should Nike make changes even if they hinder the ability of the company to compete in the marketplace?
I think that Nike has to make some changes, their policies are of old days and times have changed much. One strategy that they need to employ while changing their policy is to involve international agencies. Nike has some duties to the shareholders and improvement in the competitive market. The new policies should not to get the business down because it will not be good to workers either but that which will help the business to compete with other while at the same time improving the lives of the workers.
6. If sweatshops are a global problem, what might be a global solution to this problem?
Sweatshops are a big problem in the world for different firms. Most of the firms are looking for low cost subcontractors in every part of the world; therefore sweatshops are a global problem. The possible solutions are change or modify with minimum pay and age. Firms can get cheap labor and low cost of manufacturing in some countries. However, by having the low cost labors, they promote the free trade and improve the quality of life.