The issues within the nike manufacturing practices Essay

To be competitory in the market every bit good as maintain the fabrication costs low, hence, Nike had shifted its contract to moo labour cost states such as China, Vietnam Indonesia, Pakistan and etc. There were issues originating and deeply impact on Nike repute particularly the accusals on homo and labor rights misdemeanors by labour rights militants and the mainstream media. The accusals were lacks in working environment, wellness and safety conditions and low rewards and indiscriminate in hiring and fire patterns in the mills. Roberta Baskin ‘s CBS had reported about the conditions in Nike ‘s fabrication mills in Indonesia.

Even though subcontracted work to hapless states had created employment, the wage was “ simply $ 1.60 a twenty-four hours to Vietnam mill workers when the life pay is about $ 3 per twenty-four hours ” ( Hill, 2009 ) . In this state of affairs, whether it is ethical for Nike to handle its labours in this manner?

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We might measure the patterns by utilizing those rules:Utilitarianism is a moral theory that we should move in ways that produce the most pleasance or felicity for the greatest figure of people affected by our actions. By utilizing useful logical thinking, the following are the good and bad sequences:Good ConsequencesBad ConsequencesIncrease profitableness of the company.Labours public assistance are ignored.Stockholders wealth is maximised.

Company repute has been affected severely by those patterns.Customers ‘ trueness towards the company becomes a uncertainty.From the overall effects even it is found that by increasing net income of the company can guarantee the stockholders ‘ wealth, it is more of import to take attention of their employees ‘ public assistance and addition trust and profitable relationship between its clients. This is because employees and clients are the primary stakeholders of the company who have ability to act upon the concern of the company and they are those whose continues association is necessary for a house ‘s endurance. Therefore, if in long term, we will establish that the unethical patterns of Nike will damage stakeholders and changed the perceptual experience even of the stockholders to toward the company.

Principle of RightsThe basic human rights under Kantian are the rights that are the consequence of peculiar functions, particular relationships or specific fortunes. Nike as an employer should see the rights of its employees to hold a safe working environment and a competitory pay alternatively of being sweatshop labor. Although presently ( is it? U believe? If nt presently so merely cancel this word ) Nike is making a much better occupation with foreign labour dealingss compared to other corporations, Nike should non be comparing itself to other companies, instead it should be keeping itself to the absolute highest ethical criterions it can achieve.Principle of DutyBased on this rule, rightness of our actions depends on whether we perform our responsibilities. If we fail to transport out our responsibilities in society, our Acts of the Apostless are considered as unethical or incorrect. In our sentiment, we felt that all the contractual mills in developing states or any farther subcontracted out work of Nike has a moral responsibility to guarantee the healthy and fiscal wellbeing of all the people who work for it.Categorical ImperativePrinciple of universalizability said that we should handle others the manner we want to be treated. Nike ‘s direction squad should set themselves into the laborer ‘s places and therefore they will happen out they would non desire their employers to go against their right to hold safe on the job conditions and just rewards.

As a consequence, Nike ‘s pattern on sweatshop labor is incorrect. Therefore, it has to work on corporate duties to do certain its patterns have improved.Besides that, rule of terminals agencies that we must esteem humanity and ne’er exploit others to accomplish our ain benefit or intent. Nike ‘s act of exploitating other human existences such as the sweatshop pattern is to function its ain involvement where to maintain the low fabrication cost.Principle of Equal LibertyEach individual has an equal right to be treated every bit under rule of equal autonomy. Obviously, Rawls would differ with Nike ‘s labor and concern patterns as it is unethical for Nike to overwork its employees or possibly pay them meager rewards, merely so it can provide places to America.

Beside, In order to carry through the outlook as an employer, it was necessary to appreciate single diverseness and go more dedicated to offering equal chance for each person.

Issue 2: Nike ‘s Manufacturing Practices on Child Labors


In this issue, Nike ‘s contracted mills hire kids to work overtime and below minimal wage as the kids are non capable to do right determinations and unable to distinguish pros and cons of certain affairs. Hence, kids have been exploited to work for the subcontracted mills. The issue being is: whether it is ethical for Nike to engage child labours in cut downing fabrication cost?


UtilitarianismBased on utilitarianism, below is the comparing of good and bad effects of this issue:Good ConsequencesBad ConsequencesNike gets inexpensive labor and low cost installations and hence, low cost of production allows Nike to put lower monetary value on its merchandise to pull more consumers.Children suffer psychological and physical injuries.Bring in foreign investings and occupation chances and hence, alleviate poorness degree for the states that Nike are runing in.

Denied chances for kids ‘s instruction.Highly low wage still can non relieve poorness of the states.From the overall effects to the full society, Nike had violated the theory of utilitarianism As one of the largest transnational companies, Nike should hold carefully evaluated the result of utilizing low cost labours.

From the analysis, engage kid labors to function its ain involvement to maintain low labor cost is unethical.Principle of RightsChilds have their right to acquire their instruction alternatively of working as they are under age harmonizing to the jurisprudence of the state. Therefore, Nike should non engage kid labour which violated their right to be stay in school by the clip.Categorical ImperativeUnder the rule of universalizability, Nike should set itself into the state of affairs of the kid labour and therefore it will recognize that it besides do non desire to work under such on the job status with the low wage at that scope of ages.Nike besides should non work the kids to function its ain involvement to maintain the low labour cost where the act is unethical harmonizing to rule of agencies.Principle of Equal LibertyChildren in those Nike ‘s contracted mills ‘ states shall be given an equal chance and treated as the kids in other state as they are under the age to work and say to hold their instruction.

Issue 3: Contract between Nike and University of North Carolina


In order to work on CSR after happen those negative issues which profoundly affected the company ‘s repute, Nike has entered into societal contract with University of North Carolina.

Nike contract requires all UNC jocks to have on its equipment. In this issue, whether it is ethical to adhere all UNC jocks under the contract?


UtilitarianismBased on this construct, there are some benefits get from the contract, such as, Nike has pump in money which conveying pleasance to the athletic section and the pupil jocks by virtuousness of have oning Nike equipment, bettering Nike repute and rebuild assurance in public. However, university should see how the contract would impact the academic unity and ends of the establishment. It is more of import to look at the issue from the position of jocks and establishment which will convey more effects to the house.Rawl ‘s theory of single autonomyUnder this theory, it will differ with the contract for the lone ground being the jocks have lost their single rights to take whether or non to have on Nike ‘s equipment.

Even if the establishment has maximizes pleasance for itself, but at the same clip infringes on the pick of its jocks. There is no right for the societal establishment to take away a basic single right. Besides, Nike besides should non curtail the single right to hold their ain pick to have on other company ‘s equipments.Principle of DutyHarmonizing to this rule, the University besides has a moral duty to itself and Nike. It is morally obligated to utilize its place of power to promote Nike to work harder to better its concern patterns.

Besides, it besides has a moral duty to endorse out of a contract with any corporation that lacks ethical concern unity.

Issue 4: Enhancing Nike ‘s images by utilizing subscriber


In this issue, Nike has signed with some well-known jocks as its subscribers to project a better athletic image for itself. For illustration. Nike has signed an subscriber contract with celebrated hoops fable, Micheal Jordan. Accord to the contract, Nike has created more gross from his fans with establishing more new series of merchandise.

In return, Nike paid 20 million per twelvemonth to Micheal Jordan as its subscriber harmonizing to their contract. At the mean while, labours of its contract mills have paid the low rewards which merely above the minimal criterion. In this issue, whether Nike is ethical to pay its labours and endorses below the belt?


UtilitarianismBased on this rule, there are merely benefits the company and the subscriber entirely. While the labours are suffer from the low rewards to go on their live ( better word ) .

That is more good to more parties if Nike can utilize the money paid to endorser wo pass on employees ‘ public assistance. Therefore, we think that Nike is unethical to pay subscriber such a big sum of money alternatively of taking attention its employees ‘ public assistance.Principe of RightUnder this issue, the employees have right to acquire a just rewards and merit to acquire a better intervention.Principle of UniversalizabilityThat is unethical for Nike to handle its employees as terminal in themselves and ne’er merely every bit means to its ain terminals.Principle of JusticeEmployees should hold a just rewards and merit to acquire their public assistance where Nike should handle them every bit with the subscribers. It is unjust to pay the subscriber so high but without taking attention its emplyees ‘ public assistance.

Actions taken

From the instance survey we know that the corporate civilization in Nike did non hold a strong ethical focal point which was to promote its employees of the mills in many other states to pattern the ethical behavior in the yesteryear. However, Nike so implements some attempts to instil ethical behaviors and patterns and subsequently became an ethical corporate in the industry after traveling through some critical period with negative issues on its concern patterns.In our sentiment, we feel that Nike has used the integrity-based attack which is a value-driven attack with accent on employee duty for ethical behavior.

It is a better attack which the employees are instructed to move with unity and behavior concern traffics candidly. Besides that, Nike may put ends of an integrity-based attack as it is a broader and more expansive application to the house. For illustration, keeping trade names and repute by guaranting the good quality of merchandises and honestness to its consumers, and making a better working environment for employees whereby the safety of employees is emphasized.Furthermore, we think that presently Nike focuses on the stakeholder theory alternatively of stockholder theory in its house. All the stakeholders groups and their well being should be taken into history whenever the company wishes to take any important managerial determination but non simply concentrate on fiscal and economic relationships with proprietors.

In the past decennary, Nike has taken CSR as its societal contract. For illustration, University of North Carolina had entered into a corporate sponsorship understanding with Nike. On the other manus, Nike besides undertook CSR because of its enlightened self-interest where CSR activities bring commercial returns to the house. Particularly after the harm by the media to the company ‘s repute, Nike started to set about CSR activities in order to heighten its repute and reconstruct its good image.

However, Nike now meets its criterion for being a good corporate citizen after doing advancement for old ages.

Corporate Social Responsibility

It is a reactive construct where concerns try to make the lower limit to carry through the outlook of stakeholders. In the article, there are some treatments on Nike ‘s CSR patterns:Environmental SustainabilityNike had developed ReUse-A-Shoe Program and so expanded it by partnering with the National Recycling Coalition to advance environmental-friendly patterns and promote consumer about this issue.Code of ConductThis is the first measure taken by Nike to better the on the job conditions in its mills. It complies with the rule of justness, fulfils the responsibilities as an employer to make the coveted degree of employer duty. Other than comply with the Torahs and ordinances, the company besides strives to fulfill the outlook as a leader.Factory TransparencyThis is the corporate societal reactivity undertaken by Nike as it is the proactive actions where the house anticipate the demands of stakeholders and seek to carry through those demands before the stakeholders demand them to make so. Nike had publically disclosed its supply concatenation as it believes that can be more successful in monitoring and doing alterations as one time issues have been uncovered, non merely in its ain mills but in an industry-wide footing.

Furthermore, execution of Balanced Scorecard for its providers helps the house better buttocks mill conformity with the codification of behavior.Corporate Responsibility BoardNike developed a Corporate Responsibility Board in 2001 to reexamine policies and activities and do recommendations to the board of managers sing certain of import Fieldss. Through the attempt of the CR board, there were important betterments in its concern patterns whereby the employees are now cognizant of their rights and have the chance to be educated and well-trained.PhilanthropyEach twelvemonth, Nike proactively donates merchandise and part in hard currency to non-profit organisations and NGOs making societal alterations through athleticss catastrophe alleviation attempts around the universe.Presents, Nike has focused on invention, coaction, transparence and protagonism to fix the company to boom in a sustainable economic system. There are some of import enterprises for the company that are included in the CR study which includes Considered Design, GreenXchange ( GX ) , Lean and Human Resource Management ( HRM ) , Sport for Social Change, Energy and Climate Change Strategy.

In 2008, Nike launched a footwear energy efficiency plan with five contract makers. Nike ‘s committedness to coaction on this undertaking has shown first-class early consequences where the contract mills absolute CO2 footmark was down 6 per centum despite a 9 per centum addition in production.



Due to the ethical issues discussed in the Nike instance, we have come up with several recommendations on how to work out the jobs occurred throughout the instance. We hope that this can besides function as a guideline to other companies as good.First of wholly, the company direction should be stricter on the regulations and criterions set by themselves. This will do certain that they follow or obey the regulations of the company. In this instance, the top direction of Nike in the US should guarantee that all the other retail mercantile establishments or mills all around the universe follow a standard process in everything that they do. This will assist them in supervising all the other mercantile establishments around the universe. This can besides assist avoid the issue of hapless conditions, child labor, widespread torment and maltreatment that has happened in some states. When other makers all over the universe know the criterion and codification of moralss that they should follow, they will non make what they have done that caused all the issues to originate.

This is because they have a guideline to follow and they know that whatever process that they are making will be monitored by the top direction. The top direction should do certain that they provide a healthy and safe workplace for all its employees. This is because their employees have the right to be in a healthy and safe workplace. A hapless status of the workplace is incorrect and is one of the chief allegations that Nike had to cover with.Next, the direction squad and employees should besides be sent for developing one time in awhile. This is of import as it helps to set up a better corporate civilization. This civilization shapes the people who are members of the organisation as it is a blend of thoughts, beliefs, imposts, traditional patterns, company values, and shared significances that aid define and usher normal behavior for everyone who work in a company.

It is of import to continuously develop its employees so that the employees become more disciplined and responsible. They will ever believe of the best involvement of the company and non be easy influenced by other factors that might convey the company down. This will assist them hold a sense of answerability and duty towards the company.One of the chief issues that Nike was confronting was child labor. Therefore, we have come up with an thought that might assist work out this job. Nike began to offshore its production of footwear and other featuring equipment because it wanted to stay competitory and maintain fabrication cost at a low. To work out this, alternatively of utilizing child labor, Nike can really put in and utilize machines in it production.

At the get downing it might be a small dearly-won but in the long tally, it will assist the company salvage a batch of money. It is non merely faster, but it besides helps Nike salvage money in the long tally and the direction does non hold to worry about any child labour allegations or hapless on the job conditions.Besides that, the top direction of Nike can besides execute employee monitoring. The sort of employee monitoring meant over here is look intoing out the work done by the employees. They could possibly direct some undercover agents or 3rd parties to see how the employees perform their work but at the same clip non allow the employees know that they are being watched.

Last, the moralss and conformity system should besides be improved. Presently, there is merely one individual in charge of 10 mills and review is merely done for approximately 25 per centum of the mills. The top direction should do certain that it inspects every mill. This can be done by puting up a chart or timeline whereby they have already discussed and come to an understanding on when and which mill should be inspected throughout the twelvemonth. This is a more systematic attack and the direction must do certain that they follow what they have drawn up.


Runing a company every bit large as Nike is decidedly non an easy occupation as the direction has to fulfill non merely the stockholders of the company, but the stakeholders excessively.

No affair what has happened in the yesteryear, Nike has learned its lesson. Staying competitory and maintaining fabrication costs at a low should non be the lone aim of the company. Due to its carelessness in certain countries, Nike ‘s allegations of hapless conditions and child labor has become a planetary issue. This is non merely bad for Nike ‘s image but it has for good tarnished its repute.

However, Nike ne’er gave up and has continued to win back the Black Marias of its stakeholders by transporting out a batch of CSR. Even though it may still hold a long manner to travel in the country of corporate duty, it can be seen that it is easy having good responses from the industry. Nike will ever go on to be a major trade name throughout the whole universe.


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