Assignment 4 Nike Case Study
Nike Case Study
Shiffaun L. Alston
Jack Welch Management Institute
Professor R. Chua
JWMI 550
Sunday, December 7, 2014
Executive Summary
Nike’s business model was based in outsourcing its manufacturing, then using the money it saved on aggressive marketing campaigns. However, the process of outsourcing work internationally proved to be problematic for Nike in a variety of ways particularly in regards to low wages provided workers and poor working conditions and environment. This paper intends to evaluate Jeff Ballinger’s argument against Nike, as well as determine how convincing Nike’s response was to Ballinger’s allegations. Lastly, strategies are provided as to how Nike moves forward after the smoke of the crisis has cleared.
Evaluation of Jeff Ballinger’s argument against Nike
Ballinger’s main argument that “any company has a significant obligation towards even its lowliest workers” is a very convincing one on many levels—social, ethical, and financial. Companies, such as Nike, make large profits and benefit tremendously from workers’ low wages in their international manufacturing companies.
After reviewing Exhibit 1 (Nike Inc. Financial History 1989-1999) and Exhibit 4 (Summary of Revenue and Expense Profile of Minimum Wage Workers by Demographic Type) it would appear that Nike could indeed offer its workers higher wages at least to a level where workers can survive and help their families, some additional benefits, and provide safer working environments in the manufacturing plants in the countries that Nike inhibits. Additionally, from further research and the general tone of the case study it appears that Ballinger may have personally had some issues with Nike and all that it stood for and represented. Furthermore, due to this personal dislike, Ballinger made an example out of Nike although other corporations that utilize Indonesian and Vietnamese laborers were presumably far worse.
Furthermore, considering the value chain model by
Shiffaun L. Alston
Jack Welch Management Institute
Professor R. Chua
JWMI 550
Sunday, December 7, 2014
Executive Summary
Nike’s business model was based in outsourcing its manufacturing, then using the money it saved on aggressive marketing campaigns. However, the process of outsourcing work internationally proved to be problematic for Nike in a variety of ways particularly in regards to low wages provided workers and poor working conditions and environment. This paper intends to evaluate Jeff Ballinger’s argument against Nike, as well as determine how convincing Nike’s response was to Ballinger’s allegations. Lastly, strategies are provided as to how Nike moves forward after the smoke of the crisis has cleared.
Evaluation of Jeff Ballinger’s argument against Nike
Ballinger’s main argument that “any company has a significant obligation towards even its lowliest workers” is a very convincing one on many levels—social, ethical, and financial. Companies, such as Nike, make large profits and benefit tremendously from workers’ low wages in their international manufacturing companies.
After reviewing Exhibit 1 (Nike Inc. Financial History 1989-1999) and Exhibit 4 (Summary of Revenue and Expense Profile of Minimum Wage Workers by Demographic Type) it would appear that Nike could indeed offer its workers higher wages at least to a level where workers can survive and help their families, some additional benefits, and provide safer working environments in the manufacturing plants in the countries that Nike inhibits. Additionally, from further research and the general tone of the case study it appears that Ballinger may have personally had some issues with Nike and all that it stood for and represented. Furthermore, due to this personal dislike, Ballinger made an example out of Nike although other corporations that utilize Indonesian and Vietnamese laborers were presumably far worse.
Furthermore, considering the value chain model by