Corporate Social Responsibilities of Reebok
Challenges to Corporate Social Responsibilities
Company: Reebok International Ltd.
Student Name: Jedy Wang
Student #: 250476511
Teacher Assistant: Mike Dove Due Date: 11/14/2008 Executive Summary
The 20th century illustrated a dispersing trend of capitalism as the end of the Cold War illustrated evident economic prosperity in Western countries. Consequently, many former Communist countries implemented economic reforms due to the perception that capitalism was the economic ideology to break away from poverty and low standard of living. The emergence of these newly industrialized countries engender fierce competition to labour-intensive corporations in high wage economies, which share emphasis in cost competitive strategies instead of quality; “[firms in developed nations] have been vulnerable to imports from newly industrialized countries (NICs) where abundant supplies of low skilled, low cost labour easily undercut their high wage structure”.1
The delineated scenario characterises a significant fraction of the apparel industries in developed nations that have been threatened by the price penetration strategy of NIC imports. In response to this competitive advantage of NICs, apparel firms initiated the globalization of production through subcontractors and subsidiaries, as trade barriers during the last decade of the 20th century declined at a remarkable pace. By relocating production facilities in developing nations where production inputs such as labour, were at optimal costs; MNEs regained competitive advantage through undercutting production costs. However, the common practice of outsourcing in nations that lack comprehensive regulation and knowledge in labour standards has become a global concern due to violation of employees’ working condition and welfare. Consequently, a trend of increasing awareness in ethical governance attracted global attention while posing the question: how to effectively transform the notion of corporate social
Company: Reebok International Ltd.
Student Name: Jedy Wang
Student #: 250476511
Teacher Assistant: Mike Dove Due Date: 11/14/2008 Executive Summary
The 20th century illustrated a dispersing trend of capitalism as the end of the Cold War illustrated evident economic prosperity in Western countries. Consequently, many former Communist countries implemented economic reforms due to the perception that capitalism was the economic ideology to break away from poverty and low standard of living. The emergence of these newly industrialized countries engender fierce competition to labour-intensive corporations in high wage economies, which share emphasis in cost competitive strategies instead of quality; “[firms in developed nations] have been vulnerable to imports from newly industrialized countries (NICs) where abundant supplies of low skilled, low cost labour easily undercut their high wage structure”.1
The delineated scenario characterises a significant fraction of the apparel industries in developed nations that have been threatened by the price penetration strategy of NIC imports. In response to this competitive advantage of NICs, apparel firms initiated the globalization of production through subcontractors and subsidiaries, as trade barriers during the last decade of the 20th century declined at a remarkable pace. By relocating production facilities in developing nations where production inputs such as labour, were at optimal costs; MNEs regained competitive advantage through undercutting production costs. However, the common practice of outsourcing in nations that lack comprehensive regulation and knowledge in labour standards has become a global concern due to violation of employees’ working condition and welfare. Consequently, a trend of increasing awareness in ethical governance attracted global attention while posing the question: how to effectively transform the notion of corporate social
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