Corporate Social Responsibility and Nike Factories
CASE 9
Daryl Benson
NIKE: Managing Ethical
Missteps—Sweatshops to Leadership in Employment Practices
Phil Knight and his University of Oregon track coach Bill Bowerman founded Blue Ribbon
Sports, later renamed Nike, in 1964. The idea, born as a result of a paper written by Knight during his Stanford MBA program, was to import athletic shoes from Japan into the U.S. market otherwise dominated by German competitors Puma and Adidas. The company initially operated as a distributor for a Japanese athletic shoe company, Onitsuka Tiger, but also developed its own brand of athletic footwear to promote in the American market.
The company’s relationship with Onitsuka Tiger ended in 1971, and the Nike brand was created in 1972 (“Nike” after the Greek goddess of victory). The company was renamed
Nike in 1978, and has grown to be the largest worldwide seller of athletic goods, with approximately 19,000 retail accounts in the United States and about 160 countries around the world.
Nike’s main popularity came from celebrity athlete sponsors. As the popularity of the
Nike product grew, so did its product demands and the need to produce more apparel to meet the demands of customers. In contrast to its meteoric rise in the 1980s after going public, the late 1990s began a period composed of combating allegations about labor and human rights violations in Third World countries in which manufacturing had been subcontracted. Nike’s response to this issue has been considered by critics to be more of a damage-control stunt than a sincere attempt at labor reform.
This case was prepared by O.C. Ferrell and Jennifer Jackson, based on work by Lisa Kiscaden and Megan Long, the University of New Mexico. We appreciate the editorial assistance of Jennifer Sawayda on this edition of the case, and of Melanie Drever and Alexi Sherrill on the previous edition. This case was prepared for classroom discussion, rather than to illustrate either effective or ineffective
Daryl Benson
NIKE: Managing Ethical
Missteps—Sweatshops to Leadership in Employment Practices
Phil Knight and his University of Oregon track coach Bill Bowerman founded Blue Ribbon
Sports, later renamed Nike, in 1964. The idea, born as a result of a paper written by Knight during his Stanford MBA program, was to import athletic shoes from Japan into the U.S. market otherwise dominated by German competitors Puma and Adidas. The company initially operated as a distributor for a Japanese athletic shoe company, Onitsuka Tiger, but also developed its own brand of athletic footwear to promote in the American market.
The company’s relationship with Onitsuka Tiger ended in 1971, and the Nike brand was created in 1972 (“Nike” after the Greek goddess of victory). The company was renamed
Nike in 1978, and has grown to be the largest worldwide seller of athletic goods, with approximately 19,000 retail accounts in the United States and about 160 countries around the world.
Nike’s main popularity came from celebrity athlete sponsors. As the popularity of the
Nike product grew, so did its product demands and the need to produce more apparel to meet the demands of customers. In contrast to its meteoric rise in the 1980s after going public, the late 1990s began a period composed of combating allegations about labor and human rights violations in Third World countries in which manufacturing had been subcontracted. Nike’s response to this issue has been considered by critics to be more of a damage-control stunt than a sincere attempt at labor reform.
This case was prepared by O.C. Ferrell and Jennifer Jackson, based on work by Lisa Kiscaden and Megan Long, the University of New Mexico. We appreciate the editorial assistance of Jennifer Sawayda on this edition of the case, and of Melanie Drever and Alexi Sherrill on the previous edition. This case was prepared for classroom discussion, rather than to illustrate either effective or ineffective