Nike Case Study
HITTING THE WALL:
NIKE AND INTERNATIONAL LABOR PRACTICES
Jeff Ballinger is a labor activist since high school who believes that any company should have a significant obligation towards even its lowliest workers. While being assigned to run AAFLI (Asian-American Free Labor Association) he was charged to investigate labor conditions in Indonesia plants and study minimum wage compliance by American companies. He chose Nike as his main target in effort to change labor conditions in manufacturing companies in Asia. Ballinger argued that Nike was responsible for working conditions of manufacturing workers in Indonesia that violate human rights even though all the factories were owned by third parties as Nike was outsourcing its manufacturing needs. Ballinger also believed that Nike encouraged its contractors to mistreat their workers to achieve unrealistic production quotas. Moreover, he pointed out that in 1988 out of 17,000 violations reported, only 12 prosecutions were ever made. Mainly due to bribery. In my opinion, Jeff Ballinger did bring out an important issue to a spotlight but did not provide solid arguments specific to Nike case. To achieve his goal, I think it was smart of him to put a rising star company in the spotlight. However, it was unfair. From the article it appears that even though Nike was paying minimum wages set by the government of Indonesia, it would not have lived up to Ballinger’s standards as his calculations were based on how much Nike was making in profits compared to the amount of money spent on labor. In addition he suggests, that the same marketing and branding power that drove Nike’s bottom line could also be used to drive moral outrage against exploitation of Asian workers. To make his point stronger, Ballinger published an annotated pay-stub from an Indonesian factory, making soon-to-be famous comparison between workers’ wages and Michael Jordan’s endorsement contract. I think this is a week argument. Ballinger tries to put 100%
NIKE AND INTERNATIONAL LABOR PRACTICES
Jeff Ballinger is a labor activist since high school who believes that any company should have a significant obligation towards even its lowliest workers. While being assigned to run AAFLI (Asian-American Free Labor Association) he was charged to investigate labor conditions in Indonesia plants and study minimum wage compliance by American companies. He chose Nike as his main target in effort to change labor conditions in manufacturing companies in Asia. Ballinger argued that Nike was responsible for working conditions of manufacturing workers in Indonesia that violate human rights even though all the factories were owned by third parties as Nike was outsourcing its manufacturing needs. Ballinger also believed that Nike encouraged its contractors to mistreat their workers to achieve unrealistic production quotas. Moreover, he pointed out that in 1988 out of 17,000 violations reported, only 12 prosecutions were ever made. Mainly due to bribery. In my opinion, Jeff Ballinger did bring out an important issue to a spotlight but did not provide solid arguments specific to Nike case. To achieve his goal, I think it was smart of him to put a rising star company in the spotlight. However, it was unfair. From the article it appears that even though Nike was paying minimum wages set by the government of Indonesia, it would not have lived up to Ballinger’s standards as his calculations were based on how much Nike was making in profits compared to the amount of money spent on labor. In addition he suggests, that the same marketing and branding power that drove Nike’s bottom line could also be used to drive moral outrage against exploitation of Asian workers. To make his point stronger, Ballinger published an annotated pay-stub from an Indonesian factory, making soon-to-be famous comparison between workers’ wages and Michael Jordan’s endorsement contract. I think this is a week argument. Ballinger tries to put 100%