Nike Debate
Case Study Nike: The Sweatshop Debate
MGT/448
November 2010
Case Study Nike: The Sweatshop Debate
Nike was established in 1972 by Phil Knight. This marketing company is famous for their athletic shoes and apparels sold in some 140 countries (Hill, 2009, p. 154). Nike does not manufacturer any of these products they only design and market them. These products are manufactured in other countries such as Vietnam, Indonesia, and China, where the cost of labor is low. For years Nike has had repeated accusations of their products being produced in “sweatshops.” A sweatshop is a working environment with conditions considered by many people of industrialized nations to be difficult or dangerous, usually where the workers have few opportunities to address his or her situation(s) (Moore, 2007). This can include exposure to harmful materials, hazardous situations, extreme temperatures, or abuse from employers (Moore, 2007). Sweatshop workers earn as little as half to one quarter of what he or she needs to provide for basic nutrition, shelter, energy, clothing, education, and transportation (Moore, 2007). The following topics will be addressed in this paper legal, cultural, and ethical challenges that confront the global business, various roles that governments played in this particular global business operation, and the strategic and operational challenges facing global managers.
Legal, Cultural, and Ethical Challenges Nike’s legal challenges are under age workers and low wages. According to the Global Exchange a factory owned by a Korean subcontractor for Nike has workers as young as the age of 13 earning as little as 10 cents a hour for up to 17 hours daily (Hill, 2009, p. 155). This is a violation of Chinese labor laws, which states no child under the age of 16 may work in a factory (Hill, 2009, p. 155). Furthermore, workers in Vietnam, majority young women under the age of 25, are laboring 10 ½ hours a day for a mere $10 a week (Hill, 2009, p. 155).
MGT/448
November 2010
Case Study Nike: The Sweatshop Debate
Nike was established in 1972 by Phil Knight. This marketing company is famous for their athletic shoes and apparels sold in some 140 countries (Hill, 2009, p. 154). Nike does not manufacturer any of these products they only design and market them. These products are manufactured in other countries such as Vietnam, Indonesia, and China, where the cost of labor is low. For years Nike has had repeated accusations of their products being produced in “sweatshops.” A sweatshop is a working environment with conditions considered by many people of industrialized nations to be difficult or dangerous, usually where the workers have few opportunities to address his or her situation(s) (Moore, 2007). This can include exposure to harmful materials, hazardous situations, extreme temperatures, or abuse from employers (Moore, 2007). Sweatshop workers earn as little as half to one quarter of what he or she needs to provide for basic nutrition, shelter, energy, clothing, education, and transportation (Moore, 2007). The following topics will be addressed in this paper legal, cultural, and ethical challenges that confront the global business, various roles that governments played in this particular global business operation, and the strategic and operational challenges facing global managers.
Legal, Cultural, and Ethical Challenges Nike’s legal challenges are under age workers and low wages. According to the Global Exchange a factory owned by a Korean subcontractor for Nike has workers as young as the age of 13 earning as little as 10 cents a hour for up to 17 hours daily (Hill, 2009, p. 155). This is a violation of Chinese labor laws, which states no child under the age of 16 may work in a factory (Hill, 2009, p. 155). Furthermore, workers in Vietnam, majority young women under the age of 25, are laboring 10 ½ hours a day for a mere $10 a week (Hill, 2009, p. 155).
References: Hill, C. (2009). International Business: Competing in the Global Marketplace (7th ed.). New York, NY: The McGraw-Hill Companies. Moore, M. (2007). YouTube. Retrieved from http://www.youtube.com/watch?v=c010v4krcIQ&feature=related