Nike Legal
Nike has experienced many political and legal issues throughout its lifetime. From claims the company has used and continues to use sweatshops, to ties with terrorism, Nike has had a lot to overcome. These issues Nike has faced has shaped their current marketing strategies and led them to become one of the most recognizable brands in the world.
The largest political issue Nike has faced was with regards to the sweatshop and child labor scandal. Nike began manufacturing in South Korea and Taiwan in the early 1970s (Carty, 2002). They claimed that the lower production cost from cheaper labor was an irresistible draw. When the economies in those countries began to grow, Nike’s labor cost increased substantially, forcing them to look in other geographical areas to maintain their low cost of production. Nike moved manufacturing into Indonesia, China, and Vietnam (Carty, 2002).
In the 1990s, claims of Nike’s inhuman treatment of workers surfaced. Nike was faced with allegations of breaking numerous labor laws, including the forcing of child labor, long hours without overtime, unsafe working conditions, and low wages. Many children worked for over sixteen hours a day for less than one dollar a day (Thottam, 2005). Nike’s initial response to the criticism came from director Todd Mckean, who stated that Nike did not own the companies who broke these labor laws (Thottam, 2005). Mckean was restating the fact that Nike contracted its manufacturing out to several companies, and did not directly oversee the process.
Nike responded to these allegations by creating their first Code of Conduct called SHAPE. Shape stands for safety, health, attitude, people, and environment (Bushra, 2012). The code was created with intentions of adhering to standards such as fire safety, minimum wage requirements, and overtime limits, costing Nike approximately ten million dollars a year. Nike is also working with agencies such as the Fair Labor Association, which randomly
The largest political issue Nike has faced was with regards to the sweatshop and child labor scandal. Nike began manufacturing in South Korea and Taiwan in the early 1970s (Carty, 2002). They claimed that the lower production cost from cheaper labor was an irresistible draw. When the economies in those countries began to grow, Nike’s labor cost increased substantially, forcing them to look in other geographical areas to maintain their low cost of production. Nike moved manufacturing into Indonesia, China, and Vietnam (Carty, 2002).
In the 1990s, claims of Nike’s inhuman treatment of workers surfaced. Nike was faced with allegations of breaking numerous labor laws, including the forcing of child labor, long hours without overtime, unsafe working conditions, and low wages. Many children worked for over sixteen hours a day for less than one dollar a day (Thottam, 2005). Nike’s initial response to the criticism came from director Todd Mckean, who stated that Nike did not own the companies who broke these labor laws (Thottam, 2005). Mckean was restating the fact that Nike contracted its manufacturing out to several companies, and did not directly oversee the process.
Nike responded to these allegations by creating their first Code of Conduct called SHAPE. Shape stands for safety, health, attitude, people, and environment (Bushra, 2012). The code was created with intentions of adhering to standards such as fire safety, minimum wage requirements, and overtime limits, costing Nike approximately ten million dollars a year. Nike is also working with agencies such as the Fair Labor Association, which randomly