Nike: the Sweatshop Debate
Nike: The Sweatshop Debate
MGT/448
May 31, 2010
Instructor: Adrianne Ford
Nike: The Sweatshop Debate
The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational challenges that Nike managers face in globalization of the Nike product. Nike is a United States based sports company in Beaverton, Oregon. Nike’s original name was Blue Ribbon Sports and its mission is to be the world’s leading sports and fitness company (Nikebiz, 2010). Nike had two options for the manufacturing of footwear products. The first option is Nike can own and operate the factories and manufacture the product. The second option is to subcontract the manufacturing of the products to outside sources. In either situation, the facilities can be domestic or international and the company can have issues within its systems and processes at either place. Companies that stay within the domestic territory have a better opportunity to manage the workplace such as the benefit of being able to evaluate and monitor workplace processes, skilled workers, job creation, government stability, and the ability to reinforce labor practices. However, when using this option the company may suffer in paying higher wages to their workers. For companies choosing to operate overseas the effectiveness of monitoring the workplace is less effective but the company would save money by paying lower wages to the workers. The company still must follow the labor laws of the hosting country (Hill, 2009). Nike decided to create and design the product and use manufacturing companies outside of the United States. Nike has continued to soar in the marketplace and in 2006, Nike’s annual revenue was 15 billion dollars, sold Nike apparel in140
MGT/448
May 31, 2010
Instructor: Adrianne Ford
Nike: The Sweatshop Debate
The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational challenges that Nike managers face in globalization of the Nike product. Nike is a United States based sports company in Beaverton, Oregon. Nike’s original name was Blue Ribbon Sports and its mission is to be the world’s leading sports and fitness company (Nikebiz, 2010). Nike had two options for the manufacturing of footwear products. The first option is Nike can own and operate the factories and manufacture the product. The second option is to subcontract the manufacturing of the products to outside sources. In either situation, the facilities can be domestic or international and the company can have issues within its systems and processes at either place. Companies that stay within the domestic territory have a better opportunity to manage the workplace such as the benefit of being able to evaluate and monitor workplace processes, skilled workers, job creation, government stability, and the ability to reinforce labor practices. However, when using this option the company may suffer in paying higher wages to their workers. For companies choosing to operate overseas the effectiveness of monitoring the workplace is less effective but the company would save money by paying lower wages to the workers. The company still must follow the labor laws of the hosting country (Hill, 2009). Nike decided to create and design the product and use manufacturing companies outside of the United States. Nike has continued to soar in the marketplace and in 2006, Nike’s annual revenue was 15 billion dollars, sold Nike apparel in140
References: Charles W. L. Hill (2009), International Business, Competing in the Global Marketplace, Seventh Edition, Retrieved from Charles W. L. Hill, MGT/448 - GLOBAL BUSINESS STRATEGIES website Gail Dutton, (2008) How Nike is changing the World One Factory at a Time, retrieved May 29, 2010 from http://ethisphere.com/how-nike-is-changing-the-world-one-factory-at-a-time/ Root Causes of Non Compliance, retrieved May 29, 2010 from, http://www.nikebiz.com/responsibility/documents/3_Nike_CRR_Workers_C Boa Doan, retrieved May 29, 2010 from Sweatshop Labor in Vietnam, retrieved from www.stanford.edu/.../Swaetshop%20Labor %20Problem%20in%20Vietnam.doc