Nike: the Sweatshop Debate Case Study
Nike: The Sweatshop Debate Case Study
Brenda Borders
MGT/448
June 20, 2011
Gregory Flick
Nike: The Sweatshop Debate Case Study
Nike was established in 1972 and is a leading marketer of athletic shoes and apparel. Nike operates in more than 160 countries, directly or indirectly employs nearly one million people, and for the fiscal year ended 2010 reported revenues of $19 billion. (nikebiz.com) Nike has consistently been accused of, criticized for, and protested against, for using sweatshops to manufacture its products. Nike, as a global business, has faced many challenges including legal, cultural, and ethical challenges. The host country governments have played a role this global business operation. The global managers have faced strategic and operational challenges.
Sweatshops are described as “work environments that violate laws and where workers are subject to extreme exploitation, including the absence of a living wage or long work hours; poor working conditions, such as health and safety hazards; arbitrary discipline, such as verbal or physical abuse; and/or fear and intimidation when they speak out, organize, or attempt to form a union” (Radin & Calkins, 2006). According to a 1997 report by the San Francisco based Global Exchange several factories in Southern China, owned by Korean subcontractors for Nike, had “workers as young as 13 earning as little as 10 cents an hour who toiled up to 17 hours daily in enforced silence” (Hill, 2009). This was in violation of the Chinese labor and minimum wage requirement laws. In many of the subcontracted sweatshop factories the workers are exposed to hazardous chemicals that exceed local legal standards and they are not provided with protective gear. These legal violations have been exposed in various factories in other countries also. Nike responded by requiring the subcontractors to abide by the minimum limits for working conditions and pay, has arranged for independent auditors to inspect the
Brenda Borders
MGT/448
June 20, 2011
Gregory Flick
Nike: The Sweatshop Debate Case Study
Nike was established in 1972 and is a leading marketer of athletic shoes and apparel. Nike operates in more than 160 countries, directly or indirectly employs nearly one million people, and for the fiscal year ended 2010 reported revenues of $19 billion. (nikebiz.com) Nike has consistently been accused of, criticized for, and protested against, for using sweatshops to manufacture its products. Nike, as a global business, has faced many challenges including legal, cultural, and ethical challenges. The host country governments have played a role this global business operation. The global managers have faced strategic and operational challenges.
Sweatshops are described as “work environments that violate laws and where workers are subject to extreme exploitation, including the absence of a living wage or long work hours; poor working conditions, such as health and safety hazards; arbitrary discipline, such as verbal or physical abuse; and/or fear and intimidation when they speak out, organize, or attempt to form a union” (Radin & Calkins, 2006). According to a 1997 report by the San Francisco based Global Exchange several factories in Southern China, owned by Korean subcontractors for Nike, had “workers as young as 13 earning as little as 10 cents an hour who toiled up to 17 hours daily in enforced silence” (Hill, 2009). This was in violation of the Chinese labor and minimum wage requirement laws. In many of the subcontracted sweatshop factories the workers are exposed to hazardous chemicals that exceed local legal standards and they are not provided with protective gear. These legal violations have been exposed in various factories in other countries also. Nike responded by requiring the subcontractors to abide by the minimum limits for working conditions and pay, has arranged for independent auditors to inspect the
References: Hill, C. W. L. (2009). International Business: Competing in the Global Marketplace (7th ed.). : McGraw-Hill. Radin, T. J., & Calkins, M. (2006). The Struggle Against Sweatshops: Moving Toward Responsible Global Business. Journal of Business Ethics, ( ), 261-272.