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Nike Case Study

Essay by review  •  December 12, 2010  •  Essay  •  858 Words (4 Pages)  •  1,559 Views

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"Nike is criticized for using sweatshops in countries like Indonesia and Mexico. The company has been subject to much critical coverage of the often poor working conditions and the exploitativeness of the cheap overseas labor." -

1. Should Nike be held responsible for working conditions in foreign factories that it does not own, but where sub-contractors make product for Nike?

Yes, but I do not believe that the firm is 100% responsible since it is the sub-contractors who operate and create conditions for workers. Low-cost manufacturing is Nike's strategy, and it is realized by outsourcing the manufacturing process to cheap labor countries. If Nike were responsible for all of working conditions of workers at sub-contractors' factories, it would cost more to make shoes. However, I think that Nike should monitor minimum working conditions so that workers will not die from Karachi, which might be lead to a big issue.

2. What labor standards regarding safety, working conditions, overtime and the like should Nike hold foreign factories to: those prevailing in that country, or those prevailing in the United States?

Nike should hold the standards regarding safety and working conditions that are prevailing in that country. However, when the sweatshop workers try to tolerate the conditions and wages, firms that are making investment in that country should not intervene the movement. In countries around the world, garment workers have sought to improve their situation by trying to organize unions. Those efforts are almost crushed. Union organizers have been beaten, thrown in jail, black listed, and even killed. In some countries, such as Mexico, the government often cooperates with factory owners as they try to bust organizing drives.

3. An income of $2.28 a day, the base pay of Nike factory workers in Indonesia, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given this, is it correct to criticize Nike for low pay rates for subcontractors in Indonesia.

No, it is not. I believe that it is the local economy that determines if the wage is too low or not. If Nike factory in Indonesia allocates income double of that of about half the working population there, I think Nike should rather be applauded for providing working opportunities to the local community.

However, as Nike's factory improve the unemployment condition for the local community, local government would not bother to help the community to improve their economy anymore. Then, the local community will always be dependent on Nike factory, and the community will have to live with the factory no matter how bad the Nike factory treat workers. This kind of situation would not boost the economy of the community, therefore Nike will be considered as a greedy corporation.

4. Would Nike have handled the negative publicity over sweatshops better? What might have been done differently? Not just from the public relations perspective, but also from a policy perspective?

The company has been faced with unexpected criticism after the negative publicity about sweatshops has released. Nike's response in first place involved rejections, such as "It



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