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Nike Case Study

In: Business and Management

Submitted By fuzzycater
Words 604
Pages 3
Tracy Weispfenning
Nike Case Study #1
MGMT 310
Jason Cussler
January 31, 2014

Nike Falters in Ethical Practices

Nike has faced many ethical dilemmas such as human rights abuses, labor violations, and negative impact on the environment where manufacturing plants are located. Their responses have varied from improving labor standards in each facility to implementing a recycling program for worn out shoes for the consumer, and creating a no waste recycling program at all levels of the Nike operations. In my opinion, Nike is on the right track but could do more in their response to these ethical challenges.

Nike has responded to these ethical dilemmas in various ways. They’ve done a good job in anticipating the potential consequences, yet they have not involved enough people in the decision making process. For example, Nike did not take the allegations of human rights abuses and labor violations seriously in their overseas manufacturing plants until nongovernment organizations like Life magazine and The New York Times published articles on these violations. These articles created public awareness and exposed the lack of oversight and policies to ensure the human rights and labor guidelines were fair and enforced. After these articles were published, Nike obtained and implemented a new course of action for protecting workers rights, safety, and competitive wages. Nike should have been aware of these practices, monitoring and reviewing their manufacturing plants before the articles were written. This shift in priorities has demonstrated that Nike has created a fair and reasonable plan of action for all of the workers involved.

When choosing to set up plants overseas, Nike did not take into account the serious environmental impact that those facilities would have on the surrounding area. Some of the impacts involved are pollution of land, air, and waterways, water deficits, and huge amounts of energy expended in order to create their product. Nike solved these problems by creating a consumer shoe recycling program, providing the names and locations of their factories in 2005 and creating a companywide recycling program for all levels of the operation. These changes have helped Nike to become an industry leader in managing the environmental impacts created by the textile industry.

Nike’s approach to generate companywide ethical standards is based on enduring values tested by reviewing policies and activities through a Management Audit Verification system and Corporate Responsibility Committee. Both of these programs identify issues with the organization on labor violations, human rights abuses, and environmental issues. Through these processes there is a checks and balance system now in place to keep the board of directors actively involved in day to day issues within the company. These steps have proven to increase corporate and social responsibility throughout the company.
Nike’s commitment to establishing a code of conduct for all factories under the Nike umbrella has balanced the playing field of labor, health, and environmental standards. By giving each facility a letter grade on how compliant the facility is with the code of conduct gives the board of directors, managers, workers, and consumers a better idea of how Nike is striving to invent a universal system to apply to all industries., not just theirs.

However, even in establishing these measures Nike still has a long way to go. Nike’s disclosure about plant locations, names and scorecard grades have improved the corporate and social image of the company. But, steps to attract and keep current customers are still an issue. Through developing new sustainable products and promoting social and corporate responsibility, Nike can improve its bottom line while gaining and retaining new customers.

I used ethical checklist questions 1, 3,4,5,6, 7.…...

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