Nike
The Nike Company first came into operation in the year 1969 as a developer, marketer and distributor of footwear, apparel accessories among other services. It was one of the leading producers and sellers of the various sporting apparel and footwear among other valuable commodities. It however majored in the production of athletics footwear unlike all the other sports. The company also sold a line of other valuable commodities under the Nike brand. Some of these other valuables included bags, socks gloves to mention but a few of the equipment that go hand in hand with sporting activities. The company’s mission is to bring inspiration and innovation to every athlete in the word. That, therefore, means that the company is directed towards ensuring that, the field of sporting is well taken care of more especially athletics. Its vision states that if you have a body, you are an athlete (Bagley, 2010). The company also possesses the code of ethic of its employees which is called inside the lines. It defines the standards and the way workers ought to conduct themselves following a range of topics that include behavior, legal compliance, and competition among others. It is from that rationale that this paper will endeavor at elucidating and giving further details on the ethical issues surrounding the company and the way forward to the same issues by the leadership of the company.
The code of ethics is a very important tool that enables the company to perform to its expected standards. The Nike company having a strong code of ethics was therefore, expected to do its business with the highest level of integrity committing itself to the highest standards of ethics in order to succeed in business. Nike is one of the companies that was established under a strong ethical environment, having a strong work ethics, but was found with several ethical issues in its operation (Campbell, 2012). The Nike Company was accused of an ethical issue surrounding its production; the issue revolved the payment of employees and the involvement of children in the production of its commodities. In other words, the Nike Company went against its code of conduct by getting involved in child labor that was against its code of ethics. The company originated from America, the company was aware of the rule against child labor, it has however been accused of child labor and slavery in its production of the soccer balls. For a very long time, the Nike company wanted to see to it that it greatly minuses the costs of production majoring on profits. This was quite impossible without a strategy to reduce the production costs and maintain the profits high as usual despite the economic conditions.
It is this situation that made the company to employ non-ethical strategies to enable it maintains its profits and even make more that it was expected to make. Even under its well outlined codes of ethics, Nike found itself going against its codes of ethics, the company used to operate in America right from its onset, the strictness of regulations in America could not allow the company to practice less than it was expected (Shaw, 1999). By looking at the profit margin in the company and the fact that it was supposed to pay its workers well because the longtime of exploitation of workers was long gone. The company could not see any other way to succeed other than to continue with the practices that existed during the industrial revolution. The company exploited the employees who worked in the organization, provided very poor working conditions to the employees among other issues that were explicitly denied in its code of ethic.
When pressure exceeded in America, the company thought of other ways that it could still maximize the profits and ensure that it steadily remained in the market. It is at this time when the company decided to move its production away from the United States where there was keen monitoring of the operations of the company to a point where it could operate without surveillance. Having moved much of its production to Asia and other developing countries that were in need of employment and were ready to do any job at any pay, the company utilized this opportunity and made tremendous profits. More than the exploitation of the employees, the company still got engaged in a more serious non ethical issue, and that was the use of child labor in the production of its products. The company having known the repercussions of directly engaging in such an act, it decided to use a different approach in a bid to consolidate the market and increase the profits. It is this reason that made the company to subcontract its production with local firms in countries out of America that were strictly monitored by Nike to ensure that production was done as the company wanted.
The firms that were subcontracted by Nike to help in the production used child labor as a way to reduce the costs and maximize the profits. The practice of child labor was more evident in Pakistan where people were lowly paid and the situation there was just worse. It was also known of its child labor practices that spread all over more especially in the northern part of Pakistan (Morais, 2011). It produced very many goods for export to international despite the existence of government regulations against child labor in Pakistan; it also enjoyed the good cash that came from the production of sporting goods that were majorly produced by children. The Nike Company had the ability to monitor the firms producing their commodities abroad to ensure that the best production standards and conditions for production were favorable to the employees in order to eliminate the child labor.
Nike is therefore, characterized by making their good from countries that were growing, those that had not attained development. These countries provide very cheap labor because, the governments were authoritarian, and they had no labor union movements that can champion for change in the payment of workers and denial of child labor. All these therefore, showed how the company contradicted its ethics in pursuit for profits from the third world countries. The decision of going against the companies ethics contributed to several repercussions to the Nike Company. The customers who were part of the company’s success in consumption of the commodities produced developed a very negative attitude towards the purchase of Nike products as they associated them with the unfairness of the company in employing children and exploiting the employees of the company. The customers went on strike especially in America, and this lead to a serious reduction of the market of the Nike products all over leading to a serious loss by the company.
After all the problems that the company encountered, the leaders did not give up, despite the serious drop in sales of the commodities, it still went on producing and selling but at a very low pace than ever before. It took the leaders a great deal of decision to ensure that the company was revived to its former position being the best producer and seller of sports products (Mandal, 2010). The CEO of the organization had to explain their shift of the production processes from America to Asia and other third world countries. It was his duty to convince the public to the other stake holders that their movement of production from America to Asia was not just a strategy to increase their profits as they exploited employees and children for labor. They justified this by bringing out the origin of the company having moved from Japan to America meaning that returning the production to Japan and other areas was not for exploitation employees in the little pay and child labor that was cheap.
The organization responded to the problems in various ways the first one being to stop the used of toxic adhesive called toluene. The leaders of the organization after the serious complain from the workers due to the poor working conditions decided to eliminate this strong toxic adhesive from the production on their commodities. They realize that it caused a harmful effect to the workers especially when they were not well protected from all the environmental pollutants and decided to research on another type of adhesive that could not cause such harm to the employees and they finally landed on water adhesive that was not as pollutant as the toxic adhesive (Hellriegel & Slocum, 2007). Despite the fact that this environmental friendly adhesive would not be used on some type of shoes especially the rubber soled shoes. The promise was given by the CEO of the organization that they would still have to do their research well to get a solution to such, making sure that they could maintain the OSHA standards in maintaining indoor environment people friendly. The action that was portrayed here was a better one since it was enabling the customers believes that the company was now changing for the better to embrace the human aspect and work ethically as it was supposed to.
The other initiative that the leadership of the organization did to revive the name of the organization after it had been tarnished, was the pronouncing of the CEO to deal with the child labor issue which the Nike leadership still claimed not to have known anything of that nature. Accepting to deal with it was a big step that the leadership took to convince the public that there was an initiative that was taking place that was ready to deal with the problem (Brown & Brown, 2011). It is this that made the public to stop purchasing the commodities looking at them that they were produced by children. By declaring zero tolerance to child labor, the organization started regaining its past glory of being the best seller of sporting apparel and equipment’s all over especially in the United States that was always so discriminative when it came to such issues. Even after declaring that they would work hard to end the problem of child labor and provide a worker friendly environment, they decided to also include expansion of education program to the workers of the company. It was used to encourage people to learn and be motivated to learn since, after the completion of such as program, the employees were promised an increase of pay as a reward.
An extension of micro enterprise loans to families in Indonesia, Pakistan among others was an initiative that the organization decided to put in place to enable people like women who would wish to begin some business. The initiative also helped to clear the bad name about the organization that had existed before and within no time; the organization had turned around and started making all the money that it was making in some time before (Campbell, 2012). The leadership of the organization became very effective to reclaim the lost glory which was not just easy for any organization. It was never an easy way to reclaim the distorted image of the company and making it sell again in countries like America. It means that it must have taken the organization leaders serious work that finally landed them there. It is very important to realize such a problem before it reaches an extent of attacking the organization in order to solve it effectively and omit the probability of the organization’s image from being tarnished.
In conclusion, the organization’s image is a very important aspect that may contribute the amount of sales or operations to make, having identified the ethical issues surrounding the organization, it thus became very easy to help the situation. It is therefore, very important for the company to become very keen in identifying such problems that may lead to tarnishing the organization’s need to avoid problems it the future. The leaders of the organization should be very flexible in adopting the changes that take place in order to avoid getting into problem with the legislature.
Reference
Bagley, C. E., & Savage, D. W. (2010). Managers and the legal environment: Strategies for the 21st century. Mason, OH: South-Western Cengage Learning.
Brown, S. A., & Brown, M. (2011). Ethical issues and security monitoring trends in global healthcare: Technological advancements. Hershey, PA: Medical Information Science Reference.
Campbell, Kenneth L. (2012). Western Civilization: A Comparative and Global Approach, Since 1600. M E Sharpe Inc.
Hellriegel, D., & Slocum, J. W. (2007). Organizational behavior. Mason, Ohio: Thomson/South-Western.
Mandal, S. K. (2010). Ethics in business and corporate governance. New Delhi: Tata McGraw-Hill Education.
Morais, . C. G. J. (2011). Ethical issues and social dilemmas in knowledge management: Organizational innovation. Hershey, PA: Information Science Reference.
Shaw, R. (1999). Reclaiming America: Nike, clean air, and the new national activism. Berkeley: University of California Press.
