There are four groups of stakeholders: students, customers and WRC; Nike, FLA, and the factories where the products are manufactured; the labor force; and the University of Oregon. The first group would like to make the American companies more socially responsible and some of the stakeholders even want to return the production to the USA. The second group strives for effectiveness of the production and the acceptable working standards. The labor force is interested in the improved working conditions and the wages that are sufficient for living. Finally, the University of Oregon is a hostage of circumstance, because it would like to respect the students’ opinion and at the same time cooperate with the large companies including Nike.
This case is about the problem of the poor working conditions in the overseas factories that work in order to satisfy the high demand for the products in the developed countries including the USA. This problem is not easy to resolve due to the legal, cultural, and economic reasons. In addition, there is no consensus in the developed countries how to approach this problem.
Nike should be responsible for the working conditions in the overseas factories even though they do not belong to the company. It seems that outsourcing has helped a lot of companies to focus only on the tasks that bring the highest economic values and being responsible for the workers is not that important anymore. Nike’s practices are double-standard, because 20,000 of Nike’s employees and 500,000 people in the factories work in the very different conditions (Morris & Lawrence 511). It is impossible to adjust the salaries, but at least Nike should be more proactive in improving the basic working conditions.
There are many legal issues that make the problem of the poor conditions complicated. Firstly, subcontractors are independent legal entities registered outside the USA and they conduct business differently. Secondly, Nike cannot be made follow better CSR policies by means of the court decisions. Thirdly, Nike and other companies cannot intervene into the activity of their partners and have the chance to influence their overseas subcontractors only by means of the negotiation process. Finally, the organizations WRC and FLA are not state bodies and can only draw attention to the problem of the poor working conditions, but the effectiveness of their efforts will always be limited.
The American and foreign governments may cooperate in order to work out the legally binding agreements and make the companies pay more attention to the working conditions. For example, they could make the audit of the working conditions obligatory and following the new regulations all companies would have to think of the ways how to improve the factories in terms of safety, minimum wages, etc. Moreover, the governments could support the advocacy campaigns and the NGOs financially so that there was more information in the society about the problems in the factories. A much more ambitious goal of the government could be to encourage the companies not to outsource the production.
Milton Friedman would probably disagree with most of the suggestions that were written above, because he used to believe in the effectiveness of the free market if the government does not intervene (Friedman). He thought that globalization was not about the increased competition, but it was more about the better cooperation (Friedman).
Concerning the Nike’s problem, Friedman would probably think that the local employers should be responsible and therefore they should be accountable for the improvement of the working conditions. His recommendations would not include the active role of the government, NGOs and the consortiums of the American companies, because their involvement could harm the cooperation and effectiveness of the production facilities and lead to the fewer benefits for the customers around the world.
Works Cited
Dallas Fed. “Milton Friedman Interview: New Cooperators”. Online video clip. YouTube. 19
Morris, R., Lawrence, A. Nike’s Dispute with the University of Oregon. Cases in Business
and Society. 2001. Web. 26 April 2016
