Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike.
An effective ethics program helps an organization establish a culture that has concern for their employees well being (Mullan 2010). The organization will consider employees as an important part of their business and strive to ensure that they are working in safe conditions. In the case of Nike a more effective ethics program would have ensured that they do not hire children to work for them in their factories. It is not ethical to hire children, Nike would have shown their concern for humanity by not participating in child labor through an effective ethics program.
An effective ethics program guides an organization in meeting basic human rights concerns such as workplace safety and employee contact with hazardous materials. The code of conduct ensures the company protects its employees from any form of harm that could come upon them as they work in the company. An effective ethics program at Nike would have ensured that their employees had safe working environment and had protective equipment when carrying out processes that could be hazardous to their health for the company. All the processes that could expose them to hazardous materials could have been regulated and effort made to reduce the impact these had on the employees.
An effective code of conduct would have ensured that Nike is compliant to working regulations of the governments’ of the countries they manufactured in. They would have been in a position to meet all the expectations of their stakeholders and not be in loggerhead with any of them especially their consumers. Nike would have been open to any inspections as they would have had proper working conditions in all their factories.
An effective ethics program would have addressed the issue of environmental degradation that was being caused by Nikes’ production activities. The program would have prompted Nike to put in place measures that would regulate and control the effect their production had to the environment. This would have stopped any uproar from the public as Nike would have been perceived as accompany that is humane and has the interest of the public at heart. An effective ethics program and code of conduct would have served to improve the image of the company (Compliance and Ethics Council 2012). They would have been portrayed as a company concerned with both environment and their employees and their reputation would not have suffered from negative publicity.
Describe an ethics training and communications program that may have kept Nike from encountering the ethical issues it did in this scenario.
An ethics training and communication program that would have kept Nike from encountering the ethical issues it did should have had a clear assessment of all the risk areas. All the employees, especially those in management should have been made aware of any activities or decisions that had the potential of raising ethical compliance issues. This would have ensured that when making decisions on hiring they would have observed minimum age requirements and spared the company negative publicity regarding hiring children to work in the company’s production process.
The management would have been aware that the working conditions of their employees are an area that can raise problems for the company and a potential source of ethical compliance problems. They would have ensured that proper measures are put in place to ensure that the company is compliant with expected work place regulations and also have environmental protective measures in place.
The ethics and training program should have offered intensive training to the employees at Nike. The training should have been done before the issues came up in order to allow the employees to be proactive rather than reactive (Kouzes, J., & Posner, B. 2012). The program should have sort to address all potential and hypothetical issues that the employees would face in the production as well as all other operations of Nike as a company. The employees, especially those in management level would have been given the chance to learn how to handle any challenges that might arise through experimental learning opportunities as well as mini-cases.
An ethics training program would have educated the employees to understand that Nike will not tolerate any unethical behavior and that all employees would be held responsible for decisions and actions made. This would have prompted managers to make decisions that are in line with the company’s ethical requirements. The program would have installed the required seriousness in following stipulated ethical regulations for all employees, especially those involved in the production process (Ferrell et al 2011). This is because the Nike managers would have been aware that they will be held personally accountable for any decisions they make as well as any actions they take.
The ethics program would have aligned the employee conduct with the reputation and branding of Nike. The companies that had been subcontracted in third world countries with the responsibility to produce Nike products would have been more informed about protecting the company’s reputation. The program should have had a system that allows managers at different levels to voice concerns regarding ethics and receive timely feedback. There should have been a clear leadership hierarchy that employees can follow when faced with ethical dilemmas that they are not able to resolve at their level ( Kouzes, J., & Posner, B. 2012).
Determine and discuss how Nike could have benefited early on from ethics auditing.
Ethics auditing allows a company to assess the effectiveness of its ethical program as well as its ethical culture. Nike would have benefited from ethics, auditing because they would have been able to highlight ethical trends, improve ethics learning in the organization and facilitate working relationships and communication. The audit would have enabled Nike to achieve the greatest possible impact using the available resources. Nike would have been able to identify potential risks and taken important steps in order to comply with the law. This is especially where hiring and managing of employees was concerned.
Ethics auditing would have helped Nike establish a peaceful and stronger relationships with their stakeholders. There would have been less conflict between Nike and their consumers, human rights activists and the public if Nike had shown greater transparency through an ethics audit. An ethics audit is more effective in gaining the trust that a company requires from their stakeholders rather than just verbal promises from management( Ferrell et al 2011). A strong relationship for Nike would have ensured less expense in damage control and salvaging company reputation. It would also have ensured that Nike is compliant with guidelines on environmental protection as well as workplace safety standards that are necessary for the company to trade profitably.
Ethics auditing would have helped Nike document their compliance with established legal requirements, this would have helped them address accusations leveled against the company. The documents would have provided evidence that the company could have used to defend themselves and act as prove of the measures they had taken to improve compliance to production safety standards and environmental protection. It would have provided quantifiable, specific information as demanded by stakeholders, and especially consumers and investors. It would have shown that Nike is committed to taking a deeper look at the nature of their production and can publicly disclose the progress and the problems they are facing when addressing ethical issues in the company.
Create a high-level outline for what the ethics auditing process should look like at Nike.
The ethics, auditing process at Nike would begin by securing a commitment from top management and board of directors. This would demonstrate that Nike is taking steps to prevent future misconduct and improve compliance to ethical requirements, especially where concerns about employee, workplace safety and environmental protection have been raised. This step is important so that the findings of the audit can be used to improve the ethics program and culture in the organization.
The next step is establishing a committee that would carry the responsibility of overseeing the ethics audit process. This committee should be composed of individuals who have a clear understanding of the importance of an ethics audit. Nike should ensure that selected members do not have conflicts of interest and can source them from various departments or hire external consultants. The committee has the responsibility of establishing the scope of the audit process and the bases of their assessment.At Nike this should include the subject matters and risk areas such as employee rights and discrimination, legal compliance and environmental protection.
The next step is conducting a review of the mission, values, policies and define ethical priorities of Nike as a firm. Any deficiencies identified should be addressed appropriately so that the company is in a position to meet the stakeholders’ expectations. The committee should then identify methods for measuring the Nikes progress in ensuring progress in ethical decisions and conduct. They then collect relevant information for each of the previously identified areas of stakeholder interests such as such as sweatshops and child labor. All these data is analyzed by the committee, which results in a summary of the findings and conclusions being made ( Ferrell et al 2011).
The committee can make benchmark comparisons to see how other companies in the same industry as Nike are performing. The next step is to have an independent organization verify the results and findings of the ethical audit. They will provide assurance of the quality, accuracy and completeness of the audit to both the public and the stakeholders. The final step is reporting the findings of the audit in the form of a report to the top management and all relevant stakeholders as guided.
Work Cited.
- Compliance and Ethics Council (2012). The Compliance and Ethics Essential Toolkit: Practical Resources to Accelerate the Development of Your Program. Retrieved January 16 2014 from http://www.executiveboard.com/exbd-resources/pdf/legal-risk-compliance/compliance-ethics/CELC-Toolkit.pdf
- Ferrell,O.,Fraedrich,J.,Ferrell,. (2011). Business Ethics: Ethical Decision making and Cases (8th Ed.). Mason,. OH: South-Weste: n Cengage Learning.
- Mullan, J. (2010) Benefits to Establishing a Business Ethics Program. Retrieved January 16 2014.
- Kouzes, J., & Posner, B. (2012). The leadership challenge: How to make extraordinary things happen in organizations (5th Ed.). San Francisco, CA: Jossey-Bass.
