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Case Study: The Nike Sweatshop Debate

867 words - 3 pages

Case Study: The Nike Sweatshop Debate PAGE \* Arabic 1
Case Study: The Nike Sweatshop DebateEstablished in 1972 by former University of Oregon track star Phil Knight, Nike is one of the leading global designers and marketers of athletic shoes and apparel. The organizations "swoosh" logo and "Just Do It!" marketing phrase are among the most recognizable logos in history. Nike has annual revenues of $15 billion and sells its products in over 140 countries. The corporation does not manufacture products but rather contracts manufacturing, "…from a global network of 600 factories scattered around the globe…" (Hill, 2009, p. 154). For many Nike had become a symbol of the evils of globalization as the company became a target for accusations that products were manufactured in "sweatshops" using child labor, working excessive hours under hazardous conditions while being paid sub-standard wages. This paper, based on the case study Nike: The Sweatshop Debate authored by Charles W. L. Hill in his book International Business. Competing in the Global Marketplace (2009) will analyze the legal, cultural and ethical challenges confronted by global business; examine the roles that host governments have played and summarize the strategic and operational challenges facing global managers at Nike. Legal, Cultural and Ethical ChallengesLegal, cultural and ethical challenges play a large part in this case. Nike, one of the first truly global companies, contracts with foreign manufacturers thereby taking advantage of low-cost labor in countries such as South Korea, Taiwan, Indonesia, China and Vietnam.Many legal challenges must be considered many of which include legal, cultural and ethical differences, trade regulations, employment law, and public policy.Ethics presents a challenge for Nike as these countries have a different perspective on what is ethical and acceptable when it comes to working conditions, wages and labor practices. For example, according to Hill (2009) "The majority of Nike shoes are made in Indonesia and China, countries with governments that prohibit independent unions and set the minimum wage at rock bottom" (p. 155). Ethically speaking the base pay of a Nike factory worker is $2.28 per day, double the income of over half of the working population. Laborers are anxious and willing to work long hours for a minimum wage that does not provide for the basic needs of an individual in an attempt to survive. Nike must question the legal, cultural and ethical implications of its global workforce policies. Working within the local customs and labor standards is not enough if Nike is genuinely concerned with the rights of the workers ability to earn a decent wage rather than just a public relations inconvenience.Roles of GovernmentGovernmental actions in foreign countries have a significant impact on Nike's global operations. During the 1970s Nike contracted with South Korea and Taiwan to produce shoes and...

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