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Nike And Its Ethical Behavior Essay

2145 words - 9 pages

Phil Knight started his shoe company by selling shoes from the back of his car. As he became more successful in 1972 he branded the name Nike. In the 1980’s Nike Corporation quickly grew and established itself as a world leader in manufacturing and distributing athletic footwear and sports' attire. The Nike manufacturing model has followed is to outsource its manufacturing to developing nations in the Asia Pacific, Africa, South and Latin Americas; where labor is inexpensive. It quickly became known for its iconic “swoosh” and “Just do it” advertisements and products. Its highly successful advertising campaigns and brand developed its strong market share and consumer base. But, the road has not always been easy for Nike; in the late 1990’s they went through some challenging times when their brand become synonymous with slave wages and child labor abuses. During this period, Nike learned that it paramount that the company understands its stakeholders’ opinions and ensures their values are congruent with their stakeholders. Nike learned that their stakeholders were concerned with more than buying low cost products; their customers were also concerned with ethical and fair treatment of their workers. Because Nike was unwilling to face the ethical treatment of its employees, the company lost its loyal customers and damaged its reputation. Nike has bounced back since the late 1990’s and revived its reputation by focusing on its internal shortfalls and attacking its issues head on. Nike nearly collapsed from its missteps in the late 1990’s. They have learned from their mistakes and taken steps to quickly identify ethical issues before they become a crisis through ethics audits. This paper is based on the case study of Nike: From Sweatshops to Leaders in Employment Practices and will discuss how a more effective ethics programs and a viable code of conduct could have mitigated the ethical issues faced by Nike, describe an ethics training and communications program that may have kept Nike from encountering the ethical issues it faced, discuss how Nike could have benefited early on from ethics auditing, and create a high-level outline for what the ethics auditing process should look like for Nike.
How Effective Ethics Programs and Code of Conduct Could have Mitigated Issues
Nike in the case study acted slowly to resolve human rights violations in their factories. The media and labor rights activist reported in the mid-1990’s issues related to the poor health and working conditions, the low wages, and child labor laws violations. Nike’s initial reaction was to ignore the charges because many of the reports were on factories that Nike did not directly own. Ignoring these issues was a mistake. Nike needed to address the issues directly. If Nike would have had an active ethics program, management would have discussed and addressed the problems they were facing by outsourcing its manufacturing. The corporation should have established standards for suppliers’...

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