This essay analytically evaluates Nike and the company’s recovery from its ethical and strategic missteps to its progressive practices in becoming a socially responsible leader in its industry. In spite of Nike’s efforts in striving to develop a better reputation, the company has room for improvement in achieving higher ethical standards. The first section of this paper supplies a brief company background of Nike and the accusations against the company, establishing the context for its ethical and strategic errors. The second section assesses Nike’s response to societal and consumer concerns regarding its contract manufacturing. The third section explores the challenges Nike faces in the future. This paper closes by reviewing Nike’s current areas of concern and future challenges and the opportunities for further consideration.
Nike’s story is one of reclamation, providing the prototype of a multinational company achieving industry leadership as a socially responsible corporation while recovering from extensive ethical and strategic oversights. Initially, Nike failed to address their responsibility in the widespread contract site manufacturing problems. Only later did Nike take these issues seriously, largely due to negative media attention and consumer demands. While Nike has made immense strides in overcoming its tarnished reputation from not confronting social responsibilities early on, it remains committed to establishing high ethical standards while tackling ongoing labor and pollution issues, and the sustainability challenges they face ahead.
Nike’s Failure to Address Corporate Social Responsibility Early On
Nike, founded in 1964 by University of Oregon alumni Philip Knight and Bill Bowerman, is one of the world’s most publicly recognized leading marketers in the athletic shoe, apparel, and equipment industry (Ferrell, et al., 2013, p. 495). Nike, through a successfully developed promotional strategy, effectively integrates its “brand name and image with positive social values ranging from athleticism and fitness to social and environmental responsibility and patriotism” (Greenberg & Knight, 2004, p. 152). Nike designs and markets their products while contracting out their manufacture directly to factories owned by independents, typically in less costly foreign markets. Originally, to compete against the German market, the company imported athletic shoes from Japan, eventually contracting with Japan for its shoe production. Ultimately, as demand increased, Nike pursued offshore manufacturing “to maximize investment and increase shareholder value” (Greenberg & Knight, 2004, p. 153). Nike’s strategy involved shifting to less expensive foreign markets and subcontracting its production levels primarily in the lesser-developed labor markets in Asia, “where wages are already low, unskilled and semi-skilled, particularly female, labor power is plentiful and labor standards limited and/or easily ignored in...