Nike Labor. Essay

1204 words - 5 pages

There has been much debate and controversy recently concerning Nike's Asian labor practices. This is a very complex issue and one that is a long way from being solved. It is very difficult to determine which side of this argument to defend, as both sides acknowledge the facts, yet put a completely different spin on them. Do you believe Nike's critics who say they're exploiting workers? Or, do you believe Nike when they say that they are giving workers in these countries wonderful opportunities to raise their standard of living? The consensus answer to this question by all sides seems to be that Nike is improving but still has a ways to go. Nike's Asian ties can be traced back to the birth of the company. The CEO, chairman of the board of directors, and co-founder, Phil Knight, wrote his masters thesis at Stanford University in the 1960's on the prospects for using Asian labor to produce goods cheaper and more effectively. In order to incorporate this plan in to Nike's business structure, a partnership was set up with a Japan based company called Tiger Sports. Tiger Sports would manufacture shoes for Nike in Asia then shipped them to the United States to sell. In the 1980's however, this aspect of Nike's partnership with Tiger Sports was dissolved, and Nike was forced to expand production from the United States to countries such as Taiwan and Korea where their products could be manufactured at the same relatively low cost that Nike enjoyed through the Tiger Sports partnership. Over the last five years, however, the production numbers for these countries have been decreasing at an alarming rate due to the fact that their economies expanded at a very rapid pace. This, in turn, caused the cost of labor to increase dramatically, and therefore Nike could no longer produce their product as efficiently as before. In lieu of the rapid economic growth in the Pacific Rim, and the increased production cost, Nike has moved more into countries such as Vietnam and China where the labor is cheaper and labor laws less stringent. (VLF, VN Fact Sheet)Nike does not own any of the factories that produce its products in Asia, and subsequently they do not directly employ the workers or management. They contract out work to factories that make all of the products and run all of the factories. They do, however, have a massive amount of leverage when dealing with these factories because of the huge contracts they supply. To ensure good labor practices, Nike has a Code of Conduct that every contractor must agree to abide by in order to get a contract. The Conduct Code in theory condemns and prohibits child labor, requires that workers be paid fair wage, imposes caps on the days and hours a worker can be forced to work, prohibits mistreatment or discrimination of workers in any form, obligates factories to implement programs that benefit worker's health and safety, and recognizes and respects the workers right to freedom of association. There are 1000 Nike employees...

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