For well over a decade, Nike became defined by the term ‘sweatshop labour’. It was simply one of the principal things for which it became famous. Consequently, a good many people saw it as the epitome of uncaring capitalism. It was one of the demons of the anti-capitalist campaigners.
In reality, there was no truth to the idea that the company was wicked or uncaring. It was simply one of the first that had pioneered a new business model, and it was learning the hard way that it’s hugely successful formula had unintended consequences that would have to be dealt with.
Nike was originally founded in 1964 as Blue Ribbon Sports, changing to Nike in 1971. One of the two founders, Phil Knight, came up with the idea while he was at Stanford Business School. At the time, the vast majority of US footwear was manufactured in America. Nike was able to grow quickly using the model of outsourcing production to a network of suppliers in parts of the world where costs were lower.
By 2005, the company’s steady progress began to gain grudging respect from some of the campaign groups
Nike didn’t own the factories. In a very real sense, Nike has never manufactured a single shoe in its entire history. And because it didn’t own the factories, the assumption was that running them was business of the owners, not Nike. In its early decades of existence, there was apparently no evidence of any problem that challenged that assumption.
But by the 1990s, the world was changing. Economic deregulation was leading to a huge increase in the globalisation of the economy, and as the scale of global corporate activity was ramping up, the negative consequences were becoming highly visible. Consequently, the US and European home markets began to hear more about working conditions in foreign factories. Nike was neither better nor worse than any of its peers at this point. The whole outsourced industry was based on the premise of “ignorance is bliss”. But ignorance was proving more and more difficult to maintain.
The company began to make changes. It revised its factory code of conduct, and hired auditing firms to carry out safety checks. But by and large, it was still left to the factory owners to sort themselves out while Nike negotiated for the lowest possible prices.
Everything changed in 1996. Life magazine published a story that included a photograph of a child stitching footballs that carried the Nike logo. There is some evidence that the photo was staged, since it showed inflated footballs while in reality the balls were shipped uninflated. It didn’t matter. The picture was a powerful visual for a situation that was shown to genuinely exist. The company’s reputation suffered and the first of many protests began to take place.
By 1998, the company accepted it needed to take responsibility. Phil Knight admitted “the Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse.” It was going to be a longer journey than they might have imagined. Nike and child labour had become indelibly linked in the public consciousness.
Nike began to take the first steps. It released the names and locations of its factories. It changed elements of its shoe manufacture to reduce hazards to the workers who make them. It began producing reports to talk about its progress. And it put more focus on audits of factories to identify problems.
Still, the popular view of the company as a villain refused to go away. In 2001, one particular incident summed up the problem. The company had offered customers the ability to have a word of their choice stitched onto their new Nike trainers. One enterprising critic requested that the word ‘sweatshop’ should be used for his shoes. The company’s refusal was one of the first examples of a viral internet phenomenon as the email exchange got shared widely across the world.
Organisations such as ‘NikeWatch’ and the Clean Clothes Campaign expressed skepticism about Nike’s efforts, taking a cynical view of its seriousness and sincerity.
But by 2005, the company’s steady progress began to gain grudging respect from some of the campaign groups, and it seemed like the mood music might begin to change. Then just at that point, there came a crisis that threatened to take it right back to the beginning.
In the run-up to the 2006 World Cup, photos were presented to the company of pictures of Pakistani children stitching Nike footballs – a direct repeat of what had happened ten years earlier. It turned out that the supplier, Saga Sports, having become overwhelmed with orders linked to the approaching World Cup, had gone against the rules by sending balls out to be made at local homes.
There was a significant cost to dealing with this problem. To recall the balls would cost $100m short term, and it would delay future production considerably. The company decided to pull the product anyway and to cancel its contract with Saga, moving instead to Silver Star where all work would be done on factory premises.
It was a short-term financial blow, but it sent a strong signal to the company’s suppliers and its customers at the same time, that it was serious about tackling the problem.
The impact on former supplier Saga was enormous, essentially driving it to bankruptcy. Other suppliers based in Sialkot, Pakistan took careful note.
Nike has shown itself to be willing to take other tough decisions, for instance pulling support from a major low cost supplier in Bangladesh because it was impossible to provide working conditions that met decent standards. This was a move that gave it a competitive disadvantage when others were exploiting Bangladesh as the lowest possible cost base. But it left the company less exposed when the Rana Plaza building disaster took place and hard questions began to be asked about who was doing what.
Now, Nike finds itself more often at the top of lists for sustainable companies, particularly within its sector. It appears in the top ten of the Fortune Most Admired Companies list. Its commitment to improving its environmental impact, providing transparency about its processes, and ensuring decent working conditions in its supply chain, have turned the tide of public perception.
Now the company is more often to be found on the front foot when it comes to matters of integrity. For instance, when boxer Manny Pacquiao recently made anti-gay comments during a media interview, Nike dissolved its partnership with him the very next day, labelling his comments “abhorrent.”
The company’s turnaround has become one of the success stories of corporate integrity in the last two decades.
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1996 - In response to the controversy around the use of child labour in its products, Nike created a department that focussed on improving the lives of factory workers.
1999: Nike begins creating the Fair Labor Association, a non-profit group that combines companies, and human rights and labor representatives to establish independent monitoring and a code of conduct, including a minimum age and a 60-hour work week, and pushes other brands to join.
Soon after, it became the subject of an aggressive and sustained campaign by United Students Against Sweatshops. Nike was initially slow to respond—but under increasing pressure, it eventually made some changes by improving its monitoring efforts, raising the minimum age of workers, and increasing factory audits.
Nike is one of the largest companies that use sweatshops and child slave labor. Nike has sweatshops all over the world. In the 1970s, Nike's shoes were mostly made in South Korea and Taiwan, with some factories still in the United States. However, in 1984 the $5.2 billion dollar Nike Corp.
Nike's initial response was to deny its association with unethical practices. However, under the influence of public pressure, the company was forced to take action to resolve cases of its unethical working practices.
Nike specifically and directly forbids the use of child labor in facilities contracted to make Nike products. The Nike Code of Conduct requires that workers must be at least 16 years of age, or past the national legal age of compulsory schooling and minimum working age, whichever is higher.
Beginning in 2002, Nike began auditing its factories for occupational health and safety. The backlash and its public relations impact forced the company to change methods, improve conditions, and implement social responsibility reports in 2005. Nike has since began initiatives to improve their factory conditions.
Most Nike products are either made out of cotton or polyester, both of which can be very polluting. Starting with cotton, the Ethical Consumer found that Nike has not set clear intentions with their approach to the pesticides and herbicides used to grow cotton crops.
Answer and Explanation: Yes, Nike would have managed to handle unfavorable publicity differently through the sweatshops by employing its separate departments to handle this negative advertising.
Once Japan got too expensive they looked for another place to put their factories. They then settled in Vietnam, China and Indonesia. Since Nike made these factories in these countries there have been allegations and proof of forced labor, child labor, widespread harassment, poor working conditions and abuse.
Child Labour. Although Child Labour laws are in place in countries NIKE still choses to overlook this and children as young as 12 years of age are made to work in the factories for long hours. ...
“We work to elevate human potential through our products, partnerships and operations, something that cannot be accomplished without a fundamental respect for human rights throughout Nike's operations,” Nike's statement on forced labour, human trafficking and modern slavery for fiscal 2022 reads.
A representative for Nike did not immediately respond to requests for comment. The company's most recently available impact report from fiscal 2021 cites forced labor, supply chain transparency and labor rights as some of its essential priorities.
In response, Nike maintained its commitment to “ethical and responsible manufacturing” and claimed that it does not source from Xinjiang. But that statement led to a boycott in China.
Encourage each other… Hate speech, bullying, or other behaviors that are not in the spirit of a diverse and inclusive community will be deleted," Nike wrote.
Our research highlights allegations of forced labour in the Nike supply chain, gender discrimination towards female athletes and parents, and failure to ensure all employees receive a living wage.
Nike Is Facing Backlash Over Its Partnership With Transgender Activist Dylan Mulvaney. People are calling for a boycott of Nike because of the brand's partnership with transgender activist Dylan Mulvaney.
On the plus side, Nike has committed to not knowingly using Uzbek cotton—where forced labour and child labour has been rife—after being called out for it in early 2020. The brand also now ensures payment of a living wage in a small proportion of its supply chain.
NIKE is committed to socially responsible sourcing practices. We are driven to do. not only what is required by law, but also what is expected of a leader. We expect our. business partners to do the same.
We adhere to safety, health, environmental protection and labeling requirements for products in compliance with all applicable laws. And we work with the factories that make Nike products to meet our standards for compliance, health, safety and quality.
Initially, Nike was making mistakes in adopting a denial approach; Nike's initial reaction to this negative publicity was to ignore them. They reasoned that that they did not own the factories and were therefore not responsible for labor and human rights violations.
Nike's use of more sustainable materials increased from 41% to 59% in 2020. Nike apparel labelled with 'sustainable materials' has at least 50% recycled content. Nike significantly reduces its emissions and impact by reusing, recycling, and repurposing existing materials.
They admitted to continued problems and acknowledged the issues while working toward change. Today, Nike is one of the leaders of corporate social responsibility (CSR).
Scope 3 involves indirect GHG emissions in the company's upstream and downstream activities. Scope 3 emissions form the major portion of Nike's total GHG emissions, accounting for around 98.9% (10823.56 thousand tonnes of CO2eq) of total GHG emissions in 2021.
The Nike lawsuit records allege a culture of sexism, bullying and fear of retaliation arising from a toxic ''boys' club culture.'' Plaintiffs cited unequal pay, providing graphic employee statements relating to the unacceptable treatment of women in the workplace.
Nike has also been working on eliminating inefficient steam boilers within their factories and replacing them with electric heaters. These electric heaters have allowed some factories to reduce their overall energy use by 15-20%.
1: Should Nike be held responsible for working conditions in foreign factories that it does not own, but where subcontractors make products for Nike? Ans: Nike should be held responsible for its subcontractors, as it is operating in countries which lower its costs and increasing its profit.
A long-running sexual harassment and gender discrimination lawsuit against Nike has produced more than 5,000 pages of records, including surveys of female employees that allege sexist attitudes and behavior at the sportwear giant alongside corporate bullying and fears of retaliation.
Nike has long been criticized for its glittery surface representation of diversity and social justice while maintaining conservative political ties, discriminatory relationships with women athletes and employees, and questionable labor practices.
In the 1990s, the Portland-based sportswear giant was plagued with damning reports that its global supply chain was being supported by child labor in places like Cambodia and Pakistan, with minors stitching soccer balls and other products as many as seven days a week for up to 16 hours a day.
Sweatshops are often seen as stepping stones on the path to economic development. When millions move away from subsistence living and produce a surplus that can be invested and spent, whole nations rise up out of poverty.
As in earlier times, current American sweatshop workers tend to be immigrants (legal and undocumented) seeking economic opportunity and political freedom. Desperate for work and primarily women, these workers become easy prey for unscrupulous employers.
The company's founder, Phil Knight, came up with the idea of outsourcing manufacturing jobs to cut costs while attending Stanford Business School in the early 1960s, according to the Wall Street Journal. The company now has 68 factories in the U.S., representing just 9% of its manufacturing facilities.
Nike encourages its employees to participate in making a positive impact. “We do what we call Give Your Best,” Jorge says. “An employee might want to connect to their purpose by volunteering at their kid's school.
Social/Sociocultural Factors in Nike's Business Environment
This social external factor reflects changes in the demographic characteristics of markets for sporting goods. Demographic changes can come with changes in customer preferences and demand for products, such as different types of shoes and apparel.
Besides sharing content, Nike also uses its social media channels to listen to its customers and respond to their comments and questions in a timely and personalized manner. This helps them solidify their relationship with their audience and build further trust in their products.
The low wages and talented manpower in China encouraged Nike to shift some of its production from other countries to China. However, Philip Knight, one of the founders of Nike saw China as a huge market for Nike. The consumer presence of Nike in China started in 1981.
Nike grew rapidly in China, but instead of bringing its products over directly, Nike chose to sponsor Chinese sporting clubs and athletic events. During the 2008 Beijing Olympics, Nike took the initiative to sponsor several sports teams, which took the brand across the entire country.
In a fiscal 2022 statement on forced labor, Nike said it is growing its business "through long-term relationships with suppliers that are committed to our strict standards of sustainability and human rights, product excellence and compliance with local laws."
We adhere to safety, health, environmental protection and labeling requirements for products in compliance with all applicable laws. And we work with the factories that make Nike products to meet our standards for compliance, health, safety and quality.
Today Nike is the world's leading innovator in athletic footwear, apparel, equipment and accessories. Along the way, Nike helped the world's best athletes win races, games and championships.
Nike. Sportswear giant Nike outsources the production of all its footwear to various overseas manufacturing plants. According to a report out of Ohio State University, China does 36% of all Nike's shoe manufacturing, while Vietnam has another 36%, Indonesia accounts for 22%, and then Thailand comes in at 6%.
Nike's Weaknesses – Internal Strategic Factors. In the last 20 years, Nike has been consistently targeted regarding their poor labor conditions. These issues include forced labor, child labor, low wages, and horrific working conditions that were deemed “unsafe”.
Nike received Ethical Consumer's worst rating for its cotton sourcing policy, because it lacks a clear approach to use of pesticides and herbicides. Cotton accounts for 12.34% of all insecticide sales and 3.94% of herbicide sales, even though cotton covers only 2.78% of global arable land.
Sponsorships, advertising and experience focused retailing (Nike town) are three vivid channels that Nike has applied to enhance its brand image and awareness. Among these strategies, athlete endorsem*nts could be considered as the most significant success of Nike brand.
Introduction: My name is Greg O'Connell, I am a delightful, colorful, talented, kind, lively, modern, tender person who loves writing and wants to share my knowledge and understanding with you.
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