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Case Study "Nike: The Sweatshop Debate"

1175 words - 5 pages

Case Study "Nike: The Sweatshop Debate"
Sarah Martin
MGT 448
July 27, 2011
Kenneth Peter

Case Study "Nike: The Sweatshop Debate"
“We’ve run the course – from establishing codes of conduct and pulling together an internal team to enforce it, to working external bodies to monitor factories and engaging with stakeholders” (Nikebiz, para. 2). The creation of this code of conduct came after serious allegations of using sweatshops with women and children working in hazardous conditions for less than minimum wage in overseas factories scattered across the globe to make their product. This paper uses the case study entitled, “Nike: The Sweatshop Debate,” to describe the legal, cultural, and ...view middle of the document...

154). Nike subcontracts its manufacturing to countries such as China, Indonesia, Taiwan, and a Vietnam factory owned by a Korean company. When companies subcontract to overseas companies, they are putting themselves at risk because they are not able to fully manage the workplace by evaluating and monitoring labor practices. These companies save money on wages. “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. The Indonesian government admits that the minimum wage there does not provide enough to supply the basic needs of one person, let alone a family” (Hill, p. 155).
In regard to this case study, Nike faces many challenges to legal, ethical, and cultural points of view. Nike has the responsibility to act in an ethical way, both in the United States and overseas. Nike states, “Our code of ethics for employees is called Inside the Lines; it defines the standards of conduct we expect of all our employees. Every year, employees are required to verify that they have read and understand Inside the Lines. We expect our suppliers to share our standards and to operate in a legal and ethical manner. While Inside the Lines covers the behavior of Nike employees, our Nike Code of Conduct covers contractors who manufacture Nike-branded products. It directs them to respect the rights of their employees, and to provide them with a safe and healthy work environment” (Nikebiz, para. 3 & 5). It is unfortunate that Nike chose not to see what was happing in overseas factories they subcontract. Factory workers in Vietnam making $40 a month, 11-year-olds in Indonesia making 14 cents per hour, violating Chinese labor laws by employing workers as young as 13 earning as little as 10 cents an hour for 17 hours a day are unacceptable condition to most people in the United States. These conditions are what started the action against Nike. With the press running stories regarding Nike’s sweatshops overseas, they stood to lose a great deal of money if they did not show some effort to ratify these claims. They had an ethical obligation alleviate the sweatshop accusations.
“Unaccustomed to playing defense, over the years Nike formulated a number of strategies and tactics to deal with the problem of subcontractors’ working conditions and pay. In 1996, Nike hired Congressional Representative Andrew Young to assess working conditions in their factories around the world. He did not use his own translators and did a slipshod inspection. In 1996, Nike joined a presidential task force...

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