Nike Company’s Labor Case Study

These workers state the âonly thing they have is their work. This statement suggests that, without this work, they would have a lower standard of living. Should we inflict western values on this society? Bring in the concepts of social responsibility, integrity, and other business ethics practices

Yes, the western values should be inflicted on these societies to improve their labor practices and advance their social standards. Nike’s response to labor issues has been mainly superficial for it focuses on reputation management instead of undertaking real instigated reforms to resolve the underlying issues. The factories of Nike create numerous job opportunities in Indonesia with their workers becoming highly dependent on their work to overcome their low standards of living in the country.

Nike has over 700 contract factories in 42 countries worldwide with Indonesia manufacturing 20% of the Nike branded shoes (Yusoof et al., 2017). The high unemployment rate in Indonesia leaves a gap for employers to abuse their powers easily. As the bottom line is business ethics, a global company such as Nike should instill high integrity and ensure that there are no unfair labor practices related to discrimination, slavery, poor working conditions, and victimization (Porteous & Rammohan, 2013). There are various ethical issues that Nike has violated range from employer discrimination against employees, environmental damage, and wage reduction. Nike should enforce minimum wage policies and improve labor productivity by reducing wage discrimination to improve the business ethics in the company.

Nike has a social responsibility to their workers’ welfare and must ensure that they not only live in a healthy environment but also their standards of living are sustainable. Nike should make sure that the management treat workers well and report cases of harsh treatment, harassment, and physical abuse. As Indonesians are also humans, the laws that protect Americans’ rights in their pursuit of life, liberty, and happiness should apply to them.

From Nike as a standpoint, is this a fair assessment of their ethical standards? Explain some of the ethical issues that Nike is facing in the case

The ethical assessment is fair as Nike has been on the receiving end of numerous bad reports in regards to ethical concerns. The Nike’s Indonesian workers are in unsafe working conditions, low wage rates, restrictions on unionization, excessive overtime, discrimination against women, and negative environmental impacts. The company has denied workers their wages they deserve by paying them below the legal minimum wages. Although Nike claims it is transparent in its business, it does not change the reports of abuses, tragedies, and meager wages.

However, critics argue that Nike has improved the unemployment conditions in the community where the local government did not bother to improve. Moreover, critics hold that the local economy determines the level of wages, and thus, they assert that Nike has doubled the daily income of about half of the working population who receive less than a dollar a day. Nike also grapples with the high cost of production prompting it to reduce costs and even retrench employees.

To date, Nike has not been successful bringing its factories into check for there is minimal evidence to indicate that the company has executed most of the promised reforms in recent decades. Currently, Nike might not be the only company to use sweatshops to gain cheap labor, but it is the major one most people know. Overall, Nike has ethical issues related to labor because it does not comply with international labor practices. As a global company, Nokia has a legal and ethical responsibility of ensuring that it pays its workers a living wage based on purchasing power.

Research what Nike has done to improve this situation since this 2011 video. Include the use of codes of ethics and other ethical standards implemented within the organization

Over the past few years, Nike has been proactive in making significant improvements in its sustainability practices and improving ethical standards. Nike collaborates with governments, non-governmental organizations, labor unions, and management in training employers to comply with the best labor practices. The Indonesian Labor Rights Project (ILRP) is one of the organizations that collaborated with Nike in ensuring that there are sustainable livelihoods for the workers of Indonesia. The company implemented an industry-wide protocol on freedom of association that helped workers to form constructive organizations, which strengthened workplace rights.

One notable occurrence that did not reflect in the protocol but happened as a consequence is the progress in communication between the union and the brand. Besides, through a convergence of a single code of conduct across all industries, every contract factory in Nike’s supply chain has been subjected to a rigorous set of compliance standards, starting with Nike’s code of conduct that every factory has to meet. Companies that have a low performance across sustainability standards, including labor and environmental practices on a par with quality and on time delivery have been subject to sanctions by the company (Carrol, Schrifin, & Brady, 2013). Nike became a member of the Fair Labor Association that is helping the company to promote corporate accountability among its employees.

Is your opinion of Nike any different now after viewing this video? Would this change your buying behavior with respect to Nike products?

My opinion of Nike drastically changed upon realizing that it exploit its workers and deprive them of a decent base wages needed to improve their low standards of living to augment profits. I perceive that Nike is not willing to protect workers and comply with the best labor practices for the current interventions are only meant to hoodwink the public, government, and labor organizations. Therefore, my buying behavior relative to Nike’s products will certainly change for I will shift to similar products in the market. Unless Nike makes additional substantial changes to improve working conditions of its workers, I will not purchase its products. The factory workers deserve favorable terms and conditions to enhance their living standards.

References

Carrol, G., Schrifin, D., & Brady, D. (2013). Nike sustainability and labor practices 2008-2013. Web.

Porteous, A., & Rammohan, S. (2013). Integration, incentives and innovation: Nike’s strategy to improve social and environmental conditions in its global supply chain. Web.

Yusoof, S., Zuber, F., Hazrin, M., Zamziba, Z., & Toriry, S. (2017). Wages of labor discrimination: Case study on Nike Company Indonesia. International Journal of Academic Research in Public Policy and Governance, 4(1), 19-27.