Ethical Business of Nike Company


EthicalBusiness of Nike Company

NikeCompany is a leader globally in the areas such as sportswear making.The company has been selling high quality fashion sportswear for along time hence, achieving global dominance. It has a strong brandthat has been due to issues like devotion to clients, consistency,dependability, and transparency. However, the firm has been accusedof little regard for the welfare of their employees. The accusationsare based on the fact that employees are subjected to poor workingconditions such as low pay, long working hours, and overcrowding. Dueto the economic advancement, the employees sought to look for betterpaying jobs while labor unions in these countries gained greatinfluence. When the employees sought for additional benefits, NikeCompany closed its shops and moved to areas where they would operateat low costs. The company took advantage of the situation and ignoredthe rights of the workers. The factory heads had no relations withthe employees hence could not contemplate their interests and needs.The supervisors overstepped their mandate where they ignored therights of the workers. They managers were more interested in cuttingthe production costs in order to maximize their profits. They alsolowered the health standards and work ethics. Poor social performancehas led to poor performance and reputation owing to poor treatment ofemployees. Lean strategies can help enhance social performance aswell as increase the adoption of ethical values.

Intheir article on the Wall Street Journal, Autry &amp Davis-Sramek(2015) examines unethical practices arising from outsourcing andother business practices by multinational firms in the emergingmarkets. The two authors recognize that some companies believe thatengaging ethical practices are not economically viable. Approaches tooffshore production to the emerging markets have generated protestsagainst sweatshops. Moving production processes and manufacturingplants to the developing nations have significant benefits such asreduced labor costs and market potential. Unfortunately, the approachis misused by many manufacturing firms such as Nike Inc whosefactories are unsafe, with poor working conditions. Poor conditionsgenerate business challenges that cannot be ignored by the company.

Accordingto Autry &amp Davis-Sramek (2015), companies with poor approachesand systems in their supply chain continues to record reducedprofitability. Nike Inc is among the companies accused of having poorworking conditions within their factories. It is noteworthy that poorworking conditions reduce the productivity of the employees henceminimize the reliability of the supply chain. The authors note thatoutsourcing production has benefits to the local economies such asjob opportunities to the citizens. Low-cost regions are known to havea potential to create a stable production environment. Unfortunately,these regions lack appropriate laws to guard against unethicalpractices or even safe labor practices. Inadequate legal regimecatalyzes the emergence of sweatshops in the low-cost areas. Thesituation in the low-cost areas gets worse due to unrealistic demandsby the activists and local government agencies. A study on Bangladeshapparel industry where Nike has factories reflects the trendregarding the poor working conditions and business challenges facingthe organization. In their assessment, Autry &amp Davis-Sramek(2015) also highlights the Rana Plaza factory disaster where over1,100 people died. The disaster brought about the need to improvecompany safety by eliminating the structural issues jeopardizingemployees’ safety. The authors recommend safety measures includingemployee training and compensation for affected employees. Nike Incworking alongside other companies and advocacy has created analliance aimed at financing and supporting safety awarenessinitiatives. Activists recommend punitive measures for firms that donot comply with good business practices.

Inmanufacturing, a firm has to follow a standardized and well-organizedapproach that will ensure that the output meets the demands of theclients. Lean in manufacturing industry seeks to improve theproduction process, which results in quality and cost-effectiveproducts. Further, it also reduces turn-around time by ensuring theproducts are produced within the stipulated time. The implementationof lean approaches in the manufacturing industry must look at thestep by step processes involved in the production and productdevelopment. Continuous improvement of existing processes andcompliance with the procedures is important to avoid riskyeventualities. Manufacturing industry looks at issues such as supplychain and distribution to inform the implementation of the leanstrategies.

Poorstandards reflect in wages and work hour practices. It is notablethat poor working standards have resultant effects on safety andhealth issues within an organization. Many firms do not push for leanstrategies beyond manufacturing and production processes, whichaffect the link between the products or services and the customers’needs. Ideally, lean principles are meant to create value for thestakeholders using few resources, time, and effort. These calls foran understanding of the stakeholders’ needs and later devise astrategy to solve or meet them. Problem-solving should start withunderstanding the needs of the stakeholders to inform the businessapproaches. The approach helps in detailing how to effectively help acompany to figure out what, how and why to get things done the rightway in order to manage on the likely future risks. Closing factoriesmay not help much as it denies livelihoods to the workers. It is thusnecessary to engage in initiatives that ensure commitment to ethicalvalues as well as enhance business sustainability. Strategic andcollaborative initiatives may help much in enhancing the safetywithin the factories. It is the company’s responsibility to remainsocially responsible. Otherwise, engaging in unethical practicesthreatens business viability and sustainability.

Inconclusion, proper utilization of the resources using the rightstructure is essential to reduce wastage, conflicts, encourageinnovation, and unethical practices. Adopting lean approaches willnot only improve social performance but also the labor relations. Thefindings also indicate that improving the management systems does notguarantee improved labor relations in an organization. The approachcan also help in creating a better supply chain that reduces socialharm. In essence, the adoption of ethical values in businessprocesses is essential to warrant positive performance and bettertreatment of all stakeholders not just the employees. Nike Inc needsto enhance their strategies on ethical behaviors otherwise, they arelikely to face legal challenges and possible loss of business.Practices that are likely to tarnish a company`s image need to beeliminated to enhance the attainment of long-term objectives. It isappropriate to create policies that mitigate against undesirableeventualities. Further, the firm needs to embrace sustainableinitiatives by uniting the stakeholders. The changing businessenvironment and competition demand close interactions between thecompany and stakeholders. Stakeholder engagement serves to put theemployees, suppliers, and stockholders at the heart of any businessobjective.


Autry,C., &amp Davis-Sramek, B. (2015, 17 Aug). Guestvoices: Sweatshops hurt the bottom line. TheWall Street Journal.Retrievedon April 13, 2016, from