Ethical Case Analysis:
Nike was established in 1972 by Bill Bowerman and Phil Knight. These two men were visionaries. The goal for Nike was to carry on Bowerman’s legacy of innovative thinking by helping every athlete reach their goal or by creating lucrative business opportunities that would set the company apart from any competition. This included providing quality work environments for all who were employed by Nike.
However, Nike has long been eluding allegations of employing people in the developing and under-developed economies, at low wages and poor working conditions for a long time. ...view middle of the document...
These workers are faced with long grueling hours, some as long as sixty five hours per week, this according to the NY Times. Employees at this particular factory were located in Vietnam. (Greenhouse, NY Times) Working all those hours and only bringing home $10 USD a week. The employees endure this type of treatment because they are desperate for the little money they earn. This brings me into my next point of concern, low wages.
Nike contracts all their manufacturing to developing or third world countries. Even though the countries wages are lower than our own here in the US, Nike fails to provide wages to workers at a rate in which they can sustain themselves and their families. Because of this, cheap labor is exploited and many workers are treated poorly. Some workers earning these low wages were children as young as early and preteens.
Deplorable working conditions have lasting effects on employees. Many employees experienced skin and breathing problems in those factories. Just because you are operating in a country that is not up to the standards of the United States, does not make it ethically okay to subject your employees to conditions that are unacceptable.
One can speculate as to why Nike would be involved in such a Hodge podge of ethical dilemmas. Could it be because they are not operating in the US and feel as though they should not abide by the ethical standards and OSHA requirements set forth in our country? Is it that the upper management has something to gain personally from outsourcing its labor to under developed countries? Should our government step in and be able to regulate how the factories and workers are treated on foreign soil?
I do believe Nike was socially responsible for its actions. When the allegations came to light in the public eye, there was a lot of backlash regarding them. Nike joined a task force called fair job labor association to review the allegations made against them. This was to help ensure that Nike was abiding by the ethics code in the shoe and clothing industry. Since the allegations came out in 2008, Nike has helped improve the conditions in its manufacturing plants by improving the ventilation systems, reducing the use of many toxic chemicals, as well as improving safety features for those who work in the plants.
By joining a task force that helps promote fair labor practices, Nike is taking responsibility for its actions and showing the global market that is does take an interest in those working in the factory. This helps to alleviate any hesitation consumers may have with purchasing products made by Nike.
The Sarbanes-Oxley Act of 2002 can help Nike monitor the compliance of the factories in foreign companies because it can help Nike monitor the wages paid to its employees more closely to ensure they are being paid fairly. As well it can help the company identify any significant changes in internal controls and related factors.