Nike_Case_Corporate_Responsibility_5_11

Nike_Case_Corporate_Responsibility_5_11 -...

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Jump Starting Corporate Responsibility  There was a time when Nike came under severe criticism for labor practices in the Asian factories with which it contracted to manufacture its products. Now, however, Nike is acknowledged as a leader in corporate responsibility initiatives. How did this transformation come about? How did Nike progress through the five stages of corporate responsibility? 1 The Defensive Stage In the 1990s, Nike was heavily criticized for alleged sweatshop conditions in some of the foreign-owned factories that manufactured its products. Critics charged that many workers were underage and that most were underpaid and subjected to poor working conditions. Nike was repeatedly ridiculed in the Doonesbury comic strip, and founder Phil Knight was taunted in an interview by documentary filmmaker Michael Moore in The Big One , an exposé of irresponsible (and sometimes unconscionable) shenanigans in corporate America. Some consumers boycotted Nike products, activists groups condemned the company’s labor policies, and students on a number of campuses staged demonstrations to protest Nike’s labor practices. Nike’s initial reaction was defensive. On the one hand, explained top management, Nike couldn’t control the factories because it didn’t own them. At the same time, Nike spokespeople hastened to add, Nike managers were in the factories on a daily basis to ensure that owners were complying with Nike’s labor standards and abiding by its code of conduct, which set down rules for the fair treatment of workers. Company representatives also noted that Nike routinely recruited independent inspectors to check compliance with labor practices. They pointed out the various ways in which Nike improved the lives of the factory workers and helped the countries in which it did business. Besides, they explained, Nike products were manufactured under better factory conditions than competitors’ products, so why weren’t competitors being criticized? The one thing that Nike did not address was the fact that there were problems in the factories. The Compliant Stage Before long, however, Phil Knight and other top executives recognized the inadequacy of their response. Nike acknowledged that there were unacceptable incidents in a number of factories and admitted that there was a good deal of room for improvement in working conditions. Some had employed underage workers, some were poorly ventilated, and workers in others were exposed to toxic chemicals. In a 1998 speech to the National Press Club, Knight clarified Nike’s obligation to workers at the factories with which it did business. Anybody, he declared, who makes a Nike product will be considered a Nike employee; Nike will treat them as if it owned the factories at which they work. He 1
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pledged to improve working conditions and described several new initiatives designed to carry out his pledge:
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Nike_Case_Corporate_Responsibility_5_11 -...

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