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Economics Essay

1050 words - 5 pages

Nike’s cultural issues

Erica Cuington

ETH/316

May 1, 2013
Robert Woener

Poor work conditions and exploitation of children in the labor force are some of the common problems that are faced by organizations at the local and international. Despite the problems, nothing or very little has been done to prevent the labor related problem until it’s too late. Like in the event of a tragedy, it is then when the public takes and interest and protest against child labor. These are the same conditions that the United States faced during the Industrial Revolution. Such work conditions have currently been effectively dealt with in the United States apart from some small ...view middle of the document...

The Nike Corporation was founded by Bill Bowerman and Philip Knight. The founders of this organization opted to venture into other countries like Japan as a way of saving money for production and labor cost. It emerged as a Blue Ribbon Sports organization operating in the United States but later went global in its efforts to expand the company’s products line.

The company has also managed to expand its outsourcing to different countries including Pakistan. In Pakistan, Nike Company faced serious cultural issues including the use of children for Labour and poor work conditions. The allegations ranged from situations where children’s job was to stitch soccer balls to stitching of and sports garments. Boje & Khan (2009) indicate that Sialkot, Pakistan has been the place where soccer balls of Nike Company have been produced for several years and it is estimated that thousands of children have been used as workers in the production process of the company’s goods. Various world cultures do have different views concerning the responsibility that children should be given.  This is a different case with the United States where child law laws have been passed to protect the American children from being used as labourers at a young age.

The main cultural issue that affects Nike Corporation is child labor and this is a problem that has affected this company’s interaction with other countries outside United States. The discovery of the company’s malpractices led to countless attacks on the Nike brand and strict recommendations had to be set to improve working conditions.

Ethical and social responsibility analysis

For the corporation to remain competitive in terms of price without the need to reduce its workforce, the company decided to outsource its manufacturing factories overseas just like many other companies have done. This gives the company a cost advantage over its competitors and enables the corporation to go further and venture into new emerging global markets. Though this might be seen as an unethical practice by others, because the company was shifting its jobs from the US, some may say that Nike’s decision was in the best interest of the company.  when a company is unable to maintain an competitive edge within their current markets, it will experience stagnated growth...

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