Case Discussion Questions
1. Should Nike be held responsible for working conditions in foreign factories that it does not own, but where subcontractors make products for Nike?
Some people probably think that designing and marketing its products is what Nike is responsible for. But outsourcing its manufacturing divisions into foreign countries doesn´t release Nike from the responsibility. During a developing process manufacturing is one of the most important intermediate steps and because of that it belongs to Nike´s responsibilities, no matter if they own the manufacturer or not. Everybody knows that it is hard to keep the overview about every developing stage but if you decide to put ...view middle of the document...
” The reduction of toxic chemicals and the improvement of ventilation is very important at this point. The next step is the improvement of working conditions. Here an employee should work maximum “54 hours a week” and of course the monthly salary of the employees is supposed to be minimum “103$”. The combination of a safe workplace and fair adjusted working conditions lead to a positive feeling for the employees and gives critics no space to create negative press.
3. In Indonesia, an income of $2.28 a day, the base pay of Nike factory workers, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given these national standards, is it appropriate to criticize Nike for the low pay rates of its subcontractors in Indonesia?
Of course it is! If a farmer is sick and needs to go home, he can. If he did not finish the minimum amount of crop he is not supposed to stay at the field. He is not imperiled to toxic chemicals and does not have to remain silence. The working conditions in those low-wage factories are worse than in every other job. On the one hand I understand Nike and I do know that it is impossible to keep an eye on everything but on the other hand if you know that people have to work for you in those bad situations you have to pay them at least more than they normally earn so that there is a little level of “justice” in those factories.
4. Could Nike have handled the negative publicity over sweatshops better? What might it have done differently, not just from a public relations perspective but also from a policy perspective?
In my opinion a company like Nike has very experienced managers in executive positions. The intention of outsourcing manufacturing into foreign countries like Korea can lead to many problems. Before you start operating in those difficult locations you have to make up arrangements. One of them should be an audit team which checks the actual situation and report it to the current person in charge. They would have seen that there are very strong disproportions in manufacturing factories and would have done something against it. I don’t know why but making and signing contracts is one of the main functions an area manager does and especially in this case they missed drawing up contracts with factory owners to prevent those bad working conditions.
Anyway the way how Nike handled this difficult situation was not bad but perhaps too late. To “establish an...