Case Study: Nike

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[. . .] For example, "In countries like Bolivia, more than 100,000 children and teenagers have organized unions to defend their right to work, demanding government protection and improved job conditions" (Friedman-Rudovsky, 2011). Therefore, while Nike's usage of child labor may be morally troubling, it is certainly not the moral absolute that it appears to be at first glance. As a result, one must examine Ballinger's other critiques of Nike's labor process.

Jeff Ballinger maintains that, even when one takes into account the differences in cost of living and the comparison of the purchasing power of a dollar in foreign countries, particularly Indonesia, Nike is still engaging in exploitative hiring practices. He believes that the calculations that Nike has used to support the idea that its wages are living wages are intrinsically flawed, perhaps because they are based, in part, on comparisons to wages paid by other companies that also fail to pay living wages. In fact, what Ballinger believed about Nike's business model was that if fostered abuse of workers. "Ballinger believed that Nike's policy of competing on the basis of cost fostered and even encouraged contractors to mistreat their workers in pursuit of unrealistic production quotas" (Spar, 2002). At the same time, Nike was engaged in domestic ad campaigns that depended upon million-dollar celebrity endorsements and was aggressively marketing its products as being high-end. Ballinger chose to focus his attack on Nike, although Nike's practices did not necessarily differ from those of other manufacturers who outsourced their products, specifically because such a campaign would highlight the differences between how the workers were treated and Nike's branding in the United States. "The same marketing and branding power that drove Nike's bottom line could also be used to drive moral outrage against the exploitation of Asian workers" (Spar, 2002). Ballinger's work eventually coincided with worker strikes, particularly in Indonesia, where the minimum wage was raised in response to worker concerns, though it did not approach a living wage.

Nike's initial response to the allegations was absolutely ridiculous and it hurt the company's image. "Despite the criticism, Nike insisted that labor conditions in its contractors' factories were not -- could not -- be Nike's concern or its responsibility…Nike's company line on the issue was clear and stubborn: without an inhouse manufacturing facility, the company simply could not be held responsible for the actions of independent contractors" (Spar, 2002). However, while this denial may have worked when criticism was localized to Asia, it was not well-received in America. American consumers were well aware that Nike's products are expensive and that it had highly-paid celebrity endorsers. To suggest that Nike would not take responsibility to ensure that its workers were treated well seemed arrogant and offensive and turned many away from the brand. Of course, many consumers did not care about human rights violations and continued to purchase Nike products, but its image and brand were tarnished.

That could have been the end of Nike's story. However, in the late 1990s, Nike began to make real changes in its employment policies and procedures, which increased its accountability for the treatment of workers even those who had subcontracted. This accountability was put into practice, as Nike began performing audits at subcontracting manufacturers in the early 2000s (Nisen, 2013). In 2004, this led to recognition by human rights advocates that conditions in many Nike factories had changed (Nisen, 2013). In 2005, Nike was the first in the industry to publish a list of all of its subcontractors, taking a substantial step towards the transparency that advocates believed would help result in positive changes for workers (Nisen, 2013). While there have been allegations of abuses since that time, they have significantly declined and Nike is no longer considered synonymous with abusive labor practices.

References

Friedman-Rudovsk, J. 2011, November 16. In Latin America, looking at the positive side of child labor. Retrieved June 2, 2014 from Time website: http://content.time.com/time/world/article/0,8599,2099200,00.html

Nisen, M. 2013, May 19. How Nike solved its sweatshop problem. Retrieved June 2, 2014

from Business Insider website: http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5

Spar, D. 2002. Hitting the wall: Nike and international labor practices. Harvard Business

School. Boston, MA: Harvard College.

Van Dusen, S. 1998. The manufacturing process of the footwear industry: Nike vs.

competition. Retrieved June 2, 2014 from The University… [END OF PREVIEW]

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Nike.  (2014, June 2).  Retrieved May 24, 2019, from https://www.essaytown.com/subjects/paper/nike-case-study/4223681

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"Nike."  Essaytown.com.  June 2, 2014.  Accessed May 24, 2019.
https://www.essaytown.com/subjects/paper/nike-case-study/4223681.