Business_Ethics

Meaning and importance of ethics within the business world (P1) Introduction The company Nike is basically consisted of within design, development and worldwide marketing of footwear, equipment, apparel and accessory products. The company sells its products to around 18,000 retail accounts within the United States and through a mix of distributors who are independent, also including licences, subsidiaries, in almost 200 countries. Nikes footwear products are developed and designed mainly for athletes although people just wear not only for athletics but wear them for casual or leisure purposes as well. The products that Nike produces are aimed at all ages and genders (male, female, and children). The companies top selling product categories include: • Basket ball • Running • Cross-training • Children’s • Women’s shoes Nike also develops and designs their products for outdoor activities such as: • Golf • Tennis • Baseball • Soccer • Bicycling • Football • Wrestling • Volley ball • Aquatic activities • Cheerleading • Hiking Nikes main aim is to provide innovation and inspiration towards every athlete within the world. Nikes visions consist of providing full range of high quality, technologically and performance orientated athlete shoes and a good variety of accessories targeted to all individuals of all ages and in all supermarkets. Within this task I will be looking at what ethical issues Nike may have to take in account and its operational activities. What is business ethics' An organisation that basically works’s in order to achieve their aims. An example is a public service organisation in which must deliver government and social services; for the benefit of a private business, it seeks profit. To help businesses achieve its aims and objectives, business managers within these organisations are paid to make the decisions. These decisions can be consisted of: • Staff • Location • Products • Marketing strategy • Financial investment Anything a business does in order for it to achieve its aims is referred from operational activities. Asda, Tesco, Sainsbury’s and Marks & Spencer all contain retails outlets all over the UK as this is an aspect in which these businesses operate in order to sell. Their operational activities involve: • Storing • Buying • Delivering • Advertising Issues related with ethics arise as a bad effect from poor business decisions. This can also affect and maybe even hurt the local people, customers and staff. Business ethics is now a plays a very vital part within management. Ethics basically means what is right and what wrong Ethics also plays an increasingly important role within businesses today. A business is like a part of the society and so therefore as the society requires a specific standard of behaviour from individuals; it also has an aspect of businesses abiding by similar standards. Business ethics is consisted of the application of ethical values towards business behaviour. This is applied to all aspects of the business conduct from how the companies treat their suppliers and boardroom strategies to accounting practises and sales techniques. Ethics is therefore a matter of choice as it goes beyond the legal requirements for a company. Business is applied towards the conduct of both the organisation and individuals as a whole. It is how the company operates its business and how in which its activities affect all of its stakeholders. Ethical activities Ethical business is mainly consisted of a broad agenda and focuses upon making positive contributions towards the community. An ethical bank for example the Co-operative bank thrives to make the world a better place the affect of taking a different approach to banking. The case within this businesses ethics is at least as high a priority as profitability. A body shop may present very identifiable and clears corporate culture. This culture is based upon 5 basic values. The culture of the business comes from the philosophy of the founder of the business e.g. Dame Anita Riddick. Nikes ethical activities Nike’s ethical activities basically consist of new and different products in which can enhance ones athletic performances. For example, this is done by Nike through producing products in which can benefit the athlete while performing within any environment. Different football shoes for different grounds e.g. hard concrete, grass, soft. Nike develops its shoes and tests them before sold in order to make sure the don’t contradict themselves for example if they sold shoes and stated that the shoes could make the athlete 10 times faster but as an athlete tries the shoes, there is now change in speed or performance. Nikes aims and objectives 1. As any other business, the Nike business want to grow and expand even further 2. Provide new products and experiences within a more sustainable way 3. To create new digital solutions, and to customise products for consumers more quickly than ever before 4. Maintain market leader 5. Nike believes to create positive social change, to build team work, self-confidence, leadership, fitness and to break down barriers such as discrimination and racism 6. To protect playing around the world from climate change 7. Put investing within sustainability as a key innovation in which prioritise consumer brands 8. Fast track innovation through collaboration and investment 9. Launch ‘green exchange’ as a platform in order to enable the sharing of intellectual property to fast track changes efficiently 10. Building upon advocacy agenda in order to push for large scale investments and polices sustainable innovation as a key enabler of global economic competitiveness Professional ethics This basically relates as to how people behave within the relation towards their chosen careers. To behave in certain ways or follow specific codes of conduct are expected from professionals such as lawyers, doctors, engineers and accountants. This is beneficial as it helps to guard against their actions I which bring their profession into disrepute. Dilemmas within the work place can arise from living up to professional ethics. An example may be the profession to whistle blow in which conflicts with the sense of loyalty to a company. In relation towards Nike, if they have workers with such high qualifications working for them but their behaviour isn’t very good, they may lead to Nikes reputation becoming very poor, an example of this may be if a customer wants to buy or is shopping within Nike and then sees a worker of Nike acting in a offensive way, its like the worker is representing Nike and so people may get put of and would stop shopping at Nike. It is very important for Nike to employ the right people and to control them as if not done so can lead the business to bad reputation. Individual ethical behaviour Once a particular individual is grown upon from a business, it may then become a corporation with a legal personality all of its own in which gives the business its corporate identity. However, large businesses today eve consist of individual personalities. If individuals within the businesses take unethical decisions, no matter what ethical principles a corporation might claim to possess, these may attain negative affects. In relation to Nike, this is consisting of decisions made within the organisation in which may be actually have an affect upon the business itself, so for example within Nike if one of the key manager within the business made a decision it could either be positive or negative I which it could consist of where to open a new store or branch within a certain area. If an area is picked in which is very quite and not busy then this could affect the business as not much business or attraction is being noticed. Ethical issues 1. Working Conditions People are entitled towards a set of minimum working conditions when starting work for a business, as with these working conditions they aren’t just about wages and salaries. It also consists of aspects of work such as: • Hours • Holidays • Privacy • Harassment • Discrimination It is within the employer’s power in which to develop working conditions that are just, fair and open. Workers rights against bad employers are defended from trade unions in which are responsible for this role. Relation to Nike Within Nikes factories, poor working conditions were applied towards labourers in which were certainly below the norms accepted in the developing world. The inhumanity of these conditions drives Nikes responsibility towards its employees while the lower standards of living may also apply in the countries that attain Nike factory contracts. Desperate to remain employed within their country, Nikes employees had to consider doing overtime in which long working hours had to be endured. An example of this is Nikes factory in the country Korea in which had to work 17 hours straight in silence. Nikes behaviour towards their workers within the factories isn’t very descent. 2. Human Rights Human rights are basically revolved around some very important questions in which some may be linked with discrimination. For example, it is illegal within the UK to treat certain people differently in relation towards their: • Race • Gender • Religion • Disability • Sexual orientation This is known as a basic human right. There are other human rights that are developed within our legal system in which is also entitled towards a contract of employment in which enables to work part-time, to be able to join a union and to attain a hearing against wrongful dismissal. Relation to Nike Low wages- Nike is contracted with companies in order to do all their manufacturing within developing or undeveloped countries. Nike still fails to employ people at a rate that can maintain their basic needs, even while the wage levels there are lower that the one within the developed nations. As such cheap labour is thoroughly exploited; the wages provided are much lower than the wages needed. Towards the minimum wages prescribed within the countries, Nike has actually attempted correcting the problem from employing people as a rate equally. Child labour- The child labour laws within many countries have been overlooked by Nike as with children as young as 12 and 13 years old in which are made to work long hours and bad conditions. Nike has taken steps in order to meet the starting age limit subsequently. 3. Corporate Governance A question arises in which is stated (Who makes the decisions'), when a businesses corporation is brought into existence. A limited company is consisted of a board of directors who the ‘governance’ of a medium to large business is important. Obviously there are rules applied to shareholders rights. In specific means, individuals in businesses consult and control the various decision makers within the corporation, which are crucial. Relation to Nike Nike is known for setting up manufacturing efforts in countries such as China, Indonesia ii which prohibit union operates. The affect of this is that it will lead towards lack of revolt and protests as will leave the employees with little choices regarding work conditions and wages. Through ethic terms is it difficult to argue against countries as their laws do not maintain provisions for employment governance. Facts show that these businesses often don’t have minimum wage requirements and abundant labour in which is put to use by companies like Nike for the absolute use. 4. Corruption Corruption lead to a major public concern as it arises in many forms. If a business corporation or a person use influence or unfair means to gain business or personal advantage, this leads to corruption. Local councils could employ a large variety of building companies in order to carry out construction work within their areas e.g. building roads, offices, houses and bridges. From local council contracts a lot of money can be made and it is only fair that when a local council has a building project to finish, the contract is openly a fairly developed available to all firms. Competition to carry out the job and so on should be based upon the quality, price and ability. Examples of serious corruption is if one of the officers or councillors were related to a builder and this builder were given the job or if a builder paid cash towards an officer in order to secure the work (bribery). A process in which is meant to guarantee fairness has become corrupt. Relation to Nike Expensive endorsements- Not only have Nike been targeted continuously by human right committees, they have also maintained unceasingly a high profile by having celebrities (Michael Jordon and Tiger Woods) to endorse their products. Over the past 5 years, Tiger Woods has been expected to earn around 80-90 billion US dollars from Nikes money. Through ethical terms it would have been more beneficial to engage a part of the money within Nike factory and employee enrichment. Expensive products- While it is certain that the products manufactured by Nike within contracted factories upon foreign lands for low costs, Nike still today sell their products at steep prices. Nike has been lead to generate massive profits from the sales revenues as the cost of production is low. 5. Legal and Regularity Compliance Businesses must follow several areas of law in which are designed to protect businesses employees, consumers and others in the wider environment. Relation to Nike Skin and breathing problems are monitored through the factories that make Nikes products. Nike must be sure and always check to make sure that it performs upon the standards set by OSHO within protecting employees from hazardous chemicals and processes within the manufacturing cycle. Stakeholders (P2) Introduction All existing businesses have attained a number of stakeholders groups in which each one consists of different interests in what the business does. From their investments, business owners (maybe key stakeholders) want good financial performance. The first responsibility of the manager from a business is to deliver goods and so this should also be known by the managers themselves. In present time it is accepted that businesses should be managed with the interests of all stakeholders in mind in which businesses exist in a diverse social, political and economic environment Stakeholders are consisted of 6 main points: 1. Owners 2. Citizens 3. Suppliers 4. Customers 5. Employees 6. Competitors 1. Owners: Owners- this is basically a fact or state consisted of rights and control over property. Being an owner also includes multiple rights which is collectively referred to as ‘title’ this may be separated and held by different parties. Ownership is the basis upon many other concepts such as: 1. Money 2. Debt 3. Trade 4. Bankruptcy 5. Criminality of theft 6. Private vs Public property 2. Citizens: This is basically a person who lives within a certain country. If a person was to be born within the UK, then they are stated as a UK citizen. If the person’s parents were born within the UK but the child was born in another country, then they are still stated as a UK citizen. Citizens enjoy many freedoms such as their rights, having the power of voting in elections, having an opportunity to run for political office and many other duties such as paying tax and defending the country. 3. Suppliers: A supplier is basically an organisation that delivers components, materials, goods or services to another company. To do this, there is a simple system which all businesses go through which is called the supply chain. The supply chain starts with the ingredients for the product and ends when within the store where the consumer will purchase it from. For a business to run they need to take suppliers into account, from doing this a lot of money can be saved for example, a business may buy clothing materials abroad from middle east as it is a lot cheaper and not only good quantity can be gained with a good price but the quality of the product is also very good. Below is a picture of the supply chain to give an idea of the stages. 4. Customers: A customer is known as client, buyer and purchaser. A customer may also consist of the viewer of the product or service that is being sold despite deciding not to purchase them. The term customer has also got a wider meaning as with customer services and a less commercialised meaning in non-profit areas. The term of customer is also substituted by words such as ‘stakeholder or constituent’, to avoid unwanted implications within some areas such as community services, government services, and education. This is done to address concerns in which the word ‘customer’ implies a narrowly commercial relationship in which includes the purchase of products and services. Some managers within this environment comfortably use the word ‘customer’ towards both internal and external customers in whom the emphasis is upon being helpful to the people one is dealing with rather than upon the commercial sales. 5. Employees: An employee is specifically a person who hired by an employer in order to a specific job within the business. It is often that employees are contrasted with independent contractors, especially when certain disputes may arise with the concerns of workers compensation, minimum wage and unemployment insurance benefits. After a job interview has occurred within a company, most individual then attain a status of ‘employee’. If the individual is fit for the job that is being offered, he/she will then give the job within the company for a defined starting salary and position. From getting the job this individual is then given all the rights and privileges of an employee such as medical benefits and vocational days. Relationship between the employee and the company are taken care of through human resource department in which it handles the incorporation of new hires, any benefits that the employees are entitled to and any grievances that the employees may have. 6. Competitors: Competition is like a contest between two individuals, groups or nations in order to gain territory, niche or location of resources. This term arises when either two or more parties try and gain the same goal in which cannot be shared. Most often businesses are associated with competition as with most companies are within competition with the at least one other firm over the same group of people. Incentives may be given self-improvement from competition for example, if you get two watch makers competing for business in which they will improve their services and products in order to increase sales. One watch maker may flourish if it is more responsive towards the needs of the customers. Any new business which may be starting should plan ahead and research if there is any competition within the field they are going into, from doing this it can help the business produce certain strategies in order to overcome the opponent. Implications Owners- This is also consisted from the term stakeholders from any plc’s e.g. Nike. There is quite a decent percentage in which Nike is owned mainly based from upon outside the business e.g. shares which may even be owned by the businesses staff and other individuals, or maybe even for pensions. When the Nike Corporation performs well within the stock market, the effect of this is that the share values will increase. Sports are a very popular topic within many countries and therefore businesses that provide sporting equipment at good prices and quality may do well within stock markets. Unfortunately Nike has come across many critics towards the business because of their very unethical behaviour towards suppliers. It is important for Nike to work upon its product through design, enhancement and quality for each sport they cover. The period for this is long and short-term depending upon the product they develop e.g. footballs, trainers, golf clubs etc. Employees- Employees have a big role within the business, if there may be no employees for Nike then it wouldn’t have reached the position it is in today. As we know, Nikes products are mostly hand made as well as manufactured; this brings great benefits towards the business as their products are very well in good quality and quantity. There are certain businesses within the past that used children to do work, the wages they are given are depended upon the age of the worker and experience. Businesses can take advantage of situations from having there goods developed of good quality and quantity for a very cheap price. Other situations may arise and still the business has power from forcing their workers to do longer hours, if not then they shall be sacked and in this case the business is actually threatening the worker in order to motivate the and bringing them back to work, if not then they will be re-placed. In present time things have changed in order makes things more ethical for workers within jobs which must be paid and work hours that must be fulfilled, therefore things are more organised and cure the problem of exploitation within the business. If other certain situations arise, it can be settled within court. Suppliers- Nikes supplies are consisted of the materials which are needed in order to develop the products they produce today, factories as well for transport and packaging of the product. The main materials which are needed are gained from the middle east in which provide the best of quality. Nike thrives for suppliers that basically meet their satisfaction which are: • Excellent services • Competitive pricing • On-time deliveries • Value added product or services • Exceeding high standards of quality • Meeting insurance and indemnification requirements Stakeholders- Every business will have its stakeholders in which would want to know what the business is planning for in the future, its ethical values, how it operates and the owner of the businesses best interests. Stakeholder’s main focus from within the business is finance, seeing whether the business is performing well financially and so forth Nike must make the right decisions in order to gain profit for its stakeholders. The catering of the business for the stakeholders must not only be for performance, but should also consist of diverse, political, social and economical environments. This then helps the business meet the interests of its stakeholders. Competitors- Nike’s competitors would be other companies that also sell products within the field of sports. These companies that Nike competes against are: • Reebok • Adidas • Converse • New balance What Nike must do to over come these other organisation is to cover a wider variety of sports, to provide good quality products that do what it is made to do i.e. enhance running. Nike must find new ways in which they can enhance products and maybe even new products never used before with whole new concept to it. In present time Nike have actually provided a new idea, but this product is only a concept and even so it really is taking Nike to a whole new concept. Below is a picture of the new Nike concept vehicle. Customers- Nikes customers are like stakeholders as they want the organisation to meets its aims and targets for further development. Nikes customers may mainly look at the quality of the product and the performance of the product, not only the design. What the consumers also want are good prices for the products to be sold, clearly without consumers, any business wouldn’t really perform in any way, and it would just be useless. In order for Nike to stick towards good reputation, quality and pricing they would have to cover all three terms in a good way. From overcoming competitors, customers and supplies, only then they shall succeed and develop. Citizens- Within communities you find that all business operates and so it is very important for all businesses to plan ahead within where they may open their next shop or store. They may need to consider the local community as they will be their consumers and stakeholders. As for Nike, if this were to open in an area which is quite and which may have a school near by, then the affects of this would be certain times of the day busy but mostly quite. It is very important for every business that they pick there area’s for their stores wisely as this will then determine the reputation of the business. Is would be more consistent for Nike to open a shop within shopping malls or even near sport centres as its more relevant towards the citizens who are present. At the end of the day it is really up to the stakeholders from both within and from outside the business in making the decision for construction to be taken ahead for development. Conflicts of interest between stakeholder groups- Within an organisation, there may be conflicts in which will always arise between the different types of stakeholders. In order to find an agreement between all these different opinions, the business must find a way to balance all the needs of the stakeholders. As with Nike, they recognise and have a respect towards the rights of the employees to take part within the financial, employment, business and maybe even other activities outside of their Nike jobs. However, the activities that they might do must be lawful and free of nay potential conflicts with employees responsibilities at Nike. When an employee within the organisation of Nike uses his or hers position at Nike for personal gain or when personal interests conflicting with Nikes interests, conflicts of interest arise. Any actions or relationships that could lead to conflict or appear to conflict with the interest of Nike should be avoided by all employees. An example of this may be having a substantial investment or position in any business that deals with Nike, doing Nike deals with close friends or relatives and accepting or offering payments, gifts or favours from or to companies doing business with the Nike company are situations that could lead towards a result of a conflict of interest. As for the team members of Nike, they shouldn’t take certain opportunities in which are discovered through the use of Nike position, property and information. Social implications of business ethics facing a selected business in its areas of activity (P3) Ethics within finance Within the process within courses of work at Nike, people may come across being aware of material non-public information about Nike or maybe even other businesses that aren’t available towards the public. Information about the term ‘material’ which may be included would influence a reasonable investor to buy or sell Nike stock or maybe buying or selling stick of another business with a recent or prospective material business relationship with Nike. Employees may use materials, non-public information for their own financial benefit or that of a spouse, friend or relative against Nike policy and against the law. From buying and selling Nike stock, this is a serious violation of securities laws (or securities of another business to which the information applies to) while in possession of material, non-public information. Giving information to others who can reasonably be expected to use the information to trade any stock is also consisted of being illegal. Individuals who violate this law may be imposed towards severe criminal and civil penalties and fines. Ethics within HRM Nike is one of the worlds biggest sport article manufacturer and as with Adidas, both leading producer of football equipment. Products within Nike are offered at many different prices. These products are consisted of football jerseys with the theme of different countries. The cost for an original basic Nike jersey may cost around £65.00; this jersey is for the most common target group. Now if we look at the price for the so called limited addition Nike jersey for all those ‘extreme’ fans, the price for this comes to about £115.00. If you were to think about the limited addition, it seems quite normal that it may cost more but within this situation there is really no difference between the two jerseys except maybe this one little difference, the interior of the collar upon the limited jersey may show the jersey-number which shows that it is a limited edition jersey. Or maybe even a little badge or sticker stating it is limited edition. If we find two people wearing the jersey, no one will be able to notice any difference between the two (one is wearing the basic and the other wearing the limited addition) although you may find consumers paying for a premium around £50.00. Most of the foot ball equipments made is produced within Pakistan and other Asian countries. The costs for production within these countries are very low. Prices for transport and clothing are also very low; Nike knows this as there are many Nike jerseys within the store. The main thing here in this case is that people are willing to pay a lot more for just having number within the interior of a collar. In conclusion people are basically paying maybe around £50.00 pounds more just for the word ‘limited addition’. Two very identical jerseys, one slightly different than the other and there is around a £50.00 difference in between. Ethics in production Within Nike there may be businesses practises of deliberately outdating any one of their certain items (mush before the actual end of its useful life) by simply stopping its supply or service support and introducing a newer (often incompatible) version or model. The main objective that is present here to prod Nike consumers or user to abandon the currently owned item within the favour of the upgraded item. An example of this in relation to Nike is if a person were to own a pair of Nike trainers for football. These trainers are old, have been slightly damaged and so the person goes back for repairing. A new pair of trainers can be bought in which may last longer depending upon the quality of the football trainers. The new trainers may only last up to 3 years where as the old trainers only last around a year. This is known as planned obsolescence as the trainers made by the manufacturer could have been produced with a slightly poor quality in order for the product to become easily damaged when playing football, in a certain amount periods. From having this done to the trainers, the owner will then return for either repairing or mainly to just buy an updated new pair of trainers. In this way the business is luring back their customers in order to keep them stuck with the business. Most businesses that have planned obsolescence with rather are more consisted with technology or maybe even food. Ethics in Sales This may simply be when Nike is advertising for one of their product. When they form the advertisement, they become creative with all the different ways of advertising the business and who to include within the advertisement in order to deliver the message behind the businesses product being advertised. An example could be when there are big major parades within the city, and Nike have a big balloon in the shape of a football or the Nike tick, this simply gives the message of sport, football and the logo of the business. The way Nike usually would advertise their products in present time is through the advertisement in which shows the product being shown, in this case they may also include a famous sportsman well known to sporting fans within the advert using the product. From this it simply motivates the major fans in buying the product just because they have seen their favourite sportsman/women using it. Nike is aware of the amount of people who really enjoy watching and playing sport, so they use a famous sportsperson to promote the product. Another way Nike has tired to promote their product in an advert is no only through using a famous sportsperson, but having that sportsperson race a sports vehicle in which you can understand how Nike are trying to widen their target market. Ethics in Intellectual Property Nikes employees from time-to-tome may be exposed to confidential information in which may be consisted of things like: • Sales figures • Strategic plans • Product designs • Financial information • Agreements or dealings between Nike and others • Employee-related information • Trade secrets • Software • Trade secrets • Patents • Information from suppliers and customers Disclosure of any confidential information could result to severe damages towards Nike as the nature of Nike is very high within competition. Disclosing confidential towards any organisation or person, it could be directly or indirectly, without any prior written from Nike is very much prohibited as with also using confidential information for advertisements or other purposes. The employees must also avoid permit of any of Nikes non-public, confidential or proprietary information in order to enter the public domain through electronic transmissions. Ethical concerns facing the communities in which a business operates (P4) Communities From businesses activities across the world, the consequence of this is having a major effect upon many local communities. Some of these communities are consisted of primal tribal peoples whose entire way of life is threatened by business organisations in which are thriving for more profit. Most of the other communities are consisted of rural and agricultural. Therefore on order for these communities to fight in way they develop pressure groups and so the organisations then have to deal with them in an ethical manner to avoid any unethical behaviour. Pressure groups simply fight back to get their opinion across towards the businesses if they are uncomfortable with businesses decisions. Corporate social responsibility This is basically a controlled approach in which a business enterprise takes to meet to exceed the stakeholder’s prospect from integrating ethical, social and environmental concerns together with the usual measures of profit, revenue and legal obligation. In relation with Nike, they see their corporate responsibility as a means for development and innovation. Nike reckons this is an integral key position of how the business can use the power of their brand, the passion and energy of their consumer, and the scale of their business to create meaningful change. Upon the labour side if things, Nike is planning to abolish excessive overtime within all its contract factories worldwide within the year of 2011. As excessive overtime is one of the worlds’s biggest compliance issues the industry faces, as with Nike states that a high priority has been set on that and other working conditions for its nearly 800,000 contract factory workers. Globalisation This is simply a system which is consisted of interaction among the countries upon the world in order to improve the global economy. The term ‘globalisation; mainly refers towards the integration of economics and societies all over the world. The things that are involved within ‘globalisation’ are political, economical, technological and cultural exchanges made possible a large variety by advances within the transportation, infrastructure and communication. In relation with Nike, globalisation is the merging of a corporation interested in s certain country in which Nikes outsourcing jobs towards the global market is a good example of globalisation. Nike affects products and jobs as with which in turn propels economy countries. Cultural imperialism This is basically when the belief that the globalisation of communication has been driven entirely by Western technological advances as with constitutes a form of rule by the West over other countries. In relation towards Nike, there suppliers in a way are from china in which Nikes unethical issue arises of child labour. Nike have forced this upon the children to work long hours with very little pay. If no work is done then Nike won’t be able to sell its products. Hand made products are always mainly of better quality. Ecology and the environment This is basically a business running a company but at the same time they are effecting the environment in a negative way. Nikes trainers are made up of a variety of different types of materials in which then put together creates its trainers. From using these different types of materials it can then affect the environment. Breaking this down for example, rubber is one of the main materials for the trainer, the source of rubber come from trees and so there fore in order to keep on producing these trainers. Nike would have to keep cutting down the trees in order to produce rubber. And so from this you can see that the environment is getting effected very much. Fair trade This is here to basically make things fair through the process of a business gaining its supplies from their suppliers and paying them fairly. Instead of treating suppliers unfairly, through fair trade the businesses must give their suppliers decent amounts of pay, flexible working hours and realistic amounts of orders to be made. Again with Nike products such as its trainers, it’s made up of a bunch of materials in which are supplied from a certain country. The country may be poor and so a small amount of money may mean a lot of money. Businesses can take advantage of this as they mostly have the power, if the country refused then not only will they loose a chance to make money but the business will also be able to maybe find another source for supplies. The countries could gain some power through having a written contract within the company they are supplying towards and so this can avoid any sudden threats for example, the business stops going to them for more supplies. If they have a contract, they will have to stick by it. So instead of Nike giving their suppliers a hard time working and keeping up on time within supplies, they could simply makes things a lot better through getting their supplies within the process of fair trade in which may motivate the suppliers majorly to work hard and live more comfortable lives. Corruption This is like virus within a business itself, corruption may arise from mainly workers tampering with the business in which may even result to giving it a bad reputation. In relation to Nike, for example it may be corrupt as maybe a worker within the business is committing fraud or even stealing money from the company. Nike has unfortunately proved to be corrupt as they have various ethical issues, especially the issue with child labour. Child labour When a business has younger aged people working for them in which may be very stressful for the child, hours are long and pay is very low. Nike has a major issue with this but it’s also been stated that they are trying to sort this problem out. Even so, it really has affected its reputation and really needs to be fixed as soon as possible. Outsourcing This is when businesses find supplies from other areas or countries in which the materials needed are a lot cheaper purchasing than within the country the business is developing. For example, a clothes shop in England sells clothes for £5.00. The quality is of its best is purchased for 50p from abroad. For Nike, they may require shoes laces of good quality. Shoe laces within the country Nike are based in may cost about 2-3 pounds and so they purchase their shoe laces abroad for 20p per pairs of shoes. This is just an example of outsourcing within the company. Whistle blowing This consists of something which maybe wrong happening within the business and some how it is then leaked from outside the business in which people then find out the issue that has occurred. In Nike for example, whistle blowing my have been present when people started finding out about its issue with child labour, eventually is became leaked and people found in which may have led to the press and news. Pressure groups Through the process of Nike developing and running the business, it may have come across many pressure groups in which disagreed with the decisions or actions that Nike may have been doing. If we look at Nikes trainers and again see that there are material needed in order to produce the end product. Some materials needed may very much affect the environment dearly and thus pressure groups may arise in order to stop Nike in what they are doing. One of the key materials for Nikes trainers are the rubber coatings which form around the shoe and under. This special material of rubber is based from trees and without trees their will be no rubber for the end product. So the pressure group ‘Greenpeace’ or maybe even ‘Friends of the earth’ may arise to protect the chopping down of trees and the use of trees in a way to just make money. Nike now must deal with these pressure groups in an ethical manner I order to maintain peace and come to an agreement in which can solve the problem.