Case_Study

Case Study-China Sweatshop Kelvin Lanier MGT 448 July 22, 2012 Jean Greer This essay will cover various topic related to Nike and the production of its products. Nike has profited billions since its inception. Phil Knight has become one of the wealthiest man in the United States. Nike has products in 140 countries and profit $15 billion annually. Nike has always used third world coutries to produce its shoes. The conditions and the qualities of these shops have come under question in recent years. This essay will explore: Are the workers being paid enough, are the workers to young, and the role the government plays. The question as to whether the workers are paid enough seems to be open for debate. Many studies have done to determine if the workers are adequately being compensated. For example, Robert Basin, a CBS reporter asked a young woman named Lamp who works in a Vietnamese Sweatshop how does the pay work' She stated that the pay is below minimum wage. The woman also stated she couldn’t leave if she wanted to. Nike has always upheld it’s position as being equal to the workers. Nike postion is that it only abides by the countries standard of living. The notion that the gap between the United States and contries like Vietnam, Malaysai, and South Korea are wide seems to support Nike claims. Some workers have complain about severe weight loss. Once organizations like Nike, chooses to become a global company, it should often absorbs an raise in profitable income. Although, entities similar to Nike have to overcome some tough barriers before establishing a successful business in an international nation. A list of concern problems: are child labor laws, wages, and outsourcing’s effect on sales. As a result of this, most popular established companies have presented many cases to defend their positions on conducting business in the foreign nation. One such example is a Nike sweatshop labor case that stirred up a large amount of controversy over ethical business practices. Even though Nike has attempted to recover from the bad press it received about the sweatshops, it still struggles to defeat the negative feelings from people across the United States. Thus, a summary of the case, the legal, cultural and ethical challenges, an understanding of the roles the host governments play, and the strategic and operational challenges faced are important to gain a thorough understanding of the issues and case. Most people could easily define Nike and are familiar with the products offered, like the customized options available in the Nike store online, Nike Sportswear, Nike Women, Nike Basketball, and Nike Football. These products, among others, have led Nike to a profit of $15 billion in 2006 and a catchy “Just Do It!” slogan (Hill, 2009). The company outsourced its manufacturing plants to several countries in order to lessen costs and become more efficient in productivity. The outrage and protests that followed were far from what Nike expected; the company was labeled as forcing “children to slave away in hazardous conditions for below-subsistence wages” (Hill, 2009). As a result, protestors of globalization and human rights activists criticized Nike for taking advantage of the workers overseas and placing them in a destructive working environment. Moreover, the fact that Nike was making billions of dollars and still failed to provide a safe working environment only made matters worse. After Nike realized it was the target of several protests and complaints against globalization, it recognized the need for safer work environments and an adherence to certain standards for each of the overseas factories. The factory workers were forced to work exceptionally long hours to fulfill quotas and had to follow strict rules during work for below minimal pay despite having “77 percent of the employees in Vietnam suffer from respiratory problems” (Hill, 2009). Therefore, the legal, ethical, and cultural challenges began to add up for Nike and it was time for the company to confront them.