Nike’s CSR Challenge | Case Study
by Bishal · Published November 24, 2015 · Updated December 11, 2015
One of the popular known brands Nike, who manufacture sports and clothing, has more than 50,000 workers produces shoes through subcontractors. Most of their factories are located in Asian countries because of large non-employed population and low cost workers.
In 2005 Nike started disclosing their CSR activities after a couple of years of silence due to legal concerns. After several audits Nike reported that a large percentage of their overseas factories have their employees working in terrible environments for low pay and in unsanitary health conditions. This is the first time that a major corporation has revealed such problems to the public so honestly. Nike is now taking a new strategy and approach in an attempt to correct these problems. They are attempting to take responsibility to effect positive systematic changes in working conditions with several branches of their industry. Nike plans to reshape the way customers, supplies, investors, and regulators see the company. They are changing it from a closed system and making the company more open so that suppliers and customers can relate to Nike. One of Nike’s problems is changing the way its leadership and management style that is “leaders beyond borders” meaning leaders reach out to more than just their professional role and engage people on shared goals. Nike needs to reach out to wider issues of trade flows, governance, and media otherwise all their changes may not make a difference as they optimistically hope. Case Questions:
- Discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in their supply chains around the world.
- The apparel industry is possibly for the most part at risk to issues of social responsibility. The industry is still somewhat labor intensive and operates in a low wage environment. For example, in developing countries, apparel and sports manufacturers lack trained personal, information on CSR implementation and benefits and insufficient infrastructures for initiating CSR, but 25% to 50% of the factories in the South Asian region restrict access to toilets and drinking water during the working day. The industry has a lot of contract manufacturing in which a foreign firm is contracted to do all the production for the firm owning the brand.
Extra working hours are also required to meet demands, which result in overtime and poor working conditions in developing countries, but the same percentage of factories in Asia denies workers at least one day off in seven. More than 60 hours per week and 25% of workers punished for refusing overtime work. All of this can lead to the problems we can see in this case.
- Discuss the meaning and implications of the statement by a Nike representative that “consumers are not rewarding us for investments in improved social performance in supply chains.”
– This statement suggests that those companies who invest their sources on “above-standard compliance” will be outperformed by those companied who are less concerned about compliance. Therefore, companies who concerns about compliance have to either reduce their profit margin or lose in market share if they charge extra for improved social performance. Nevertheless, it is not a good excuse for not doing the right thing. Although competitors may be engaging in unethical practices, and consumers may not care about the working conditions of foreign employees, it is still not a justification situation to engage in socially irresponsible actions. In the case of Nike, the company is not competing with the low end of the market, and one would assume that the premium pricing of the brand could allow for improvements in wages and working conditions. It should be pointed out that consumer perceptions and concerns can change and a firm can find it dealing with a successful PR campaign directed toward its practices. Consumer “rewarding” can change and make such companies vulnerable due to their foreign employment practices.
- What does it mean to have an industry open-systems approach to social responsibility? What parties are involved? Who are stakeholders?
- Open-system approach refers to the organization views its actions in terms of the effect it has on larger social system that’s not only concerning with internal part of companies such as employees, manager, material, equipment and production, and labors, but also all elements, which includes environment-such as competitor, suppliers, distributors and governmental regulator, as well as citizenship and its internal elements. Basically everyone is involved in this case, ranging from government, to company and even customers/buyers. Stakeholders are person with an interest or concern in business. In addition to being socially responsive to internal stakeholders such as domestic employees, the organization also views its impact on suppliers, investors, regulators and communities, regardless of their location.
- What is meant by “Leadership beyond borders”?
– Leadership beyond borders means that leadership moves beyond borders or barriers created by others. For example, leaders in the apparel industry would attempt to extend their influence beyond the company borders in order to deal with the CSR issues. Real life example could be Gandhi, who has given hopes, whose life and personality was enhanced in the process. This kind of leader is only little in existence. Transcendent leadership offers us a metaphor to help Nike move more closely to a world where human talents and energies will be maximized for the betterment of al – personally, organizationally, and globally (Gardiner, 2006).
- Is it possible to have “a compatibility of profits with people and planet”? Whose responsibility is it to achieve that state?
– Yes, it is possible to have “a compatibility of profits with people and planet”, but this is an idea of socialism and in some point it does not work. It’s everyone responsibility to care for each other and everything. It is a based of culture on corporation not competition with not just humans, but also everything that lives on the planet including other animals and resources. This is a social ideal ecosystem. Some people work hard toward the needs of others and the planet, while others will exploit. So it must be mixed with areas of competition in order to maintain a balance of cooperation with competition.
- Research Nike’s CSR actions since the time frame and why it has earned the reputation as one of the world’s foremost organizations in sustainability.
– When Nike adopted open-system approach, they had believed that the future of the company will be dependent on every element – internal and external. They believe that good society will bring good profitability and thus it would contribute to sustainability, Nike managed to create a green life cycle, were Nike has managed to eliminate waste in production and harmful substances, and ensure that all their products are recyclable and re-usable. Despite Nike’s efforts to take the lead in the apparel industry to form a Global Alliance to improve labor conditions, not only in its own factories and sub-contractors, but also among its competitors on the footwear and other apparel industries, incidents such as:
- Collapse in April 2013 of Rana building in Bangladesh, which housed a number of garment units, who were sub contractors to leading MNCs (Multinational corporations) collapsed, killing over a 1,000 people – mostly women and injuring seriously a few hundreds, keep happening.
- Early this year (2014) in the state of Tamilnadu in India, 7 workers died when they were cleaning a tank in a textile dyeing unit, KPR textiles, Perundurai, Erode district. They were exposed to toxic gases from chemicals used in dyeing.
Nike also took the lead in forming the Fair Labor Association (FLA). The awareness and the initiative taken by Nike has been acknowledged and appreciated by all the stakeholders in the industry, including customers. The operation council of the Global Alliance after detailed audit, has commended Nike for the processes introduced, not only in its own operations and among its subcontractors, but also in the rest of the industry.
References: Adidas Group. Sustainability History. Retrieved from: http://www.adidas-group.com/en/sustainability/managing-sustainability/sustainability-history/ International Institute for Sustainable Development (2013). Nike. From: http://www.iisd.org/business/viewcasestudy.aspx?id=81 Megha, G. (2012). Corporate Social Responsibility in the Global Apparel Industry: An Exploration of Indian Manufacturers’ Perceptions. Recovered from: http://libres.uncg.edu/ir/uncg/f/Gupta_uncg_0154D_11000.pdf The Bangladesh Factory Collapse: Why CSR is more important than ever http://www.theguardian.com/sustainable-business/blog/bangladesh-factory-collapse-csr-important CM condoles death of 7 workers in textile dyeing unit. From: http://www.business-standard.com/article/pti-stories/cm-condoles-death-of-7-workers-in-textile-dyeing-unit-114031900421_1.html Trapped in Textile. Retrieved from: http://newjurist.com/trapped-in-textile.html
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Corporate Social Responsibility: Case Study of Nike, Inc.
Essay, 2013, 5 pages, grade: a, michael watford (author).
Abstract or Introduction
Nike Inc. was founded in 1964 by Bill and Phil as Blue Ribbon Sports. It is headquartered in Oregon, United States and operates on a global scale. The company is traded on NYSE and operates in apparel industry. Its segment markets include athletic footwear and apparel, sports equipment’s, and recreational products. With control of over 60% of the business Nike has become a pop culture and at the same time involved in corporate social responsibilities. Increase in market resulted to be marked as the advertisement of the year in 2003 while in 2004 its annual revenues exceeded $ 13 billion. Nike’s acquisitions include Starter and Umbro (NIKE, INC., 2013). Its subsidiaries include Hurley International and Converse Inc. with over 44,000 employees it made a revenue of US$ 24.128 billion and a net income of US$ 2.223 billion in the fiscal year 2012. In 2 fiscal year 2009 Nike reported a revenue of US$ 19.2 billion. Nike has offices are located over 45 countries. Nike sells products in over 180 countries. Nike Portfolio include top competitive brands which include: NIKE brand ( accessories, footwear, apparel, and equipment); Cole Haan (designs, distributes and markets handbags, luxury shoes, outwear and footwear); Converse ( athletic footwear, apparel and accessories); Hurley International LLC (action sports and youth lifestyle footwear, apparel and accessories); Umbro; Nike Golf; and Jordan brand providing similar products (Carbasho, 2010).
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Case study - Social responsibility strategy for Nike, Inc. limited
by Linda N Williams
For writing help, reach me on: [email protected]
The company that I am going to develop a social responsibility strategy is the Nike Company that was formed in 1962by Bill Bowerman and Phil Knight as a result of collaboration of the two to come up with the most sufficient athletic shoes after the dominance of German and cheap Japanese athletic shoes in the American market (Almaney, 2000). The company has gained increased sales since it was formed and thus making it a global giant in the manufacturing and sale of sports equipment utilities. The company has faced a number of challenges in its daily administration in the market as a result of stiff competition, imitation, environmental pollution and lack of raw materials.
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JAMID UL ISLAM
Journal ijmr.net.in(UGC Approved)
Corporate Social Responsibility has gained novel significance and become exigent to any corporation's decision making process. In today's economic and social environment, issues related to social responsibility and sustainability are gaining more and more importance. Due to its growing importance CSR also plays a crucial role in Banking Sector Company's strategic decision making. This paper explains the Corporate Social Responsibility practices framework in India and analyse the CSR practices of private sector banks in India and found that banks are doing a great job in the field of CSR.
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Carmela Loreena Solidum
Increasing number of studies supports the positive impact of corporate responsibility (CR) in long-term perspective and for securing sustainable performance (e.g. Freeman, 2000; McElhaney, 2008; Hollander, 2008), moreover several recent studies (see Carroll, 2010; Hansen and Reichwald, 2009; Googins et al., 2009) found that organisations which performed according to their principles and core values were significantly less influenced by the economic recession and were able to restore their business easier than those who cut corners or neglected ethics and / or responsibility in their activities. Therefore we can argue that corporate responsibility is a key to sustainable performance and helps organisations to survive and succeed through turbulent times. However it is suggested that corporate responsibilities activities are sustainable only when they are tightly linked to the core business goals (Schreck, 2009) and are lead strategically (e.g. Mele and Guillen, 2006). Jonker and de Witte (2006) maintain that although the roots of corporate responsibility are strong, the strategic approach is still relatively new. The discussion is illustrated with a brief overview of a study among Estonian organisations. The purpose of our study is to find out whether and how CR is related to strategic management, business objectives and leadership competences, and whether the responsible activities of an organisation correspond to the attributes of strategic corporate responsibility (SCR). The study is conducted among Estonian organisations who took part in Responsible Business Index (RBI) study in 2009 and 2010 (csr.ee homepage), research methods are combined, including analysis of the RBI questionnaires, the organisations’ home-pages, annual reports and personal conversations with organisations’ representatives.
Friedman (1970) argued that the responsibility of business managers is to only think about financial profits of the organization. The main purpose of writing this paper is to test the credibility of this statement in 21 st century. 21 st century is the century of globalization, businesses are going beyond domestic borders for getting more number of customers and channels of revenue. The product and service innovations are going on but those product and service innovations are not enough to get the attention of customers. The organizations are looking new way to outpace their competitors. In 21 st century it is hard for business managers to ignore the concept of corporate social responsibility. They can't outpace the competitors only by showing concern about financial profits. Especially the small and medium enterprises who are looking for making a place in the heart of customers, fulfilling corporate social responsibility is good option. Introduction In this paper the authors will check the emergence of corporate social responsibility in SMEs and large organizations. In the first part of the paper, the authors will test the concept of CSR and its growing emergence in globalized era. All the small, medium and large organizations are looking to increase their customer base in the market and gaining competitive advantage. Solely the product and service innovations can't be helpful in attracting the customers because pricing is also a concern while launching new innovation. CSR activities of the company are very helpful in retaining the old customers and attracting new customers towards the firm. The authors will also discuss few important theories which will be helpful in understanding the concept of corporate social responsibility. These important theories are stakeholder management theory, social capital theory and glimpse of triple bottom line approach followed by the managers. The theoretical debate will be entirely based on the need of corporate social responsibility in small and medium level organizations.
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- Nike: Nike responsibility
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Introduction, factories and workers, athletes as role models (armtour), reuse-a-shoe, company profile, nike responsibility.
This Case Study will profile the approach that Nike - the world's market leader in the design, marketing and distribution of authentic athletic footwear, apparel, equipment and accessories - has taken to address and promote the issue of corporate responsibility, through a range of targeted programs and priorities. As a result of reading this Case Study, the student should be able to:
- Understand that it makes good business practice for a business to be at the forefront of developing corporate responsibility programs
- Analyse the benefits for a range of stakeholders in a business that promotes high standards of corporate responsibility
- Explain different strategies that can be used by a business to promote corporate responsibility.
Corporate ethical and social responsibility is an issue that has attracted much attention over recent years.
Independent contract manufacturers produce almost all of Nike's products, meaning that the factories manufacturing Nike branded products are owned and operated by outside suppliers.
The ARMTour program, sponsored by Nike, is a unique and successful program that encourages indigenous children to live healthier lives.
Community standards have changed over the last decade with consumers and other societal groups expecting companies to have a more positive environmental impact on the communities in which they operate.
There is much concern about growing levels of physical inactivity amongst children, which is contributing to more and more children being overweight around the world.
Nike had humble beginnings in 1962 under the name of Blue Ribbon Sports.
Nike is a high-profile world leader in the design, marketing and distribution of sporting footwear, apparel, equipment and accessories.
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CSR and Company Reputation - Case study of Nike
Valjakka, mira (2013).
Tiivistelmä, selaa kokoelmaa, henkilökunnalle.
Case Study Of Nike's Corporate Social Responsibility
Nike slave labor.
As such, it applied cultural relativism to justify the use of child labor, unsafe labor practices, and near slave labor in its factories. Since then, Nike has been a driving force to ensure fair labor practices across the apparel industry. In 1999, Nike was a key contributor to the establishment of the Fair Labor Association, an organization that is “…dedicated to protecting workers’ rights around the world” (Fair Labor Association, 2016). Today, Nike continues efforts to ensure that contract factories comply with its Code of Conduct to improve labor standards in overseas factories (Nike, 2016). Because of Nike’s efforts to expand and enforce social responsibility at its factories and given the lessons learned from its sordid past, it is unlikely that Nike would resort to any of the straw men fallacies. However, given the pressure by investors to expect solid returns, one hopes the company continues its altruistic social responsibility efforts while veering away from the Friedman Doctrine and its assertion that “… the only social responsibility of business is to increase profits” (Hill, 2011).
The Sustainability Strategy of Nike Company Essay
- 40 Works Cited
Nike has a very sophisticated sustainability strategy. The strategy is based on company’s prospects for future, to ensure that the company remains profitable and reputable, taking into consideration the social responsibility of the company (NIKE 2013). For instance, the strategy is supposed to ensure that the company gains a stable supply for the raw materials for the product manufacturing that will ensure stable supply of the products in the market at favorable prices. The strategy also targets make the company responsive to environmental concerns, aiming at reducing environmental pollution through emissions to the atmosphere (Charter, 2001). The strategy outlines the company
Corporate Social Responsibility Essay
- 12 Works Cited
The purpose of this essay is to research the notion of CSR and uncover its true framework and outline what social responsibility truly means to corporate organisations, and whether it should be seriously considered to be a legitimate addition to the corporate framework of an organisation.
The Effect Of Ethics On Nike
The ethics of businesses are under more scrutiny than ever before (Bones, 2014). Ethics can be considered as following a code of behaviour agreeable with the context of society and can also be defined as the application of moral and ethical considerations in a business environment (Hurn, 2008). Sport businesses have been targeted a lot more in recent years due to the conditions they place their workers in has become more apparent to the outside world. Nike are one of the world’s leading sports brands but have been faced with many allegations in recent years (Daily Mail, 2011) in regards to the conditions they put their workers in and their ethics and morals have been questioned. This report will critically evaluate the impact ethics has on the business operations of Nike and then analyse the reasons for why ethics impact the sport organisation. Finally, recommendations will be made to improve Nike’s business ethics.
mark kasky vs nike
Although this is advertised, what really matters is to be met, so hopefully within the program when finished, have minimally met these standards have been proposed. And if so, NIKE would be an example of a brand with a good Corporative Social Responsibility
Nike : Case Report : Strategic Marketing
Today Nike Inc is the largest manufacturer of sports footwear, apparel and equipment with worldwide revenue in excess of $25 billion in 2012 under various labels including Nike, Nike Golf, Converse and Hurley. Seventy percent of the company’s value is derived from footwear and apparel sold under the main brand Nike with Nike footwear commanding a market share
The Ethical Dilemmas Of Nike
This paper will discuss the company Nike. Nike has had many ethical issues, which will be addressed. The ethical dilemmas that Nike faced will be evaluated under two ethical frameworks. The whistleblower part that was played in exposing Nike will be analyzed. This paper will evaluate whether Nike used marketing or public relations successfully when trying to repair the damage caused by the reported lapse in ethics.
Corporate Social Responsibility in Sports
Over the past several years the sports industry has grown phenomenally, and it now ranks among the largest industries in the world. Concomitant with its growth is an increase in the importance of a element of value which is the corporate social responsibility which has become a necessity in terms of the bottom line. Illegal and immoral activities in all settings have emerged to the point that some factions of the society have made efforts to call those in charge to take responsibility and improve situations. As managers learning to adopt a social consciousness leading to a commitment of being socially responsible is paramount to the execution of one’s job. Developing a social
Nike and Social Corporate Responsibility
- 1 Works Cited
They have created more sustainable products such as t-shirts made of recycled polyester and recycled plastic bottles. Recycling old shoes into new ones. Nike started numerous charities and has donated millions of dollars to organizations to help repair Nike's image. Nike must continuously work towards the enforcement of their corporate social responsibilities that they have presented to their suppliers at the same time they must remain competitive in the market place.
Nike: the Sweatshop Debate Essay
The purpose and intent of this paper is to describe the legal, cultural, and ethical challenges that face the Nike Corporation in their global business ventures. This paper will also touch on the roles of the host government and countries where Nike manufactures their products and the author will summarize the strategic and operational challenges that Nike managers face in globalization of the Nike product.
Marketing audit of Nike
Nike must cater to a large portion of the new generation that demands the latest trends and styles. Nike should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans. These groups have different preferences that Nike should be able to satisfy. Nike should identify the next generation of loyal customers and provide for their needs.
Ethical Companies with Unethical Practices Essay
- 9 Works Cited
American business should not be permitted to claim it is an ethical firm if it ignores unethical practices by its international suppliers. For the purpose of this assignment I will use the Nike Company to highlight its unethical practices. Despite the popularity of Nike in the American market, it has been accused of exploiting employees abroad. The corporate social responsibility stipulates that a company should maximize its profit and minimizes its cost in operations and manufacturing, also at the same time benefit the community it operates in. This paper will further elaborate on the global strategy employed by Nike Company as it outsources its goods and the unethical issues its
Nike Case Study
Nike’s negative nickname “Sweat Shop” comes from the bad press it received around 1991 when Jeff Ballinger wrote a report on their Indonesia factories’ poor working conditions and equally poor wages. Furthermore, because of human rights not being as largely fought for as they are currently, Nike was able to take advantage of this ethics loop-hole particularly in their Asian factories. Nike’s code of conduct and code of ethics was fairly broad during the 1980’s and 1990’s whereby upper management ignored and washed their hands of the criticism about their Indonesia
Virtue Ethics In Nike
Another perspective is to analyse based on the amount of good done as compared to the amount of bad. By subcontracting its operations in underdeveloped countries, Nike helps to create job and improve the lives of the employed. Then, we have to consider the poor working conditions, poor wages, and the constant violation of child labour laws. Now, the bad inevitably outweighs the good despite the lack of unit of measurement in the
Report on the Case Study Nike Essay
The report is about Nike, regarding the case study. The report elaborates on the aspects including buyer behaviour, brand image, consumer decision making, and marketing research techniques applicable to Nike. 3.0 Introduction Nike is the worlds number one sports shoe company. In the US Nike dominates 35% (source: see appendices) of the sports shoe market and its products are sold in more than 140
- Corporate social responsibility