Glanville, Hosfield, Bartholomew Kayla Glanville
Alexis Hosfield
Katie Bartholomew
Nike Case Study: J453
Overview:
Nike, a US-based international business powerhouse, has successfully lead the
sportswear industry in innovation and performance for decades. Since its inception at the
University of Oregon in 1964 by Phil Knight and Bill Bowerman, Nike has sought to be a
precedent-setting company in all aspects of business (Nike CRR, 2009). The company
designs, creates and markets high-quality footwear, apparel, equipment and accessory
products for distribution all over the globe (Nike Inc., 2013). As such, Nike has grown
from a grassroots track shoe maker in Eugene, Oregon to a dominant $16 billion dollar
global corporation with especially deep roots in Asian markets (CNBC).
In the late 1980s and early 1990s Nike was enjoying stellar success. With high
revenue, innovative products and successful marketing, Nike was well positioned to
remain among the global sportswear industry’s elite (Clancy). However, things began to
change in the mid- to late 1990s. With rumors of Nike-tied Asian sweatshops and harsh
international labor practices, activist groups began taking to the media, and that decade’s
newest technology: the Internet (Nike CRR, 2009). Although Nike claimed to be an
innovator of business, with industry-standard labor practices and sustainable wages, their
good reputation was quickly called into question.
Problem:
Nike’s key problem when it came to reacting to the sweatshop accusations and
communicating with the people making said accusations was that Nike, in fact, did not
react or communicate at all for the first three years that the accusations spread. The
1 Glanville, Hosfield, Bartholomew company deflected all accusations by claiming that ensuring fair labor was the
responsibility of the Asian factories themselves, and that Nike was merely a factory
customer. By not immediately addressing the accusations, Nike left plenty of room for
Internet users, media outlets and activist groups to spread uncontested and detrimental
information (true or untrue) across multiple platforms.
Alternative Solutions:
To address this problem, we suggest these potential solutions: (1) Create a
communication initiative that includes multiple stakeholders, such as, but not limited to,
the supply industry, civil society, and government organizations. (2) Utilize the Corporate
Responsibility Division to create an annual Sustainable Products and Business report
(Nike’s version of a CSR plan). Implementing one, or both of these suggestions could
help Nike continue to set standards in the shoe and apparel industry.
Establishing communication lines between multiple stakeholders will help resolve
the issue of not taking responsibility of the incident. Also, with open lines of
communication employees are encouraged to voice questions and/or concerns. When it
comes to the implementation of the annual Sustainable Products and Business Report,
Nike will have to keep track of decisions made, and opportunities taken. In addition, Nike
will have to make this report open to the public, ensuring nothing is being hidden or
skewed. However, each potential solution has its own pros and cons, making them
difficult to execute.
Evaluation of Alternatives:
By generating a communication initiative it will help create a unified
implementation and adoption of the Nike-made international labor Code of Conduct. This
2 Glanville, Hosfield, Bartholomew will be executed through monthly meetings and online at Nike.com. Allowing all
stakeholders to voice their concerns will give Nike an outside perspective allowing them
to develop as a company. Also, a communication initiative will push Nike to pay
attention to pressing matters and take responsibility when fault is at hand. However, by
creating a communication initiative Nike now has to monitor all traffic, and respond
accordingly to each complaint or suggestion. The amount of time and manpower needed
to execute such an operation could be expensive.
As for the annual Sustainable Products and Business report Nike would be
allowing stakeholders and employees to see first hand, everything that is occurring. By
utilizing the Corporate Responsibility Division, Nike will show the public there is
nothing to hide. However, on the off case something went wrong, Nike will be unable to
hide it. Also, by creating an annual Sustainable Products and Business report it will give
Nike the chance to take responsibility in departments where it is needed.
Recommendations:
We recommend that Nike implement our first suggestion and work to improve
communication lines between their multiple stakeholders and make these
implementations visible to the public. Improving communication and establishing
partnerships with stakeholders is always valuable for an organization. It is one of the
most effective ways Nike can create an atmosphere of trust and build positive
relationships with all types of groups, including those who might initially be opposed to
Nike.
Implementing these communication efforts between stakeholders is also a new
and more creative perspective on solving the issue. Revising and improving the
3 Glanville, Hosfield, Bartholomew Corporate Social Responsibility Report might be valuable, but it has already been a
source of negative press for Nike, unlike the suggested resolution where we will establish
new methods of communication and improvement for multiple parties involved.
Additionally, making all of the communication efforts visible to the public will allow for
a transparency that will appease critics.
Possible Results & Obstacles to Implementation:
Although we recommend improving the communication between multiple
stakeholders as an effective solution, we recognize that there may be some challenges in
implementation. First, there is the potential for stakeholders to resist partnering with
Nike. Second, the solution may be logistically difficult to implement. There are many
cultural factors to take into account and can be sensitive issues. In addition, the different
economic, political, and legal environments could prove to be an obstacle.
Nike must consider the socio-economic balance of the countries they are working
in and will also need to make a conscience effort to understand how the changes they are
looking to implement will be perceived internationally. Transparency is the final
obstacle we foresee as it can create opportunities for lawsuits. However, considering the
challenges the solution may face, ultimately the advantages of establishing the new and
transparent communication plan greatly outweigh the cons.
4 Glanville, Hosfield, Bartholomew References
Clancy, M. Sweating The Swoosh: Nike, The Globalization of Sneakers and The
Question of Sweatshop Labor. InUniversity of Hartford. Retrieved February 9, 2013,
from
http://umdrive.memphis.edu/rblanton/public/POLS4510_6510_sum11/case_nike.pdf
NIKE, Inc. (2009). Corporate Responsibility Report. Beaverton, OR. Retrieved February
9, 2013, from http://www.nikebiz.com/crreport/content/pdf/documents/en-US/fullreport.pdf
Nike Inc. (NKE). (2013). In CNN Money. Retrieved February 9, 2013, from
http://money.cnn.com/quote/profile/profile.html?symb=NKE
NIKE, Inc.- Workers and Factories. Retrieved February 9, 2013, from
http://www.nikebiz.com/crreport/content/workers-and-factories/3-1-0overview.php?cat=overview
(2010). Swoosh: Inside Nike [Online video]. United States of America: CNBC. Retrieved
February 9, 2013, from http://video.cnbc.com/gallery/?video=1414941056
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