The Perfect Storm
1997-1999. It was “the perfect storm” — a tempest that may
happen only once in a century — created by so rare a combination
of factors that it could not possibly have been worse. The storm
whipped the sea to inconceivable levels few people on Earth have
ever witnessed. Few, except the crew of Nike — with Phil Knight
at the helm — which headed towards its hellish center.1
INTRODUCTION
Traditional 20th century economic business theory was on a collision course with the new age
beliefs of Corporate Responsibility. From the wake of this storm, Corporate Social
Responsibility was born. Nike rode the traditional wave to the center of the storm, and defiantly
tried to withstand the storm’s effects – to no avail. Today, Nike has yielded to the results of the
storm, and is making profound efforts to become a Good Corporate Citizen. However, the
attempt to withstand the torrent of change cost Nike dearly – quantifying the new beliefs that
Social Responsibility has Economic Impacts2.
Corporate citizenship has evolved through three major stages: Awakening (1960-1983),
Engaging (1984-1994), Networking (1995-present). Sustainability is argued to be strongly
correlated to a company’s understanding and management of its resources for both the benefit of
the company and society as a whole. Phil Knight attempted to defy this progression as Nike was
accused of exploiting labor. The dynamics of this conflict were a complex array of Phil Knight’s
personal ego, Nike’s corporate initiatives, and activists.
A historic narrative of this “labor” issue will best demonstrate the dynamics of this situation as
one company is isolated in the evolution of corporate citizenship.
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PHIL KNIGHT
Philip Hampson Knight was born February 24, 1938. Always
passionate about sports, Phil has always been considered a freespirited and resourceful competitor. In 1959, he graduated from the
University of Oregon, receiving his undergraduate degree in
accounting. He was a middle-distance-runner for the Oregon
Ducks, running a 4:10 mile. In 1962, he earned his MBA from
Stanford, developing a strategy to build a business around sports
shoes. One term paper – “Can Japanese Sports Shoes do to German
Sports Shoes what Japanese Cameras did to German Cameras?” –
described a “you're-crazy-it-will-never-work- or-someone-wouldalready-be-doing-it idea about bringing low-priced, high-tech
athletic shoes from Japan to dislodge German domination of the
U.S. athletic footwear industry.” The strategy had two major elements: one, all manufacturing
would be outsourced creating one of the world’s first virtual corporations; two, saved money
would be poured into marketing celebrity, high-profile, athletic endorsements.
Phil Knight partnered with his former University of Oregon track coach Bill Bowerman, “shook
hands,” and began Blue Ribbon Sports. They began importing shoes, called them the Tiger line,
and Phil Knight would sell them from the trunk of his car at track meets. Both partners invested
$550 in the venture, and cleared a total of $3,240 in their first year of operation (1964). Jeff
Johnson, a former University of Oregon track rival of Phil Knight, began selling shoes with Phil
in 1965 as they opened their first retail outlet in Santa Monica, California. Steve Prefontaine
also joined the company.
In 1971, Phil Knight was supplementing his income by teaching accounting at Portland State
University. Looking for the perfect logo, representing flight and motion,
he offered to pay a student a few bucks to create a logo. Carolyn
Davidson, specializing in graphic design, delivered the “swoosh” which
Phil admitted that “I don’t love it, but it will grown on me.” Jeff
Johnson dreamed up the Nike name based on the Greek Winged
Goddess of Victory – Nike, Inc. was born. 3
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NIKE, INC.
Phil Knight created a unique culture around Nike – a culture of confidence, an iconoclast defying
the Establishment. This air of excellence, with great marketing slogans like “Just Do It” and “Be
Like Mike” helped create a Nike brand of unparalleled value. Nike was the definition of brand
in the early and mid 1990s. Key to Nike’s initial success was its endorsement of famous sports
icons; lasting success can be attributed to its endorsement of University Sports Programs.
Behind the scenes, Nike reduced costs by strongly encouraging suppliers to move to lower-cost
production areas. Supplier contracts in Japan expired in the mid 70s. Until 1982, supplier
contracts were almost exclusively in South Korea and Taiwan. Through the 90s, most factories
were in Indonesia and China. The mid 90s even had the opening of factories in Vietnam.
This strategy for moving production locations was clearly correlated to the two-pronged strategy
formulated in 1962 when the company was created. A Hong Kong-based financial group,
Jardine Fleming Securities, would later create an indicator called the Nike Index to describe the
entry and exit of Nike manufacturing suppliers in developing countries:
When choosing factory sites, Nike
looks for cheap labor. However, it
also picks countries with stable-usually authoritarian--leadership,
decent infrastructure, a pro-business
government, and a liberal trade
regime.
When it decides to leave, that doesn't
signal the end of prosperity. It often
means that countries are ready to
move on to high-end manufacturing.
And democracy.4
In 1991, daily wages varied from the
extreme of $64 in the U.S. to $24 in South
Korea and to $1 in Indonesia. Leaving
South Korea for Indonesia was an easy
business decision for Nike based on its
initial and ongoing strategy. Although there
are strong economic arguments for this
entry/exit strategy, the perception of the
strategy was created: Nike exploits
workers.5
1996 Life Magazine – Nike’s vigorous protests stopped the
magazine from running the photo on its cover.
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In reality, Nike had always cautiously maintained a distance from its suppliers. This Don’t Ask
Don’t Tell ignorance would become their first line of defense, and would unintentionally open
the floodgates of criticism in multiple arenas.6
Further, the encouragement of suppliers to move had severe cultural ramifications on the day-today operations of the facilities. To maintain the profitable relationships, suppliers would jump
countries to Nike suggestions. Japanese would open factories in South Korea and Taiwan.
Then, these three groups would open factories in Indonesia, China, and Vietnam7.
Nike’s overall strategy, its purposeful ignorance, and the tumultuous cultural atmosphere in the
manufacturing facilities were combining forces to create the Social Storm of the Century.
CRITICS’ VOICE
As Phil Knight and Nike were soon to find out, the sports world is not the only realm of
fanaticism. Criticism and anti-Nike sentiment came from all segments of society. Athletes,
Human Rights Activists, Labor Activists, Watch-Dog Groups, Congressmen, Consumer
Activists, Anti-Corporate Activists, News Journalists, SPIN police, Student Advocates, and of
most important, the average American consumer8.
Jeffrey Ballinger “A labor activist since high school, Ballinger felt passionately that any
company had a significant obligation towards even its lowliest workers.” In 1988, as the director
of Labor association in Indonesia, Jeff interviewed hundreds of
Indonesian workers and compiled data against Nike and others:
unrealistic production quotas, mistreatment of workers, health
regulation violations, bribery, etc. His debut as a Nike critic
came in 1992 when he wrote an exposé in Harper’s Monthly.
Working from the basement of his in-laws, Jeff has spent over
10 years academically criticizing Nike. His tactic “one
company – one country” was created based on PR and financial
constraints, and has proved to be so successful that most critics
have adopted this method in many activist campaigns. One
company – he picked Nike because it was a large public image.
One country – he picked Indonesia because he had enough data to create a sustainable argument.
He criticizes the media as being a large culprit of this Nike issue, because most reporters don’t
know the facts and that the distraction of the ego battles blurs the overall labor issue. Nike held
one public debate with its critics, and Jeff was the only invitee.9
Jim Keady A devout Roman Catholic, Jim was a former soccer player. He was an assistant
soccer coach at St. John’s University while studying theology. In 1997, when he learned that
Nike exploits labor he refused to wear Nike apparel as part of his contract with the Red Storm
athletic program. He and a college friend, Leslie Kretzu decided to live in Indonesia on the Nike
going rate of $1.25 / day for a month. The petitioned to work at a Nike facility during that time,
Nike responded unfavorably. They video taped interviews with exploited workers,
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unsuccessfully tried to arrange Nike facility tours, and
pondered the intellectual components of the issues. Since the
Indonesian experience, Jim has created a children’s play that
demonstrates the exploitation, appeared as an athlete advocate
for Nike Watch-Dog Groups, and is preparing to release a
documentary “Sweat: A Story of Solidarity with Indonesian
Sweatshop Workers” in 2005.10
Tim Connor Founder of the Australian-based Oxfam Community Aid
Abroad Nike Watch, Tim is an fearless advocate of labor rights: the
living wage standard, job safety, health, right to
organize, etc. Tim has become most recently
affiliated with the Global Exchange and
CorpWatch. Tim’s publications are focused
around Nike claims and the lack of results, with
his most noteworthy being a publication
through the Global Exchange—Still Waiting
For Nike To Do It: Nike’s Labor Practices in
the Three Years Since CEO Phil Knight’s
Medea Benjamin
Speech to the National Press Club. Global
Exchange is located in San Francisco, directed by Medea Benjamin.
Global Exchange has been a personal nemesis to Phil Knight, who was
specifically mentioned in a stockholder’s address in late 1997 as the one NGO with which Nike
will never openly dialogue. The foundation of this mutual dislike and ego struggle is based on
the fundamental accusations of the Global Exchange: Nike created this exploitation mess and
forced its competition to follow. Therefore, Nike will be the public image for the desired
reform.11
Marc Kasky An avid runner who for personal reasons gave up Nike
products in 1995, Marc saw the Nike debate unfold. He was infuriated
by the ability of Nike to propagandize to maintain market share and
consumer support. He felt this was misrepresentation of the truth, and
decided to sue them based on a “California Citizen Attorney General”
law. His case was lost in the lower courts, and he continued to appeal
to the California Supreme Court who ruled (4-3) in favor of Kasky.
Nike’s hired the best lawyers to defend their position that “political free
speech” was guaranteed by the First Amendment; Kasky’s lawyer argued that such speed was
“commercial” and therefore constituted “false advertising.”
Nike appealed this decision, and the U.S. Supreme Court
determined to hear the case. The U.S. Supreme Court did
not make a decision on the overall issue Did Nike Lie?
Instead the Court dismissed the writ of certiorari they had
previously granted making a decision of no decision,
throwing the case back to the California Supreme Court.12
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NIKE BRACES AGAINST THE STORM
The defense that It’s not our business was changed to Everyone does it. Enemy lines were
drawn. Substantial damage was already sustained by the time the Nike message became We are
fixing it. Nike’s moral capital and perceived Integrity & Trust were gone. What’s more, the
Nike message never contained a key element that many were looking for: We are sorry. We
were wrong. We need to be responsible for the footprint we leave. Phil Knight’s competitive
ego is the driving force behind this missing element. Even in the middle of the storm Nike
employees had to carefully manage this ego.13
Dusty Kidd A newly-hired member of the PR department, Dusty was one of the first movers
internally to take action. Internally created as a competition to be the best,
Dusty and two others began working on the Corporate Code of Conduct
which was published in 1992, only months behind the Levi Strauss’ Code.
Dusty Kidd later became the Director of Labor Practices which he
founded in 1996. By mid 2000, Nike created the Corporate Responsibility
Compliance Group and named Dusty VP. He understands the scope and
degree of complexity of his tasks, and describes the process as ongoing
and continuous. He explains that there were varying opinions and
discussion internally on dealing with the situation, and in hindsight,
admits that Nike would have been much better off embracing the NGO
critics from the start. He also agrees with Jeff Ballinger that the focus of
helping the laborers is forgotten in the frenzied debates.14
Vada Manager Joining Nike in 1997, Vada was thrust into his role as Global Director of Issues
Management with expertise in litigation support, global manufacturing practices, and crisis
communications. Formerly employed by Levi Strauss, he has been
entrenched in the details of the political climate of the issues. Determined
to educate the public on Nike’s efforts, Vada promoted the image of
Nike: “Nike approaches this as it approaches everything, as competition.
And we aim to win.” He has adamantly defended the Nike stance in
various media settings, including a Today Show segment in which he
defended Nike’s right to not allow Jonah Peretti to order a custom shoe
with the word “sweatshop.” His message has always been clear – Nike is
the leader in all aspects of business and activist groups constantly obscure
or distort Nike’s commitment to human rights.15
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Maria Eitel Formerly a special assistant to President Ronald Reagan for
media relations and corporate affairs group manager for Microsoft, Phil
Knight hired Maria in January 1998 to be a VP of Corporate
Responsibility – Senior Advisor. She currently is a board member of
Global Alliance, an organization created to improve the workplace.
Most recently she was appointed to be the Nike Foundation President,
with an initiative for this newly restructured organization to create
opportunities for disadvantaged girls throughout the world. She has
always focused on the main issue of improving conditions for the worker
and understands the importance of critics. She, however, does not yield to outside pressures to
create “blanket” simplified actions – rather strategic actions should be taken with both economic
and social elements accounted.16
NIKE POUNDED BY WAVES OF ACTIVISM
Phil Knight, the ever-active sports enthusiast and die-hard competitor, was ready and willing to
lead his team into battle. Little did he know that he was steering his company into the heart of a
violent storm. “Knight was blindsided by the ferocity of the anti-Nike sentiment about its
overseas workers. The damage to the brand was real.” Market share was being lost to hiking
boots, sales were slowing, profits were lagging, and the stock value had plummeted. Falling
from its all-time high of $67.51 (February 13, 1997) with the release of the Jardine Fleming Nike
Index, Nike hit low points of $29.07 (September 2, 1998) and $25.09 (February 25, 2000).17
p. 124, Business Week – February 21, 2000
Reactionary PR tactics were backfiring as activist momentum built following the release of the
Nike Index. Garry Trudeau, the “social satirist,” devoted a series of Doonesbury (May-June
1997) strips to heighten the “americana experience” of the Nike dilemma. The Andrew Young
report was immediately criticized for its faulty methodologies, as was a “sufficient wage”
analysis completed by MBA students at Amos Tuck Dartmouth. Immediately in between the
press release announcements of these two reports, an internal audit from Earnst & Young was
leaked to the press, grabbing the front page of the New York Times: Nike Shoe Plant in Vietnam
Is Called Unsafe for Workers.18
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The standing waves came crashing down as Nike was barraged with attacks. The Nike ship was
out of control, being pounded by the crashing waves of activism, yet Phil Knight maintained his
confident course. From 1997 through the 2000 Summer Olympic Games held in Australia, Nike
was not popular. Forty congressman sent letters to Phil Knight reprimanding Nike practices and
demanding change. Several “sweat shop” bills emerged on Capitol Hill. Recruiters for Nike
would have a difficult time filling their interview slots—student organizations held sit-ins
protesting Nike’s unfair labor practices.19
CHANGING COURSE – WEATHERING THE STORM
Finally, in January 1998, Phil Knight began to change course, which probably resulted from
pressures from stockholders (Phil owns about 25% and investor banking owns about 61%). Phil
Knight hired Maria Eitel, who made it clear to everyone that she would not have joined Nike if
she felt she would be unable to contribute to improving Nike’s corporate citizenship. “In April
1998, Knight summoned the headquarters staff [and] apologized for his taking his eye off the
ball during Nike’s boom years and failing to prepare it for the rough times that followed.” By
May 12, 1998 at the National Press Club, Phil Knight announced Nike’s commitments to change:
New Labor Initiatives. The tone of the introductory comments showed no sign of remorse or
acceptance of responsibility for the criticisms received. Rather, it demonstrated his personal
frustrations with the media and its injustice – how dare they treat me and Nike this way! His
comments full of ego and arrogance segued into six announcements to extend Nike’s Code of
Conduct.20
The next day, however, Phil Knight made it clear that Nike is rethinking its overall strategy to
prepare for the new millennium. Indeed, he admitted the anti-Nike sentiment had some impact
(about 10%) on Nike’s decision to evaluate and improve its processes: “we really look at [the
responsibility to working conditions] as more than just a subcontracting relationship, that it's
really a partnership not in the legal sense but in the moral sense, with the Asian factories.”
Reconnecting to the value chain, to both suppliers and retail outlets, was essential to creating
sustainable change and turning the company around.
Critics responded “cautiously” to the actions Nike began to implement. Slowing the storm
lessened as the tragedies of September 11th and the Iraqi War took the wind out of the “One
Company – One Country” campaign. Only the Kasky case maintained staying power. Finally,
the storm ended as the U.S. Supreme Court ruled in favor of Nike, dismissing the writ of
certiorari previously granted.
THE AFTERMATH
Nike has lost values in many ways, but will survive. The value of Nike reached an all-time high
on December 17, 2004 ($91.70). 2004 will stand out as Nike’s comeback year. Nike was
awarded the Advertiser of the Year for its second time in corporate history (the only company to
ever win this honor twice in its fifty year history).
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Phil Knight as CEO, however, did not survive. Although he was named the Best Manager of
the Year for Nike’s comeback recovery, he announced that December 28th would be his last day
of work. Phil Knight learned that indeed there was a finish line, and he crossed it running
strong.21
GOING FORWARD
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ENDNOTES
1
Adapted from the synopsis of the novel The Perfect Storm.
http://perfectstorm.warnerbros.com/cmp/book_syn.html
NIKE “SWOOSH” in footer from http://en.wikipedia.org/wiki/Image:Nikelogotype.png
ANTI-NIKE SMILE in footer from http://www.sweatthefilm.org/store.htm
Milton Friedman’s idea that “business is the business of business” summarizes the traditional view. The debate
continues, although most corporations have learned from Nike’s example to embrace the future.
http://www.rbc.com/newsroom/20031030coffey_1.html (New View)
http://www.dailytimes.com.pk/default.asp?page=story_20-7-2004_pg3_6 (Traditional View)
2
3
Phil Knight
http://www.nike.com/nikebiz/nikebiz.jhtml?page=5
http://cbae.nmsu.edu/~dboje/conferences/nike%20rhetoric%20and%20sweatshops.html
http://www.indystar.com/articles/2/166692-3872-191.html
http://running.syr.edu/column/19991227.html
http://www.stanfordalumni.org/news/magazine/1997/janfeb/articles/knight.html
http://answers.google.com/answers/threadview?id=463611 (Seeking MBA term paper)
Spar 2002, p 2. HBS Case: 9-700-047 “Hitting the Wall: Nike and International Labor Practices.”
Knight PHOTO: http://outside.away.com/outside/magazine/1097/9710phil.html
Nike PHOTO: http://www.nike.com/nikebiz/nikebiz.jhtml?page=5&item=origin
Phil Knight, in 1983, showers Carolyn with gifts in recognition of the swoosh. See
http://www.nike.com/nikebiz/nikebiz.jhtml?page=5&item=origin
“Tracking Nike's Footprints Across Asia,” Jardine Fleming Research Regional Manufacturing Sector, April 9 1997
http://www.businessweek.com/1997/18/b352523.htm (Business Week)
For a time, Vada Manager, the director of global issues management for Nike, published elements of this report on
the Nike FAQ to demonstrate how Nike was helping developing countries:
In simplest terms, the NIKE Index tracks a developing economy's economic development by
NIKE's activity in each country. Economic development starts when NIKE products are starting to
be manufactured there (Indonesia, 1989; Vietnam, 1996). The economy hits the second stage -development at a level where per capita income indicates labor flowing from basic industries like
footwear and textiles to advanced industries like electronics and cars (Hong Kong, 1985; Korea,
1990); and an economy is fully developed when NIKE has developed that country as a major
market (Singapore, 1991; Japan, 1984; Korea, 1994).
[ http://cbae.nmsu.edu/~dboje/NIKfaqcompensation.html ]
Vada responding to wages – “We’re not in Burma.”
http://www.chicagopublicradio.com/audio_library/ram/wv/wv_020131c.ram (January 31, 2002)
4
5
Spar 2002, p 3 & p 6 (Footnote 21) & p 21 (Exhibit 9).
Government Policy regarding import quotas also are balanced into the production capacities of each
country—also determining Nike mobility.
David Taylor, VP of production: “We don’t pay anybody at the factories, and we don’t set policy within the
factories. It’s their business to run.”
Everatt 1999, p 4. Ivey Case: 9A99C034 “Nike Inc. : Developing An Effective Public Relations Strategy”
6
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This reality exacerbated the labor issues: “Last year, for instance, it ordered 400,000 paris of one of its sports
sandals from its contract factories. But when the actual retail orders came in months later, they totaled more than a
million pairs, leaving Nike scrambling for demand.”
Lee 2002, p 126.
7
Japanese management in South Korea or Taiwan creates an atmosphere for conflict. Further, the cultural conflict
of the permutations of management and workers in all these countries is a seedbed for discontent: Japan, South
Korea, Taiwan, China, Indonesia, and Vietnam.
http://www.charlesdarwinresearch.org/reb.html
Hartman & Wokutch, 2003. pp 158-159, “Nike, Inc.: Corporate Social Responsibility and Workplace
Initiatives in Vietname” Rising Above Sweatshops.
8
Consumer Opinions Today Still Vary Considerably
http://www.epinions.com/otdr-topic-Backpacks-All-Background_InfoWhat_Should_You_Know_About-Nike_Brand
9
Jeff Ballinger
Spar 2002, p 4.
http://www.senser.com/btwelve.htm
http://www.nosweatapparel.com/aboutus/ballinger.html
http://ksghome.harvard.edu/~dking/ballinger.htm
http://www.thirdworldtraveler.com/Labor/Labor_Rights_Ballinger.html
Wokutch June 2001, pp 207. “Nike and Its Critics: Beginning a dialogue” Organization and Environment.
10
Jim Keady
http://www.sweatthefilm.org/story.htm
http://www.web.net/~msn/3nike17.htm
http://www.lrna.org/speakers/jimkeady.html
http://www.cleanclothes.org/companies/nike01-02-05.htm
http://www.sweatthefilm.org/
http://www.chicagopublicradio.com/audio_library/ram/wv/wv_020124b.ram (January 24, 2002)
http://news.bbc.co.uk/1/hi/world/asia-pacific/910313.stm
http://www.campusministry.villanova.edu/peace_and_justice/keady_pics.htm
http://electromagnet.us/news/trade/phil_k.html
11
Tim Connor and Medea Benjamin
http://www.evb.ch/cm_data/Panellrtconnor_0.pdf
Everatt 1999, p 4-6, 13.
Louise Lee, p 124. “Can Nike Still Do It?” Business Week February 21, 2000.
http://www.corpwatch.org/article.php?id=619
http://www.cleanclothes.org/companies/nike01-02-22.htm
http://www.ausport.gov.au/fulltext/2002/sportsf/s641464.asp (Radio “debate” with Eitel)
http://www.oxfam.org.au/campaigns/nike/
http://www.globalexchange.org/campaigns/sweatshops/nike/
http://www.globalexchange.org/campaigns/sweatshops/nike/NikeReport.pdf
http://www.globalexchange.org/getInvolved/speakers/12.html
12
Marc Kasky
http://www.moraldefense.com/Campaigns/Speech/default.htm
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/05/03/MN149517.DTL
http://www.corpwatch.org/article.php?id=6508
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http://www.firstamendmentcenter.org/faclibrary/casesummary.aspx?case=Nike_v_Kasky
http://www.srimedia.com/artman/publish/article_419.shtml
http://www.prfirms.org/resources/nike/default.asp
http://www.nvri.org/about/challenge12.shtml
http://www.supremecourtus.gov/opinions/02pdf/02-575.pdf
NIKE, INC., et al., Petitioners v. MARC KASKY - No. 02-575 - SUPREME COURT OF THE UNITED
STATES [April 23, 2003, Argued June 26, 2003] LexisNexis.
http://www.commondreams.org/headlines03/0424-07.htm
http://www.commondreams.org/headlines03/0627-04.htm
http://reclaimdemocracy.org/nike/
13
“Knight admits that his unconventional style – he was known to disappear from day-to-day operations for weeks
at a time—contributed to his company’s current predicament. ” Lee 2000, p 128.
14
Dusty Kidd
Everatt 1999, p 7.
Spar 2002, p 5.
http://www.umich.edu/~asiabus/abc04/panelists/Panelist_Kidd.pdf
http://www.ceres.org/conference/2001/notes/labor_practices.htm
http://www.mercycorps.org/items/172/
http://www.dailyemerald.com/archive/v100/3/990428/nike.html
– The strategic concept for Nike entering the new century is to be an archetype of the
responsible 21st century global company, in the sense that we are providing a sustainable
footprint everywhere, not only with environmental performance, but with people performance
as well. The triple bottom line of people, planet and profit is our goal.
– Nike made a real mistake. I think we reacted negatively to the criticism. We said wait a
minute, we’ve got the best corporate values in the world, so why aren’t you yelling at the
other folks? That was a stupid thing to do and didn’t get us anywhere. If anything it raised the
volume higher.
– I think we've learnt a lot in three years, the hard way maybe, but we've learned a lot and one
of the things I have is a great deal of respect now for the NGO community. There are
organizations out there who really do great work and really do care and are trying to make a
difficult bridge between the private sector and their issue and their constituencies despite the
great risks involved.
http://www.new-academy.ac.uk/publications/keypublications/documents/nikereport.pdf
15
Vada Manager
http://sasua.org/news/newsweek.html
http://www.issuemanagement.org/documents/bios/vada_manager.html
– Nike’s been unfairly targeted by a number of both other companies as well as by individuals
with regard to our practices. We’ve actually been quite a world leader in the past 25 years at
making investments in developing economies throughout Asia, throughout South--Latin
America and have actually provided economic opportunities for quite some time to workers
who seek better opportunities.
http://www.globalvision.org/program/globalization/roleof.html
Everatt 1999, p 13.
http://www.chicagopublicradio.com/audio_library/ram/wv/wv_020131c.ram
http://www.shey.net/niked.html
http://cbae.nmsu.edu/~dboje/nike/nike_pages/2001_february_28_Peretti_Nike.htm
http://www.aflcio.org/aboutunions/globalunions/ns03062001.cfm
16
Maria Eitel
http://portland.bizjournals.com/portland/stories/1998/01/26/story2.html
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http://www.csrwire.com/article.cgi/3154.html
http://www.theglobalalliance.org/boardmembers.htm
http://www.dailyemerald.com/archive/v100/3/990428/nike.html
– I’m really being given responsibility, and Nike is really committed to these issues and doing
the right thing. This is no way a public relations exercise. I’m here to look at programs and
policies and to work with our critics. I wouldn’t have taken the job if the desire to do the
right thing wasn’t there.
Everatt 1999, p 7.
– Oh I think it’s made us a better company. I think that activist groups and consumers are very
instrumental in bringing to the forefront issues that are important, and pushing companies to
pay more attention to a lot of issues where they have impact either on the environment or on
people, or anything. I think it’s a very important role that they play, and I think in our case
it’s made Nike a better company.
http://www.ausport.gov.au/fulltext/2002/sportsf/s641464.asp
17
Lee 200, pp 121 & 124. Stock prices are adjusted for splits to create comparable measures over time. Data
compiled from http://finance.yahoo.com/
18
Nike Index – see Note 4
http://www.thirdworldtraveler.com/Boycotts/Nike_DontDoIt_GX.html (General Criticism Response)
Doonesbury cartoons can be found in Exhibit A
http://www.geocities.com/Athens/Acropolis/5232/comicmay97.htm
Exhibit B contains Phil Knight’s commentary.
Andrew Young
http://www.calbaptist.edu/dskubik/young.htm (Actual Report)
http://www.saigon.com/~nike/pr5.html (Thuyen Nguyen Response)
http://www.hartford-hwp.com/archives/26/097.html (PR Spin Response)
Amos Tuck Dartmouth
http://www.nike.com/nikebiz/gc/mp/pdf/vietnameseandindonesian.pdf (Actual Report)
http://cbae.nmsu.edu/mgt/handout/boje/bnike/ (PR Spin Response)
http://abstract.cs.washington.edu/~renacer/Molden%20Ryan.htm (Challenge Premise)
http://www.sweatshopwatch.org/swatch/headlines/1998/nike_jan98.html
Earnst & Young Audit
http://www-personal.umich.edu/~lormand/poli/nike/nike101-9.htm
http://www.motherjones.com/news/feature/1997/11/nike.html
http://www.saigon.com/~nike/pr9.htm
19
Activism Momentum
http://cbae.nmsu.edu/~dboje/inthenewsNIKE.html
http://www.michaelmoore.com/dogeatdogfilms/nikerelease.html
http://www.michaelmoore.com/dogeatdogfilms/nike2.html
http://www.stanford.edu/group/SICD/Nike/nike.html
http://sasua.org/news/newsweek.html
20
Entire Speech is contained in Exhibit B
http://cbae.nmsu.edu/~dboje/NIKphilspeech.html
http://www.pbs.org/newshour/bb/business/jan-june98/nike_5-13.html (Phil Knight -- Next Day)
http://www.pbs.org/newshour/forum/may98/nike.html (Phil Knight -- FAQ)
21
Phil Knight’s Strong Finish – New Blood at the Top
http://netscape.businessweek.com/magazine/content/05_02/b3915626.htm
http://www.katc.com/Global/story.asp?S=2812965
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http://sports.espn.go.com/espn/sportsbusiness/news/story?id=1926045
http://www.forbes.com/management/2004/11/19/cx_da_1119topnews.html
http://www.katc.com/Global/story.asp?S=2812965
http://www.oregonlive.com/search/index.ssf?/base/business/1106139924241490.xml?oregonian?fng
http://www.oregonlive.com/search/index.ssf?/base/business/1106657896133130.xml?oregonian?fng
Lost Value
Exhibit C shows brand deterioration and regain since 2000
Exhibit D compares Nike & Addidas Stock Value – demonstrating logarithmic and exponential curves of
fit. Lost value could be measured by CSR issues. Agreeing to discuss with critics a living wage has never occurred.
Many would suggest that such a concession would lead to constant pressure to improve wages. Others would
suggest that involving certain NGOs would help educate them on the difficult of managing such a solution across so
many national dynamics (inflation, stability, strikes, etc.)
Exhibit E puts a timeline of major events related to Nike in comparison to its Stock Value.
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