Laura Goldberg
April 5, 2010
COM 232 Gaither
Nike Case Study
Situation Analysis
Despite Nike’s best efforts, the company has not faired well in the eyes of the
global community. Through out the 90’s, it seemed Nike made headlines for all the
wrong reasons. Outsourced companies, as it turned out, were treating their workers
unfairly. While technically they were not part of the Nike Company and only their
suppliers, Nike’s name was still dragged through the mud.
Some of the main issues that were brought up during the 90’s were wages,
the use of child labor, and health and safety problems. In Indonesia, a third party
company from Korea was paying their employees minimum wage and petitioning
the government to try and let them pay even less than minimum wage. Minimum
wage was about a dollar a day at the time, and didn’t even cover basic human daily
needs. In Pakistan, a picture was taken of a 12-year-old boy stitching up a Nike
soccer ball and when it began to circulate people became outraged. Finally in
Vietnam, after a safety inspection a factory was found to have unsafe amounts of
Toulene, which can cause nervous system depression, liver and kidney damage, as
well as skin and eye problems. While all of the factories were third parties to Nike,
Nike became guilty by association of all these human rights crimes.
Objectives

To gain better standing in global community. The negative press has put
them in a bad light through out the world. If Nike wants to do good business
they need to be viewed in good standing.

To make employees feel more comfortable to work somewhere associated
with the Nike name. They need employees to help run the company and they
need to make sure people still want to work for Nike. Employees need to be
educated as to the Nike standards and codes of conduct. This includes their
suppliers.

To make customers feel good about buying Nike products. People don’t want
to buy something if supports something negative. Nike doesn’t want their
customers to be thinking about some poor exploited boy half way around the
world every time they kick their soccer ball.

To be a more environmentally friendly company. Since there was a problem
with toxins being in the air in some factories, Nike wants to make sure that
their products are made in an eco-friendly manner.
Target Audiences

Customers – make them feel good about buying their products

Suppliers – let them know that Nike will not tolerate them abusing
employees under Nike’s name

Employees – they are working for a reliable company where their basic
human rights will be honored and respected.

Global Community – Nike wont abuse human rights and is doing respectable
business

NPO’s – Nike wants to fix current problems and work towards making sure
they never happen again as well as ensuring other companies do the same
Strategies
Nike had quite a few strategies to help them fulfill their objectives. One was
to try and make sure that all employees, including those employed by other
companies were aware of Nike’s specific code of conduct. Another strategy that Nike
used was to make sure staff members were educated about the environment as well
as safe and fair labor practices. This is to help ensure that Nike will be both
environmentally and people friendly and help Nike to obtain the objective of having
better standing with employees as well as the environment.
Another strategy is to get involved with NGO’s. By getting involved with
NGO’s to help other companies as well as better regulate their own, it will help put
them in a better standing in the global community. All of these strategies relate to
the objectives and will help Nike reach their goals.
Tactics

Post Code of Conduct on walls of every Nike factory. This was a somewhat
failed attempt to help educate employees. Many employees are illiterate and
are therefore unable to read the Code of Conduct any way

Create a Labor Practices department. This is a better attempt to educate the
employees. Members of the team visit all of the Nike factories and make sure
they are up the current Nike standards.

Create Nike Environmental Action Team. This department makes sure that all
of Nike’s products are being made in an environment that is safe for
employees as well as good for the environment.

Use SHAPE (Safety, Health, Attitudes of Management, People Investment, and
Environment) to check up on suppliers. Since it was the suppliers who gave
Nike the bad name, this department makes sure the even the suppliers are
working up to Nike’s tough standards.

Use an outside audit to be sure wages are being fairly given. By having a third
party give audit it gives the message to the global community that Nike is
treating their employees fairly, and they will do what it takes to correct any
problem that comes up.

Become active member of United Nations Global Compact and Fair Labor
Association. By becoming involved in a NGO it gives the message that Nike
genuinely cares about the global community. While they could only worry
about themselves, they have decided to help others as well make sure they
do not make the same mistakes Nike did.

Help found organization to help prevent these problems from occurring in the
future. Nike help found Global Alliance for Workers and Communities which,
helps improve working conditions and training for young people in third
world countries.