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Case Analysis on Nike

In: Business and Management

Submitted By doubleh
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Case Study Analysis

(Hitting the Wall: Nike and International Labor Practices )

Business Ethics (MBA-513)

Section: 02

Case Summary

Nike is global footwear for athletes and non-athletes. It is still a highly successful athletic shoemaker today. Based in Beaverton, Oregon, Nike had been a corporate success story for more than three decades. It was a sneaker company, but one armed with an inimitable attitude, phenomenal growth, and the apparent ability to dictate fashion trends to some of the world’s most influential consumers. Selling a combination of basic footwear and street-smart athleticism, Nike pushed its revenues from a 1972 level of $62,000 to a startling $49 million in just ten years. Many researchers believe that Nike went in decline due to two reasons: Michael Jordan’s final retirement and the slowing economy.

Another aspect of Nike that has brought a negative image upon them is the negative accusations of exploiting foreign child labor with lower wage. Poor labor conditions and low wages have been an issue for many years, and are still present in 2011.In the 1980s and 1990s, Nike had been plagued by a series of labor incidents and public relations nightmares: underage workers in Indonesian plants, allegations of coerced overtime in China, dangerous working conditions in Vietnam. For a while, the stories had been largely confined to labor circles and activist publications, until a young female worker had died in a Nike contracting factory in 1997, the labor conditions at Nike had hit the mainstream. Nike has differentiated itself from its competitors were not so much its shoes as its strategy. First, the company would shave costs by outsourcing all manufacturing. There would be no in-house contracting factories, no dedicated manufacturing lines. Then, the money saved through outsourcing would be poured…...

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