NIKEs Cheap Labor - Case Study Example

Case Study - NIKE’S CHEAP LABOR 1. What is the ethical issue in this case? Was Nike at fault for unethical labor practices? Give two reasons for your answer and explain in detail, applying theory and references where possible. The ethical issue in the above mentioned case is the total suppression and violation of basic human rights by Nike in underdeveloped countries. The citizens are victimized in the hand of the first world countries that use cheap labor to manufacture their products and sell the same while multiplying the sum. There are several allegations against Nike for its labor practices. Nike as we know is the largest shoe manufacturing company. In Indonesia Nike pays a minimum wage of $2.50 a day to its workers although the daily livable wage in Indonesia is $4.00 to $4.50 a day. The case also reflects the poor living conditions of the workers employed in Nike. Other instances of suppression includes settling labor issues through the military, compelling workers for overtime without pay, sexual harassment and molestation of female employees, and total negligence of the welfare of the workers. Nike was definitely at fault because it resources to control, prevent job injuries, tools for advocating health and safety of its workers is not very pertinent. Finally high rates of occupational illness and poor compensation are result of inequality in political power (Pillay & Holtz, 2009). 2. What role do the media play in cases such as this? Explain Media’s two different roles and describe in detail. The role of media is huge when it comes to raising awareness and preventing exploitation of people. They are powerful effect on a countries growth and development. It should serve as agents for the modernization of the third world countries. Media here refers to mass media, print media and all other forms of media including the internet. They should increase their reach and provide all the news about the third world countries to the first world countries in the first place. They should also increase the third world control over communications asset which personnel from the first world countries are permitted to extract and process those into news. They should also hold some control over world communication institutions like UN agencies (Fourie, 2001, 427). The Social responsibility system advocates press freedom. Its purposes are similar to libertarian goals of informing, entertaining, selling, serving as a check on government (Willis & Willis, 42). Media acts as a bridge between the government and the citizens of that country. It should keep the citizens aware of the development that is going on in their country and whether it would profit them or led them towards destruction. 3. In your opinion in what ways could the situation faced by the Asian laborers damage Nike as a brand? Please explain one consequence in detail. Brand is a sign, name or logo that distinguishes one or more products from other similar products. Brand is used to dominate the market by reducing or eliminating competition, it increases customer loyalty by increasing switch cost and it helps in raising entry barrier by fending off potential threats. The corporate reputation of a brand also depends on the buyer`s perception. It concerns itself with how people feel bout that company`s activities, workplace, performance, labor practices, past performance and future prospects. In this context the recent protests where cars were burned and offices were ransacked by Indonesian workers and the protests and demonstrations in the factories can hamper the brand image of Nike in A large way. Some of the countries that are governed by International Labor Organization can restrain the entry of Nike products in their country. The stocks of the company can fall because of this reason. Questions are also being raised on Michael Jordan who is a public figure for endorsing the brand that is associated with such labor suppression. Actions can be taken against such organization by human rights commissions such as UNESCO and ILO. They can pressurize the particular government to take stern action. 4. The public has been made aware of the exploited laborers in Asia by a variety of magazines, newspapers, TV and radio channels Assume you are the President of Nike and want to change the organization’s damaged image. What actions would you take to regain your customer’s trust and improve your image? List 2 actions and explain in detail. Corporate Social Responsibility is a weapon in the hands of any brand which helps it regain its lost integrity. It embraces social, ethical and environmental issues and its impact on international market. 2 actions that I would undertake if I were the president of Nike would be first: provide the fair wage to the employees especially in the third world countries. Satisfied employees are the best workers. Productivity out of sheer compulsion and force leads to demotivation of the employees. Providing the minimum wage if not the fair wage can help to increase the living standard of the employees which will help them to fulfill their basic needs. Secondly I will prioritize employee’s safety measures. Female candidates will be safeguarded against any issue pertaining to sexual molestation and harassment. Female candidates will be under a reporting structure where they will be reporting only to female supervisors. In case of any reports on sexual harassment, proper enquiry will be done and action will be taken against the accused. Reference Fourie, P.J. (2001). Media Studies Volume 1: Institutions, Theories and Issues. South Africa: Juta and Company Ltd. Pillay, Y. & Holtz, T. H. (2009). Textbook of International Health: Global Health in a Dynamic World. New York: Oxford University Press. http://books.google.co.in/books?id=2XBB4-eYGZIC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false http://books.google.co.in/books?id=XsTSXIhG2sgC&dq=role+of+media+in+third+world+countries&source=gbs_navlinks_s Read More