is a company that has come to symbolize both the benefits and the risks inherent in globalization. During the year 1998, the company was under attack for allegedly exploiting overseas factory workers. In the past few years, the Nike Corporation has offered a microcosm of the issues surrounding consumerism and the global free market economy. Nike, like many other corporations from the economized world, has been criticized for exploiting laborers in manufacturing plants relocated to less economized societies. This exploitation has appeared grosser in that they are producing luxury products for over consumptive economized societies and disproportionally reward their star endorsers with lucrative contracts. The mounting criticism and campaigns against Nike, however, have not had much impact on a key part of their market, urban African-America (Watts, 2000). Poor African Americans understandably have some difficulty extending concern for abuses of workers overseas when the injustices they face in their own country are similarly acute. Although multinationals are eager to pursue the opportunities of increased global integration, they are increasingly aware of the reactions which their strategies induce - both at home and abroad. As part of the analysis of the case study of Nike Inc., this paper examines the difficulties and complexities that the company had to face with respect to its overseas labor problems.
Exploitation of overseas workers of the company
The labor practices that the company followed with respect to its overseas laborers was the major crisis that the company is facing (Lee, 2000). Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as costs/prices increased in Japan over the course of the 1970s Nike began to search for alternative, lower-cost producers. During these same years, Nike opened up its own shoe factories in Maine and New Hampshire, hoping to develop a reliable and high-quality source to supply its growing domestic market. At the same time, the company also began to cultivate potential suppliers in Korea, Thailand, China and Taiwan.
Over time, as Korea and Taiwan also began to develop, costs began to rise in these countries as well. As a result, Nike began to urge its suppliers to re-locate their operations to other, lower-cost countries. The company worked with its lead suppliers to open up manufacturing plants in Indonesia, China and Vietnam. By guaranteeing a significant number of orders and by placing Nike employees at these new factories to help monitor product quality and production processes, Nike was able to help its lead vendors establish an extensive network of footwear factories throughout Southeast Asia (Locke).
The same factors that permitted Nike to grow at an impressive rate over the last several decades - taking advantage of global sourcing opportunities to produce lower cost products and investing these savings into innovative designs and marketing campaigns - have also created serious problems for the company in recent years. Though analysts and many others feel that the management of the company is responsible for this crisis, it cannot be said so. The company and its management cannot be 100% responsible since it is the