Jeff’s argument of focusing on the costs of production was an important aspect because Nike’s revenue was mostly from this pool.
On the other hand, Nike’s response was not convincing. Their response that the labor conditions of its contractors were not their concern was not a proper response. Like any other production company, it is necessary to evaluate the production principles of your partners or contractors. Their response was a selfish response that showed that they were concerned about profits, rather than the welfare of the employees and other stakeholders. Their response to the realization of the severity of the labor issue should have been done in the initial periods. At that time, they would have reduced the pressure that was rising in the labor market. The competitors such as Reebok used this opportunity to increase their competitive advantage while Nike was continuing to be stubborn.
Nike did not handle the publicity surrounding its labor practices in a positive way. They waited for the labor issue to be amplified before they reacted. They reacted very late when the damage had been made. Had they acted earlier enough, they would have prevented the issues that arose from the labor unrest in its major distribution platforms. For example, when the criticism arose, they should have taken the initiative of evaluating the labor environment and making the possible changes. On entry into the market, Nike should have surveyed the minimum wages and provided considerable wages to its employees. It should have also evaluated its hiring platform to allow for the hiring of competitive and age appropriate individuals. This issue would have prevented the allegations that arose from the use of underage children in their production. They should also have involved major stakeholders such as the government, the unions, and other bodies in designing the employee rights and wages.
In Vietnam, a fair ...