Nike, Inc., an apparel, sports equipment and shoe company, happens to dominate the athletic shoe market in the whole world. Despite the fact of the company’s very stable and unbeaten financial health status, Nike receives different criticisms on its global labor conditions. In terms of social aspects, Locke (2003) stated that Nike is highly criticized because of the low wages and poor working conditions given to the outsourced labor workers in factories located in different countries.
Indeed, the Nike’s factory operations in various nations are seen to be problematic because of the work conditions among the workers that are really in need of improvement. Nike should be held responsible on changing their corporate behavior in the developing world. There is a need of transformation in this because of the consequences of inequality posted by capitalism and globalization. In this regards, this paper will use Nike as a case that illustrates an issue of corporate accountability.
Review of Related Literatures
The phenomenon of globalization has greatly affected the condition of each country of the world today. O’ Brien (1992) defined the concept in relation to the geographical borders which can be global, international, offshore and global. According to O’ Brien (1992), globalization transcends geographical boundaries making the economy of the world interconnected and integrated. This makes the world markets for goods, services as well as capital interlinked. According to Hak-Min (1992), the developed nations are the ones who greatly benefits from this interconnectedness because of the unequal distribution of income between the developed and developing countries. ...
According to Hak-Min (1992), the developed nations are the ones who greatly benefits from this interconnectedness because of the unequal distribution of income between the developed and developing countries. It is the case that the share of income is skewed to the developed countries which makes their industries to grow far better while the developing nations are left behind. Meanwhile, according Rama (2003), globalization primarily affects the labor market in the developing countries because its common interest is the “cheap” labor costs through which the different companies in the developed worlds may highly maximize their profits. The poor wages together with the risky and abusive working conditions remain to trouble many factories in the third world countries. Given this, global companies which outsource labor from the developed countries are confronted with the ethical issues on how they conduct business for the greater good of society. Nike is one among the companies that are confronted by the issue of corporate accountability. The concept of corporate accountability is defined as the affected corporation’s responsibility to control the operations of that corporation for the greater good of individuals and society (Keith, 2010). According to Petrecca and Howard (2005), it owns more than 36 per cent market share in the athletic shoe sector in United States and more than 33 per cent for its athletic footwear alone at the global level even though if it is the case that the companies of Reebok International Ltd. as well as Adidas AG have just recently merged. Despite the stable financial status of the said company, Nike is highly criticized for the poor working conditions of its outsourced labor force in the developing regions of the world.