Running head: NIKE CASE 1
NIKE CASE 5
Discern how a more Effective Ethics Program and a more Viable Code of Conduct could have mitigated the Ethical Issues Faced by Nike
Nike is one of the most important producers and suppliers in the industry of athletic clothing, sporty footwear, and accessories around the globe. The corporation has faced a lot of ethical issues during the period of its existence. Nike was blamed for the violation of the employment laws and the rights of citizens when it was trying to cut down the prices and manufacture goods at low-cost clothing, footwear, sporting goods equipment, toys, consumer electronics, and others. In addition, the company was blamed for hiring young children in Pakistan. The article that revealed the issue was published in 1996 by the Life magazine. It was said that the children were involved in doing the stitching of soccer balls for Nike, Adidas AG, and other companies. The photos of working teenagers employed by the company had an extreme influence on the Nikes reputation and its deals (Ferrell, Fraedrich, & Ferrell, 2011, p. 387). Furthermore, their plant located in Cambodia got a citation for employing children.
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The company started to fight against charges. It was stated that, in Cambodia, people sold fake IDs that were used to get jobs. The plant in Indonesia had a number of contractors who were accused of violating the labor laws, operating sweatshops, and physical injury. However, more and more facts highlighted the unfair play of Nike. It was found that the plant in Taiwan had more than 10,000 female workers receiving only 50 cents per hour. Employees were fired just for calling out sick. In addition, when an employee did not meet the quota, the managers made him/her stand outside bearing the excessive heat. The employees of the company did not say anything as they were afraid of losing their jobs and the only source of income.
As the U.S. employees wanted to get more money for their work, the company decided to move its production to South Korea and Taiwan. With the development of democracy in these countries, Nike moved to Vietnam, Indonesia, and China. The plant in Indonesian violated human rights and safety. The employees got only $2.00 per day and were forced to work with chemicals and toxic glue without proper training. Hence, the employee treatment at different plants of the company is horrible and requires an urgent reaction.
The United Nations Secretary developed the Global Compact that was an initiative to encourage businesses around the globe to adopt socially responsible practices. The practices were based on the principles than covered the area of labor, human rights, environment, corruption, and others. The organizers of the Global Compact were brought together by the U.S. labor groups, agencies, and civil society. It is considered to be the largest initiative of the corporate citizenship in the world. The initiative has two key objectives: to mainstream the business activity principles worldwide and to catalyze actions to support broader goals. The Global Compact was launched in July 2000. A year later, Nike became its member agreeing to follow the principles.
Therefore, Nike has been constantly accused of violating the principles associated with the effective recognition of the right to collective bargaining. There were attempts in Canada to organize a union; however, the plant took the decision to close the doors. It was explained by the desire to find cheaper labor. Most of the Nikes plants are located in the areas where unions frown upon. The plants are known for the violation of several principles of the Global Compact. However, the company promised to abide by all principles.
Describe an Ethics Training and Communications Program that May Have Kept Nike from Encountering the Ethical Issues it Did in this Scenario
Nike has plants in different countries around the globe. It should prompt the company to hire researchers who would help it find out about the labor laws, child laws, culture, and rituals of the country where the company is going to operate. It will ensure the company that it operates in compliance with the countrys laws. As the company has plants in different countries, it is necessary to have information available in various languages. It is also advised to hire people who are fluent English speakers. As soon as the company hires people for the plants, it should begin the training related to communication and ethics. It is essential that the employees play various scenarios that they may encounter in real life. It should continue till the employees understand the key principles of ethical behavior.
It should be noted that some behavior that is unethical in the USA may be ethical in other countries. Employees should be aware of the consequences they may have the violation of the key policies. All employees should sign off on an acknowledgement that states that they understand the policies and agree with their terms. In addition, Nike should offer ethical computer training, as well as ongoing training, to keep everyone aware of any changes that may occur.
Determine and Discuss how Nike Could Have Benefited Early on from the Ethics Auditing
Nike could have saved money in case of implementation of ethical audits from the beginning of its operation. The audit would have provided the company with insight on the unethical behaviors of the subcontract plants. This would have given Nike an opportunity to improve the working conditions of employees and eliminate the sweatshops. The damage that was done to the shops could have been prevented in case of implementation of the ethics audit. It would make the company aware of the fact employees deal with chemicals and toxic glues and should wear proper safety equipment. The company was treated as the one that abuses children. However, the audit would have helped the company change this attitude and treatment. In addition, the auditing would have provided Nike with an opportunity to cut down on the contract losses from universities because of the unethical behavior.
Create a High-level Outline for what the Ethics Auditing Process Should Look Like at Nike
The auditing process should presuppose the hiring of researchers to investigate the market in various areas. Ethical training should be set up to train employees online and in person. Necessary changes should be reviewed, modified, and implemented through the ethics policy. The audit process should be directed to find any unethical issues that are going on at different locations and develop resolutions for them. Finally, the process of auditing should be set up to provide managers with advice concerning the changes needed to protect them and the company from potential liabilities.