Prepared For:

Mr. Bobby Hajjaj

Lecturer, Department of Management

North South University

Course Name: MGT 489
Section No: 9
Date of submission: 5 August 2020

Submitted By:

Name ID Number

Jakaria Hossain Shajid 1621829030

Nike and Its Strategies
Nike is a very profitable American shoes and sports clothing company. With its Distinguished swoosh
symbol, it is a famous company round the world. Thus, its slogan "Just Do It" is embraced by using
early life and the business enterprise grew to be one who can dictate trend developments in many
countries. Nike CEO Phil Knight, got here up with two logical commercial enterprise strategies, which
are reducing prices by way of outsourcing the total manufacturing and channeling savings from
outsourcing into marketing. For these reasons, Nike aimed to have their products manufactured the place
the labor fees have been low such as China, Indonesia, South Korea and Taiwan. Thus, by using
outsoaring Nike accomplished running with no physical assets. Thanks to world inaction, Nike was once
utterly utilized outsourcing in developing nations and elevated its profitability, as properly Then, with
outsourcing savings, Nike used celebrities to promote its products. Furthermore, Nike made
Agreement with contractors in South Korea and Taiwan. However, the rising value of labor in these
countries made Nike to shit its suppliers to different developing countries such as China and Indonesia
the place low labor value was once available. In this case, Nike ought to now not be touchy to the
communities in these remember rise, and concerns of public and overlooked taking responsibility. Also,
Nike may want to now not forecast the consequences of having affordable and irresponsible labor
practices overseas earlier. With the accelerated media pressure, critics and public protests, Nike's huge
Reputation and company photo was once about to be destroyed through public.

Accusations and Nike Response

Once again, Nike outsourced its manufacturing in international locations the place labor price used to be
low and used financial savings for advertising and marketing campaign. A labor organizer, Jeff Ball
fought with Nike in labor practices and posted publication towards Nike. He argued that Nike compelled
contractors to meet the manufacturing quota, which made labors to be handled merciless in Indonesia.
Although there had been legal guidelines in prefer of labors in Indonesia, Nike contractors did no longer
comply with the regulation and no one should argue in opposition to due to Corruption in the country.
Ballinger succeeded in drawing interest of the US and Indonesian government. Hence, Indonesian
authorities enlarge d the minimal every day wage to round $1.24. But, most of the humans found the
increase insufficient. Think what made Nike state of affairs worse used to be Nike reckless and
irresponsible mind-set towards criticism. In the case, it is stated, "without an in house
Manufacturing facility, the organization virtually should now not be held accountable for the moves of
unbiased contractors. In response to criticism, Nike difficulty d Code of Conduct and Memorandum of
Understanding to be utilized for contractors in 1992. Protests had been nevertheless persevering with
towards Nike. To calm media, Nike additionally labored with Ernst & Young, unbiased accounting
firm, to audit Nike vegetation in overseas international locations However, labor activists once more had
been no longer comfortable with it and did now not discover it dependable due to the fact Ernst &
Young was once paid by using Nike for the audit. On the different hand the U.S authorities hooked up
the Apparel Industry Partnership to useful resource higher labor requirements for overseas plants. Nike
joined in partnership first. In addition to this, Nike launched a Labor Practices Department in 1996. I
suppose Phil Knight assumed that all the accusations and protests would stop by means of collaborating
in these establishments. Nike different method was once hiring Andrew Young, a revered civil rights
leader, in or der to put together a file for the factories in Asia. After Nike launched the results, the critics
bought indignant once more due to the fact there used to be no confusion about the wages in the report,
which performed the key function of all the accusations. Later on, an audit document was once that
noted serious fitness and security problems in a manufacturing unit in 1997 leaked through an employee.
In addition to that, Nike amounted its first loss in thirteen years in 1998. Finally, as a substitute of
denying accusations, "Phil Knight introduced sequence of sweeping reforms, such as elevating the
minimal age of workers." Also, Nike furnished higher working stipulations in the factories. Then, Nike
tried greater in governmental reform efforts, which used to be Apparel Industry Apparel. Lastly, Nike
joined Fair Labor Association, which requires corporations to adapt its positive standards like minimum
Wage and construct inner display structures to impose. As a result, Nike carried out serious reforms and
programs, however, it has failed to tackle wages in their activities. As Ballinger said, “But on wages,
they’re nevertheless mendacity thru their teeth."

Corporate Social Responsibility in Nike

Every organization must have adopted Corporate Social Responsibility (CSR) to do the proper issue for
societies they interact. Especially huge corporations like Nike need to have been extra cautious when
interacting with overseas society. Nike, as a worldwide company, should have maintained sure degree of
social responsibility. It is no longer solely assembly economic desires to be a profitable company, it is
additionally imposing requirements tor being moral and accountable inside the company. Nike failed in
phrases of making use of CSR. Nike denied to be an accountable agency and did no longer attempt to
enhance working conditions in overseas factories in the first vicinity the place their sneakers had been
produced. Even after many criticisms, Nike did now not care to take the responsibility. After it began to
take Nike popularity and earnings down, Nike meant to follow applications in phrases of CSR.
However, they have been lacking the key aspect that they wished to repair it first. It was once the low
labor wages. I suppose Nike had to fulfill the protesting crew by means of growing the wages to the
degree the place the employees can continue to exist and assist their families, as well. Moreover, as an
alternative of ignoring unhealthy working prerequisites in the factories, Nike must have utilized CSR in
the direction of safety of the environment. For instance, most of the people acquired respiratory disorder
due to the fact of terrible air flow and publicity to poisonous chemicals. Nike must have adopted
Environmental safety insurance policies in the very first vicinity in order to guard workers' health.

Recommendations and Conclusion

Nike case illustrates selections of an organization appearing to treatment the trouble of negative
Criticism in a legally covered and defended world village the place company's social responsibility can
no longer go left out or uncensored. As many structured entities (companies. governments, worldwide
organizations, and activists) enter multinational arena and the public become greater conscious of social
environmental prerequisites in developing countries, the want for sufficient, truthful disclosure of
company habits will always increase and put stress on organizations practices. Nike started out working
on its tradition to flip matters round however the injury used to be so severe that it want to maintain
working to buy in the thought of full disclosure of social duty practices, using inner and exterior audit to
exhibit to consumers, rivals and the world that it is carrying alongside with them the vogue of making
social duty a precedence in production, finance and buy decisions. As cautioned via Philip and Kevin
(2006) for something Nike will plan to do for its success, "adapting and conducting business practices
that protect the environment and human" (p.22) will keep away from him to be its personal enemy and
will supply him tools to protect in opposition to detractors.