Beyond the Swoosh:

Examining Nike’s Ethical &

Moral Standards for Labor Practices

Prepared For: Ms. Vicki LeQuire

Chief Ethics Officer
Nike

Prepared By: Katherine LeBrun

Business Ethics Investigator
Nike

April 2, 2024

Nike World Headquarters

One Bowerman Dr.
Beaverton, OR 97005
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Katherine LeBrun
One Bowerman Drive
Beaverton, Oregon 97005
katherine.lebrun@nike.com
123-456-7890
April 2, 2024

Ms. Vicki LeQuire

Chief Ethics Officer
Nike World Headquarters
One Bowerman Drive
Beaverton, Oregon 97005

Dear Ms. Vicki LeQuire,

I am writing to inform the Nike Ethics Department that I have investigated the ethical standards
of Nike, particularly concerning unethical child labor, forced labor, and sweatshop labor
practices.

Nike has been a subject of significant scrutiny regarding its labor practices, particularly in
developing countries where reports of exploitation and abuse have surfaced. As an advocate for
ethical business practices, I find it imperative to dive into the intricacies of such issues, aiming to
understand the root causes and potential solutions.

The selection of Nike as a case study stems from its prominent position in the global sportwear
industry and its pervasive influence on consumer behavior. By examining Nike’s practices, I
hope to help shed light on the broader implications of labor exploitation within multinational
corporations, emphasizing the urgent need for immediate reform and implementation of higher
standards.

Child labor, forced labor, and sweatshop labor not only violate fundamental human rights but
also reflects failures within Nike’s corporation. These practices not only tarnish a company’s
reputation but also pose significant legal, financial, and ethical risks. Addressing these issues is
not only a moral imperative, but also a necessity in today’s retail business world.

I aim to contribute to the understanding of corporate responsibility and advocating for

transparency, accountability, and ethical standards in corporations regardless of how big or small
they are in the global industry.

Throughout this report, I aim to identify actionable recommendations that can drive positive
change within the company and across the entire retail industry through thorough and impactful
research. I believe that by studying Nike’s labor practices, awareness for social justice and
ethical business conduct can promote change.

Sincerely,
Katherine LeBrun

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 Table of Contents

Letter of Intent………………………………………………………………….....1

Table of Contents……………………………………………………………….....2

List of Illustrations………………………………………………………………...3

Executive Summary……………………………………………………………….4

Introduction………………………………………………………………………..5

Methodology………………………………………………………………………6

Results……………………………………………………………………………..7

Discussion…………………………………………………………………………9

Conclusion………………………………………………………………………..10

References………………………………………………………………………...11

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 List of Illustrations

Image 1: Nike’s Overcrowded Factories…………………………………….Page 7

Figure 2: Don’t Buy Nike’s Lies …………………………………………….Page 7

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 Executive Summary
This report dives into the unethical labor practices of Nike, a multinational corporation
renowned for its athletic apparel and footwear. Nike’s journey to global prominence has been
marked by allegations of exploitation, human rights violations, and poor working conditions in
its supply chain factories. Nike has aimed for cost efficiency and rapid production which may
seem like a good business strategy; however, it has come at the expense of ethical
considerations, leading to significant damage to their reputation. Key findings reveal that Nike’s
supply chain has been marred by instances of forced labor, child labor, low wages, excessive
working hours, and unsafe working conditions in factories across developing countries. This
report will explore the importance of ethical responsibility for large corporations to prioritize the
well-being of its workers and adopt measures to ensure that compliance with labor laws and
ethical standards are followed through with. Failure to address these issues not only tarnished
Nike’s reputation, but also undermined its long-term sustainability and credibility as a socially
responsible corporate entity. This report recommends comprehensive reforms, including
increased transparency, an individual auditing process, and investment in more serious ethical
leadership to foster positive change. Nike has the opportunity to make a change to resolve their
past wrongs and set a new standard for corporate responsibility and ethical standards in the
global business world.

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 Introduction
The global sportswear brand got its start in 1964 after student and track-and-field star from the
University of Oregon, Phil Knight, toured the Onitsuka, now Asics, factory in Japan. This trip
inspired Knight to partner with his coach, Bill Bowerman, at the University of Oregon to launch
Blue Ribbon Sports in collaboration with Onitsuka.

Just seven years later, Knight and Bowerman made the decision to split from Onitsuka to form
their own company which we know today as Nike. The company got its name after the Greek
goddess of victory. Its “swoosh” logo has become one of the world’s most recognized brand
logos and has continued to rise above typical corporate branding and emerged with cultural
significance.

Nike went public in 1980 but struggled until 1984 when the company spent its entire marketing
budget to sign, at the time, NBA rookie Michael Jordan to breathe life into its basketball shoe
division. Originally, Jordan signed a five-year, $2.5 million contract to promote the Air Jordan
shoe that initially sold for just $65 a pair. In the first two months of the shoe’s release, Nike sold
$70 million worth of Jordans and by the end of 1985, Nike reported revenue of more than $100
million. This contract changed the way that brands signed athletes and other celebrities to
marketing deals.

Despite Nike’s continued success, they have found themselves in the middle of complex ethical
dilemmas and controversies. Nike’s rise to fame has been marred by persistent allegations of
unethical labor practices within its supply chain, particularly in developing countries where
manufacturing costs are lower than that of the United States. Reports of sweatshop conditions,
low wages, and exploitation of workers have tarnished the brand’s image and sparked
widespread outrage among customers.

These ethical lapses have not only cast a dark cloud over Nike’s reputation but have also caused
a fundamental shift in the company’s trajectory to promote positive change in the company’s
standards. Nike has had to face these allegations head on and confront the uncomfortable
realities rather than stay hiding behind their marketing team.

While Nike's unethical labor practices have undeniably shaped its past, they also represent a
pivotal opportunity for the company to redefine its future by prioritizing ethical considerations
within its business model. Through a comprehensive reassessment of its supply chain practices
and a commitment to social and environmental responsibility, Nike can not only mitigate the
damage caused by its past decisions, but also emerge as a leader in ethical leadership within the
retail and corporate world.

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 Methodology
To research Nike’s ethical and moral standards of their labor practices, I first conducted a simple
Google search to find general information about the company. In doing so, I was able to gather
the basic background information about the company that helped me to gain an insight of where
they began, what their mission is, as well as an overview of the ethical dilemmas that Nike has
faced throughout their lifetime.

Conducting a Google search was more helpful than originally anticipated. At first, I was
expecting to just find lots of news and journal articles about Nike’s unethical labor practices.
Many of these articles did come through however I also found lots of scholarly sources from
schools like the Harbert College of Business at Auburn University, Stanford University,
Chapman University, Yale University, and Harvard Business School.

I utilized all these sources to help formulate my argument that Nike must change their labor
practices if they want to continue as a leader in the sportwear apparel industry.

After conducting a variety of Google searches for scholarly sources, I took to the Fairfield
University Library Database to find more academic articles and journals. Unfortunately, the
database had no information on Nike or Nike’s unethical labor practices in third world countries.

Unsure of where to go to look for sources next, I sat down to look through all my sources and I
determined that I had enough information to move on to writing the first draft of my Business
Ethics Report.

I sat down and thoroughly read through every source that I had collected throughout my two
days of research. I combed through each source two different times—one for reading to get a gist
of what the source had to offer, and another to highlight and pull the important information that
would be crucial to building my argument in this report.

After pulling out specific information from each source, I then grouped all the similar
information together in categories to help me stay organized. This helped me make sure that I
included the most important information in each of the sections of the report.

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 Results
Nike, a leader in the global sportswear industry, has long been entangled in controversies
surrounding its labor practices in third world countries. Despite its status as a symbol of athletic
excellence and innovation, the brand has faced relentless scrutiny for exploiting cheap labor in
countries with extremely lax regulations, leading to egregious violations of human rights and
ethical standards. I will dive into the specifics of what has happened with Nike’s labor violations
and how the company has responded.

There is no secret that Nike has relied heavily on third world countries for manufacturing. Its
production facilities are primarily located in countries like China, Vietnam, and Indonesia where
wages are much lower than that of the United States. While outsourcing production has allowed
Nike to minimize costs and maximize their profits, it has come at a human cost. Reports of
sweatshop-like conditions, extremely low wages, excessive work hours, and child labor have
plagued Nike’s supply chain for decades, yet they continue.

Image 1: Nike’s Overcrowded Factories

Source: The Wall Street Journal

Workers, often from impoverished backgrounds and looking for any job that will put money in
their pocket, endure grueling conditions in factories to produce Nike’s clothing, footwear, and
other products. For their 12–14 hour days, factory workers are only to be compensated with
insufficient wages that barely cover their basic needs.

There have also been reports of inadequate safety measures and standards in these factories. This
puts workers at risk of accidents and injuries, only further highlighting Nike’s disregard for
human welfare in pursuit of making a large profit.

Image 2: Don’t Buy Nike’s Lies

Source: Oregon Public Broadcasting

Nike’s initial response to allegations of unethical labor practices were characterized by denial
and deflection. The company refuted claims of exploitation, dismissing them as being over

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exaggerated. Eventually, pressure from consumers, advocacy groups, and the media forced Nike
to acknowledge the severity of the issue. After the first allegations of poor labor practices in
1998, under intense public pressure and declining sales, Nike pledged improve labor conditions
in its factories and adopted a code of conduct. This code outlined minimum standards for labor
practices including fair wages, reasonable working hours, and safe working conditions.

It appears Nike may have been putting in effort for show because despite these efforts, criticisms
persisted as reports of labor violations continued to surface month after month, year after year.
Nike’s compliance with its own code of conduct remained questionable with instances of non-
compliance and unregulated factories still common. Throughout the years, critics have argued
that Nike’s commitment to ethical labor practices was merely a PR strategy aimed at appeasing
consumers and deflecting criticism, rather than a genuine effort to effect meaningful change.

In recent years, Nike has made progress in addressing labor issues within its supply chain. The
company has increased transparency by publishing factory locations and audit reports, allowing
for greater accountability. Additionally, Nike has invested in programs aimed at improving
worker empowerment and education. While these efforts represent a step in the right direction,
many challenges remain in ensuring ethical labor practices throughout Nike’s global supply
chain.

Nike’s unethical labor practices in third world countries have tarnished its reputation and raised
fundamental questions about corporate responsibility in a globalized economy. While the
company has taken steps to address these issues, significant work remains to be done to ensure
the fair treatment of workers and uphold ethical standards. As consumers become more
conscientious about the origins of the products they purchase, companies like Nike prioritize
human welfare over profit margins and truly embody the values of social responsibility and
ethical leadership.

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 Discussion
As previously discussed, Nike is synonymous with athletic excellence and innovation in the
sportwear industry however they have been entangled in accusations of negligence and ethical
malpractice in its treatment of labor workers in third world countries. As a concerned consumer,
I firmly believe that Nike must take full accountability for its poo labor standards and the
resulting human rights violations that still stand today. The corporations ineffective handling of
the situation and failure to embody competence, character, and care have only exacerbated the
issues further. Nike lacks ethical leadership that is crucial in retail companies as successful as
this one.

First and foremost, Nike’s harmful labor practices in third world countries demand
accountability. For decades, reports of sweatshop like conditions, insufficient funds to support
the most basic lifestyle, and child labor have plagued the company’s supply chain, casting a dark
shadow over its brand image. It is hard to believe that today, in 2024, global corporations like
Nike continue to prioritize profit margins and revenue over the well-being of its workers that
produce their profit-making entities.

As consumers, we cannot turn a blind eye to such egregious violations of human rights. Nike
must be held to the upmost standard for its role in perpetuating exploitative labor practices and
must take immediate steps to rectify the harm it has caused.

Furthermore, it has been disappointing to watch the way that Nike has handled their unethical
labor allegations for the last 25 years. The company has lacked competence, character, and care
that should be expected of a company with a such a reputation. Instead of taking proactive steps
to address labor violations and implementing meaningful reforms, Nike has resorted to
implementing PR stunts and strategies that have aimed at deflecting criticism and preserving
what it can of its reputation, and profits for that matter.

Nike’s response has been marked by halfhearted apologies, empty promises, and cosmetic
changes that do little to nothing to address the root cause of the unethical dilemma that they have
found themselves in. Nike’s failure to demonstrate genuine remorse or commitment to change
reflects a profound lack of integrity and ethical leadership.

Nike’s disregard for ethical labor standards and its ineffective response to criticism constitutes
betrayal of trust and a clear vision of basic human decency. As consumers, we have a
responsibility to demand better from companies that have our unwavering support—otherwise
we will stop shopping there and the revenue losses will dive even deeper. It is critical that Nike
continues to be held responsible for its unethical actions as long as they continue down the path
that they are on. It is only after manufacturing is transferred to the United States or standards are
heightened.

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 Conclusion
In conclusion, it is imperative that Nike do more to address their unethical labor standards. These
practices extend far beyond the confined of the athletic apparel industry which resonates deeply
within the broader business world. The responses that Nike has given to their labor issues
underscore the critical role that corporations play in shaping social, economic, and ethical
standards in the business world. The repercussions of unethical labor practices tarnish a
company’s reputation, consumer trust, and invite public outrage. Addressing these issues is a
moral obligation as well as a strategic imperative for overall success.

In researching Nike’s unethical labor practices, there have been several invaluable lessons that
have emerged for the corporation to take advantage of in the future as well as for other
companies in the business world. For one, transparency and accountability are of upmost
importance. Concealing or downplaying labor violations, as Nike did, only exacerbates the
problem and undermines trust for consumers and workers. It is crucial that companies
proactively disclose information about their supply chains, engage in audits of the company, and
demonstrate genuine commitment to correcting what they have done wrong in the past.

Another lesson learned is that ethical leadership is a non-negotiable in corporations as large and
well known as Nike. Leaders and administrators within a company that make deal breaking
decisions must prioritize ethical decisions over short term profits, championing a culture of
integrity, fairness, and respect within their organizations.

Researching Nike and their unethical labor practices has served as a potent reminder of the
power and responsibility that businesses play a large part in shaping the world that we live in
right now. In learning from past mistakes and embracing ethical standards, businesses can not
only avoid reputational damage but also contribute positively to a society where profit and
ethical standards can coexist with one another. For Nike, they will have to start at the bottom and
work their way up to implementing completely new, ethical labor practices. While this may be
challenging, it will enhance their brand reputation, stakeholder and consumer trust, and the
impact on society—a much more impactful change than hiding behind PR stunts ever would. It is
my hope that Nike’s story will serve as a catalyst for positive change, inspiring businesses to
strive for excellence and ethical standards throughout their entire company.

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 References
Burns, Jennifer and Debora Spar. (2002 September). Hitting the Wall: Nike and International
Labor Practices. https://www.hbs.edu/faculty/Pages/item.aspx?num=26875.

Lichtig, Scott, and Matt Wilsey. (n.d.). The Nike Controversy. Stanford.
https://web.stanford.edu/class/e297c/trade_environment/wheeling/hnike.html

Nike: Managing Ethical Missteps—Sweatshops to Leadership in Employment Practices. (n.d.).

Auburn University. https://harbert.auburn.edu/binaries/documents/center-for-ethical-
organizational-cultures/cases/nike.pdf.

Statement on Forced Labor. (n.d.).

https://about.nike.com/en/impact-resources/statement-on-forced-labor.

Teather, David. (2005, April 15). Nike Lists Abuses at Asian Factories. Yale University.
https://archive-yaleglobal.yale.edu/content/nike-lists-abuses-asian-factories.

Carlson, Debbie. (n.d.). Nike, Inc. Brittanica Money.

https://www.britannica.com/money/Nike-Inc.

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