Stakeholder Management

Nike Inc. (NYSE: NKE) is a marketer of athletic footwear and apparel based in
suburban Portland, Oregon. As a large and diversified company Nike has a wide range
of stakeholders both internal and 0demal. Key intemal stakeholders include the
shareholders, management, in-house employees, and endorsers. External stakeholders
Include supplies, the employees of suppliers, customers, wholesale and retail
channels, competitors, the community and governments. This paper will examine the
degree to which Nike meets the needs of these stakeholders. Nike is a good example
of a company that believes that success is equated with meeting the needs of its
stakeholders.
Internal stakeholders
The most important intemal stakeholder of Nike is the shareholders. Executives and
managers are agents of the shareholders, and work to meet their needs. Nike's
shareholders expect a strong return on the investment, In particular in relation to
Download full competitos in the industry. Nike's returns come in two forms the
dividend and the paper NOW! appreciation of the company's share value. The dividend
Is $1.08, which delivers a yield of 1.32% on the current stock price. The stock
price has experienced steady apprecadon over the past several years. In November
2005, Nike traded at $42.65. Today, despite two years of economic recession and
stagnation, Nike trades at $81.82. This penermance comes as the direct result of
steadily increasing sales. Even when sales slumped in 2009 profits continued to
improve. The company's balance sheet shows a steady Improvement in the value of the
firm's equity meaning that Nike is meeting the expectations of its shareholders
(MSN Moneycentral, 2010).
TOPIC: Term Paper on Stakeholder Management Nike Inc. (NYSE: Nke) Is Assignment
Executives and management comprise another class of internal stakeholders at Nike.
The company provides a stimulating work environment for managerial talent, brought
about by the company's number one position in the market and a philosophy that
emphasizes creativity and self-actualization. The company's executive compensation
is considered low by the standards of a company its size, so the company focuses on
attracting executive and managerial talent through opportunity and work environment
(Back 2002).
Non-managerial employees are another key internal stakeholder at Nike. The company,
in an effort to improve outcomes for non-managerial employees, has initiated worker
surveys to determine the needs of those workers and the degree to which the company
meets them.
Executives and management comprise another class of internal stakeholders at Nike.
The company provides a stimulating work environment for managerial talent, brought
about by the company's number one position in the market and a philosophy that
emphasizes creativity and self-actualization. The company's executive compensation
is cons low by the standards of a company its size, so the company focuses on
attracting executive and managerial talent through opportunity and work environment
(Back 2002).
Non-managerial employees are another key internal stakeholder at Nike. The company
in an effort to improve outcomes for non-managerial employees, has initiated worker
surveys O determine the needs of those workers and the degree O which the company
meets them. In the most recent survey, the company scored well on a number of
measures relating the supervisors training and fringe benefits. The company scored
more poorly with respect to compensation, worker-management communication and
living conditensdood, a concern Or Asian workers Or whom the company provides such
benefits in kebiz.com, 2010) That Nike is able to measure the needs of its workers
and focus its efforts on meeting those needs is an important component of the
company meeting its obligations O this critical internal stakeholder group.
Celebrity endorsers are another internal stakeholder. These athletes enter into
lucrative contracts with Nike and this constffutes a mutual relationship. Both
parties are expected to live up to the terms of the contract. The athletes expect
support, payment and Or Nike to continue to cultivate a positive image among
consumers. That Nike is able to build a roster of the world's most popular elite
athletes is indicative of the company's ability O meet the needs of this
shareholder group, especially given the high level of compenten in the athletic
apparel endorsement market.
External Stakeholders
The first group of external stakeholders consists of the suppliers and their
employees. Nike is a desirable not for suppliers, a function of the volume of
business that the company does. A factory can exist solely to meet demand from
Nike. Suppliers seem to regard Nike well. The employees of suppliers are a
different group and community pressure has resulted in this group becoming a key
stakeholder for nke especially where public image is concerned. nke has responded
to the needs of this group and is proactive in investigating allegations of
improprietyon the part of factory owners and managers. F. example Nike dropped a
soccer ball maker in Pakistan after child labor abuses were revealed (Fazl-e-
Haider, 2007) The company forced a supplier in Malaysia to improve treatment of its
workers after receiving reports of poor conditions (Nikebiz com, 2010).
Customers expect a high quality product from Nike, which generally positions itself
at the upper end of its industry. Nike has a high degree of customer satisfaction,
but ranks below rival Reebok (ACSI, 2006).

Nike shares are running toward the longest losing streak in company history.

The retail giant’s stock has fallen for 10 consecutive days, losing over 11%. A
close of $92.10 would be the lowest since November 2022, as tracked by Dow Jones
Market Data Group.

Annual losses are now at 16%, while the S&P 500 has advanced by the same amount.
Nearly $17 billion in Nike's market cap has been erased.

Wednesday’s selling accelerated after Foot Locker, which counts on Nike for about
50% of its products, slashed its forecast, with Foot Locker CEO Mary Dillon noting
"price-sensitive" consumers. It also suspended its dividend. Foot Locker shares
fell over 30% in intraday trading.

"Nike is an ‘unaffordable luxury’ with 61% of consumers living paycheck-to-

paycheck," Burt Flickinger III, managing director at Strategic Resource Group, told
FOX Business.

While inflation eased to 3.2% in July, down from more than 9% last summer, it
remains elevated and consumers are facing rising borrowing costs for credit cards,
auto loans and mortgages, which topped 7%.

Retailers hit by inflation and theft

But even before the bombshell, Nike’s selloff was on its ninth day. Dick’s Sporting
Goods, another partner seller, reported a 23% drop in profit, slashed its profit
forecast and CEO Lauren Hobart warned about rising theft.

China
Nike’s China business grew 25% in its fourth quarter, which was reported in June.
Since then, the economic data coming out of the most populous nation has weakened.
Economic growth in the region is expected to miss its 5% growth target this year,
as firms including JPMorgan lower expectations. Additionally, the youth
unemployment rate soared to 21% and the People’s Bank of China recently cut
interest rates.

Nike’s Mixed Quarter

Nike, which reported fourth-quarter and full-year results in June, earned $0.66
cents per share, below analysts' $0.67 estimate. Full-year profits fell 14% to
$3.23 per share. Additionally, inventory levels – while improving – remain a work
in progress.

"We expect first-quarter revenue growth to be flat to up low single digits,

reflecting our decision to tighten first-half buys and restrain marketplace
inventory," said Nike Chief Financial Officer Matt Fried.

Nike Stakeholders & Corporate Social Responsibility

Nike Inc. maintains corporate social responsibility (CSR) programs to address the
interests of its major stakeholder groups. According to Archie Carroll,
stakeholders are individuals or groups that have a stake in what the business does.
The company influences them, and they influence the company in return. The brand
image and sales performance of Nike sports shoes, apparel, and equipment are
subject to the effects of stakeholders’ interests and corresponding actions. Nike
addresses these stakeholders’ interests through a number of corporate social
responsibility programs. However, charitable programs are the main arm of the
sporting goods company’s corporate social responsibility strategy.

Stakeholders’ interests are satisfied through Nike’s corporate social

responsibility (CSR) programs. The corresponding CSR policy and strategy are based
on Nike’s consideration for communities and customers, whose interests influence
the company’s design and production of its athletic footwear, equipment, and
apparel. Considering that members of these stakeholder groups represent the
sporting goods market, the satisfaction of corporate citizenship goals relates to
the effectiveness of the brand and other competitive advantages described in the
SWOT analysis of Nike. For example, a sustainable or green brand image can increase
the company’s effectiveness in attracting environment-focused customers.

Nike’s Stakeholder Groups & CSR Initiatives

As a global business, Nike Inc. has a wide variety of stakeholders influencing the
sales of its sports shoes and other products. However, the company’s corporate
social responsibility programs target only a number of major stakeholder groups.
Nike has the following stakeholders, arranged according to the company’s
prioritization:

1.Customers (top priority)

2.Communities
3.Employees
4.Governments
5.Interest Groups
Customers. Nike’s corporate social responsibility strategy gives top priority to
customers as a stakeholder group. Customers are significant because they affect
sales revenues in the footwear, apparel, and equipment market. In the case of Nike
Inc., these stakeholders’ interests include high-quality products and reasonable
prices. The company addresses these interests through R&D investments. For example,
Nike continues to provide products with high quality and advanced technology. Many
of the corporate citizenship efforts for this stakeholder group are communicated
through Nike’s marketing mix (4Ps). For example, the public relations component of
promotion activities highlights the company’s CSR programs, sustainability status,
and business ethics, to maintain a positive brand image. The corporate social
responsibility strategies of competitors, like Adidas and Puma, affect how
customers respond as they compare the corporate citizenship statuses of firms in
the sporting goods market. Considering high profitability and growing sales
revenues, Nike’s corporate social responsibility programs effectively satisfy the
interests of customers as a top-priority stakeholder group.

Communities. This stakeholder group influences Nike’s corporate social

responsibility standing and brand strength. Customers tend to buy more of a product
that has a positive impact on communities. The interests of these stakeholders
include support for the development of communities. Nike Inc. addresses these
interests through charitable programs and grants, which serve as the company’s
primary means of supporting community development initiatives. For example, the
company has community development programs in developing countries, focusing on
supporting the empowerment of girls. The company also has a variety of “Community
Impact” corporate social responsibility programs, such as the Active Schools &
Youth Sports program, which donates funds and sports shoes, apparel, and equipment
to promote physical activity among students. These Community Impact programs align
with Nike’s mission statement and vision statement, in terms of considering
everyone an athlete. The sportswear company allocates a percentage of its pre-tax
income to support these community development initiatives.

Employees. Nike Inc. recognizes the significance of employees as a stakeholder

group that influences organizational effectiveness. For instance, employees’
performance directly translates to business performance. The interests of these
stakeholders include fair compensation, career development opportunities, and a
sense of purpose. Nike addresses these interests through corporate social
responsibility policies and programs that focus on internal leadership development,
talent management through coaching and mentoring, and team building. Also, Nike’s
company culture (organizational culture) promotes an inclusive work environment
that boosts employees’ morale and facilitates the satisfaction of their concerns
regarding corporate social responsibility and business ethics in the workplace.
These CSR efforts maximize human resource support for Nike’s ability to produce
more popular and advanced athletic footwear, apparel, and equipment.

Governments. As part of its corporate social responsibility strategy, Nike Inc.

identifies governments as a stakeholder group. These stakeholders are important
because they affect how Nike operates, in terms of its permits, limits, and legal
actions. Governments are interested in legal and regulatory compliance, as well as
business contributions to tax revenues and community development. Understandably,
the community development interest is addressed through Nike’s corporate social
responsibility programs for community development. In addressing the other
interests of this stakeholder group of governments, Nike Inc. maintains policies
and standards to ensure compliance in all its business areas. Thus, the firm’s
corporate social responsibility strategy satisfies the interests of governments as
stakeholders.

Interest Groups. Nike’s corporate social responsibility policies also address the
concerns of some interest groups. These stakeholders affect Nike in terms of
potential government intervention and in terms of consumer perception regarding the
company and its sporting goods. The interests of these stakeholders are varied,
including fair labor practices, business sustainability, and environmental
conservation. These interests reflect sociocultural and ecological trends, such as
the ones identified in the PESTLE/PESTEL analysis of Nike. These trends show that
communities tend to favor sustainable businesses and companies that have
satisfactory corporate citizenship programs. Nike Inc. addresses these interests
through charitable giving, sponsorships, and funding for some social programs. The
company also has corporate social responsibility policies for improving labor
management and environmental impact. These considerations indicate that Nike Inc.
satisfies the concerns of interest groups.

Nike’s CSR Performance in Addressing Stakeholders’ Interests

Nike’s prioritization of customers reflects the importance of this stakeholder
group. The satisfaction of customers directly affects revenues. The company’s
corporate social responsibility strategy is also satisfactory in terms of giving
second priority to communities, considering the variety of policies and programs to
support these stakeholders. While it is understandable that employees determine
organizational performance, Nike’s corporate social responsibility support for
communities is congruent to its support for customers as a top-priority stakeholder
group. Communities determine customers’ buying behaviors. Overall, Nike Inc. is
effective in ensuring that its corporate social responsibility programs support the
sporting goods business aims of optimizing sales revenues while contributing to
societal improvement.

BEAVERTON, Ore.--(BUSINESS WIRE)-- NIKE, Inc. (NYSE:NKE) today reported fiscal 2024
financial results for its first quarter ended August 31, 2023.

First quarter revenues were $12.9 billion, up 2 percent compared to prior year on a
reported and currency-neutral basis*
NIKE Direct revenues were $5.4 billion, up 6 percent compared to prior year on a
reported and currency-neutral basis with growth across all geographies
NIKE Brand Digital sales increased 2 percent on a reported and currency-neutral
basis
Wholesale revenues were $7.0 billion, flat compared to prior year on a reported
basis and up 1 percent on a currency-neutral basis
Gross margin decreased 10 basis points to 44.2 percent
Diluted earnings per share was $0.94 for the first quarter, up 1 percent
“Q1 offered proof of what NIKE can deliver when we connect great innovation, great
storytelling and great marketplace experiences to consumers,” said John Donahoe,
President & CEO, NIKE, Inc. “Moving forward, we are laser-focused on scaling these
successes with greater consistency and speed as we continue to integrate and
streamline our business. This is how we’ll extend our leadership position and drive
growth over the long-term.”**

Matthew Friend, Executive Vice President & Chief Financial Officer, NIKE, Inc.
said, “Our first-quarter results demonstrated the impact of staying on the offense
over the past fiscal year. With a healthy marketplace and another quarter of brand
and business momentum, we are strengthening our foundation for sustainable,
profitable, long-term growth.”**

First Quarter Income Statement Review

Revenues for NIKE, Inc. increased 2 percent on a reported and currency-neutral

basis to $12.9 billion compared to the prior year.
Revenues for the NIKE Brand were $12.4 billion, up 3 percent on a reported and
currency-neutral basis, led by currency-neutral growth in EMEA, Greater China and
APLA, partially offset by a decline in North America.
Revenues for Converse were $588 million, down 9 percent on a reported and currency-
neutral basis, due to a decline in North America, partially offset by growth in
Asia.
Gross margin decreased 10 basis points to 44.2 percent, primarily driven by higher
product costs and unfavorable changes in net foreign currency exchange rates,
largely offset by strategic pricing actions.
Selling and administrative expense increased 5 percent to $4.1 billion.
Demand creation expense was $1.1 billion, up 13 percent, primarily due to
advertising and marketing expense.
Operating overhead expense increased 2 percent to $3.0 billion, primarily due to
wage-related expenses and NIKE Direct variable costs, partially offset by lower
technology spend.
The effective tax rate was 12.0 percent compared to 19.7 percent for the same
period last year primarily due to a one-time benefit provided by the recent delay
of the effective date of U.S. foreign tax regulations.
Net income was $1.5 billion, down 1 percent, and Diluted earnings per share was
$0.94, increasing 1 percent.
August 31, 2023 Balance Sheet Review

Inventories for NIKE, Inc. were $8.7 billion, down 10 percent compared to the prior
year, primarily driven by a decrease in units, partially offset by product mix and
higher product input costs.
Cash and equivalents and short-term investments were $8.8 billion, down
approximately $3.1 billion from last year, as cash generated by operations was more
than offset by share repurchases, cash dividends and capital expenditures.
Shareholder Returns

NIKE continues to have a strong track record of investing to fuel growth and
consistently increasing returns to shareholders, including 21 consecutive years of
increasing dividend payouts. In the first quarter, NIKE returned approximately $1.7
billion to shareholders, including:

Dividends of $524 million, up 9 percent from the prior year.

Share repurchases of $1.1 billion, reflecting 10.5 million shares retired as part
of the Company’s four-year, $18 billion program approved by the Board of Directors
in June 2022. As of August 31, 2023, a total of 54 million shares have been
repurchased under the program for a total of approximately $5.9 billion.
Conference Call

NIKE, Inc. management will host a conference call beginning at approximately 2:00
p.m. PT on September 28, 2023, to review fiscal first quarter results. The
conference call will be broadcast live via the Internet and can be accessed at
https://investors.nike.com. For those unable to listen to the live broadcast, an
archived version will be available at the same location through approximately 11:00
p.m. PT, October 19, 2023.

Founded in 1964, Nike is the largest and most recognized sports apparel brand in
the world today. From their humble beginnings as a shoe and t-shirt company, Nike
has grown into an international conglomerate with an estimated global brand value
of $30 billion in 2021.[1] Headquartered near Beaverton, Oregon, the company
operates more than 1,000 retail stores worldwide and employs over 73,000 people in
170 countries.[2]

In line with their iconic swoosh and “Just Do It” trademark, Nike’s business model
is built on developing game-changing technologies and products that have redefined
the sports apparel industry. Much of the company’s success is attributed to its
international marketing, which includes partnering with popular celebrity athletes
and sports teams from around the globe.

Nike’s Corporate Social Responsibility (CSR) Policy

Nike’s Corporate Social Responsibility and Sustainability program resonates with
the company’s core belief that “sports can change the world for the better.” Nike
leverages the unifying power of sports to promote its CSR agenda in three key
areas: diversity and inclusion, community investment, and environmental
sustainability.

I. Nike’s Diversity and Inclusion Program

Nike’s CSR and corporate governance programs center on providing a healthy and
tolerant work environment for all employees. To that end, the company invests in
promoting a work environment that celebrates diversity and inclusion. In 2020, Nike
introduced two new CSR programs, their Juneteenth learning initiative, and their
Unconscious Bias Awareness training program to promote a greater understanding of
racial equality and social change. Throughout 2020-21, Nike laid out a five-year
plan for creating more diversity in their workforce, which included a target goal
of 50% representation of women and 35% representation of racial and ethnic
minorities in their corporate workforce by 2025.[3] In conjunction with this
initiative, Nike announced an investment of $125 million over the next five years
to support businesses committed to “leveling the playing field.”[4]
In 2020, Nike allocated $4 million to support diversity and inclusion in
communities throughout North America through its Until We All Win program.
Additionally, eight of Nike’s Employee Networks donated $25,000 a year to nonprofit
organizations focusing on promoting social equality, regardless of race, gender,
and sexual orientation.

II. Nike’s Community Support Program

As part of their community outreach program, Nike spent more than $89 million in
2020 to help over 17 million kids around the world get active in sports and
exercise. Nike also committed to training nearly 100,000 coaches to help
communities most in need.

To encourage more gender inclusivity and equality, Nike invested over $100 million
into their Girl Effect program between 2015-2020 to improve the lives of tens of
millions of girls in 20 countries throughout Africa and Asia.[5] The company also
expanded its digital training tools to include the Coaching Girls program which
aims to make sports more fun and inclusive for girls through coach education and
leadership training.

Lastly, in collaboration with Converse, Jordan Brand, and Michael Jordan, Nike
announced a 10-year $140 million CSR commitment to support social equality for
Black Americans, $40 million of which is intended to support organizations and
nonprofits addressing systemic inequality.

COVID-19 Response
Nike’s COVID-19 response was widespread, covering the costs of food and apparel for
global communities and extra assistance for their employees. The efforts included
$30 million for food and medical care and a $5.7 million dollar donation of
footwear and apparel to healthcare professionals and front-line workers.

For employees, Nike worked with suppliers to implement proper health and safety
protocols at their facilities and provided paid time off and free virtual
counseling for those who were experiencing mental and emotional distress due to the
pandemic. Nike also implemented a two-to-one match for all employee donations made
to organizations addressing COVID-19-related relief and support.

III. Nike’s Sustainability Program

Understanding that if there “is no planet, there is no sport” Nike continues to
make considerable inroads in promoting their environmental sustainability
initiatives.

Through the Supplier Climate Action Program, Nike ensures their suppliers and
manufacturers are committed to their goal of carbon neutrality by 2025. So far, the
company announced that all of their North American facilities, as well as 48% of
their global operations, are operating on 100% renewable energy, and 99.9% of
manufacturing waste from their tier 1 suppliers have been diverted from landfills.
Under this new program, there was also a 30% reduction of fresh water used in
manufacturing textiles and materials in 2020.

To further reduce waste, Nike is introducing more sustainable materials into their
product lines and taking advantage of reusable and recyclable products. In 2020,
sustainable material integration increased from 41% to 59% in their clothing lines.
Although [EE1] [MH2] the use of sustainable materials in their footwear was
unchanged in 2020, the company is focusing on sustainable materials such as
Flyleather, a material made with at least 50% recycled leather scraps. So far, over
4 billion plastic bottles have been reprocessed into polyester and other textiles
that are used in their products. Nike is also piloting alternative packaging
solutions that replace corrugated cardboard with reusable shipping totes.[6]
Nike’s Corporate Social Responsibility Issues
Despite adopting a range of new environmental protocols to reduce environmental
waste, Nike’s carbon footprint remains unchanged from its 2015 baseline. This is
largely attributed to a steady stream of new footwear lines that require new
materials. In addition, while the brand has set a science-based target to reduce
greenhouse gas emissions, there is little evidence they are on track to meet their
target of operating entirely on renewable energy by 2025. There is also no clear
indication that the company – which relies heavily on trees and plants for their
textiles – has a policy in place to address deforestation.

In addition to concerns surrounding their environmental impact, Nike’s labor

practices continue to be scrutinized for human rights violations. In 2020, The
Washington Post reported that members of the Uighur Muslim minority in China
working for Nike were subjected to coerced working conditions and ethno-religious
discrimination. In response to this criticism, Nike issued a statement saying that
while they are “concerned about reports of forced labor, Nike does not source
products from the XUAR [Xinjiang Uyghur Autonomous Region].”[7]

Nike has also been under fire recently for financially penalizing female athletes
who become pregnant while under contract. To address the controversy, Nike has
since amended its policy, stated that it will no longer pause or stop payment to
pregnant athletes. Despite these efforts, the company continues to be criticized
for not acknowledging its past treatment of female athletes.[8]

Nike’s Corporate Social Responsibility Report

Access Nike’s 2019-20 CSR Impact report here.

Conclusion
Living up to their “Just Do It” brand, Nike continues to set industry standards for
its innovative product designs and marketing strategies. To maintain its
competitive advantage, Nike will need to expand and improve their supply chain
practices to ensure that protocols protecting the safety and wellbeing of all
workers are enforced. The company’s heavy reliance on overseas factories also means
that Nike will need to continuously monitor and improve their operations to ensure
that its products are socially and ecologically sustainable.

Our Targets
In 2005, NIKE published its first set of
five-year Purpose targets, and we have
stayed committed to this practice ever since.
Today, we have a set of 29 ambitious
corporate targets for the period from FY20
to FY25, focused on our Purpose across
People, Planet and Play. These targets
represent our multi-year commitment to
drive impact, meet stakeholder expectations
and align with NIKE’s business priorities.
When we set our 2025 targets, we did so
with the ambition that they be bold but
attainable and measurable. Approaching the
work with an athlete’s mindset, our targets
are meant to push us to the edges of what
we can achieve – and in doing so, progress
our enterprise meaningfully. Simply put, if
we are easily crossing every finish line, then
we need a race that is more challenging.
We work toward progress through strategic
planning, piloting innovations, implementing
solutions at scale and sharing best
practices with our partners. Our approach
distinguishes us because we:
− Connect executive compensation
to progress toward our 2025 targets
− Leverage annual milestones and
rigorous tracking to improve
performance management
− Extend accountability of targets deeper
into our value chain than ever before,
specifically in the areas of carbon,
waste, labor and supplier diversity
− Align with the United Nations Sustainable
Development Goals and other frameworks

Aspect Details Analysis

Vision “To bring inspiration and innovation to every athlete in the world.”
– Emphasizes inspiration and innovation as core values. – Inclusive vision
defines “every athlete” globally, extending beyond professionals.
Mission “To do everything possible to expand human potential. We do that by
creating groundbreaking sports innovations, by making our products more
sustainably, by building a creative and diverse global team, and by making a
positive impact in communities where we live and work.” – Comprehensive mission
encompassing various facets of Nike’s approach. – Focus areas include innovation,
sustainability, diversity, and community impact.
Objectives 1. Create groundbreaking sports innovations. 2. Make products more
sustainably. 3. Build a creative and diverse global team. 4. Make a positive impact
on communities. – Objectives align with Nike’s mission. – Innovation drives
product excellence. – Sustainability addresses environmental responsibility. –
Diversity fosters innovation. – Community impact reflects corporate social
responsibility.
Key Takeaways – Nike’s vision inspires athletes globally through innovation. –
Mission combines innovation, sustainability, diversity, and community impact.
– Objectives align with mission, emphasizing innovation, sustainability, diversity,
and social responsibility. – Demand generation leverages branding and athlete
endorsements. – Vision and mission reflect Nike’s core values and global
impact. – Objectives provide specific areas of focus. – This is achieved via
nnovation, sustainability, diversity, and community engagement. – Demand generation
remains central to Nike’s success strategy.