CIA 1- RESEARCH PROBLEM IDENTIFICATION

By

SANJAY SURESH

REGISTER NUMBER

2328057

Under the Guidance of

Prof. SASEEKALA M

MBA PROGRAMME
SCHOOL OF BUSINESS AND MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

JANUARY 2023
 CONTENTS
1. Introduction
2. Company Background
3. Problem 1: Lack of Sustainability
3.1 Water Usage Concerns 3.2 Materials Sustainability Issues 3.3 Textile
Waste and Microfiber Pollution 3.4 Chemical Management Concerns 3.5
Rebound Effects Negating Progress
4. Problem 2: Supply Chain Complexity
4.1 Overview of Supply Chain Structure 4.2 Excessive and Illegal
Overtime 4.3 Late and Unfair Wage Payments 4.4 Workplace Harassment
and Abuse 4.5 Unsafe Working Conditions
5. Major Concepts and Terms Related to the Research Problem
6. Research Questions and Objectives
7. Literature Review
7.1 Sustainability in the Apparel Industry 7.2 Global Supply Chain Ethics
and Compliance
8. Proposed Methodology
8.1 Semi-Structured Interviews 8.2 Focus Group Discussions 8.3 Multi-
Stakeholder Surveys 8.4 Benchmarking and Gap Analysis
9. Timeline and Budget
10.Conclusion
11.References
1. INTRODUCTION

Nike Inc. faces growing criticism over sustainability progress and supply chain ethics
issues. This report provides an in-depth examination of these two critical management
problems. It analyses the specific concerns undermining Nike's sustainability and
supply chain, proposes targeted research questions/objectives, reviews academic
literature, outlines robust methodology combining qualitative and quantitative
techniques, and details a realistic timeline and budget.

2. COMPANY BACKGROUND

In 1964, Nike established itself as the world's most extensive athletic footwear and
apparel brand. Its vast scale of operations, including 79,400 employees, revenue of
over $44.5 billion, and a complex manufacturing supply chain spanning over 30
countries, presents significant sustainability and ethical compliance challenges
(Forbes, 2022; Macrotrends, 2023).

3. PROBLEM 1:

Lack of Sustainability Despite launching initiatives such as 'Move to Zero' and

'Circular Design Guide', Nike scored poorly in the 2021 Fashion Transparency Index
 with higher carbon emissions and water usage than in previous years, indicating a lack
of tangible progress on sustainability (Fashion et al., 2021).

Specific problem areas are examined below:

3.1 Water Usage Concerns:

 High water intensity for irrigating cotton crops

 Significant withdrawals for materials production like polyester

 Water pollution from textile manufacturing effluents

3.2 Materials Sustainability Issues:

 Reliance on virgin synthetic materials like polyester (derived from finite oil resources)

 Limited use of recycled polyester and biosynthetic

 Lack of adoption of alternate eco-friendly materials

3.3 Textile Waste and Microfiber Pollution:

 Substantial textile waste generation across production and consumer use

 Issue of microfiber pollution from garments during washing

 Limited fabric/product recycling initiatives

3.4 Chemical Management Concerns:

 Discharge of hazardous chemicals into wastewater from textile processes

 High usage of toxic chemicals like nonylphenols across the supply chain

 Lack of transparency around chemical inventory and safety data sheets

3.5 Rebound Effects Negating Progress:

 Improved manufacturing efficiency, driving higher overall production volumes

 Growth in developing markets increasing product demand/output

 Lower prices from cheap synthetics, increasing fast fashion product purchase

4. PROBLEM 2:
 Supply Chain Complexity Nike outsources production to over 30,000 suppliers across
the globe. However, this vast and complex supply chain structure creates significant
worker exploitation risks (Nike, 2023).

4.1 Overview of Supply Chain Structure: Nike categorises its suppliers into
multiple tiers:

Tier 1: Materials suppliers - Provides raw materials like cotton, rubber etc

Tier 2: Footwear manufacturers - Manufacture shoe parts like uppers, midsoles

Tier 3: Footwear assemblers - Assemble all footwear components into finished shoes

Tier 4: Apparel manufacturers - Cut, sew, and dye fabrics into apparel
Tier 5: Logistics providers - Transport materials and finished products

4.2 Excessive and Illegal Overtime:

 Excessive overtime beyond legal limits is pervasive across supplier tiers

 Workers face pressures for overtime due to tight production deadlines

 Impacts on health and safety from working extra hours

4.3 Late and Unfair Wage Payments:

 Consistent wage payment delays to factory workers

 Insufficient earnings, lack of fair living wages

 Unauthorized payroll deductions further reduce take-home wages

4.4 Workplace Harassment and Abuse:

 Reports of verbal harassment, bullying and abuse at supplier factories

 Inadequate grievance mechanisms to report harassment concerns

4.5 Unsafe Working Conditions:

 Failure to provide adequate health and safety protections

 Exposure to hazardous chemicals, machines and materials

 Insufficient freedom to refuse unsafe work or report injuries

 5. THE MAJOR CONCEPTS AND KEY TERMS RELATED TO THIS
RESEARCH PROBLEM:

5.1 Sustainability:

- Circular economy: An economic system aimed at eliminating waste and continual use of
resources

- Closed-loop production: Reusing byproducts or waste back into the production system

- Carbon emissions: Greenhouse gases released that contribute to climate change

- Water intensity: The amount of water utilised per unit of production

- Microfiber pollution: Tiny synthetic plastic fibres shed during garment washing that pollute
oceans

- Supply chain transparency: Disclosure of impact information across the entire production
system

5.2 Supply Chain Ethics:

- Code of conduct: Outlines expected standards and responsibilities for supply chain partners

- Excessive overtime: Working hours that exceed legal limits regularly

- Living wage: The income needed to meet basic needs and participate in community life

- Workplace harassment: Unwelcome behaviour that creates an intimidating environment

- Freedom of association: The right of workers to collectively organise and join trade unions

- Grievance mechanisms: Systems to report complaints regarding labour conditions

5.3 Textiles and Materials:

- Virgin synthetic materials: Petroleum-based fibres like polyester produced directly from raw
materials

- Recycled polyester: Reusing old polyester textiles and plastics to create new fibre
- Biosynthetic: Plant-based synthetic materials that are biodegradable

- Waterless dyeing: Dyeing technology that eliminates water use in the colouration process

- Effluents: Wastewater discharges from industry containing chemicals

6. RESEARCH QUESTIONS AND OBJECTIVES:

Research Questions:

 How can Nike implement closed-loop production and circular economy principles
across its supply chain?

 What enhanced code of conduct measures can Nike adopt to ensure supply chain
worker rights?

Objectives:

 Critically review Nike's sustainability initiatives

 Identify circular economy opportunities to improve environmental performance

 Analyze Nike's existing supply chain policies and code of conduct gaps

 Outline required supply chain compliance monitoring mechanisms

7. LITERATURE REVIEW:

Academic research provides valuable insights into sustainability innovations within the
apparel industry and examines supply chain ethics issues.

7.1 Sustainability in the Apparel Industry: Sustainable production studies have

analysed reduced-impact fibre choices, waterless dyeing, closed-loop recycling processes and
blockchain transparency solutions (Joy et al., 2012; Klepp & Laitala, 2018). Research also
reveals consumer demand shifting towards ethical brands, creating economic incentives
alongside environmental drivers for sustainability (Diddi et al., 2019).

7.2 Global Supply Chain Ethics and Compliance: Research on global supply
chain ethics has focused on labour rights issues in apparel manufacturing hubs, including
excessive hours, unfair wages, harassment and unsafe conditions (Anner, 2012). Scholars
have prescribed stringent supplier codes of conduct, improved purchasing practices to allow
reasonable lead times and worker-manager dialogue mechanisms to increase transparency
and better working conditions (Distelhorst et al., 2016; Locke et al., 2007).

8. PROPOSED METHODOLOGY

8.1 Semi-structured interviews: In-depth sustainability and sourcing manager

interviews regarding existing policies, targets and challenges.

8.2 Focus group discussions: Joint focus groups with Nike designers, suppliers and
industry experts to brainstorm solutions.

8.3 multi-stakeholder surveys: Large-scale surveys across Nike staff, suppliers, and
independent bodies to gather perceptions.

8.4 Benchmarking and gap analysis: Compare Nike’s performance and practices
against best practice case studies.

9. TIMELINE AND BUDGET:

Timeline: A 12-month timeline is proposed:
 Months 1-2: Set-up, literature review, methodology design, participant recruitment
 Months 3-5: Data Collection, including interviews, focus groups, and supply chain
surveys
 Months 6-8: Data Analysis and research insights compilation
 Months 9-11: Develop sustainability solutions and supply chain recommendations
 Month 12: Compile and report findings

Budget: The total proposed budget is $100,000, including:

 Research personnel: $55,000
 Data collection costs: $20,000
 Data analysis tools and services: $10,000
 Operational costs: $15,000
10.CONCLUSION:

In conclusion, through an extensive mixed methods research approach, this project

will support Nike in substantially improving its sustainability performance and supply
chain ethics. The benchmarking, gap analysis and solution identification will provide
data-backed recommendations tailored to Nike’s specific operational context. With the
proposed 18-month timeline and $125,000 budget, the research has strong potential to
drive positive change and position Nike as an industry leader in purpose-driven,
socially responsible business practices across both environmental and social
dimensions. The key will be Nike’s willingness to transparently engage across its
supply chain, embrace identified issues, and commit resources to implementing
necessary reform measures to nourish people and the planet.

11.REFERENCES:

 Anner, M. (2012). Corporate social responsibility and freedom of association rights.

Politics & Society, 40(4), 609–644.
 Distelhorst, G., Locke, R. M., Pal, T., & Samel, H. (2016). Production goes global;
compliance stays local: Private regulation in the global electronics industry.
Regulation & Governance, 10(3), 224-242.
 Fashion Transparency Index. (2021). Fashion Transparency Index 2021 Report.
Fashion Revolution. https://www.fashionrevolution.org/about/transparency/
 Forbes. (2022). Company Profile: Nike. Forbes.
https://www.forbes.com/companies/nike/?sh=324b7b3d3ef2
 Joy, A., Sherry Jr, J. F., Venkatesh, A., Wang, J., & Chan, R. (2012). Fast fashion,
sustainability, and the ethical appeal of luxury brands. Fashion Theory, 16(3), 273-
296.