Nike: Managing Ethical Missteps – Sweatshops to

leadership in Employment Practices

Submitted to:
Dr. Nilanjan Sengupta
Prof. Hrm & Ob
Chairperson Academic enhancement
Sdmimd, Mysuru

Submitted by:
Nithin Srinivas (2111)
Mohammed Rayyan (2112)
Ronak S (2113)
Introduction

◦ Phil Knight and his track coach Bill Bowerman founded the Blue Ribbon Sports
◦ Later in 1964, it was renamed as Nike
◦ Initial idea was to import athletic shoes from Japan into US market, as the market was dominated by
German competitors like Puma and Adidas
◦ After being fully renamed as Nike in 1978, it then grew to be the largest worldwide seller of the
athletic goods with approx. more than 168 Nike stores in the US and a presence in about 160
countries.
◦ Nike products were publicized by celebrity athlete sponsors.
 Nike’s face of barrage of criticism from
labour activities in the mid 1990’s.

The 1996 life magazine expose

Case Issues Vietnam’s factory condition problems

The environmental problems from textile

industry

the demand of cheap labour and lax labour

laws
 The company had other challenges related to weighing the
expence of labour in nations where the product manufacturing
is available
It had difficulty in regulating the working environment

The legal controversy in the Californian Supreme court

Continued Future Challenges for nike

Like threat from the Universities to cancel the contracts with

Nike

Nike’s subcontractors closed without notice, laying off 1800

workers
 What Happened ?

Factories located in korea and Taiwan were replaced with Factories in

Indonesia,Vietnam & China.

In the early 90’s Nike was criticised for poor wages,Forced OT’s, indiscriminant hiring
as per NGO’s report in Indonesia and Ernst & Young’s report in Vietnam.

Negative perception among the public.

Protests by the youth in universities.

Effect of The Negative Publicity

Accusitions
Negative reports by agencies in Indonesia & Vietnam
Phil knight conflit on full scale with nobody to take the
responsibility.
Andrew Young report
Marc Kasky Lawsuit
The Courts against Nike
What did they decide

They believed that they could change the bad reputation by taking the blame
on themselves.
They went to gain support from university students by having attractive deals
which were cancelled due to bad reputation
To increase their sales

Have better public relations

Social Responsibility

Retaining Cost effectiveness by working on the cost of labour as well as human right issues
Factories open to research groups.
Commitment to environment.
Rewarding systems
Transparency
New production methods
Took lead in the industry for Social Responsibility and made competitors follow
 Noticeable improvements

Better
Social
Training Workshops rewarding
policies
system

Strategic GAP analysis Impact

crisis for analysis in the
management philantrophy society
Results

Business Ethics- 100 Best Corporate citizens

Fortune- 100 Best companies to work with

Human rights campaign Foundation – Corporate Equality Inde

 Microsoft Word
Document

Questions?

Q1. Why did Nike fail to address corporate social Q2. Evaluate the challenges faced by Nike and
responsibility early on? Use relevant theories and provide solutions to the company. Use relevant
models to support your answer. theories and models to support your answer.