In this essay, I will attempt to present an analysis of the ethics and social responsibility issues that an organization can face when it is a global organization. One of the most recognized organizations globally would without a doubt have to be the Nike Corporation. Several years ago the Nike Corporation came under fire for using child labor in Pakistan and Cambodia to make their soccer balls. Because Nike came under fire for this unethical and inhumane practice, the organization attempted to reduce this practice. Pakistan and Cambodia have strict child labor and slavery laws, however, the government has done very little to regulate it.
Contracts for production are still being granted in areas of Pakistan where there is not sufficient monitoring or regulation to make sure that child labor laws are being observed and enforced. The United States Constitution deems that child labor is not only illegal but also inhumane and that any organization caught practicing or even encouraging forced labor or violating child labor laws will be prosecuted. The general thought process of Nike and many other global organizations is that they can operate their production with the lowest cost of labor. This leads the organizations to enter into violations of child labor laws.
An investigation was conducted where Nike was found to have a large number of cases that involved forced labor or child labor law violations in some of the large apparel factories of Nike. In a particular factory in Malaysia, it was found that Nike was operating production in terrible working conditions for the employees in addition to the forced labor. It was found that Nike had underage children working in sweatshops up to seventy hours a week in unhealthy conditions making their products.
Pakistan has a population of approximately 1 million people and it is also an important location or “hub” per say for the production of goods that are to be exported to international markets, this is especially true of the production and export of sporting goods which brings in revenues in excess of 300 million dollars a year. When confronted with the findings, Nike issued a statement stating that they would take corrective action to make sure that the child labor laws were followed and that they would not continue to operate forced labor and bad working conditions within any of their factories.
Nike started focusing on their social responsibility efforts in areas in which they can have the greatest impact and create the greatest value for the organization and for the communities that the various factories are in. Nike has initiated the social responsibility efforts in the materials they design for their products, as well as the process of making those materials and products. An analysis of the ethical and social responsibilities Nike faced with global expansion had many factors that needed consideration.
The first consideration was the cost of making their products. To stay competitive in their prices while not reducing the amount of employees, Nike, decided to outsource some of their manufacturing and suppliers on a global scale. This provided Nike cost advantage over their competition and it also allowed Nike to expand into emerging markets. Some could view this as unethical practice because it could take jobs away from manufacturing plants in the United States; however, Nike was acting in the best interests of the organization including its employees overseas and the employees back in the United States.
If an organization does not maintain a competitive edge in their respective markets when expanding the organization not only in the United States but also worldwide, there would be no room for growth and jobs would be lost. When a company is no longer competitive in their respective industry, it can eventually cause them to shut down factories in their communities, which in turn can cause people to lose their of jobs.
Nike’s social responsibility to the community includes the Nike Foundation. The Nike Foundation focuses on adolescent girls in developing countries. Nike has established custom product lines, marketing, events that have raised donations from consumers. Nike strongly believes that every young person in should have access to sports and has developed various programs and activities.
Aside from the Nike Foundation, Nike has also developed several other programs as part of their social responsibility such as the Homeless World Cup (HWC), ninemillion and Let us Play in China. The Homeless World Cup (HWC) has supported locally-run football programs for homeless community members in more than 60 countries globally. In addition, 34 of these nations either plan or already have active national street soccer leagues running throughout the year (Nikebiz.com). The HWC training programs include technical training as well as assist the players with drug or alcohol dependency programs, finding jobs, finding homes and receiving education to name a few (Nikebiz.com).
In 2006, NIKE, Inc., partnered with the United Nations High Commissioner of Refugees (UNHCR) and Microsoft to launch the ninemillion campaign through ninemillion.org to give more than 9 million children living in refugee camps access to better education, sports and technology (Nikebiz.com). The let us play in China program has partnered with China Children and Teenagers' Fund, under the government-organized NGO Women's Federation, on a program that empowers migrant youth and introduces more child-centered teaching methods through sports (Nikebiz.com).
The Nike Foundation's mission is to provide innovative programs that offer solutions for girls, by partnering with larger organizations to get girls' issues on the international agenda and to mobilize resources to support them (Nikebiz.com). This promotes learning skills and the ability to work as a team. It creates the ability to adapt to situations that could arise in the work environment and in life; it also promotes confidence in playing sports. This is one of the most ethical things that a company can do to help develop the next generation.
In conclusion, Nike has accepted that they have done some things in the past that have been rather unethical and have been damaging to their image, not to mention that it could have really altered their profitability. Nike has worked hard to correct these problems and has also worked hard to be more socially responsible not only in the United States but globally as well. Nike developed programs that help communities to develop confidence and allow for growth. .
References Retrieved from: http://www.nikebiz.com/crreport/content/communities/5-4-0-case-study-homeless-world-cup.php Retrieved from: http://www.nikebiz.com/crreport/content/communities/5-5-0-case-study-nine-million.php Retrieved from:
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