Ethical Issues in Nike Essay Sample for Singapore College Students

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Ethical Issues in Nike

During the industrial revolutions, many big corporations of the USA have moved a large portion of their factories to third world countries like China, South Korea, Vietnam, and Taiwan because of the access to the readily abundant cheap labor. It made those corporations able to reap the benefits of the USA market at an extremely low cost of production offshore.

In the USA the rules were stringent but in third world countries, those rules were relaxed. Later on, the media found a lot of corporations indulged in malpractices and much criticism caught by Nike. The factories of Nike were established in the far-flung areas overseas where even for employees it was hard to reach there. A lot of practices of exploitation were found there simply because of the less of the concerns for labor and more concerns for the profit.

As news came in front of the world Nike was ceased and strict recommendations were made to improve the conditions of the labor.

Reasons for steps by Nike

Nike had its headquarter Beaverton, Oregon. It had planned to move to tap the markets across the globe. Before we look at the problems at the overseas sites, we must first understand why Nike moved the majority of its production so far away from its headquarters in Beaverton, Oregon. Even the labor aspects which fetched the interest to get the cheap labor those can produce shoes and clothing in just a fraction of the cost of production in the USA. Establishing a factory in China the most populous country will make it easier for them to access the rest of the Asian Market.Nike wanted to get the opportunity in clothing and the market of the nearly 2 billion people in China alone where Adidas was beholding to raise in Eastern Europe and the Soviet Union.

What went wrong

In starting everything was well all mangers and stockholders were gaining huge profits and people around the world where getting the best products even with some criticism all over the world. Labor conditions deteriorated with time in Asian countries. Nike had reached the level of low human rights for the laborers. Later the products had become synonymous with the slave wages. The labor in Nike used to work for long hours with forced overtime, arbitrary abuse, and minimum wages. Later whole media raised the campaign against the exploitative wages and poor working conditions of the labor.

The criticism was not only for the exploitation of the workers of Asia but also for the taking jobs of the American workers. Later this staged into the war of welfare and profit.

Ethical issues involved

  • The first issue was the long working hours (62 hours per week) with inadequate working conditions and low wages. It violated the labor right and as well as human rights.
  • Production facilities had a high level of hazardous chemicals above the prescribed limits and the workers were not even provided with any protection kit.
  • With some workers, poor treatment and abuse had been practiced which included physical and mental abuse both.
  • There was no medical leave and medical facilities available at the workplace.
  • For reducing rates, far-flung areas had been chosen for production which was not even easy to commute to by the workers.
  • Another ethical issue was the involvement of manual child labor in the harsh conditions of the footwear industry which also releases hazardous chemicals. It was not only ethical but also a legal issue.
  • There was no child care facility for the workers who were working for long hours.

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Stringent recommendations

  • Elimination of forced over-timings and excessive work timings.
  • The wages must be paid with pay stubs so the workers can know for what they got the pay and for what the money had been deducted.
  • Immediately giving back to workers all deposits were taken illegally from them.
  • Ensuring the payment of minimum wages rate decided by the government
  • Eliminate regulations of prohibiting workers from talking to each other.
  • Stop the illegal procedure of deducting paychecks.
  • Cease firing workers who are pregnant and provide them with their legally mandated maternity benefits.
  • Provide childcare, social security benefits, medical insurance, and bereavement leave
  • Undertake a health and safety review of factories with regard to heat, fumes and congestion dust and noise pollution,
  • Set up a compensation fund for workers who are injured or killed on the job.

The company, later on, improved the conditions but lost the reputation of the brand name. There is a need for the organization to adopt the utilitarian perspective with positive development for all. There should be a strategic management plan to produce with all social and environmental concerns

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