Cross-Cultural Perspectives

Cross-Cultural Perspectives

Hugo Velasquez

ETH/316

March 9, 2016

Dr. Kenneth Farenick

Cross-Cultural Perspectives

One of the most well-known corporations in the world today is Nike. The company was founded in 1964 with the name Blue Ribbon Sports and “initially operated as a distributor for the Japanese shoe maker Onitsuka Tiger, also known as Asics. The company later became Nike Inc. in 1971” (O'Reilly, 2014).   Over the years the Nike Corporation evolved by adding athletic apparel and equipment, it then grew to become one of the largest footwear distributors globally worth $15 billion dollars. Unfortunately, even with all the success the organization has had, it has also faced a couple challenges with cultural issues along the way.

From the beginning Nike, like most companies, has turned to foreign countries as means for cheaper labor. The Nike organization commenced expanding through mass-producing in countries, such as Vietnam, Indonesia, Malaysia as well as Cambodia. By doing so, it instantly created jobs for these improvised areas, which at the time this was a positive thing. In spite of this, by the end of the 90’s Nike’s use of offshore production brought exposures about the sweatshop working conditions, which is customary in these nations. By doing so, the company is criticized for using factories in countries which were violating minimum wage as well as overtime laws, such as the one located in Vietnam. Not to mention, the factory in Cambodia was violating the child labor law, and Malaysia was using forced labor to guarantee manufacturing requirements were met. An investigation in 2008 found a large number of cases where this was occurring as well discovering instances of filthy living conditions. Instead of shying away from their situation “The multi-billion dollar sportswear company Nike admitted that they blew it” (Boggan, 2001). The company was swift to recognize their social responsibilities and took immediate action to correct these problems. Nike implemented a code of social responsibility throughout its supply chain which improved working conditions for its employees. Nike is directing their corporate responsibility endeavors in the areas in where they can produce the largest impact and generate the most value for the company as well as for the communities where the factory is located. Some of these areas are the materials which are used to design their products, the process used to make those materials and products, and influence the world of sports where their products are used. The company also developed a code of conduct aligning with and extending the organization’s value to its suppliers.

The instant actions illustrated above are indicative of Nike’s efforts to project the company’s core ethical perspectives.  The company’s globalization was an effort to lower production cost in manufacturing, and not to be deemed as a corporate sweat shop sponsor. The goals Nike had in mind was a complete change for its suppliers, not to mention the industry as a whole. Nike is trying to improve lives, in particular those of their suppliers, by doing so they take key steps in improving profits. They were able to learn this first hand by working in conjunction with their suppliers in limiting overtime, ensuring freedom of association as well as extending additional conditions which are taken for granted in the industrial world. This group effort to engage the topics listed above show the ethical standpoints of Nike as a global organization.

Analysis of the ethical and social responsibilities Nike faces with expanding globally yields numerous elements that need attention. First one being the cost of making their products, in order to stay competitive with pricing without diminishing the amount of employees, like other corporations, Nike, chose to outsource manufacturing and suppliers globally; this gives them an advantage over the competition. Many may see this unethical due to it taking jobs away from U.S., but if a company cannot be competitive jobs will be lost and the company will eventually fail.