Hitting the Wall: Nike and International Labour Practices

Nike started as a sneakers company and experienced incredible growth in the 70's and 80's.

Nike's revenues grew from 60000$ - 49 000 000 in just 10 years

Nike's success was due to it's focus on outsourcing all manufacturing

Jeff Ballinger , a labor activist, was the first to criticize Nike for it's exploitation of under wage workers

Criticism on labor abuse expanded onto a global scale and revenues eventually plummeted due to its reputation

Nike has now started new programs devoted to protecting labor standards

Some very valid points in his argument:

Does Jeff Ballinger have a convincing argument about Nike?

Companies should have significant obligation to its lower position workers

UN Universal Declaration of Human Rights

Nike's policy of competing on basis of cost causes many issues in the workplace

Unrealistic production quotas

Developing countries have very little enforcement for their laws and regulations

Indonesian worker protection

Out of 17,000 violation reports, only 12 prosecutions were made

Does Nike have a convincing response

Labor conditions not Nike's responsibility

No in-house manufacturing

Realized complexity of the labor issue and drafted regulations into a code of conduct

Addressed working conditions, safety standards, and worker insurance

Not a convincing response compared to Reebok

Reebok created Human Rights Award, extensive guidelines, specific standards and occasional audits

How well has Nike handled the publicity surrounding its labour practices? Could or should the company have done anything differently?

Did not handle properly

Took a defensive stance in the resolution of the minimum wage issue, and safety issues of subcontracted workers

Should have taken a proactive stance

Should have reacted quickly

Reebok case

Not the only company to outsource labour and operations abroad