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Nike's CSR Insurance policy - Ethical Issues and Dilemmas



Nike has been dodging accusations of hiring people in the growing and under-developed economies, at low salary and poor working conditions for a considerable time frame. Having attempted course correction and pr as a solution to salvage the bad image generated by the sweatshops that Nike is accused of working, Nike has carried out massive work to conquer these hurdles. Herein we will examine Nike's international business functions with a critical eye on the honest issues and dilemmas that organization has experienced while developing its goods in foreign lands.


There are lots of areas that have emerged as weak points or links in this Nike case. We shall first highlight the situation areas and then dive into the ethical ideas that are likely to govern them. According to the Wikipedia dictionary, ethics is thought as an over-all term for the science of morality. [1] While this branch of review can be further sub-divided into various categories, we have to remember that what is appropriate in confirmed situation may not be so among different circumstances and your choice of right or incorrect is relative to its area. Elaborated here will be the issues and problems that stick out because of the ethical dynamics as issues or dilemmas encountered by Nike and its own functions towards its employees and customers as stated in the event study:

Poor Working Conditions - In Nike factories, the laborers were provided with poor working conditions which were certainly below the norms accepted in the developed world. While lower requirements of living may apply in the countries that have Nike factory deals, the inhumanity of these conditions drives attention to Nike's responsibility towards its employees. Significant overtime and long working hours needed to be endured by Nike employees desperate to stay employed in their country. An example claims that Nike factory staff in Korea needed to work with seventeen straight time in silence. This means that almost barbaric tendencies on Nike's part towards employees in these conditions.

Low Income - Nike agreements with companies to do all their manufacturing in growing or under-developed countries. While the wage levels there are less than the methods in developed countries, Nike still does not employ people for a price that can preserve their basic needs. The income provided are lower than the pay needed and therefore cheap labor is thoroughly exploited. Nike has attempted at correcting the challenge and hiring people for a price at least equal to the minimum salary prescribed in the united states.

Child Labor - Child labor laws and regulations in many countries are overlooked by Nike and children as young as 12 and 13 years of age are created to work long hours and treacherous conditions. Nike has taken steps to meet up with the starting years limit subsequently.

Operations in Countries with Union Restrictions - Nike has been recognized to set manufacturing efforts in countries like Indonesia and China that prohibit union functions. This contributes to lack of revolt and protests that leave the employees with little choice regarding work conditions and salary. Ethically, it is hard to argue against these countries as their laws do not have provisions for occupation governance. Actually these countries often do not have minimum wage requirements and abundant labor is put to use by companies like Nike for the utter minimum.

Expensive Endorsements - While Nike has been consistently targeted by human rights committees, they may have unceasingly maintained a high account image by getting celebrities like JORDAN and Tiger Woods to endorse their products. Over five years, PADRAIG HARRINGTON is expected to earn 80-90 million All of us dollars of Nike money. [2] Ethically it could have been more beneficial to engage an integral part of that profit Nike factory and employee enrichment.

Expensive Products - Nike offers its products at steep prices, while everybody knows that the merchandise are produced in contracted factories on overseas lands for low costs. The expense of development being low leads Nike to create massive gains from the sales income.

Cover-up Public Relations Work - Being involved in child labor initiatives was undertaken by Nike to take care of the issue at large and also to rectify the public relationships pitch for Nike. Some of the problem is being described as adequate wages problem instead of the child labor initiatives that seem to be like a hide for the larger issues plaguing Nike.

Lack of Development Work at Stock Locations - While one constantly hears testimonies of sweatshops and security by Nike regarding its work force problems, one hardly ever hears of philanthropic activities adopted by Nike in the area of the manufacturing plant location. For instance, at Hershey, PA one hears of the development the company Hershey's has done for the city. Likewise it displays as selfish tendencies from Nike in not promoting the causes faced by the city occupying Nike's labor force.

Health Dangers in Factories - Skin and breathing problems are found in factories that makes Nike products. Nike has to ensure that it works by the expectations arranged by OSHO in guarding employees from dangerous chemicals and processes in the production cycle.


Ethical theories can help rationalize certain decisions that Nike has made as a company and highlight the problems regarding its followed repercussions. Why don't we now analyze some ethics ideas and observe the case of Nike in this light. [3]

Egoism - This theory claims that individuals or corporations have the right to guide their conduct positioning ones own interest most important in rational decisions. Through this theory one can justify the placement of profits or revenue era as the high obtained goal of your entity. In this relation Nike has played to the idea so far as possible. They have not only conducted production with cheap labor but also guaranteed that the factories do not earn even a little extra than these were likely to. This theory declares that every person who promotes self applied interest cause social good. In such a context we're able to see that as the creator of Nike, Phil Knight performed with self applied interest in mind, he was propelling Nike ahead by huge proportions. Doing so, he does manage to create the rise of 1 of the most well known brands in the world today.

Social Group Point of view - It is not only self that decides all decisions however the surrounding that forms the cultural group under that your specific or company resides. It is the norm or standard in public communities wherein an entity can determine the incorrect or right for the reason that particular circumstance. For Nike this sociable group has become a collection of customers, shareholders, employees, international contractors while others. The notion of right and wrong is determined by these social categories that operate in another way in various places. For instance, while the minimum amount wage in Indonesia, Korea and China may be less that that in america of America, the typical of living there will meet the minimum income requirements and Nike must ensure that they follow that.

Cultural Relativism - Every country has its unique culture that accompanies it. For Nike, a corporation that has a presence in many countries on the globe, minding the cultural relevance can be an effective means to growth. For instance, while bribes are seen as a ethnical norm in a few countries, they are seen as unlawful in certain other countries. Population as a whole using countries is known to consider bribes as a standard occurrence, which for a few countries is a crime. This culture makes or breaks certain laws and regulations set up and so long as Nike abides by these laws and regulations, in the respective country, and at the same time intellects its home country benchmarks, controversy for Nike will be minimized.

Utilitarianism - This theory works under the premise that the best good is made for the greatest number. Herein it is the majority that counts above other things. Only if a few elements of the entity feel that the decision is wrong, the decisions must be right which is what's said by the majority. In the case of Nike, the decisions that were enforced by the majority are responsible for the sustained controversy encompassing it. The mother board obviously had taken certain steps in clearing the controversies that contain affected the business. Since these decisions are considered with the view of the company good in mind, with the majority of the people agreeing to it, the decision must be seemed as right.

Deontological Point of view - This view goes on the saying 'do unto others as you would keep these things do unto you. ' The work to make this world a better place is a responsibility that you have to take upon themselves, besides pursuing certain obligations. For instance, telling the simple truth is an obligation which sometimes appears as 'right. ' Just as for corporations, it's the giving back return concept that needs to be perfected. The corporation is obliged to give a good product and it is eligible for bring positive changes to its constituents.

Values Clarification[4] - This ethical theory expects that a person is familiar with ones own views, reasoning and rationale. It really is for this reason that companies try to build cultures within the organization just as that Nike has changed its commercial culture. Nike's branding, products and outfits suggest its image and success.


Nike has encountered moral dilemmas in operations and manufacturing for some time now. The definition of ethical dilemma states that it's a predicament wherein exists issues between moral imperatives and choosing one situation result over another can lead to compromising of what also seemed like a viable solution in the situation[5]. Why don't we review the moral dilemmas that Nike has encountered over its working.

Manufacturing Ownership - Nike chooses to long term contract its developing to factories in foreign lands where in fact the pay and conditions do not meet developed nation's benchmarks. Yet they have got their products made there at low costs after enforcing their product controls. While they could manufacture these products in the United States of America, profitability of these products is victorious over providing the house country with work and opportunities in the developing segment.

Advertising Finances - Nike has endorsed many athletes and stars like PADRAIG HARRINGTON and JORDAN paying them exorbitant levels of money. As the brand has been successful in maintaining a graphic of athleticism, it offers compromised how the money could have been used to raised serve the united states where they have got their factories.

Public Relationships - Nike has already established to go measures to safeguard its open public image and possessed to employ many legal experts and pr individuals. The issue occurs when Nike may need to say that to its faults but doing so would cost them greatly, hence the truth may have to be manipulated and then disclosed, which will not conform to moral standards.

Employee Enrichment - With the profits that Nike generated from developing products in foreign countries at low costs, a problem before them can happen from the actual fact that even if the country's wage and benchmarks are found they land way below the US expectations. While Nike can spend money on employee welfare, it isn't a norm in the united states that operates their factories. Besides many of these factories are contracted to do Nike developing and Nike as such is not obligated to execute factory and staff welfare.


While Nike has faced severe criticism because of its production decisions, it as a brand and product has fought and sustained its success. Ethics experts will continue to question Nike in unfavorable ways, but when we apply the ethical theories which have relevance available world, we observe that Nike does indeed its best to meet the requirements. This is especially apparent when Nike made decisions to perform unbiased audits and take part in human protection under the law activities. On the other hand Nike faces honest dilemmas due to its operations and these dilemmas will continue to exist on the planet economy. Nike has gone with the path of international contracting in its previous phase and has received great criticism through it. Faced with its plenty of ethical dilemmas, Nike has were able to sustain the product, develop new products and continue to be a push to reckon with as a consumer brand.

[1] http://en. wikipedia. org/wiki/Ethics

[2] http://www. golftoday. co. uk/news/yeartodate/news99/woods12. html

[3] http://www. mgmtguru. com/mgt499/TN2_PAGE3. htm

[4]http://64. 233. 187. 104/search?q=cache:ofLIUDDIiW0J:jan. ucc. nau. edu/~dgs2/ideas. pdf+theories+in+ethics&hl=en

[5] www. ethicsscoreboard. com

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