Nike: The Sweatshop Debate
Established in 1972, Nikkei, one of the leading marketers of athletic shoes and apparel on the lane, has brought in billions of dollars in revenues and sold its products in some 140 countries (Hill, 2009). American companies have sought to outsource their manufacturing through cheap labor, and Nikkei has been accused of for abusing its overseas workforce in sweatshops. The fight against Nikkei still continues and a film documentary entitled “Sweat,” which follows a team as they learn and document from first-hand experience, Nine’s operations, is scheduled to be released later this year (Educating for Justice Films [EJB], 2009).
In this paper, I will evaluate and discuss he case study about the Nikkei sweatshops as written by author Charles W.
L. Hill In his book International Business: Competing In the Global Marketplace. I will analyze the legal, cultural, and ethical challenges presented, the roles that governments played In the global operation, and finally, I will summarize the strategic and operational challenges facing global managers as illustrated in the case.
As previously mentioned, ethical issues surrounding Nikkei have been, in my opinion, the foundation and catalyst for the entire debate and the building block for the legal ND cultural challenges that were examined thereafter. In regard to legal and cultural challenges, Nikkei was found to have had major labor practice issues, including hazardous working conditions, violations of overtime laws, and violation of wage laws. The company has to make sure to hold foreign factories to appropriate labor standards regarding these issues.
Nikkei has contracted Its manufacturing to countries such as Indonesia, China, South Korea, Vietnam, and Taiwan, taking advantage of low-cost labor, and as some of Its opposition has claimed, building Itself n the backs of the world’s poor (p. 154). The company is accused of exploiting the world’s poor, including children, to provide expensive apparel that will go to pamper consumers in the developed world. Some surprising legal issues presented in the case study by reporter Roberta Basin were alarming.
She shared that a young woman named Lap, who worked at one of the Nikkei factories has put in much more overtime than the annual legal limit of 200 hours.
In addition, if she is sick or had to take care of a sick relative, she would not be able to leave the factory until she would meet the auto of making enough shoes. Ethically, multiple countries throughout the world would disagree with the conduct and practices of Nikkei, not only with the alleged child labor, but with the existing working condition and wage Issues.
In Indonesia, for example, workers are paid $2. 28 per day, which is double the income of over half of the working population (p. 157). Slice alternate Ana Oligopolies workers are desperate Tort Joss, Ana even to work an unbelievable amount of hours, Nikkei has taken advantage of the demand and allowed TTS factories to force workers like Lap, to become slaves to the product and to put Nikkei above their own health and their family.
I believe that these issues are sort of basics of business ethical practices and are viewed as unethical by the majority of the world.
In regard to the role that governments played in this global operation, it was said defeater workers in South Korea and Taiwan gained new freedom to organize and experienced a rise in wages, Nikkei sought out other countries where low-cost labor could once again be found. The Indonesian and China government prohibits independent unions and controls the minimum wage to be set at rock bottom, but these are the countries where the majority of Nikkei shoes are now made.
In 1997, Global Exchange, in conjunction with two Hong Kong human rights groups, found that a factory owned by a Korean subcontractor for Nikkei had workers as young as 13 earning as little as 10 cents and hour and working up to 17 hours in forced silence (p. 155). The strategic and operational challenges facing global managers as illustrated in the ease can be numerous, depending on the industry and line of products or services.
However, global managers can learn some key lessons from Nikkei and be aware of the challenges that they may face.
Obviously, contracting with foreign countries may have some serious consequences if controls are not in place to govern or manage the day-to-day operations at global locations, including working conditions, wages, and distribution of products. A firm cannot wait until the public begins to wonder about working conditions in the global company’s locations, but should instead include, thin its strategic plan, a quarterly assessment of working conditions in subcontractor’s plants around the world.
Global managers may escape the possibility of accusations, whether true or false, by planning ahead with pre-established controls. Ethically, global managers should also ensure that the company’s international hubs preserve the Code of Ethics established and practiced at the firm’s originating country.
In summary, I examined the case study and discussed the more obvious legal, cultural, and ethical challenges that Nikkei has faced, the roles that the Chinese and Indonesian governments played in the global operation, and summarized some strategic and operational challenges facing global managers today.
Although the case presents past data about the controversy surrounding Nine’s so-called sweatshops, one cannot ignore nor avoid the fact that the accusations and campaigns against the athletic giant are still going strong. The internet features a number of websites and groups dedicated to shedding a negative light on the Nikkei corporation. Nikkei is a successful global giant, therefore, such scrutiny has not yet been able to reach a level rueful enough to bring down the company.