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Nike’s Business Ethics

Nike is one of the largest sports organisations in the world. Nike sell sportswear and equipment all over the world. As they are in the private sector the main objective would be to make a profit. However with all organisations this would be surrounded with other aims and objectives that their organisation may have set in place at the beginning of their campaign. For example Nike has an aim to be the largest sporting organisation for the foreseeable future, which they are currently achieving.

Other aims and objectives that Nike may set out would be to improve the working conditions of the factories in the Less Economically Developed Countries (LEDC’s). Nike’s Corporate Governance would make the decision about the aims and objectives that Nike has set out. However when deciding these aims and objectives they must take into account the interests of all the stakeholders in the organisation. A stakeholder is anyone who has an interest in the business; this may be customers, shareholders, employees, local communities, suppliers and banks.

All of these different sets of people with have an interest, and it is the corporate governance job to ensure that the aims and objectives do not conflict with these interests. On the official Nike website their mission statement was “Our goal is to carry on his legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders. ” However in recent years they have been surrounded by reports of sweatshops and child labour in their manufacturing plants in the LEDC’s.

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This seems to indicate that Nike is not worried about the way in which they go about achieving these goals. Although Nike has said that these reports are biased and that this was simply a one off situation which they are currently dealing with. However since the first report was released more have followed going into detail about how Nike deal with their employees outside of the More Economically Developed Countries (MEDC’s). Nike’s argument was that these factories were just supplying them with the goods and that they were not involved with the unethical issues that were found in these factories as they did not own them.

However they but were owned by other organisations that deal with the conditions and payments to the sweatshop workers. However Nike still does business with these organisations and that seems to be the problem that everyone has to deal with this issue. On April 13th, 2005 Nike issued its “2004 Corporate Responsibility Report” which lead to Nike admitting to the poor conditions that the employees had to put up with for many years. In this report Nike gave the names and addresses of each of their factories in the world.

This is so that the non-profit organisations that are interested in human rights and working conditions can keep check on how Nike are trying to combat this situation. The non-profit organisations like EFJ, Global Exchange, OXFAM Australia, and Press for Change were hoping that this report will encourage other sports industries to come out and name their factories around the world so that these can also be tracked. Nike has spent a lot of time improving the way they treat these workers in LEDC’s. They have improved the conditions in their factories and raised the amount that they pay their workers.

However some of this was forced on Nike since The National Committee has introduced an anti-sweatshop legislation. This legislation meant that Nike has to respect human rights by prohibiting the import, sale or export or sweatshop goods in the US. Goods that are made under conditions that does not meet with the standards are not allowed to be transported. The main points in this legislation is that there is no child labour, no forced labour, freedom to form associations, right to organise and bargain collectively and the right to decent working conditions.

Since the debate Nike have received an award for one of the World’s Most Ethical Companies for 2009. Other ethical issues that have affected Nike are the global warming effect. Nike have been researching different methods that will allow them to cut down on their greenhouse emissions across their operations, incorporating sustainability in the design of their products and attempting to decrease the total footprint their company gives out. Nike has a target to transform all of their factories into environment friendly areas by 2015.

Nike has also been looking at different ways in which they can produce or purchase their leather. This is because many of the suppliers were well known for many unethical issues, therefore Nike have insisted that all of their leather suppliers join the leather working group by the end of 2009. This will ensure that the supplier which Nike use to produce their products will supply fair working conditions to their workers, and pay a reasonable price for their work. Finally Nike has been running a recycling campaign since 1990, which so far they have taken in 24,271,631 shoes.

There are 4 stages to Nike’s recycling campaign. So to start with people should bring their worn-out athletic shoes to any Reuse-A-Shoe collection center or shoe drive event. The shoes will then be shipped off to one of the recycling centres. Thirdly they will grind up the shoes in raw material that could be used. And finally they will use this raw material to rebuild sports facilities such as basketball courts, tennis courts and running tracks. So to conclude Nike has obviously began to take seriously the ethical issues that they are affected within their day to day business.

Many of these steps that Nike has taken to improve on these factors have not really contributed to Nike’s aim to gain a profit. This is because Nike has had to spend a lot of money improving on these issues, for example with the working conditions in the factories in the LEDC’s. Also the rise in wages which they pay their employees has meant to a cut in their profit. However from taking into account these ethical issues more people look at Nike in a positive way, as they are trying to combat the use of sweatshops and child labour.

When large organisations do this, then there is a big chance that the smaller sport industries will follow suit. Nike may have had an increase in sales because of the fact that they are now a more ethical company, however many people are not aware of the changes that Nike have made over the last few years, therefore thinking that Nike are still an unethical company. Although Nike have been awarded as one of the most ethical companies of 2009 there is still a lot of promotional activities that they can use to increase the awareness of Nike’s combat against Sweatshops and the supply of their products.

Nike’s other aims and objectives to be one of the largest sport organisations in the foreseeable future and improving the conditions in their factories would have been positively affected by the changes Nike have made. This is because there would be more interest from possible shareholders which would help Nike to increase their overall size of the organisations. I believe that overall Nike have had one of the largest impacts on the ethical issues with sweatshops and child labour in 2009.

They were the first sports organisation to give the names and addresses of all the factories that they receive products from. This has allowed the non profit organisations to check up on these factories to ensure that the working conditions have improved and all laws have been taken into account when employing staff for the job. Nike has already received the award for one of the most ethical companies of 2009. All of these reasons are why I believe Nike should receive the Ethical Company of the year award.

Bibliography:

http://news.nike.com

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