Nike

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Transcript of Nike's CSR Challenge

Nike's CSR Challenge

Summary- Nike's CSR Challenge

In 2005 Nike started disclosing their CSR activities after a couple of years of silence due to legal concerns.

After several audits Nike reported that a large percentage of their overseas factories have their employees working in terrible environments for low pay and in unsanitary health conditions.

1.This statement suggests that those companies who invest their sources on “above-standard compliance” will be outperformed by those companies who are less concerned about compliance.

Question 1: Discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in their supply chain around the world.

1. Lack of Support

Suppliers lacks support from buyers and retailers. Furthermore, suppliers have to bear all of the CSR implementation costs and sometimes it will be too costly for SMEs.

In developing countries, apparel manufacturers lack trained personal, information on CSR implementation and benefits and insufficient infrastructures for initiating CSR.

Due to tight deadlines, management’s time and attention is necessarily focused on achieving timely and efficient production outcomes and often neglect CSR.

Question 2. Discuss the meaning and implications of the statement by a Nike representative that “consumers are not rewarding us for investments in improved social performance in supply chains.”

2. Therefore, companies who concerns about compliance have to either reduce their profit margin or lose in market share if they charge extra for improved social performance.

3. In the case of Nike, this implies that the company is not willing to reduce its profit margin, as well as lose market share due to an extra charge Nike impose to customer.

In respond to this, the company make a change in systemic change. 

In this context, company is expected to create an ethical...