Nike Sweatshop Analysis

Nike: Sweatshop Debate

Michael Styles

MGT/448

June 29, 2011

Michael Mancini

University of Phoenix

Introduction

This paper will describe the challenges in the legal, cultural, and ethical challenges that Nike faced while conducting global business within the foreign governments. This paper will also analyze the strategic and operational challenges facing global managers. The various roles these foreign governments played in the case will also be examined.

Nike Scandal

Nike is a global corporation that was “established in 1972 by former University of Oregon track star Phil Knight”, (Hill, 2009). Nike is the leading shoe company in the world. Nike does not manufacture any products. Instead, Nike contracts to over 600 factories around the world for the manufacture of products. According to Hill (2009), by using these factories Nike employs around 650,000 people. Nike has been accused of running sweatshops where children are treated as slaves for low wages. The company has been accused of this for more than a decade. In 1996, there was a CBS 48 Hours news report on Nike, where a news reporter visited a Nike factory in Vietnam.

The report found that mostly young women worked in these shops in Vietnam. They were paid 20 cents per hour and worked six days a week. Nike’s response to this was that they require all contractors to follow local laws. Another case which followed this one was a case in Malaysia. This time an Australian news reporter visited a t-shirt factory in Malaysia. The “foreign migrant workers told a grim tale” (Levenson, 2008). They stated they were forced to give up their passports. Another thing, they stated their wages were garnished to pay of huge recruitment fees. The migrant workers were also forced to live in filthy and crowed rooms.

This information was eventually released on Australian airwaves. In 1998, the CEO of Nike, Phil Knight recognized that there was a problem. He recognized that the...