Case Study 19

Nike: Managing Ethical Missteps

1. Why did Nike fail to address social responsibility early on?

Several things can be addressed as to why Nike failed to initially address their corporate social responsibility (CSR). The first being Nike’s senior leadership and/or director’s inability to recognize the intelligence gaps that had been created when their external suppliers had begun to outsource production. Secondly Nike had not established an external form of corporate governance within their external supply system and not doing so left accountability and oversight open to interpretation by their external suppliers. This lead to Nikes inability to monitor external workplace decisions, provide systems check and ensure policies were not deviated from, and control key decision on the foreign market. Finally it could be assessed that Nike was taking the defensive “It’s not our fault” and compliance “Well do only what we have to do” stance; which happens to be the first and second stage of Simon Zadeks CSR model.

The bottom line is that there was not a standardized and viable framework to build off of. Manufactures in this foreign locations were simply going through the motions. They where minimizing their efforts in contract requirements, while simultaneously overlooking fair labor practices in order to preserve their low-cost.

2. Evaluate Nike’s response to societal and consumer concerns about its contract manufacturing.

Nike utilization of the stakeholder framework to manage these concerns was effective. First Nike was able to assess the degradation in corporate culture and acknowledging the fifty percent drop and stock prices, by launching a large public relations campaign to combat the damaging child labor, inhospitable working conditions, and low to nonexistent wage allegations. In addition Nike visited several college campuses hoping to establish open dialogue with students and university administrations about manufacturing policies.

Second...