Nike: From Sweatshops to Leadership in Employment Practices 28.04.2010 – MGMT 452 Alper Şahan Bahar Ege Setenay Atacan Şemsa Haczeyni Zeynep Yenibayrak

Nike Founded in 1964 by Paul Knight “Blue Ribbon Sports” Focus on athletic shoes The Nike brand was publicized in 1984 One of the largest manufacturers of athletic goods

The Scandal Factories located in Korea and Taiwan were replaced with new locations, Indonesia, Vietnam and China. In 1990s, Nike were criticised about slave wages, forced overtime, arbitrary abuse and indiscriminate hiring. Indonesia: Non-govermental organization’s report Vietnam: Ernst&Young’s Report Public protests University boycotts

Negative Publicty Accusations Indonesia,Vietnam Reports Phil Knight Conflict on full and none responsibility. Andrew Young Report Marc Kasky Lawsuit The Court against Nike

Negative Publicty Andrew Young: Nike was doing a good job. 1998: Marc Kasky---- a lawsuit against Nike. Other Allegations—claimed that Nike consciously misleading the public when it claimed that workers in its factories were being paid in accordance with minimum wage laws, that they were being paid substantially more than minimum wage and they received free meals and health services. The Court against Nike--- Nike agreed to settle with Kasky.

Negative Publicty 1990’s Having criticism Accusations: health and safety conditions, extremely low wages and indiscriminate hiring and firing practices. Indonesia: several cases of human rights abuses (Roberta Baskin’s CBS report and the article from The New York Times— Bob Herbert ) 1996 Phil Knight claimed full responsibility for working conditions. 1998 Phil Knight denied Nike had a sweatshop problem but claimed that the problems had to do with public relations rather than actual factory conditions.

The Response Ignorance Public Relations CEO of Nike, Knight denied sweatshop problems The problems had to do with public relations rather than actual factory conditions. Public Relations Workplace code of conduct Wage Policy Nike Spokesperson: Michael Jordan University Relations

Intent of the Tactics Want to prevent the protests against them such as boycotts Believed that they can change the bad reputation on themselves by taking responsibility Want to gain support of university students again because they had a deals for athletic goods which were cancelled after the bad reputation of Nike Desire to increase its sales Have better relations with public

Nike Social Responsibility Dual goal of retaining cost effectiveness while honoring the cost of labor and human rights issues Three types monitoring SHAPE inspection M- Audit Fair Labor Associations Factories open to research groups: MIT Commitment to environment Rewarding systems Transparency New Production Methods Equal Value

Nike Social Responsibility Nike has improved quite a lot concerning SR Rather than denying everything, they chose to follow a proactive strategy. Negative publicity is bad and requires lots of money to get it right Follow a social responsibility plan Take the lead in you industry and make your competitors follow you. An example to be taught at schools.

Improvements Training Workshops Enlargement of rewarding systyem Socializing policies Stratgic Planing about crisis GAP Analysis for Philantrophy Impact Analysis in the society

Result in... New CEO Bill Perez “100 Best Corporate Citizens” Business Ethics “100 Best Companies to Work For” Fortune “Corporate Equality Index” Human Rights Campaign Foundation

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