global biz ethics nike case

8/18/2019 Global Biz Ethics Nike Case

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NIKE CASE STUDY

This post is a based on a case study of Nike. The article will be discussing legal and ethicalanalysis and how the impact the operational/ ethical issues of the organization, the paper shall

also be discussing the contribution factors and how the company’s corporate culture may havehelped to minimize the unethical behavior or actually contributed to/caused the unethical behavior. The paper is also going to provide ethical decision factors, which are going to addressor going to be considered in resolving the legal/ethical issues identified within this case. Andfinally the paper is going to provide an action plan for each of the legal/ethical issues along withrecommendations that company can take to help prevent these issues in the future.

Nike is one of the famous franchises in the world that sells sportswear for all ages. But is mostlyfamous for their athlete shoes and apparel and ike is also one of the ma!or manufacturers ofsport e"uipment as well. The slogan for ike is #$ust %o &t'. ike was founded in $anuary ()*+in regon, -nited tates by hilip 0night and Bill Bowerman. ike has somewhere around 122

or more retail outlets spread all over the world, and has appro3imately 45 offices only outside the-nited tates. And it employs 62,222 people all over the world. ike had a revenue e3cess of7(* billion in +221. ike’s factories are mostly located in Asian countries like akistan, &ndia,8alaysia, 9hina, &ndonesia, hilippines, Taiwan, :ietnam and Thailand. &n ();2 the companyhad a 52< market share only in the -nited tates shoe market and then the company decided togo public and it did by the end of that ();2’s %ecember. Through the ;2’s ike decided toe3pand its product line so that the line would include many other sports like tennis, golf, baseball, cricket, badminton etc. all over the world.

Stakeholders

&f we view the organization from a social responsibility perspective, enlightened organizations

like ike view internal and e3ternal environment as their stakeholders of the company that is themanagement of the company believes that the stakeholder can affect the processing of thecompany.&t must be remembered that every stakeholder has a very different criterion of responses becausethey all have a different interest in the company.

The primary stakeholders of the company would be the shareholders, business partners, theemployees, and the customers/ consumers. =hat the shareholders and the investors want fromthe company is that the company achieves its profits, the employees of the e3pect worksatisfaction, pay along with good supervision and the customers are concerned with "uality,safety and availability of services when they re"uire it. And when any primary stakeholder group

is not satisfied the organization progress becomes "uestionable. >rom these the activestakeholders would be the employees, investors and the shareholders, whereas the passivestakeholders would be the customers and the customers want to get high dividends for theirinvestment. ?tockdale @ 9rosby, +224

The secondary stakeholders of the company would be the community ?which includes specialinterest groups. 8ost companies like ike e3it under only a charter and licenses and operatewithin the limits of safety laws, environmental protection and other laws and regulations. The



socially responsible organizations like ike consider the effect of their actions upon allstakeholders. =hat all of these want from the company is that company is ethically and sociallyresponsible and when this secondary stakeholder group becomes dissatisfied, the reputation ofthe company gets tarnished ?for e3ample, the debate of sweatshops tarnished the reputation of ike.

=hat the stakeholders want from the company is that they want their needs to be ma3imizingtheir value in the company. >or e3ample, if both the customers and the employees along with thestockholder interests are addressed then both of the groups will benefit from the sales of thecompany.

Legal Analysis

egal responsibility defines what the society thinks is important with the respect appropriate behavior. The companies are e3pected to fulfill their economic goals within the legal framework.egal re"uirements can be imposed by the local, national and international regulatory services. ?tockdale @ 9rosby, +224

The legal dimension means the general environment of the company that includes federal, stateand local rules and regulations that help the company to control the behavior of the employees.The legal challenges of the company would include the CC ?e"ual employment opportunity.The legal issues that were being faced by ike and the factors that have contributed to thecompany being nonDcompliant are as followsE

Health Safety Issues Lo! "ages Indiscri#inate Hiring $iring %ractices

The organization needs to take affirmative actions towards any kind of discrimination is donewithin the company. Affirmative action mostly refers to the management’s effort to correct theresults of any past discrimination that was done against a protected class. These actions are basically written plans that show goals and ob!ectives for hiring, training, promoting andcompensating the people of the protected classes by the CC laws and other laws that protect thelaws of the protected groups. The management has to make sure for the future that any kind ofdiscrimination does not occur again therefore the management of the company has to developaffirmative action plans voluntarily. The CC9 compliance is one of the main responsibilities ofthe FG department of the organization, the FG e3perts and managers have to develop a plan thatwould achieve the organization’s action goals in the least disruptive way. The affirmative action plans have to follow the steps if the FG department wants to make this program a success. Thefollowing steps are as followsEDC3hibit strong employer commitment Appoint a high rankingdirector ublicize commitment internally and e3ternally urvey the workforce forunderutilization and concentration%evelop goals and timetables %esign remedial and preventive programs ?tockdale @ 9rosby,+224

Ethical Analysis

&n this case we are talking about the company doing the right thing that it is ethically responsible.Cthics can be defined as the code of moral principles and values that help to oversee the behaviors of the employees or teams with respect to what is right and what is not. To be ethically



responsible, ike decision makers need to act with e"uity, fairness and impartiality, respect theright of the individuals and provide different treatment to employees and individuals but onlywhen it’s relevant to the goals and ob!ectives of the company.

Ethical Issues

The organizations these days are also faced with ethical dilemma within the company. Cthicalchallenges arise in the organization when in a situation each alternative choice or behavior inundesirable because of potentially harmful ethical conse"uences. Gight and wrong is not clearlyidentifiable in the situation. The ethical challenges ?that is the sweatshop debate that confrontthe global business of ike are as followsED

The issue of child labor and the sweat shop problem has been one of the legal challenges ike isfaced with. Another challenge that is faced by ike is the workers are given a very low wage and doovertime in countries like :ietnam, 9hina and &ndonesia under a subcontract.

Another challenge that is faced by ike is poor working conditions, s"ualid workingconditions and forced labor in the factories that manufacture their products. And another challenge that is faced by the company is the environmental damage that is doneto the society by air and water pollution, noises and change in the climate due to the pollutionetc. ?tockdale @ 9rosby, +224

The role of the government also plays a ma!or role in these challenges that are faced by ike. Aswe know that government laws and regulations differ from country to country and this makesmanufacturing of products very difficult challenge for the international companies like ike. Thehost governments have laws concerns against consumer protection, information and labeling,employment, wages and salaries and safety of the workers who work in those firms. Theinternational organizations must keep these rules and regulations in their minds and should abide by them. The most visible changes in the legalDpolitical factors develop and grow out ofinternational trade agreements and the emergence of international trade alliance betweendifferent countries for e3ample, HATT or C- etc. ?tockdale @ 9rosby, +224

=hat happened is that the various roles that the host governments of different countries like9hina, :ietnam or &ndonesia played in this particular global business’s operations were that theyturned a blind eye towards the poor working conditions of the manufacturing plants. Another rolethat these governments played was that they did not do anything about the very low wages of theworkers for e3ample, in :ietnam the workers were paid +2 cents per hour or a mere 7(.*2 perday but in actual the living wage in :ietnam was actually 76 per day. And neither of thesegovernments did do anything about child labor problems or the sweatshop problems.

Ethical %ers&ecti'es

>or this case study we are going to apply three kinds of ethical perspectives, which will help todemonstrate ethically sound behavior and which illustrate unethical behavior of ike. the ethical perspectives that have been chosen are as followsED

%eontology CthicsE &t has been argued in the theories of ethics that if people want to act



morally then they need to act in accordance to the duty. &t has also been argued in the ethicstheory that it is the motives of the individual that carry out the actions and not the other wayaround, which is, the conse"uences of the actions of the individuals to act in a wrong or rightmanner. >or e3ample, in our case, fear of an employee in the department would be that he or shemight get a customer who is not pleased very easily, and is hard to deal with, with that in mind

this could help the employee to work hard and overcome his or her fears and this could only bedone due to the ad!ustment of the employee’s behavior. but it also must be remembered that thefear of losing ?for e3ample, one !ob due to a customer’s hard to please attitude can also deDmotivate an individual to perform badly on the !ob can result in a great deal of problems for himor her and this is also due to the behavior ad!ustment of the employee.

-tilitarianism ApproachE -tilitarian approach is based on considering all the effects thathappen due to a decision alternatives for a solution and then selecting one alternative whichma3imizes and provides the greatest satisfaction to the large number of people or population.-tilitarian ethics are code for public and personal actions. >or e3ample, in our case, in themanagement culture of the organization and its departments, they believe in providing the

employees with good working conditions, with fair wages and salaries along with secureemployment, it is for all the employees who work there. =hen the organization is hiring recruitsto fill out a particular position, makes sure that the candidate that is applying for the !ob has theeducation along with the skills the position re"uires even if it is an entry level position becausehere individuals get the !ob based on both but especially their skills that is their ability tocommunicate with the customers or not, why, because communication is very important becauseit helps ike to know more about the needs and demands of their customers and to provide themwith the best customer e3perience. ?tockdale @ 9rosby, +224

Cthical CgoismE is about a condition in which moral agent tend to do what they believe is intheir self interest. This approach is more like the individualism approachI this approach contendsthe acts of an individual as moral when they promote the person’s best long term interests. Theaction that is intended to produce a greater ratio of good to bad for the individual when comparedwith other alternatives is the rights to one perform. &t must be remembered that everyone in thisworld is perusing selfDdirectionI the greater good is ultimately served because people learn toaccommodate each other in their own long term interest. >or e3ample, in ike teams play a veryimportant role, without teams the departments would not be able to grow and learn. The teamslearn to communicate and collaborate with one anotherI through this collaboration the goals andob!ectives of the organization are achieved. And ike also strongly believes that the employeesof the company need to be involved within the company, this will help the employees becomeempowered. >or e3ample, ike sustains top performance through their people. The managementof the company pays attention to its employees and empowers them to certain degrees which inreturn makes their employees satisfied with their !obs and remain motivated. ?tockdale @9rosby, +224

Contri(uting factors) Cor&orate Culture and Cor&orate *o'ernance+*uidelines

Cthics can be more clearly understood when they are compared with behaviors that actuallygovern the laws and free choice. There are great deals of companies that get into trouble with thesimplified view that choices are governed either by law or free choice. As principles of ethicsand social responsibility are more widely recognized, the companies can use codes of ethics and



their corporate cultures to govern behavior, thereby eliminating the need for additional laws andavoiding the problems of unfretted choice. There are different kinds of guiding principles thatcan prevent ike type scandals, and this is what the company did, they are as followsED

E#&loy#ent %ractices

The management of ike took a look at its employment practicesI they made sure that thecompany is following the policies on recruitment, training, health, safety and welfare. Themanagement of the company should also oversee that the environmental practices. To make surethat the company follows procedures that are responsible in terms of waste disposal andavoidance and energy inputs etc. ?8alachowski, +22(

Training %lan

9onduct and design a training program for the employees. Training and development effortsenable the employees to assume e3panded duties and greater responsibilities. The managementmust also remember that training and development programs are not universal solutions to every

need of the company. Cffective !ob designs, selection, placement and other activities of the FGdepartment are also very important. 9reate such a program that would help the management indealing with problematic behaviors of the employees. The company used cross functional teamsto develop products and services and solve the issues that arise. ?8alachowski, +22(

Assessing %erfor#ance

et targets and identify performance measure standards. &f performance is to be rated accurately,the performance of the company would re"uire the management to asses each and every relevant performance dimension. A multidimensional form increases the usefulness of the performanceappraisal for giving rewards and the facilitate the employees of the company to grow anddevelop and this in return will help the company to become more professional and it will alsohelp in to grow and develop.

Ethical ,es&onsi(ility

The management of ike should understand that why ethical responsibility is needed within thecompany because it is the obligation of organization’s management to make decisions and takeactions that will grow the welfare and interest of the society and as well the organization. &twould include activities and commitments that are related to human rights, governance andethics, development, working conditions of the employees, community involvement, customersatisfaction, relations with the company’s suppliers and customers and lastly respect for diversecultures and different people etc.

Ethical Decision $actors to Consider

The ethical factors that are needed to be considered by the management of ike in respect tothe ethical perspectives ?which are mentioned above are as followsED

eadership by e3ampleE The 9C of ike and the senior managers of the company need to beopenly and strong committed to the social responsibility and ethical conduct. They must give



constant leadership in renewing the ethical values and the social responsibility of the company.The management must be active in communicating about the company’s commitment in thespeeches, directives, company publications and especially in actions too. The 9C along withthe company’s managers is the ones that set the tone of the organization most clearly by their behavior.

9ode of ethicsE 9ode of ethics state that the values or behaviors that are e3pected and thosethat will not be tolerated backed up by management’s actions. ?chuler @ $ackson, +221

Cthical structuresE ethical structure actually represents the various systems, positions and programs that a company can undertake to implement a social effort and ethical behavior. Anethics committee is a group of e3ecutives under the 9C to oversee the company’s ethics and9G efforts, for e3ample, the ike committee that conducts corporate social responsibilityefforts.

=histle blowingE employee disclosure of illegal, immoral or illegitimate practices on the

employer’s part is called whistle blowing. o organization like ike can rely only on codes ofconduct to prevent such kinds of behavior. =hen there are no effective protective measures,whistle blowers suffer and the company may continue its unethical or illegal activities. The 9Cand the management of ike should make sure that the managers are trained well so that theyview whistle blowing as a benefit and not a threat. ?chuler @ $ackson, +221

,eco##ended Correcti'e Action

There are two recommended corrective action plans that & would suggest to the management of ikeI ( compensation and + training and development. =hen talking about best practice it must be remembered that best practice can be defined as an idea that suggests that there is some sort of techni"ue, method, process, incentive or reward which is considered to be more useful at producing the desired outcome or result for the company than any other techni"ue, method or areward etc. ?chuler @ $ackson, +221

Co#&ensation

9ompensation can be defined as what the employees of the company receive in e3change fortheir contribution to the company. =hen they are managed correctly that is the employeeswhether they are e3ecutives or not, it helps the company to achieve its targeted goals andob!ectives and the company is able to obtain, maintain and retain a productive workforce. Theoutcomes due to pay dissatisfaction can be very harmful to productivity and can disrupt the"uality of work life. >or constructing a compensation package for the e3ecutives, it is importanto follow the following stepsED

$ob analysis and evaluation 9onstruction of a oint ystem ?chuler @ $ackson, +221

Training @ %evelopmentkills, 0nowledge Ability of =orkersrogram 9onte3t



eeds AssessmentTraining @ %evelopment b!ectives&f the company wants to achieve its desired goals and ob!ectives and if it wants to receive the benefits, then the human resource managers and specialists must assess the needs, ob!ectives,content and learning principles that are connected with training. reliminary steps in preparing a

training and development program are as followsEDActual rogram earning rinciplesCvaluation 9riteriaCvaluation

&t must be remembered by the FG managers that when making training program to follow theabove diagram in the se"uence before the training and the development program can commence.As implied by the diagram, the individual who is responsible for training or development mustassess the needs of the employees and the organization like ike to learn those ob!ectives thatneed to sought. nce the ob!ectives are set then the content and learning principles are to beconsidered by the trainer who is training the employees. ?chuler @ $ackson, +221

,eco##endations

The management of ike should look at the employment practicesI they should make sure thatthe company is following the policies on recruitment, training, health, safety and welfare.

The management of the company should also oversee that the environmental practices. Tomake sure that the company follows procedures that are responsible in terms of waste disposaland avoidance and energy inputs etc.

9onduct and design a training program for the employees. Training and development effortsenable the employees to assume e3panded duties and greater responsibilities. The managementmust also remember that training and development programs are not universal solutions to everyneed of the company. Cffective !ob designs, selection, placement and other activities of the FGdepartment are also very important.

9reate such a program that would help the management in dealing with problematic behaviorsof the employees. The company use uses cross functional teams to develop products and servicesand solve the issues that arise.

et targets and identify performance measure standards. =ith the help of performancemanagement, ike will be able to develop skills of people to achieve their capability to satisfytheir ambitiousness and also increase profit of a firm

ike has decided to use a G campaign so that it is able to repair its social image due to thesweatshop debate.

The management of ike should understand that why ethical responsibility is needed withinthe company because it is the obligation of organization’s management to make decisions andtake actions that will grow the welfare and interest of the society and as well the organization. &t



would include activities and commitments that are related to human rights, governance andethics, development, working conditions of the employees, community involvement, customersatisfaction, relations with the company’s suppliers and customers and lastly respect for diversecultures and different people etc.

global biz ethics nike case

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