the promise and perils of globalization
TRANSCRIPT
Globalization involving us all
Source: http://www.strongtowns.org/journal/2016/6/29/globalizations-challenge-to-cities
Globalization involving us all
Source: http://www.strongtowns.org/journal/2016/6/29/globalizations-challenge-to-cities
oogle
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cacola a
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art
Alibac
de
Questions?
Benefits?Drawbacks?
Performance
Corporate citizenship
The promise and perils of globalization:
the case of NIKEGroup 1:
Jen Vu Huong – 15044079
Puko Ha Anh –
Danny -
Duy Anh -
28 Sept 2016
Contents
1. Introduction about Nike
2. Nike in the globalisation context
3. The promise
4. The perils
5. Lessons learned and discussion
About Nike
Sales of Nike (2001)
Footwear
Apparel
Equipment(Largest company)
About Nike (Cont)
(Data in 2015: https://www.statista.com/)
Nike and globalisation context
4th phase
3rd phase
2nd phase
1st
phase
1948-1970s 1980s-presents
Nike and the 3rd phase of Globalisation-1960s
• Market drivers
• Falling barriers to trade/investment
• Rise of Japanese Multinational enterprise
• Technological innovation
• Convergence in consumer lifestyle & preference (1985: USA spent $5 billion on shoes)
• Competitors drivers (Adidas)
Globalisation drivers
• Changed the business model
• Outsourcing to lower-cost Japanese producers
• Sales increased to almost 2M USD Results
Nike and the 3rd phase of Globalisation-1970s
• Cost drivers
• Costs/prices increased in Japan
• Tighter labour market/shift in currency, etc
Globalization drivers
• Cultivated potential suppliers in Korea, Thailand, China and Taiwan
Nike and the 4th phase of Globalisation-1980s
• Government drivers
• Korean govern focused on footwear industry
Globalization drivers
• Closed its US factories
• Outsourced almost its production to Asia
Results
82%
18%
Footwear productionKorea & Taiwan
Others
Nike factorieslocations
Nike and the 4th phase of Globalisation1990s – currently
• Cost drivers
• Korea and Taiwan developed
Globalization drivers
• Outsourced to Indonesia, China and Vietnam
• Entered to other industries
Results
• More than 700 factories
• Employed over 500,000 workers in 51 countries
(data from the year: 2002)
Nike and new industries
• Markets drivers
• The integration of world financial markets
• Customers preferences and lifestyles
• Government drivers
Globalization drivers
• How to deal with suppliers
Nike and the promise of globalisation
Nike and the perils of globalisation
Poor health and working
condition
Child labour
Low wages
Nike and The perils of globalisation
Poor health and working
condition
Child labour
Low wages
1. Low wages in Indonesia:
Paid lower than minimum wage
Ex: less than 1USD/day
Refuse to take responsibility
Early 1990s:25,000 workers workingfor Nike in Indonesia
Nike and The perils of globalisation
1. Low wages in Indonesia2. Child labour in Pakistan
Poor health and working
condition
Child labour
Low wages
70% of the world’s high-quality soccer balls
Were produced in Sialkot. Pakistan
(Data: the year 2001)
Nike and the perils of globalisation
Poor health and working
condition
Child labour
Low wages
The wave of criticism against Nike increased
with a “critical event” when Life magazine published
photo of 12 year-old boy stitching a Nike soccer ball
1. Low wages in Indonesia2. Child labour in Pakistan
Nike and the perils of globalisation
1. Low wages in Indonesia2. Child Labor in Pakistan 3. Health and Safety Problems in Vietnam
Poor health and working
condition
Child labour
Low wages
1997: employed 9000 workers
A chemical solvent(named Tounlene exceed 6 to 177 times acceptable standards)
Nike and the perils of globalisation
1. Low wages in Indonesia2. Child Labor in Pakistan 3. Health and Safety Problems in Vietnam
Poor health and working
condition
Child labour
Low wages
Poor working conditions caused health & safety problem
(especially skin and heart diseases)
Boycott, protest
Nike’s response to the perils
Poor health and working
condition
Child labour
Low wages
New staff and training
Increased monitoring of its suppliers
Cooperated with international and non-profit organizations
Nike’s response to the perils
New staff and training
Nike’s response to the perils
-Creating new teams to frequently (weekly, monthly, etc) to monitor factories
Example: 85 labor & environmental specialist 1000 production specialists
- Building training programs for employees - Evaluating and rewarding managers
Increased monitoring of its suppliers
Nike’s first response to the perils
- Internal and external inspectors -Not only focusing on price, quality but labor health/environmental perspectives
- Using incentives and punishments
Cooperated with international and non-profit organizations
Nike’s response to the perils
ATLANTA AGREEMENT
- Seek to improve working conditions in developing countries- Promote corporate citizenship- Focus on human rights, labour rights and environmental sustainability- Develop a common set of standards for monitoring around the world
The results and the debates
Eliminate chemicals released
in footwear production
Improving conditions
Wages increased
Performance
Corporate citizenship
Lessons learned and discussion
Thank you^^
Reference
• The Promise and Perils of Globalization: The Case of Nike Richard M. Locke, MIT Working Paper IPC-02-007, July 2002
• 1978-97: HBS Case #9-299-084 "Nike, Inc.: Entering the Millennium," March 31, 1999 and 1998-2001: Company financial information
• National Sporting Goods Association, 2002; www.sbrnet.com
• http://www.nike.com/
• The Japanese Model of Political Economy,” in The Political Economy of Japan: Volume 1, The Domestic Transformation, Kozo Yamamura and YasukichiYasuba, eds., Stanford University Press, 1987
• http://www.strongtowns.org/journal/2016/6/29/globalizations-challenge-to-cities
• https://www.statista.com