NIKE Violations of International Business Ethics (Case Study)

In doing business, it is clear that business ethics are the sets of value standards which serve as guidelines or references for managers and all employees in decision-making and implementing those values in running a business ethically. In the era of fierce competition, a company’s great reputation based on business ethics is a competitive advantage which is difficult to imitate but also hard to maintain. NIKE Inc. is one of the largest multinational companies which manufactures sport gears across the globe. It is a worldwide seller of athletic shoes and sportswear whereby the company’s primary focus spans across seven main categories; Running, Basketball, Football, Men’s Training, Women’s Training, Sports-Inspired Products, and Action Sports.

Back in the 1970s, NIKE began to concentrate its production in Japan due to the cheap labor cost. Then, in 1982, most of the company’s products were manufactured in South Korea and Taiwan because of the low cost production (similar to Japan, the labor cost in these two countries were relatively less expensive). However, as the wages of foreign workers were increasing in South Korea and Taiwan, the company decided to relocate its operation to Indonesia, China, and Vietnam.

Throughout the years of corporate long establishment, NIKE has violated numerous faults or mistakes. Perhaps, the most popular one is labor exploitation where the company was embroiled in a controversy of employing cheap workers in developing countries to make such products at a lower cost. Although there is nothing wrong about minimizing such a cost production, however, the outsourcing problem in the case of NIKE was aggravated by the leaking of confidential reports by its subcontracting company in Vietnam where the reports showed a bleak of picture of unfavorable working environment, the footage of underage youths working for long hours with low wages, and the data of workers being contaminated by chemicals’ exposure which cause respiratory problems.

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