Nike is one of the largest cloths and shoe seller in the world, and it has enjoyed great love and equal criticism. Although Nike does not manufacture any of its apparels, it has for a long time come under heavy attack for allowing its contractors to use cheap labor, overwork their employees, and employ minors (Nisen). Most of the company’s critics argue that Nike has a moral duty of ensuring that its contractors provide a safe working environment and adequate salaries to their workers.
Nike does not manufacture any of its apparels; rather, it subcontracts these work to manufacturers in countries where the production costs are lower than those of the United States. On its part, the company concentrates in designing and marketing its shoes and cloths. This strategy has enabled it to earn huge incomes, without going through the hustles of manufacturing its products. Although this method is efficient, it has exposed the company to unscrupulous subcontractors who are interested in making huge profits by exploiting workers. According to an audit report carried by Ernst and Young, some subcontractors hire minors, underpay their employees, and let them work in areas with hazardous chemicals (Nisen). These unjustified practices have tarnished Nike’s image.
Nike should establish that all its contractors adhere to internationally accepted working standards to safeguard its reputation. In particular, it should ensure that they do not employ minors, underpay their workers, or expose them to hazardous chemicals. It should also introduce severe penalties, including termination of contracts for those who violate these regulations. Moreover, Nike should require all its subcontractors to display its working policies in their factories so that workers can be away of their rights.
The “Nike: The Sweatshop Debate” case is important to business managers because it provides important information on the need for companies to have their products manufactured ethically. This case also enlightens entrepreneurs on their responsibilities even when they subcontract part of their work. In particular, it indicates that the owner of the finished commodity has the unequivocal role of establishing that all the rights of employees are respected. Otherwise, the society may view him/her as only being interested in amassing wealth and not benefiting them, which may tarnish the entrepreneur’s reputation.
Nisen, Max. How Nike Solved its Sweatshop Problem. Business Insider, 9 May 2009, www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5?IR=T. Accessed 16 Sept. 2017.