Question

Companies use complex systems to control and evaluate managers’ actions. Unfortunately, these systems and controls unwittingly create incentives for managers to sometimes take unethical actions. Select a company and identify and briefly discuss two ethical challenges to that company.

please do not answer without a companies example

Answer 1

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Ethical Issues at Nike

3646 words (15 pages) Essay in Business Strategy

19/04/19  Business Strategy  Reference this

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Business ethics has increasingly becoming one of the most contentious issues in today’s business society. Due to the globalisation of markets and production processes, an increasing number of Multi-National Companies (MNC) are having to deal with ethical issues in the different counties they are operating in (Dunn and Brooks, 2011). According to Archibong-Anyans (2015), a company’s reputation is dependent on its ethical practices which, in turn, helps to define a business model that can flourish over time even in adversity. In today’s business environment, however, every company is on a wild race to acquire a greater level of profit by using ‘shortcut’ means (McFarlin and Sweeny, 2015 pp309). As society wants companies to create better paying jobs and protect the environment, some organisations want to acquire more profit by engaging in activities that are not tolerated by society (Parboteeah and Cullen, 2013). Companies are also facing consumers with a growing desire to buy commodities at a lower price. As a result, most companies are facing the inevitable conflict arising in the concept of business ethics due to differences in the interests of business stake holders, shareholders and consumers (Archibong-Anyans, 2015). One such multinational corporation facing ethical challenges hence the focus of this essay is Nike Inc, a company originally founded in America.

Nike Inc. is a multinational American organisation that is known for its ability to design, manufacture and sell footwear-based products, gym accessories and sporting goods. Thus, Nike is considered as one of the largest shoe retailers worldwide (Sage, 2008), controlling approximately 36% of shoe market (Locke et al., 2007). With a revenue of $30 billion in 2015 alone, Nike was acknowledged as the 18th most valuable brand employing over 600,000 workers worldwide. It is, therefore, this which has given Nike the ability to open stores globally (Locke et al., 2007).

Despite the organisations growing success, Nike has been inundated with criticism since the 1990s regarding the unethical treatment of employees overseas and its impact on the environment (Wazir, 2001). As well as this, there is evidence to suggest that Nike has failed to meet consumer/stakeholder needs in relation to corporate social responsibility; therefore, reducing customer-brand loyalty and consumer trust. Regardless of the effort put in place to overcome these issues, Nike still faces ethical problems on a daily basis, primarily relating to child labour, social injustice, uneducated workers, workplace abuse and poor employment pay levels (Wazir, 2001). Thus, this essay is going to focus on three ethical issues faced by Nike Inc., its stakeholders, and society in general.   

The first ethical issue involves the use of sweatshops – a factory whereby manual workers are employed at very low wages for long working hours and under very poor conditions (Powell and Zwolinski, 2011). Since 1996, Nike has been critiqued for manufacturing its products Indonesian, Mexican, Chinese, Vietnamese-based sweatshops. Many workers were found to have been subdued to minimum wage and long overtime hours; issues which violated laws put in place to protect workers (Greenburg and Knight, 2006). Despite denying such issues, the company continued to be subjected to critical exposure for deprived working conditions and the exploitation of cheap labour. It is only through the establishment of campaigns which has led to organisational changes, strategically and ethically, in both the USA and UK (Powell and Skarbek, 2006).

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2. Business Strategy

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Ethical Issues at Nike

3646 words (15 pages) Essay in Business Strategy

19/04/19  Business Strategy  Reference this

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Business ethics has increasingly becoming one of the most contentious issues in today’s business society. Due to the globalisation of markets and production processes, an increasing number of Multi-National Companies (MNC) are having to deal with ethical issues in the different counties they are operating in (Dunn and Brooks, 2011). According to Archibong-Anyans (2015), a company’s reputation is dependent on its ethical practices which, in turn, helps to define a business model that can flourish over time even in adversity. In today’s business environment, however, every company is on a wild race to acquire a greater level of profit by using ‘shortcut’ means (McFarlin and Sweeny, 2015 pp309). As society wants companies to create better paying jobs and protect the environment, some organisations want to acquire more profit by engaging in activities that are not tolerated by society (Parboteeah and Cullen, 2013). Companies are also facing consumers with a growing desire to buy commodities at a lower price. As a result, most companies are facing the inevitable conflict arising in the concept of business ethics due to differences in the interests of business stake holders, shareholders and consumers (Archibong-Anyans, 2015). One such multinational corporation facing ethical challenges hence the focus of this essay is Nike Inc, a company originally founded in America.

Given the above, the following paper is going to examine the ethical challenges facing Nike Inc. and will critically evaluate the approaches the company has taken to tackle these issues. Furthermore, the paper will also make some recommendations in regard to how Nike should develop its approach to managing these ethical challenges and will evaluate the challenges that Nike faces in implementing the identified recommendations.

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Nike Inc. is a multinational American organisation that is known for its ability to design, manufacture and sell footwear-based products, gym accessories and sporting goods. Thus, Nike is considered as one of the largest shoe retailers worldwide (Sage, 2008), controlling approximately 36% of shoe market (Locke et al., 2007). With a revenue of $30 billion in 2015 alone, Nike was acknowledged as the 18th most valuable brand employing over 600,000 workers worldwide. It is, therefore, this which has given Nike the ability to open stores globally (Locke et al., 2007).

Despite the organisations growing success, Nike has been inundated with criticism since the 1990s regarding the unethical treatment of employees overseas and its impact on the environment (Wazir, 2001). As well as this, there is evidence to suggest that Nike has failed to meet consumer/stakeholder needs in relation to corporate social responsibility; therefore, reducing customer-brand loyalty and consumer trust. Regardless of the effort put in place to overcome these issues, Nike still faces ethical problems on a daily basis, primarily relating to child labour, social injustice, uneducated workers, workplace abuse and poor employment pay levels (Wazir, 2001). Thus, this essay is going to focus on three ethical issues faced by Nike Inc., its stakeholders, and society in general.   

The first ethical issue involves the use of sweatshops – a factory whereby manual workers are employed at very low wages for long working hours and under very poor conditions (Powell and Zwolinski, 2011). Since 1996, Nike has been critiqued for manufacturing its products Indonesian, Mexican, Chinese, Vietnamese-based sweatshops. Many workers were found to have been subdued to minimum wage and long overtime hours; issues which violated laws put in place to protect workers (Greenburg and Knight, 2006). Despite denying such issues, the company continued to be subjected to critical exposure for deprived working conditions and the exploitation of cheap labour. It is only through the establishment of campaigns which has led to organisational changes, strategically and ethically, in both the USA and UK (Powell and Skarbek, 2006).

Following the identification of sweatshop issues in 1996, Nike critically assessed its factories in order to detect the horrific conditions in place, and found that all factories had no drinkable water and had high toxic chemical concentrations – above the permitted levels deemed as ethical. By 2001, Nike had been exposed for its poor treatment of employees who faced poverty, harassment and in some cases, violent intimidation (Wazir, 2001). Further strategic changes to improve these conditions failed, when employees were found to still be subjected to unsanitary conditions and excessive working hours; thus, going against an employee’s living needs.

In a bid to overcome these ethical issues, Nike published a report regarding factories where employees manually manufactured products under horrific conditions (Teather, 2005). The report identified that Asian factories were subjected to the worst cases of physical and verbal abuse, and that many of the employees worked more than 60 hours per week. For those refusing to do so, they were punished (Teather, 2005). While self-publishing this report reduced the branding image for Nike, it also increased the organisations transparency with its customers.

Subsequent to changes put in place, Nike has failed to prevent the physical and mental abuse to its employees in the workplace (Daily Mail, 2011). Unfortunately, supervisors and important stakeholders failed to prevent these issues from occurring and aided in the unethical treatment of workers worldwide; thus, the organisation did little strategically to fix this (Beder, 2002). Interestingly, Nike placed the majority of the blame to suppliers and factory owners overseas, and to help remove the use of sweatshops, the company introduced the Just Don’t Do It campaign (Chu, 2017). Nike’s strategic plan, therefore, now focuses on the ethical treatment of employees worldwide.