Question

This is based on a course that is an Intro to Marketing Course:

Give an example of an ethical violation by a company that has been covered in the news.

a. Identify the company. In a few sentences, describe the ethical violation.
b. Describe the company's response to the publicity of the ethical violation.
c. Do you believe the company's response was adequate? Why or why not? If not, what suggestion(s) do you have on what the company could have done differently?

Answer 1

In the mid nineties Nike was accused for paying less to their employees as well as using the child labour in the factories which leaded them to a drop in sales as well as a bad image in the society. This is specific news created negative impact on the company's profile around the globe just like the company doesn't recognize that its involvement with the suppliers is also a very bad thing for their image.
The problem began with improper resource management team of nike which collaborated with the different what is around the world to supply them the manufactured goods without having a proper survey over the companies were responsible for manufacturing for Nike, companies management system decided to go with the manufacturers and does not had a look in companies work structure on the environment.
Nike's policy of working with the independent supplier for their products was the biggest mistake of the supply chain management system which lead them to unethical crisis
This specific incident was focused in the media for a long time for supporting the child labour as well as being low wages to their customers. Authentically Nike was nowhere related to this child labour incident but as those manufacturing facilities are a part of Nike's supply chain management system. That's the specific term was amazing story for all the media houses at the time. Media companies portrait 90 as an unethical manufacturer with exploiting image. Suddenly all the houses were talking about the child labour and how it is involved in paying low wages to his employees.

For avoiding the crisis company should have done these things:-

• Company should have recruited a proper management system which reviews all the manufacturing facilities before involving them into the supply chain management.
• Periodically auditing manufacturing facilities, looking for any unethical practice should be done by the company because these independent manufacturers are directly related with the company's image.
• By setting of your own manufacturing plants Nike can regulate and maintain the ethical structure of their company as well as avoiding the crisis.
• Investing in the article is diverse platform with cultural diversity also helps in reducing the overall unethical practices in an organisation when investing in the socially accepted organisations should be done .
• By properly looking at the wages of their employees and having an eye on the company responsibility towards the society is also very essential in developing a positive image. This positive image would help the company to avoid the crisis as the standards of the company would be very high.

The labour crisis of night was handled by them in a very good manner which face everything and regain the company is brand image after sometime by doing the positive practices as well as increasing the wages of labour and bending the total use of child labour in the manufacturing facilities.
Other businesses should learn the importance of giving attention to the supply chain as well as other factors. Company does not properly provide any attention to it supply chain and gets away from the responsibility result would be worse, If a company does not maintain its auditing program towards the ethical practices of their company, crisis like Nike can happen anytime.
For maintaining the brand image in the society as well as keep gaining the same profit which the company is getting right now or making progress inside the industry, from this incident are very very important as they affect the overall image of the company as well as the sales.
If the situation was handled poorly then the company would have gone bankrupt as nobody wants to buy products from an unethical company who uses child labour to produce its products. Companies should learn that using unethical practices in your manufacturing facility would lead you into a trouble and create a condition where you company would not be able to work.