NIKE Human rights

The Case of Nike and Human Rights

What ethical issues faced by MNC's in their treatment of foreign workers could bring allegations of misconduct in their operation?

Answer: The ethical issues faced by MNC's in their treatment of foreign workers are given  below: a !m"loying child labor   b #sing workers overtime c $aying unfair salaries d Treating inhumanly with workers e $roviding "oor working condition for the em"loyees f %omen discrimination g #nfair business with minorities such as older worker& religious minorities h #nlawful business "ractice

Would the use of the third party independent contractors insulate MNC's from being attacked? Would that practice offer MNC's a good defensive shield against charges of  abuse of “their employees”?

Answer: Human rights issues is one of the most im"ortant issues in this globaliation era There are no universal or (nternational )tandard of what is right or wrong because of the cultural differences among the countries *or e+am"le& some country a""reciate child labor but some

country has a strict law of child labor )o when a business organiation conducts business in another country& they are trying to take advantage of that country The reason for an organiation to do business beyond the border is to ma+imie their "rofit )ometimes some MNC does offshore or outsourcing to get the ,ob done )o some MNC goes to the third world country to gain gain econom economies ies of scale scale *or e+am"le e+am"le A""le A""le (nc (nc $roduct $roductss are "roduced "roduced by a third third "arty "arty inde"endent manufacturer *o+conn& which situated in China They have some controversies about some unethical human rights issues which brings "ublic attention attention !ven though *o+conn  "roduce a""le inc "roducts -ut A""le (nc *ace any loss for that )o ) o .es& .es& the use of third "arty inde"endent contractors insulate MNC from being attacked by b y the customer for ethics .es& this "ractice would offer MNCs a good defensive shield against charges of abuses of /their  em"loyees

o you think that statements by companies that describe good social and moral conduct in the trea treatme tment nt of their their worke workers rs are are part part of the image image those those comp compani anies es crea creates tes and! and! therefore! are part of their advertising message? o consumers "udge companies and base their buying decision on their perceptions of corporate behavior and values? #s the historic “made in” $uestion now being replaced by a “made by” in$uiry?

Answer: %ithout a doubt the statement that some MNC "rovide to the "ublic about their good social and moral conduct in the treatment of their workers are "art of their advertising message )ome MNC com"any don't want to grab "ublic attention about this issue that's why they give such false statements *or e+am"le: After the child labor incident Nike s"ends billions of dollar  to regain their re"utation They also did some C)R stuff to get rid of the negativity

 No& ( don't think that consumers ,udge com"anies and base their buying decision on their   "erce"tion of cor"orate behavior and values There are some "eo"le who might think twice  before "urchasing a "roduct -ut no one cares how the "roduct is made They all care how the  "roduct will be (f we see Nike's case& we will see that even though Nike had negative issues& but they didn't go down financially No matter what they manage to increase their sales

.es& the historic /made in /0uestion now is being re"laced by a /made by1 in0uiry This is the globaliation era -ig com"any "roduce their "roduct through the third "arty to get the cost advanta advantage ge 2ne of the %almar almartt cloths cloths maybe maybe "roduc "roduces es in -angla -anglades desh h Com"ani Com"anies es now go multi"le countries to "roduce their "roducts 

%iven the principles noted in the case! how can companies comment on their positive actions to promote human rights so that consumers will think well of them? Would you propose that a company &a do nothing &b construct a corporate code of ethics!&c align itself with some of the universal covenants or compacts prepared by international agencies?

Answer: As a "art of the society we have to give something back to the society An MNC also is the "art of the society (t is their res"onsibility to take care of the society C)R is one of the im"ortant factor for an MNC There is certain "ositive way that A com"any can do something good for "romoting human rights& and that deed may hel" to create a "ositive image on MNC ( think to create a "ositive im"act on consumer mind a com"any should construct a cor"orate code of ethics and maintain an agreement that will "ractice in every corner of the world A cor"orate

code of !thics will hel" MNC to conduct business well (t will hel" MNC to create a "ositive im"act among the Consumer as well as the em"loyees -ut if a com"any fails to maintain the cor"orate code of !thics then it should follow some of universal agreement "re"ared by some international agencies like #nited Nations !very com"any does detail market research when entering a market )o MNC should do a careful research when entering into a region They should have known about country's culture& norms and value and what is good and what is bad in that country before doing business What What does does Nike' Nike'ss conti continue nued d finan financi cial al succe success! ss! in spit spitee of the lawsu lawsuit! it! sugg suggest est about about consumers reaction to negative publicity? (ave )merican media and N%* e+aggerated the impact of a firm's labor practices and corporate social responsibility on its sales? (ow should managers of an MNC respond to such negative publicity?

 Answer: (t is clear that consumer are fully aware of the cor"orate social res"onsibilit res"onsibility y Nike's Nike's continued financial success is the result of their showing res"onsibility to the society Today Today Nike is one of the "o"ular brands around the world Nike has s"ent billions of dollar for "romoting their "roduct every year -ut the thing is that those negative issues that arise by some "eo"le cannot create any "roblem for Nike (t was a big issue but Nike successfully able to handle the issue According to their international C)R "rofile& they donated 34 million to tsunami relief in 5667 )o this kind of charity hel"s Nike to regain consumer trust -ut generally when a customer  goes to the Nike store they don't think about all negative issue Nike have A customer always cares about the "roduct That is why Nike is still financially successful ( don't think that the negative issues of Nike create a "roblem on their sales American media and some N82's were so conscious about the labor issues of Nike -ut the general consumer doesn't

care about it They care about the "roduct they will going to use )o those negative "ublicity don't create any obligation on Nike's sales The only way to create the "roblem of Nike's sales is when the consumer of the world will sto" buying goods from Nike& but that is 0uite im"ossible A manager of an MNC could do certain things to get rid of the negative "ublicity Those are given below

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The manager should focus on the "ositive thing that com"any have *or e+am"le& Nike advertises their C)R activities to the consumer Maintain a cor"orate code of ethics eth ics so that every one of the com"any treat fairly $romote "ositive attribute of the com"any like good "roducts& good deeds& C)R& etc 9o more charity work to regain the trust of the Media and N82s