NIKE - ETHICAL ISSUES AND DILEMMAS
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NIKE - ETHICAL ISSUES AND DILEMMAS
Nike has been dodging accusations of employing people in the developing and under-developed economies, at low wages and poor working conditions for a considerable period of time. Having tried course correction and public relations as a measure to salvage the bad image generated by the sweatshops that Nike is accused of running, Nike has undertaken massive efforts to overcome these hurdles. Herein we will analyze Nike's international business operations with a critical eye over the ethical issues and dilemmas that this organization has faced while manufacturing its goods in foreign lands.
There are a number of areas that are seen as weak points or links in this Nike case. We shall first highlight the problem areas and then dive into the ethical theories that are supposed to govern them. According to the Wikipedia dictionary, ethics is defined as a general term for the science of morality.  While this branch of study can be further sub-divided into various categories, we have to remember that what is appropriate in a given situation may not be so among different circumstances and the decision of right or wrong is relative to its surroundings. Elaborated here are the issues and problems that stand out due to their ethical nature as issues or dilemmas faced by Nike and its operations towards its employees and customers as mentioned in the case study:
Poor Working Conditions - In Nike factories, the laborers were provided with poor working conditions that were certainly below the norms accepted in the developed world. While lower standards of living may apply in the countries that have Nike factory contracts, the inhumanity of these conditions drives attention to Nike's responsibility towards its employees. Considerable overtime and long working hours had to be endured by Nike employees desperate to remain employed in their country. An example states that Nike factory workers in Korea had to work for seventeen straight hours in silence. This indicates almost barbaric behavior on Nike's part towards workers in these conditions.
Low Wages - Nike contracts with companies to do all of their manufacturing in developing or under-developed countries. While the wage levels there are lower than the ones in developed nations, Nike still fails to employ people at a rate that can sustain their basic needs. The wages provided are much lower than the wages needed and as such cheap labor is thoroughly exploited. Nike has attempted at correcting the problem and employing people at a rate at least equal to the minimum wages prescribed in the country.
Child Labor - Child labor laws in many countries are overlooked by Nike and children as young as 12 and 13 years of age are made to work long hours and treacherous conditions. Nike has taken steps to meet the starting age limit subsequently.
Operations in Countries with Union Restrictions - Nike has been known to set manufacturing efforts in countries like Indonesia and China that prohibit union operations. This leads to lack of revolt and protests that leave the employees with little choice regarding work conditions and wages. Ethically, it is hard to argue against these countries as their laws do not have provisions for employment governance. In fact these countries often do not have minimum wage requirements and abundant labor is put to use by companies like Nike for the absolute minimum.
Expensive Endorsements - While Nike has been continuously targeted by human rights committees, they have unceasingly maintained a high profile image by getting celebrities like Michael Jordan and Tiger Woods to endorse their products. Over five years, Tiger Woods is expected to earn 80-90 million US dollars of Nike money.  Ethically it would have been more beneficial to engage a part of that money in Nike factory and employee enrichment.
Expensive Products - Nike sells its products at steep prices, while we all know that the products are manufactured in contracted factories on foreign lands for low costs. The cost of production being low leads Nike to generate massive profits from the sales revenues.
Cover-up Public Relations Efforts - Being involved in child labor initiatives was undertaken by Nike to handle the issue at large and also to
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