College: Centenary College

Subject: Legal and Social Environment of Business

Professor: Mona Ressaissi
Date: 11-11-2013

NIKE and its Public Image

Student: Anton Sokoli

The Issue
NIKE is a leader company in its market and will keep the same level and standard in its
work and products in the future. Our attention has always been on delivering good products and
building up a good reputation and public image. A new challenge is confronting our company
and that is its public image. Lately we have been put in the center of media attention regards to
our ethics with our employees and practices used in our factories. We have been classified as an
unethical company, bad treatment of our employees, bad payment rates and bad working
conditions. Their research marks us with poor working conditions, below-subsistence wages and
worker abuse, that we have problems in our policy behaviors and that our supervisors exceed
with their punishments. They have raised this issue to a high importance and brought it to the
public eye. It seems that it already has affected our customers view towards our company image
and our reputation has been affected. We have to take all possible measures to put an end to this
bad advertisement and prevent from developing to another higher and more damaging stage. We
set our rules and make necessary changes before outsiders oblige us to so. International
institutions, human rights organizations and employee unions has started to pay attention and
take it as a very serious matter. Strikes has been organized by our employees in countries where
our factories are based, legal interventions has been taken in some cases and all this is getting
more and more constructive and organized.

Brief History of what our company has done related to the issue.
In our contracts with our suppliers and factories we have been very strict on the matter of
these problems and issues. We have our own audits that check the obedience of these specific

clauses by our partners. Several incidents and complaints has been reported during our controls
and straight decisions has been made by our part. In one case, a worker had to run laps around
the factory because the shoes she assembled had defects, in Vietnam a forewoman lined up 15
female workers and beat them with an unfinished shoe because she was angered by the quality of
their work. We have insisted that managers who were found to be abusive be transferred or
removed. A massive strike and protest was staged at PT HASI, demanding to be paid the new
minimum monthly wage of $71,37 excluding allowances. The company agreed to pay the
minimum including allowances, overtime, transport, holiday pay and meals. We always have
tried to be comprehensive and cooperative, we always paid attention to these issues and tried to
implement the best possible. But still it looks that it is much more to be done and further
intervention is needed.

Impact to us and strategies

Yesterday we were in the position of achieving and putting a standard on shoes quality
and today we have made it reality, we have put that standard. In my opinion we should not
become greedy in this point we are. Now our job is to protect our companys image and
reputation and develop it to higher stage of performance. That is the strategy I suggest for a safe
and successful future. This will have an increasing effect in our product cost and may have an
effect at overall capital due to investment needed in our suppliers facilities. But it will affect only
temporarily into our finances. We will invest on helping our partners on fixing those major
problems that has been detected and pointed out but the payback that the company will receive

will be multiplied. Things that I suggest to be focused more and will give the effect we are
looking for in eyes of our customers will be the following.

Implement working conditions standards

Find and improve all factories with poor working conditions. That is of a major importance
for our change. We cooperate with our partners for the expenses and we make reality that our
products to be made in the best facilities with the best working conditions in our industry.
We have to focus in some areas that seem the most important for now as the chemical levels
in the workplace, the dust issue in the mixing rooms and the unprotected use of dangerous
materials. Those are some issues that can cause death of our employees or cause serious
health problems.

Labor practices department

We will have to make clear for all our suppliers that worker abuse and bad treatment of
workers will be highly prohibited. Decision will be made immediately and those managers
will be fired and get proper punishment. We should implement our audits in monthly basis
and create the spirit that every complain will be resolved with quick and strict decisions. Our
workers have to feel safe and treated with respect for their contribution to our company. In
order to have better quality of our products what we need is training and time spent with our
employees so we make sure they understand how it has to be done instead of violence.

Salary changes
Salary is a direct measurement of appreciation to our employees work. We have to consider
that salary is one of the biggest motivation to employees and even more to countries with low
economy. Having high wages in our factories and having happy workers is the best image
and publicity that we can ask for. Moreover employees will be motivated to work harder and

our production department will have an increase and the affect will touch the company
overall.

Improve the companys public image

We need to make an improvement in the company's public image. The damage has not been
that strong or has not developed that much but still it is spread enough for us to have a
campaign for that. After we finish with the project of doing necessary changes we have to
create a marketing plan of our companys image. After we make sure that the changes has
been successfully finished and our company fulfills all the standards asked by the
international and countries our factories are based on we should let our public know about
our commitment. To regain the trust from our customers we will hire an Independent
monitoring company for all issues that has been raised. Making a detailed report of all the
steps our company had to follow and putting it in our websites and including labor conditions
and human rights in some of our ads will help on informing the public for the changes. This
will make a clear picture of the company changes to the public and will have an impact of
bettering our public image and securing a safe future trip.

Conclusion

In order to regain the reputation we have lost by the latest problems and be presented as
an ethical company to the public we need to make some changes. Those changes implemented
will have a very strong effect in the companys image. Changes needed to be done start with
improving working conditions in our factories, implementing ethical behaviors in the working
environment and increase salaries with to a reasonable amount. This changes will affect the

companys finance and will be evaluated as a percentage of revenue per year. It does not mean
that all the expenses will be from our budget only. I am sure that factory owners will understand
and agree with our proposals for necessary changes that will have to be done. This means that
they will have to do their part as well and it is in the benefit of everyone.. I doubt that none of
our suppliers would prefer to loose NIKE as a partner considering that we are their major
customer. High reputation is the best start for high performance. That is our goal.