BUSINESS ETHICS : CSR CAMPAIGN

GROUP 8
 BUSINESS ETHICS : CSR CAMPAIGN

NIKE, Inc. is one of the world’s leading

brands in designing and developing
athletic footwear, apparel, equipment
ad accessories. It is ranked in top 10 in
CR magazine’s ‘Best Corporate
Citizens’ list and as ‘Most Valuable
Global Brand’ in apparel industry. Nike
Inc. includes seven distinct brands.
 BUSINESS ETHICS : CSR CAMPAIGN

Nike’s products are manufactured by

527 factories in 41 countries and
1,069,674 workers.
 BUSINESS ETHICS : CSR CAMPAIGN

_ Born : Phillip Hampson Knight

Feb 24, 1938 (age 80) Portland,
Oregon, U.S
_ Citizenship : United States
_ Alma mater : University of Oregon
Stanford University
_ Occupation : Chairman Emeritus
Nike, Inc.
_ Net worth : US$30 billion (January
2018

THEN NOW
 CSR Background
3 Most Famous Even
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results
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THE PERILS OF GLOBALISATION
 THE PERILS OF GLOBALISATION

In the 1980s, Nike had been

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criticized for sourcing its
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results

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products in factories/countries
where low wages, poor working
conditions, and human rights
problems were rampant.
 THE PERILS OF GLOBALISATION

In the 1990s, a series of

public relations nightmares –
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involving underpaid workers
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in Indonesia, child labor in
Pakistan, and poor working
condition in Vietnam –
combined to tarnish Nike’s
image.
Low Wages in
Indonesia
 In the early 1990s, Nike products were being
manufactured in six Indonesian factories,
1990s employing more than 25,000 workers.. As Nike’s

1
presence in Indonesia increased, the factories
supplying its products (about six million pairs of
shoes per year) came under greater scrutiny.
response

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results

about
Low Wages in
Indonesia
 Reports by a variety of NGOs and labor activists
claimed that these plants wererife with
exploitation, poor working conditions, and a
Low Wages in range of human rights and labor abuses. Many
Indonesia Indonesian shoe factories did not even pay the
minimum daily wage (at thetime, 2,100 rupiah
response

or about US$1).

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results

about
 In 1993, CBS aired a report about workers’ struggles at Nike’s
Indonesian suppliers, featuring Ballinger.

1993
Low Wages in
1994
Indonesia
response

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results

about
In 1994, harsh criticism of the company’s
practices appeared in an array of different
publications: The New Republic,Rolling
Stone, The New York Times, Foreign
Affairs, and The Economist.
Child Labor in
Pakistan
 In June 1996, Life magazine published an article

1996 on child labor in Pakistan, whichincluded a photo

of a 12 year old boy stitching a Nike soccer ball.

2
response

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reults

Child Labor in
Pakistan
 This article and its accompanying photo
unleashed another wave of criticism against Nike
and a call by various consumer groups, trade
unions, and Non-governmental organizations -
NGOs.
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In Pakistan

about
reults
 Health and Safety
Problems in Vietnam
 Tae Kwang Vina employed over
Health and Safety 9000 workers and produced more
Problem in than 400,000 pairs of Nike shoes
Vietnam per month.
response

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results

about
 In November 1997, The Tae Kwang
Vina Company was reported serious
health and safety problems

Health and Safety

Problem in
Vietnam
response

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results

teams

about
Toulene concentrations were said to exceed between 6 and
177 times acceptable standards in certain sections of the
plant
 Health and Safety
Problem in
Vietnam
response

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results

teams

about
nervous system depression

various skin and eye irritations

damage to the liver and kidney

 According to the report, personal protective
equipment was not provided at the factory and
Health and Safety working conditions and work hours at the plant
Problem in were in violation of Nike’s code of conduct.
Vietnam
response

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results

about
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about
1990s 1996 1997
Low Wages in Child Labor in Health and Safety
Indonesia Pakistan Problem in
Vietnam

These events made Nike a target for the anti-globalization and anti-sweatshop
movements. Several NGOs decided to focus most of their attention on Nike
and the various problems found among its suppliers.
response

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results

about
1990s 1996 1997
Low Wages in Child Labor in Health and Safety
Indonesia Pakistan Problem in
Vietnam

Under pressure from several student groups,

some universities cancelled their orders with
Nike to produce collegiate athletic products.
Nike’s Response
 Nike’s Response

response

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about
At first, Nike managers refused to accept any responsibility for
the various labor and environmental/health problems found at
their suppliers’ plants.
 Nike’s Response

response

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about
By 1992, Nike formulated a Code of Conduct for its suppliers that
required them to observe some basic labor and environmental/health
standards
 Nike’s Response

response

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Since 1998, Nike has increased the minimum age of footwear factory
workersto 18 and all other workers (in apparel, equipment) to 16
 Nike’s Efforts In
Improving Three
Specific Areas
1 New Staff and Training

Creating several new

departments :
• Nike Environmental Action
Team (1993) NEAT
• Labor Practices (1996)

Today, Nike has 85 people

specifically dedicated to labor
and environmental compliance
 1 New Staff and Training

Nike managers conduct on-site

inspections on a weekly or monthly
basis,depending upon the size of the
firm.
Developing a new incentive system to
evaluate and reward its managers for
improvements in labor and
environmental standards among its
supplier base.
2 Increased Monitoring of Its Suppliers

All suppliers must meet Nike’s

standards for a clean
and healthy workplace,
respectful labor-management
relations, fair wages and working
conditions, and minimum
working age
2 Increased Monitoring of Its Suppliers

Nike suppliers are regularly

audited by external firms like
Ernst and Young, PWC
and various accredited non-
profits that specialize in internal
activities
3 Relations with International and Non-Profit
Organizations

Launched in 2000, seeks to promote corporate citizenship

among multinational companies
3 Relations with International and Non-Profit
Organizations

Companies join the Global

Compact adhere to set of core
standards in :
Reasons to Participate
in CSR Activities
Being boycotted by consumers in the 1990s, Nike was obliged
to response to the need of more ethical practices in order to
maintain its competitiveness in global markets.
Increasing company reputation by press conference which is apologise and
publish this news in various media
Nike’s Member Councils thought CSR more as an opportunity, innovation and
competitive advantage instead of a cost. So Nike believed that after CSR
campaigns Nike’s stock market value would boost up its price to attract and
corporate with more financial investors
In 2018, Nike’s revenue rose to 36.4 Billion dollars from 3.4 Billion dollars in
1992. (Approximately 11 times )
 The Impact Of CSR
Campaign On Stakeholders
THE IMPACTS OF CSR CAMPAIGN ON STAKEHOLDERS

CUSTOMERS ( TOP PRIORITY )

• Their interests include high

quality products and reasonable
prices

• The company addresses these

interests through significant R&D
investments
THE IMPACTS OF CSR CAMPAIGN ON STAKEHOLDERS

CUSTOMERS ( TOP PRIORITY ) COMMUNITIES

• Their interests include high • Nike Foundation supported the

quality products and reasonable empowerment of girls
prices

• The company addresses these

interests through significant R&D
investments
THE IMPACTS OF CSR CAMPAIGN ON STAKEHOLDERS

CUSTOMERS ( TOP PRIORITY ) COMMUNITIES

• Their interests include high • Nike Foundation supported the

quality products and reasonable
prices
• The company addresses these
interests through significant R&D
investments
empowerment of girls
• Active Schools & Youth Sports
program
• Allocating 1.5% of its pre-tax
income to support these
community developments
THE IMPACTS OF CSR CAMPAIGN ON STAKEHOLDERS

EMPLOYEES

• Providing fair compensation, career

development opportunities

• Focusing on internal leadership,

talent management through
coaching and mentoring, team
buidling
THE IMPACTS OF CSR CAMPAIGN ON STAKEHOLDERS

EMPLOYEES INTEREST GROUPS

• Providing fair compensation, career • Keeping the business

development opportunities
• Focusing on internal leadership,
talent management through
coaching and mentoring, team
buidling
sustainability, environmental
conservation
• Paying dividends annually and
regularly with optional choices :
cash and stocks
In those days the Internet was brand new,
but we began to see the power of
instantaneous information and new
communities enabled on a global scale.
We suspected that a new model was
being born – one that would tap into the
wisdom of diverse contributors, where
collaboration was more important than
proprietary secrets
Awareness and monitoring of any mandated Code of Conduct had to be embraced and
enforced at the local level.

Based on real business-based solutions driven by strong market signals.

We can’t do it alone. We need partners, collaboration from industry, civil society and
government
The real benefits of lean
manufacturing and human
resource management.
• Transparency is an asset, not a risk

• Collaboration enables systemic change

• Every challenge and risk is an

opportunity

• Design allows you prototype the future

rather than retrofit the past

• To make real change, you have to do it

drastically
• Sophistication of technology has to be increased

• Strictly enforce of no employ of child labor

• Strengthen the penalties of child labor found in Nike’s

Supplier Plants

• Legal minimum paid for workers, paid clearly to ensure

the level of equality

• Suspending the officer who found guilty of abusing

worker from work

• Tighten the standard of safety and health measurement

of the factory

• Benefits for welfare need to be implemented towards the

workers

• Enhance the communication from Nike with employees