“Greeks say when we go to battle and win,we say it is NIKE” INTRODUCTION TO NIKE • Est. in 1960 in Oregon • Phil knight and Bowerman- founder • Started small and now has covered U. S and international markets • Nike is now one of the biggest mfd. Of the world BACKGROUND • Most of the factories are located in Asia including Indonesia,China,Taiwan,India Thailand,Veitnam,Pakistan ,Philippines and Malaysia • Nike outsourcing contracts around 500 factories in 45 countries. Nike currently controls more than 45% of the US sportswear market.
Background cont. • The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight’s automobile. • The company’s profits grew quickly, and in 1966, BRS opened its first retail store, located on Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. ANALYSIS OF CASE STUDY • Child labour • Not satisfying customer needs • Ignorance of mkt. trends Accusations
In 1996-1997, Nike was accused of labor violations and human rights abuses in foreign countries (mainly Asian). Contrary Evidences • Thousands of mostly young, female workers in Southeast Asia (Indonesia, Vietnam, China) were being exposed to reproductive toxins and suspected carcinogens. • Some workers were not earning a “living wage” even though they work oftentimes 12 to 14 hours per day. • Nike workers in Southeast Asia have suffered corporal punishment and corporal abuse. • Nike young female workers have suffered sexual harassment. Nike workers in Southeast Asia have been forced to work overtime in violation of applicable laws. Core issue of Nike NIKE PRATICES CHILD LABOUR • Children are not only the easiest to intimidate, they’re also the cheapest workers. Twelve-year-old Tariq, one of thousands employed in Pakistan’s soccer ball industry, which produces five million balls a year for the U. S. market, stitches leather pieces in Mahotra. He earns 60 cents a ball, and it takes most of a day to make one (Schanberg, 1996: 38).
Silgi is only three. Her hands are so tiny she can’t handle a scissors. But she started stitching soccer balls recently to help her mother and four sisters. Together they earn 75 cents a day working in their shanty home in Jullundur, India (Sidebar to Life Magazine Story, p 41 NOTE: There is a photo (Source) of a young girl dressed in town and soiled clothing next to the soccer ball clutching a needle and thread. The needle is longer than her fingers. • CONSEQUENCES Nike executives have been targets at public place • Students have pressed administrators and athletic directors to ban products that have been made under “sweatshop” conditions • In 2002 an individual sued Nike, alleging that the company knowingly made false and misleading statements in its denial of direct participation in abusive labor conditions abroad. REMEDIES • Nike defended, through corporate news releases, full-page ads in major newspapers, and letters to editors • Nike gave $1. million to the Washington D. C. based Fair Labor Association (FLA) • In 2003, company employed 86 compliance officer • But stigma of past practices remains emblazoned on its image and brand name. Nike’s Responses • Nike responded with… – Press releases – Letters to the newspaper – Personal letters to university presidents and athletic directors – Campus Visits – Independent audit of factories – Speak at conferences COMPILED BY AKRITI JHA DEEPTI SINGH TRIPTI SINGH