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Essay on Nike

Essay by   •  April 6, 2011  •  Essay  •  432 Words (2 Pages)  •  2,588 Views

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Nike was a success in the corporate world for three decades. They were able to predict and market fashion trends that their customers wanted. By the 1990's they had put many factories in Indonesia for lower wages and costs that would benefit this company. Soon after starting these operations in Indonesia the country had large amounts of strikes across the country. Also, around this time a man named Jeff Ballinger was involved in bad press that Nike received for the abusive labor practices in Indonesia. Ballinger interviewed and observed working condition over many plants. He claimed that Nike had 17,000 violations in Indonesia and only 12 were taken seriously and the rest were bribed. Also, Ballinger noted that the wages paid to workers was extremely low compared to the contract Michael Jordan had with Nike at the time. It would take one Indonesian worker 44,492 years to make what Jordan made. This took a big hit on Nike and its reputation.

Eventually, because of this information, the Indonesian government raised the daily wage for workers to try and help the low wages workers receive from outsourced companies. Ballinger published continuously in Harper's Magazine, Life Magazine, Business Week about Nike's practices including, low wages, child labor, and much more. This caused President Clinton to start a task force to study this issue closely. Nike started a Labor Practices Department in order to carefully watch for fair labor practices throughout the company. This shows Nike is making an effort to make things right again. In 1996, Nike hired Andrew Young to evaluate their Code of Conduct and he recommended that they fix a few things and pay attention to complaints better. This showed that Nike was truly trying to change for the better for their employees worldwide.

However, in 1998 Nike had a huge downturn by low demand and too much supply. Phil Knight decided to lay off 1,600 employees to restructure the company. Knight also raised the minimum age for workers, OSHA clean air standards in all factories, monitoring and educational programs, and loans for employees. Knight responded to the critics quickly after admitting to labor violations. I would have responded to the public much sooner rather than wait for the rumors and critics to damage the Nike brand name. Going forward I would recommend Nike to keep an extremely tight reign over all labor practices worldwide in their company. Continually teaching and enforcing the Code of Conduct and all business regulations throughout the company and regularly checking up on these things will help Nike to stay away from a horrible problem like this again.



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