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The global company chosen for analysis is a US-headquartered multinational known as Nike Inc. It is the global leader of athletic footwear supplies. However, it also engages in the provision of apparel, sports equipment as well as sports related-services such as training software.
The firm’s global supply chain spans across multiple countries around the world, with the largest portion coming from Asia. The US represents its largest market while several other western nations have shown considerable loyalty towards the company’s wares.
Ethical perspectives in the global organisation
As a manufacturing organisation, Nike must tackle ethical issues revolving around production of its goods. It must strike a balance between the cost efficient production of its goods as well as the fair treatment of its employees as well as its other stakeholders.
One issue of concern is the need to pay minimum wage to its workers. Nike does not directly create all of its products; it contracts manufacture to companies around the world especially in Asia (Nike Inc., 2012). As a result, the organisation must ensure that minimum wages are paid to workers and overtime is dully compensated.
Ethical issues revolving around the working conditions must also be taken into consideration. Nike is ethically obligated to provide its workers with the right working conditions. If they come in contact with toxic substances during production, then the firm would be violating its ethical obligations if it does not protect its employees. However, it must also consider the cost implications of doing this.
These are all challenges that most be addressed by the organisation. Employers must also treat workers with dignity without abusing them. However, this is a fine balancing act owing to the fact that Nike needs to reap value from its employees. It needs to ensure that they exploit their potential and exert themselves within reasonable limits.
Environmental concerns also play an important role in ethical dimensions of production within this organisation. Since it has manufacturing centres in various parts of the world, it needs to ensure that it does not contribute to the phenomenon of global warming through pollution.
Additionally, the company has an opportunity to be proactive about production, especially in the wake of recycling as a common phenomenon in manufacturing.
Workers’ age is a matter of concern for the company as well. Child labour is prohibited by most countries around the world. However, because Nike is global organisation, it may not always be possible to ensure that only adults are employed. If the organisation becomes complacent about this matter, then anti-globalisation groups as well as other human rights group may detect the practice and hold the company to account.
Ethical perspectives across cultures in Nike
Cultures across the world differ about the issue of child labour. While most governments officially condemn the practice, a lot more comes into play when dealing with the problem practically. Countries such as Cambodia are notorious for tolerance of this practice.
Furthermore, because Nike works with contracting companies in these locations, then it is relatively difficult to ensure that they comply with global conduct obligations. Countries like Pakistan often tolerate violation of children’s rights. Conversely, developed nations, such as the US, abhor child labour and would lobby against a company that engages in such practices.
Since Nike is a global organisation, its unethical, child labour practices in Cambodia and other Asian countries were reported in these western counties. Many consumers boycotted the firm’s products and aggressively talked about the issue. In essence, the company would probably have gotten away with employment of minors if it sold its products exclusively in those countries that abuse their children.
However, because it was a global organisation, then the strong commitment to ethical standards that pervaded most of its target markets had to come into play. The firm worked on reducing these practices across contracting firms because of external pressure. It strengthened its code of conduct so as to improve labour conditions in those areas (Nike Inc., 2012).
The issue of workers’ pay also illuminates challenges of going global. Various countries have different expectations concerning minimum wage and overtime payment. In countries such as Vietnam, employees were grateful that they had a job at all. They, therefore, accepted meagre payments from Nike’s contract factories in the company. Some of them only received $1.6 when the minimum wage in the county was $3.
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Many of the outsourcing countries also pay minimal attention to overtime work as it can be unduly compensated with minimal reinforcements.
Protests from international consumer groups and associations have demonstrated that global organisations, like Nike, can be affected adversely by simple consumers. The company has joined the fair labour association, which is designed to change labour practices in underdeveloped or developing nations.
The issue of working conditions has also dramatically affected Nike’s business practices. In Thailand and Vietnam, reports have shown that Nike used to expose its workers to hazardous conditions. These assertions were particularly disturbing because the company was a billion-dollar enterprise that was towering over its competitions. Some of the workers were exposed to toxic chemicals like isocyanates.
Additionally, many of them developed respiratory conditions such as asthma as result of those conditions. Furthermore, some of these contracting factoring abused their employers and subjected them to unfair treatment. In western cultures, such treatment of workers is intolerable. Therefore, several entities came up to speak against the practice.
Nike responded by providing face masks and gloves to workers who were handling dangerous chemicals. It realised that it was essential to create certain standards for its international partners so as to stay ahead of its competitors.
The firm increased transparency levels in its supplier factories by exposing company audits to the public. Ethical standards from different cultures applied to those contractors who cared little about workers’ rights (Birch, 2012).
The ethical standards that relate to environmental management have also affected the country, albeit in a positive way. Certain cultures expect their manufacturers to recycle or at least minimise their global carbon footprint. Nike heeded these warnings and adopted a proactive stance on the environment.
Most of its supplier factories implement the firm’s sustainability plan. This means that they track their material use and try as much as possible to minimise their effects on their surroundings. As a consequence, most of them now understand what it means to operate in environmentally-friendly factories.
Nike’s global supply chain and market has presented divergent ethical concerns to the company. In certain cultures it was permissible to pay workers minimal wage, default on overtime and pay minimal interest on their working conditions.
However, in other countries, this issue was so crucial to them that it caused buyers to boycott the company’s production. Nike had to respond to stakeholders’ pleas in order to save its corporate image. As a result, one can learn from this case study that cultures with high ethical standards in the global environment will often affect those ones in less-ethically inclined cultures.
Birch, S. (2012). How activism forced Nike to change its ethical game. Web.
Nike Inc. (2012). Supply chain public position. Web.