Nike, a manufacturer of shoes and related goods was founded in 1972 operates as contracting factories in Taiwan and Southern Korea. It has been faced with lobbies for improved wages and employees’ rights to be in labor unions due to its working environment. Nike then moved its sizeable part of production to countries, which illegalizes workers from joining organization and one of the poorest in terms of wage rates such as China, Indonesia, and Vietnam. Various accusations and allegations have been put forward accusing Nike manufacturers of using Sweatshops for its industry. Many Nike factories across the world have been accused of child labor, poor wages, forced overtime, physical abuse by management, and exposure to hazardous materials, harmful situations, and extreme temperatures. Nike factories have been accused of promoting sweatshops, where employer violates labor laws and regulations alongside undermining human rights, life, and dignity (Hill, 2009).
It is a fact that Nike manufacturers have faced a number of challenges especially with the Sweatshop debate. The most profound challenges, which have faced its global businesses, include legal, cultural, and ethical challenges. Nike has been seen to flout legal laws and regulations pertaining to labor force. Nike industries have violated child labor laws by employing children below maturity age. It is an offence to employ persons of tender age to work for individual gain. The industries have also violated laws on wages by paying amounts below the set minimal wage. They also expose employees to poor working conditions and forced overtime, which is legally unacceptable. The manufacturers have contravened the Universal Declaration of Human Rights (UDHR) by not adhering to the set international standards on human rights and labor laws (Hill, 2009).
The company is also facing cultural and ethical challenges of not meeting the expected community standards. Culturally, they do not respect human dignity and have offered wages below culturally accepted living wage. Ethically, they have received inadequate press for failure to respect humanity by using people as tools while disregarding their interest (Hill, 2009). They have been criticized for taking advantage of overseas workers and risking their lives. They pay the minimum wage, which is far much below the recommended living wages; thus, making workers live pathetic life. They moreover expose workers to hazardous environment with no protective devices; thus, risking their lives. They also disregard workers’ health by not transferring workers with skin or respiratory problems to other departments free from chemicals. Its industries have been scenes of unsafe conditions at the expense of profiting themselves. In addition, it has been a symbol of evils of globalization, for its disregard to healthy working environment and no adherence to global standards of labor in their overseas factories (Hill, 2009).
With these challenges, the host governments have tried to intervene in the business operations of Nike manufacturer. The host governments across its regions have enacted local laws and regulations relating to labour that must be followed. These laws stipulate how employees would be registered in host countries or incorporate acceptable systems for better treatment. It prescribes expected standards to be met and what amounts to violation of employee’s rights. They have also domesticated international laws and ratified treaties ensuring proper labor regulations. These have ensured employee’s rights, such as forming and joining organizations are respected. They have also liaised with the manufacturers in implementing their action plan to deal with the problems cited within the industry. The host government has also been involved in auditing and overseeing factory operation. They also make reports on discrepancies noted and methods used in conducting research. They also assess Nike’s sub-contractors working conditions to ensure observation of legal, safe, and ethical business practices as well as monitoring operations of sweatshops. These governments work with labour and civil unions to ensure employees’ rights are respected through provision of standard working conditions. Global managers of Nike manufacturers face strategic and operational challenges in its operations. These are issues faced by the manufacturer when planning and strategizing on how it will run its businesses. Manufacturing process, on the other hand, faces operational challenges, which makes the whole production process inefficient in terms of finances and time (Hill, 2009).
The manufacturer should always be at par with the ever-changing operations practices and strategies. This will enable the company to operate smoothly in the global business environment where different rules and regulations within host nations are established and implemented differently. Every subcontractor should abide by the laws of the host country. Operational challenges are also encountered on the way to ensure exemplary international monitoring system within the industry. The other strategic issue encountered by the organization is through employing an external firm to develop precise accounting reports since the output should not just be exact but confidential. The issue of selecting a country to establish another branch is both an operational as well as strategic issue to Nike manufacturers. It is apparent from the foregoing that every business entity whether conducting business in its home country or overseas regions should at all-time provide favorable working conditions and considerations for its employees. This will also boost employees’ morale for maximum production (Hill, 2009).
Reference:
Hill, C. (2009). International business: competing in the global marketplace. New York, NY: McGraw-Hill/Irwin.