Business ethics is one of the top issues which is also the most misunderstanding issues in todays business modern culture. In the last many years, business ethics becomes a problem appealing to a great deal of attention when the competitive situation is more challenging than before. Society always desires companies to produce high-paying jobs and protect the environment. But on the other hand, these companies want to reduce costs incurred to adhere to environmental rules in the productionand improve labor output. And Consumers desire to buy the least expensive price. From this arises the inevitable conflict in the idea of business ethics that called "ethical problem" scheduled to variations in the passions of businesses between stakeholders and shareholders. Just like others, Nike; a sport clothing produce; also faces some ethical dilemmas that they have to solve them ethically basing on appropriate ethics theory and interests awareness of stakeholders in the business.
II/ What's ethics and why ethics play an important role in decision making process.
According to Crane and Mattern, Business ethics is the analysis of business situations, activities, and decisions where issues of right and incorrect are addressed. This idea is really important and brings a tremendous value chain for companies. For the media, make good business ethics to help businesses improve their public image - a significant turning point in the branding. Because of no scandal devotion, the value of shares can maintain stableness. Furthermore, the prestige of corporations will be improved. As the consequence of it, the business enterprise can get more investments from inside and external interactions. In addition, joint endeavors happen all the time. They happen all the time because they're ultimately of great importance to underneath lines of businesses. An enterprise can be produced or destroyed on just one single jv and part of the reason that joint endeavors are successful is that they combine the causes of two extremely powerful companies sometimes. A business cannot do well in jv if they didn't do ethical procedures.
IV/ Nike's background
Despite its almost 40-time record in USA, Nike is a favorite sportswear & sneakers brand in 180 countries. Besides, Nike also offers the history from the stretch until today and it's so popular across to consumer brain in many countries (About Nike INC, 2011). Nike has begun on 1960; it was founded by Charge Boweman&Phill Knight on 1960. Nike was associated in shoes or boots, sportswear, clothes of golfing and team even on 1972 as yet. Alternatively, Nike also exports to Japan, Malaysia, Singapore, and UK. At present, Nike is a higher standard of design and good quality brand on customer mind (Nike INC -Record & Traditions, 2011). - Sample
V/ Nike's Stakeholder analysis
Every decision of the mother board is damaged by the affect of external and internal environment and it influences directly to the target, mission or the effect outcome. Relating to http://www. pmhut. com, "stakeholder examination can be an important way of stakeholder identification and examining their needs. It is used to recognize all key stakeholders who've a vested involvement in issues with which the project concerned". This is a good tool for Nike to analysis their ethical dilemma for the best solution.
When unethical practice happens, there were several unwanted effects on Customers. It has made a massive boycott of the community for Nike and customers felt unethical when using Nike products. It happened when a child in US was attacked because he wears Nike's shoes in 1990 In addition, there were 14-year old youngster in a low price apartment was beaten to unconsciousness and was left on the subway songs just because of shoes Nike's Air Jordan at his legs (icolor. vn, no night out). Due to it, the company will meet difficult in their business strategy beforehand.
Secondly, shareholder is another term that Nike needs to consider. When information of unethical practice broke, talk about prices of Nike will dropped down. Such negative publicity has possibly led to decrease in shareholders' confidence in the company's ability to take care of situation, which led to a drop of the talk about prices. In 1992, income of Nike reduced 40%. (Investment survey, no time frame). Moreover, the relationship between Nike and college or university of Oregon became bad because the university or college joined Worker Rights Consortium (WRC) to against the firm. Following of this is the objections of other colleges in US. (Multiply journal, no time)
Finally, the term romantic relationship between Nike and company also has some impacts. The majority of products of Nike are created by raw materials that are given from expanding countries because Nike can have more profits with cheap material supply. But, the primary point is Nike can be inspired from unethical techniques of some suppliers. For example, company can do offer a best price of natural material because they tighten up interests of staff. One more thing, cheapest is dearest. Nike may face a threat of quality of these products.
VI/ Nike's honest dilemmas. ( this is 3. 0 part)
Every business has its own dilemmas. Nike is a global firm that has branches and factories around the world with thousand employees and many suppliers. So, honest dilemmas are issues that Nike has to face each year. However, the main ethical problem of Nike is whether to put the firm's benefits prior to the personal well-being of the employees.
A/ Nike has a poor environment for workers
Nike is facing the same dilemma of Foxconn, one of partner manufacture of Apple's product, is poor environment for staff. This indicates clearly by the protests of Vietnamese. Regarding to "Vietnam Communicating Point", in Apr 2010, a large number of Vietnamese Nike manufacturer workers continued strike due to poor working conditions and low wages. Actually, this happens about the world where Nike factories are located. Due to keep low costs as you of completive advantages, Nike did not pay attention to the rights of workers. Due to it, a influx of protests has affected the image of the business and for a long period, Nike was thought to be unethical company. Regarding to Australia Tv Station record on july 2008, the workers uncovered that the living condition is unacceptable. "Housed in dormitories with overcrowded sleeping quarters, unhygienic bathroom facilities and poor kitchen sanitation" is the reality they are battling. Beside this, the employees are also suffering from violence situation in the workplace. "Nike employees are 'kicked, slapped and verbally abused' at factories making Converse" is not only the title of Mail online article on 13 July, 2011, but also what staffs are coping every day. Inside the manufacturing plant, employees are treated in a humiliating. Applying Utilitarian theory to justify, this idea is attaining good end result but poor environment situation and consequence leads to workers no pleased to work. Beneath the view of egoism theory, employees contain the right for their dignity. Nike has wrong action scheduled to provide a poor management to employees.
B/ Nike is a sweatshop, paid low wages and extreme time.
The second concern is Nike paid low wage and to increased time to worker in developing countries, such as China, Vietnam, and Cambodia etc. Nike is a sweatshop against by large people in developing countries. Sweatshop means that, employees are paid by low wages and work with extended hours. In Vietnam, a few staff explained that the 4000 VND ($0. 21) dishes weren't sufficient or healthy enough to maintain effective work. Even after 5% upsurge in wages, employees were still unsatisfied (Jennie lee, 2010). Applying Utiliatism theory, Nike does the proper way because the business contributed to lessen unemployment situation and boost the current economic climate. Under a view of big picture, Nike's action contributes to a lot of great benefit to a country and it is a possible moral. However, in micro aspects, the employees aren't satisfied with the salary and they may harm the company scheduled to low production. Besides that, the theory is failed when checking it to the essential guidelines of international labor firm in which "The rules of the global economy should be aimed at improving the privileges, livelihoods, security, and opportunities of individuals, families and neighborhoods around the world. " (International Labourorganisation, 2011). , Nike feels sorry for issues they triggered.
VII/ Nike Solution for the Ethical Dilemmas. (this is part 3. 0 part)
The action must be taken when the dilemmas arise. It's important in order to make sure that the business will not encounters any issue in future that may give a direct effect towards the business. To solve the ethical problem, it should be better to perform a remedy that brings a major value to the company. For the problem of poor environment, this problem is very important because it has direct impacts on not only the quality of products but also the trustworthiness of Nike. In case there is sweatshop issue, this matter is associated with non-profit business of human protection under the law such as FLA (Fair Labor Association) and it could make negative influences onward to Nike's stakeholders. To handle these issues, Nike has appropriate approaches for internal and exterior environment. Initially, Nike conducted an interior review among staffs based on the "satisfaction pyramid" to carry out "worker satisfaction chart" as below:
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Via this chart, Nike set up the "Code of Do" (Appendix) to drive individual factory abide by it. Nike requires suppliers to pay staff at least the neighborhood least wage and any extra benefits discussed in individual staff contract or collective bargaining arrangement. A remediation action will be made for just about any factories do not meet up with the standards. This problem is to be sure employees get their benefits and boosts working conditions.
To enforce conformity with "code of carry out", Nike do monitoring teams located in 21 countries to keep an eye on these partners. As long as with the establishment of "SHAPE", inspection of basic picture of labor, environment, safe practices and health standard. Next the first is "M-audit" that delivers in depth assessment of the labor management techniques and working conditions at the stock. And the previous is "FLA" with the work of unannounced inspections of company factories. When gathering all the result from these groups, Nike started out grading systems (A-D) (appendix) for almost all their suppliers. This class reflects all the information about genuine situation of working conditions. Via this, the company will have appropriate answers to prevent unethical issues.
With solutions above, Nike not only increases the image of the company but also to increase the issues that stakeholders are facing. At first, by using the end result data from the clubs, Nike can control well the operation and can answer 3 questions that are "how good or bad will work conditions among Nike's distributor? "Should the data reveal variation in working conditions among Nike's dealer?, "are working conditions improving as time passes in factories?". Once the working condition was increased, personnel will have critical change of positive thinking to the companyand they will be the considerable resources in persuading the advertising to and they'll be the considerable resources in persuading the press to get rid of negative thoughts about Nike before and instead is anethical company. Next, the organization can evaluate the success of the renovation. Some factories look like in or close to full compliance with Nike's code of conduct while others may actually suffer from persistent with wages, work hours and health, safety issues.
Another Nike's reaction is a 12 minutes recording video tour of its contracted shoes facilities in Vietnam. In addition, it produced video films of its factories in Indonesia, Thailand, and China. Via this activity, Nike wanted to convey a message "an wide open company with safe working environment, clean, happy and satisfied individuals. " Although this action had some positive impact, it isn't enough to persuade the advertising because the correctness of information is not high.
Viii/ Best practice and Value. (CSR) (this is 4. 0 part, now understand ha, cute beautiful blah blah blah woman.
In order for the business to take advantage of business ethics in the improvement of these brand image, it'll be important to target more on the improvement of the surroundings, sociable condition as well as individuals resource. First is the fact that it will be important to focus on the different activities that will help the company to improve their organizational personal information and workplace image. This is because of the truth that it has a great impact towards interested stakeholder if the business will have an image of great workplace which gives good working environment and benefits. In addition, it will be important for the business to focus on implementing more jobs or programs that will give attention to the hobbies of the junior; it is because of the truth that the principal target market of the business is that human population. The business must focus on the aspect of education by giving different scholarship and tutorial jobs. Above all, it will be important for the business to focus on the hobbies of the whole community about the environment.
Children play an exceptionally important role for Nike in the execution of the aforementioned objectives. In CSR activities, the junk food company, Mc Donald, is one of the successful companies in the execution of this concern. One of their famous CSR is the function of the title "UNICEF, McDonald's and Ronald McDonald House Charities Synergy to Raise Money for Children" (Csrwire record, 2012). Unicef is a sizable and prestigious corporation on the world in social activities. Mc Donald do a very good job in working with organizations to improve their image and Nike should follow Mc Donald to achieve the best value associated with this firm. Nike can corporate with UNICEF to perform appropriate CSR that related to children like: account to school, charity for children, education, children protection, poverty reduction, children health careetc.
PepsiCo is one of the top companies to contribute to disaster pain relief in Haiti in the quantity of up to $ 1 million (Csrwire survey, 2012). In case of Nike are faced with images is an irresponsible company with people, Nike can learn follow PepsiCo in disaster comfort will greatly contribute to increasing the firm's image.
IX/ Suggestion.
The managing director of the Nike should plan to visit those of the factories always in expanding countries. For instance, visit the factories to ensure not any child labour work under unlawful age, to make sure no poor environment condition on expanding countries. Besides that, technology nowadays have minimizes the issues caused by long distance marketing communications. Video phone calls, telephones can be easily available to director to communication with the suppliers and company.
Second, Nike could be hires controller(s) to help monitor the business, help to organize the various departments, reducing the issues and mistake between your employer and employee. Controller is also accountable for the quality of the merchandise to ensure that the material meets the product quality standards, Check on the manufacturing process, such as the kind of skills and control the types of materials.
Last but not least, Nike has fixed some problems start from the 2007 to 2009, also low wages still occurring on some expanding countries. Nike could follow the nationwide minimum pay rate to ensure that employees paid by enough wage and search some information of salary before they setup the factories in producing countries.
Conclusion
Nike was the first sports activities organization to give the titles and the addresses of all the factories that they get products from. It has allowed the nonprofit organizations to check on up to ensure that the working conditions have better and all laws have been take part in to consideration when hiring staff for the work. Nike must do some CSR to make people around feels pleased by aiding the Nike's activities. In addition, any dilemma that occurs during the business activity should be settling down properly in effective and reliable way to be sure that individuals around feels appreciated and not been a sufferer of circumstances. In conclusion, Depending on each of theory that is utilized to evaluation, it is named that honest or unethical. For Staff member, their need is ethical because of theory of egoism. On the other hand, Nike's action is right due to ultilitarism. Right or wrong is not important; the important is Nike need to balance benefits of both factors.
