Case Study Analysis – Nike & the University of Oregon

Nike is a remarkable story about a company that emerged from partnership between two

individuals to becoming the largest athletic footwear company in the world. Nike built its market

leadership on a variety of principles, from its strong commitment to its contractors, its practices

in health and safety management, and its commitment towards how it ran its business, across the

world. Soon after Nike emerged as a market leader, negative publicity followed with a series of

news about Nike’s ill managed practices related to its labors, safety hazards, living standards and

working conditions. A large part of this negative publicity was played by the Phil Knight’s

announcement of the withdrawal of his pledge for the University of Oregon’s football stadium.

At the very same time, amidst the financial crisis in the Asian markets, Nike was negatively

publicized by human rights and labor activist organizations of engaging into malpractice through

treating their employees in derogatory manner, through long work hours, unsafe and unhealthy

labor practices, environmental safety and issues of labor wage. How is Nike contributing for the

betterment of its employees in the regions in which it operates? Is Nike paying its employees

well above or well below the minimum wage, as advertised and publicized by labor activist

organizations? Labor issues have long been part of the problem in every organization that shifts

its operations from one place to another. The same problem followed when Nike shifted its

manufacturing units from one region to another, along with same owners and managers operating

in the previous region to forge even greater relationships with them. Eventually, some animosity

existed between the Vietnamese workers and their Korean and Taiwanese managers that gave

rise to the issue. For the resolution of this issue, Nike extended its efforts in lots and lots of ways

to induce the feelings of positivity, trust and privilege being associated with the company

through a variety of actions, some of which are:

1. Encourage strict adherence to Nike’s policy for human capital management, the

regulation of which can be performed by periodic audits, snap checks and press

inspection of its manufacturing sites across different parts of the world to ensure that

these standards are uniformly followed.

2. Communicating code of conduct to all employees by printing small pocket-sized cards to

enhance their performance by telling that they are an important part of the company

3. Conducting independent monitoring and audits, using help and assistance from

recognized authorities in their disciplines and work areas.

4. Encouraging diverse culture, through dedicating a specific quota for hiring female

workers at different sites. Fair practices should be ensured with complete disregard to

race, gender, creed, ethnicity, or personal preferences.

5. Allow for “open” as well as “anonymous” communication for all employees, by

facilitating an intranet based website, enabling employees to whistle-blow on any

malpractice in the organization.

6. Encouraging organizational citizenship behavior by engaging employees into

collaborative decision making and focus groups on different company issues, especially

introduction of new policies and procedures.

7. Paying its employees well above the minimum wage to encourage positivism in

employees towards the company.

These practices can be monitored and enforced using a variety of mechanisms:

1. Collect anonymous feedbacks from employees about their managers

2. Carry out surveys on wage management structures followed in the region where Nike

operates.

3. Apart from regular external audits, Nike should carry out unannounced internal audits as

well to ensure its fair labor practices are appropriately enforced.

Nike has long been haunted by the curse of not being able to mass market its standards globally

wherever it operates. Since Nike owns subsidiaries as well as has forged long-term relationships

with same contractors operating in now different regions of the world instead of where they used

to operate before, this has become increasingly challenging for Nike to control its practice of fair

labor standards, regulations that ensure that employees are not made to work extra hours, or

through forceful engagement of children to work in their facilities inducing negative feelings

about the company. Nike has faced lots of accusations on its control over employees working

under different contractors in Asian regions specifically where regional enmity exists at large. In

order to resolve this issue, Nike had to take on a variety of changes, from the inception of a new

division, the recruitment of a new labor division manager, overall communications structure of

the organization.

Works Cited

CSR and Business Strategy with Nike. (2007, June 05). Retrieved April 16, 2009, from World is Green:

http://worldisgreen.com/2007/06/05/csr-and-business-startegy-with-nike/