Professional Documents
Culture Documents
CORPORATE SOCIAL
RESPONSIBILITY
Designing and Financial aspect of CSR at
NIKE
About Nike
Nike Inc produces footwear,
clothing, equipment and
accessory products for the
sports and athletic market. It
is the largest seller of such
garments in the world. It
sells
to
approximately
19,000 retail accounts in the
US,
and
then
in
approximately 140 countries
around the world. Just about
all of its products are
manufactured
by
independent
contractors
with footwear products in
particular
being
manufactured in developing
countries. The company
manufactures
in
India,
China, Taiwan, Korea, and
Mexico as well as in the US
and in Italy.
Nike has become one of the global companies targeted by a broad range of
campaigning NGOs and journalists as a symbolic representation of the business in
society. In Nikes case, the issues are those of human rights and conditions for
workers in factories in developing countries. In the face of constant accusations,
Nike has developed a considered response, supported by corporate website
reporting. It now has a well developed focus for its corporate responsibility on
improving conditions in contracted factories, aiming for carbon neutrality, and making
sports available to young people across the world. The criticism continues, however.
In India:
o
Collaboration with Magic Bus: Nike has partnered with Magic Bus to
build awareness and develop life skills of children through sports.
manufacturing units. Nike spent around ten million globally to improve its
supply chain.
Although Nike its showing its trying to improve its supply chain it remains
one of the biggest challenges for Nike to implement, so now well focus on this
problem and will recommend changes for the same.
The Global Alliance report on the factories in Indonesia gave the following
workforce profile: 58% of them are young adults between 20 and 24 years old,
and 83% are women.
95% of the workers in the nine participating factories have received pay or
wage increases in the last year, consistent with government minimum wage
increases, and with small exceptions the bases wages in these factories are
above the regions minimum wage although critics would observe that
doesnt add up to a great deal.
Nike has around 700 contract factories, within which around 20% of the workers are
creating Nike products. Conditions for these workers have been a source of heated
debate, with allegations made by campaigns of poor conditions, with commonplace
harassment and abuse. Nike has sought to respond to these allegations by putting
into place a code of conduct for all of its suppliers, and working with the Global
Alliance to review around 21 of these factories, and to pick up and respond to issues.
In Indonesia, the following was reported: 30.2% of the workers had personally
experienced, and 56.8% had observed, verbal abuse. An average of 7.8% of
workers reported receiving unwelcome sexual comments, and 3.3% reported being
physically abused. In addition, sexual trade practices in recruitment and promotion
were reported by at least two workers in each of two different factories, although a
subsequent investigation was unable to confirm this. 73.4% of workers are satisfied
with their relationship with direct line supervisors, 67.8% are satisfied with
management.
Far and away, the main concerns expressed by workers relate to their physical
working environment.
A further report has been produced relating to a site in Mexico, which has
experienced serious problems leading to labour disputes. In both cases, Nike
responded to the audit reports with a detailed remediation plan.
Nike should look to monitor working conditions in factories that produce their
products
even
more
strictly. For
example:
During the 1990s, Nike installed a code of conduct for their factories. This
code is called SHAPE: Safety, Health, Attitude, People, and
Environment. They spend about 10 million dollars a year to follow the code,
adhering to regulations for fire safety, air quality, minimum wage, and
overtime limits. In 1998, Nike introduced a program to replace its petroleumbased solvents with less dangerous water-based solvents. A year later, an
independent expert stated that Nike had, "substituted less harmful chemicals
in its production, installed local exhaust ventilation systems, and trained key
personnel on occupational health and safety issues." The study was
conducted in a factory in Vietnam.
Nike should develop a program to deal with claims of unfair practices. Nike
claims to have hired a staff of 97 people to randomly inspect several hundred
of their factories each year, but these officials need to be well trained and
claims must be documented.
These monitoring processes might be rigorous, but they are often woefully
incomplete are filled with loopholes. Nike must make a more foolproof system
and try to update their list of allowed contractors and subcontractors as often
as possible to make sure that no overtime is enforced on workers or no illegal
subcontracting is done.
Conclusion
Thus we can say that Nike being one of the biggest companies in the world and also
one of the most sustainable ones when compared to others, if could improve its
labour practices it might become the one of the leading companies to bring about a
great change in this world and become CSR leaders in the world.
References:
http://allfamousthings.blogspot.in/2013/04/how-much-it-cost-to-design-thesefamous.html
http://www.indiacsr.in/en/?page_id=1775
http://nikeinc.com/pages/responsibility
http://www.nikeresponsibility.com/report/
http://www.mallenbaker.net/csr/CSRfiles/nike.html