Nike’s Corporate (Ethical) Values
Nike is an international company that is well known for the sale of sportswear for a long period. It makes athletic things, which includes; shoes, equipment, apparel and accessories. Nike was founded by Philip Knight and Bill Bowerman in 1962 at Oregon, United States. It grew and expanded to currently whereby it has factories in most Asian countries(FRISCH, A. 2009).Nike has experienced a lot of troubles in the past in regard to the ethical values of the company. In the past, Nike did not give substantial attention to maintaining high ethical standards in its operations and service delivery. It has been abusing and not regarding the workers’ rights thereby, disregarding the United Nations Global Compact Principles. In addition, Nike has failed to work in line with the theories of ethics, for instance, the ethical theory whereby it’s supposed to create good relationships with other parties. It portrays less achievement concerning values of ethics which are; honesty, integrity, responsibility, respect, and compliance among others.
An ethical company should contain good values and well structured set of rules according to which its workers and partners should always comply to when executing their duties. This must be designed in such a way that they comply with the universal, socially accepted code of conduct. For example, the compliance with the human rights laws and regulations, anti-corruption laws, United Organizations’ acts and business regulations among others. The company should be able to involve all the stakeholders in formulation of their decisions to avoid opposition during implementation by some stakeholders. Nike has been experiencing riots among its employees due to lack of good communication and involvement of the employees in formulation of important decisions. Therefore, Nike due to its failure to portray high ethical values and virtues it’s not an ethical company
Corporate ethical Values
An ethical company should be able to create an environment that is free from discrimination and unlawful harassment for its stakeholders, whereby, employees are provided with channels through which they air their grievances. The organization is supposed to treat other parties as it may desire to be treated, listen to what the stakeholders are raising and always include all the involved stakeholders in coming up with the key decisions in the organization. Nike for years has failed to honor its key stakeholders primarily the employers.
For example after Nike purchasing the Converse Company, in 2011 workers from Pou Chen factory situated at Sukabum in Indonesia really exposed how they were abused by the company management. They said that they experienced physical abuse and mental harassment within the factory. The physical harassment involved kicks slaps and scratching while the mental abuse involved calling them names like pigs, dogs and monkeys. It’s reported that a woman was fired because she decided to share her opinion that opposed the management. This is a high level of disrespect to its employees that can even lead to the company being sued and suffer legal penalties. Nike acted against the UN Global compact principle one and two by abusing the rights of the workers (“Ten Principles | UN Global Compact,” n.d.). Therefore, Nike’s failure to exhibit respect for its employees’ rights eventually disqualifies it from featuring among the ethical companies.
Compliance with laws and regulations
Adhering to regulations and laws is another ethical value that every organization should consider when carrying out its day today activities. Majorly, the regulations that involve protection of human rights should be highly adhered to (BENNETT, C. 2003). The companies should comply with international laws that involve protection of human lights like the United Nations Global compact principles. These principles were formulated to guide the operations of various organizations concerning creation of a conducive and sustainable working environment. Principle one and two involves human right protection. They states that every business entity should respect and support the protection of the significant international rights and ensure they don’t abuse human rights in any manner. Companies should create strong internal control systems that keep constant checks on how the rights of employees are protected from the wrath of harsh management officials (“Ten Principles | UN Global Compact,” n.d.).
The past acts of Nike are in most cases against the rights of its stakeholders. This can be portrayed from the ethical dilemma that Nike has been through for the past years. The issues that involved Nike using child labor in their factories were suppressing the rights of children. This was unethical and unfair to the society. According to the international children rights, children should be free from labor. In addition, the working conditions for employees were poor and they were subjected to forced labor in the factories. In consideration of all these acts, which do not comply with the rights of stakeholders, Nike can eventually be termed as unethical (“Ten Principles | UN Global Compact,” n.d.).
Environment safety and health
Organizations are expected to provide a health and safe environment for all the stakeholders involved in its operations, which primarily are the employees, customers and the society surrounding the company. The management of Nike currently is working hard to minimize the effects of their businesses to the environment using economical, scientific and socially based methods. Nike, in the past has been associated with environmental pollution through emission of carbon dioxide from their factories, production of products, which contain low sustainability indexes, and discharging of hazardous chemicals to the environment. All these actions endanger human life within the factories and the surrounding environment. The company ends up making a bad relationship and image to the society. This will highly affect its operations as these people are the same who offer the company with crucial aspects like labor.
In reference to United Nations’ principle number seven, eight and nine; they all lie under safety of the environment. They outline that the business entities should initiate a precautionary methodology to environmental problems, promote environmental responsibilities through initiatives, and encourage the development and application of technologies that are environmentally friendly. Currently Nike is formulating strategies, which are aimed at totally minimizing its effects on the environment (“Ten Principles | UN Global Compact,” n.d.).
In order to achieve high ethical standards, an organization should exhibit a high quality of honesty and carry out its operations along with the accepted morals in the society. Therefore, companies should show honest to other people with intent of creation and maintenance of trust. However, building trust is a very difficult part because you will use a lot of nice acts to build it, but only one bad to lose it. In other words, they should create a clean image concerning how they secure their contracts and other day today endeavors. In addition, organizations should create a consistent and strong moral code of conduct. This enables companies to maintain and get new customers.
In the past years, Nike has been regarded to be dishonest and carrying out its operations without considering the morals of the society. This ultimately makes the company to be viewed as one which doesn’t consider integrity in executing its duties. Although it practices honesty in some of their operations, it has been associated with some actions, which are considered immoral in regard to the accepted code of conduct within the society. For example, the case of Sweatshops whereby, Nike was blamed for misusing the efforts of some individuals in form of labor who were poorly paid (BALLINGER, J. & OLSSON, C. 1997). In addition, the use of child labor is considered immoral and therefore Nike doomed to be a company, which doesn’t exercise integrity in carrying out their practices.
Businesses should use part of their profits in supporting various initiatives that are meant to benefit the society. Companies should be socially responsible through practicing favorable and friendly environmental use. This can be achieved through avoiding pollution, philanthropic practices which involves donating to charitable institutions and operating within ethical labor policies. By so doing, they create sustainability and a good image in the public within the environment in which the company operates (HAERENS, M. & ZOTT, M. 2014). This provides a company with a market advantage which in turn will promote its sales and eventually the returns. Nike among other companies has tried to enhance sustainability through various innovations which enables it to produce products which will not have diverse effects in the society and its environment.
As far as an organization will be committed in social responsibility programs, it should ensure that it is delivering within the accepted ethical values such that parts of its activities that may not be ethical do not dominate over the good ones. Nike being one of the organizations has been engaging in social responsibilities although not to the required standards, but some of its activities like not taking into account the laborers welfare has dominated over the good deeds that it has done. Therefore, Nike should rectify its drawbacks as far as ethical achievement is concerned in order to fully associate itself with social responsibility in the society to avoid being considered from both the good and bad perspectives.
Quality of products
The quality of produce really matters as it directly affects the customers. An ethical company should commit itself in application of high technology to produce high quality products which will not have a negative effect on the users. In addition, they should sell products, which are quality worthy to the prices that they set for such goods. The quality of goods should always match with what the consumers want in the sense that the products can suit best the purpose they are supposed to serve. This will create a good relationship between the customers and the company, which definitely will increase the overall returns of the company (MOON, C. 2001).
Nike like any other company has been engaging in innovations and use of modern technology to create high quality materials in form of shoes and other sport equipments in order to promote sustainability. In consideration of their vision it clearly outlines that they are committed in helping the company itself and the consumers to achieve a sustainable economy where satisfaction is achieved. This is a good plan in that, the products that it produces do not develop negative effects to both the consumers and the environment in which they are being used. Therefore, Nike’s quality of products in most cases match with what the consumers need although not fully environmental friendly. They should improve the quality to the extent of not harming the environment in anyway.
Transparency and anti-corruption
Companies should make their information and books of accounts relevant, accessible, timely and accurate in case they may be need for a given audit. They should be ready to be answerable for their actions and definitely defend themselves. Nevertheless, they should not engage in corrupt practices in executing their duties. In reference to the United Nation’s principle number ten, it states that businesses should carry out their operations in a corrupt free manner without extortion and bribery. Corruption is considered as a big challenge, which is responsible for hindering the achievement of sustainable development.
Nike at the moment is being associated with a corrupt case which is involving FIFA in its allocation of contracts. Nike is facing allegations that it bribed the FIFA officials in the Brazilian Football Federation (CBF) in order to secure a ten-year contract of providing Brazilian soccer national team with uniforms, which involved a lot of millions of dollars. This is a very bad scandal for such a big brand company to be associated with. This means that Nike has carried out its activities disregarding the anti-corruption principles and laws. Therefore, Nike can be viewed to be exhibiting unethical values in carrying out its businesses.
In the study of Nike and to what extent that it carries out its operations, we will apply the five theories of ethics which are; Deontology, Utilitarianism, Care ethics, Virtue ethics and Egoism (GRAHAM, G. 2011). They will clearly portray how various actions could be handled in order to promote high ethical achievements.
The theory argues that if people or given organizations would like to act morally, then they should act in accordance to their lines of duties and obligations. In other words it means that one should carry out his or her duties to the society or another individual with an aim of upholding one’s duty. This is what is considered to be ethical concerning this theory. Following this theory is likely to produce consistent decisions, which are based on individual’s duties.
This theory further argues that it’s the individual motives that are responsible for the actions and not vice versa thereby, leading the actions of individuals to act in a right or wrong manner. Considering the situations in Nike, the past fear in employees due to the harsh treatment by the management, is that they can get customers who are not easily pleased, which will be hard to deal with because of the worries and therefore the situation requires behavior adjustment. Nike should respect the labor laws and human rights acts that protect employees for it to achieve the expected high ethical standards.
This ethical theory is based on the ability of an individual or company to predict and study in detail the consequences of a given action. According to a utilitarian, a choice of action that is capable of yielding the greatest benefit to many people qualifies to be called ethically correct. It further argues that, what makes something bad or good, wrong or right is the amount of pleasure it produces in comparison with the number of people. The actions which lead to the greatest happiness should be considered. This theory can be advantageous to organizations in the sense that it can be able to compare similar solutions and give out the best through the study of its benefits and coverage in terms of number of people.
Nike as a well established company should have applied this theory in making important decisions. For example, it could have considered the consequences of low wages on the employees and poor conditions in their working environments and acted upon for the better. This could have controlled the activism that rose in the past years demanding better pay and improved working conditions. Nike thereof, could have maintained high ethical standards and a good public image.
This theory judges individuals through consideration of character and not their actions that may be viewed to deviate from the normal behaviors. This theory mostly considers reputations, morals and motivations of individuals when rating an irregular behavior that may be considered unethical. However, the main drawback of this theory is that it doesn’t pay attention to changes in moral characters of individuals.
In reference to Nike, it has been associated with bad occurrences for a long time to the extent that its character has been doomed to be bad. Although, in recent times it engages in doing right things, according to this theory still Nike is considered to lack ethical values.
This theory involves a condition whereby individuals tend to take given actions which they think and believe are right for their self-interests. The actions of an individual are considered moral whenever they promote the individual’s best interests over a long period. For example Nike, believes in teamwork, which plays very significant roles in its growth. These teams usually try to work together with a common interest of achieving the company’s goals and objectives. In addition, in the current times Nike has changed its perspective on employees and now believes that the employees should be involved in crucial activities like decision-making.
However, this theory should be executed with care because not all what individuals’ believes will be acceptable in regard to the societies’ morals and values.
Companies should invoke the principle of care in the sense that it will maintain, support, and extends the available relationships. It usually involves developing care for another individual. For instance, Nike is trying to change its operational ways to better by caring on the employees’ welfares. This will create motivation and eventually foster success.
In consideration of the various ethical values and how Nike has been carrying out its operations, it’s clear that Nike as a company has not been keen in maintaining high ethical standards. This leads us to our conclusion that Nike is not an ethical Company because it does not portray ethical values in carrying out its operations. This is the reason why it has constantly been sued in courts over violation of various regulations ranging from abuse of human rights to involvement in corrupt practices. Therefore, Nike should review its code of conduct and formulate a strong internal control system that will enable it to do away with all the unethical practices and change for the better. In addition, it should initiate modern technology in their manufacturing processes that are efficient in order to reduce their impact on the environment in terms of pollution. By so doing it will contribute to creation of a sustainable economy in its area of operation, which is the main objective of most countries.
BALLINGER, J., & OLSSON, C. (1997). Behind the swoosh: the struggle of Indonesians making Nike shoes. Uppsala, Global Publications Foundation.
HARTMAN, L. P., ARNOLD, D. G., & WOKUTCH, R. E. (2003). Rising above sweatshops innovative approaches to global labor challenges. Westport, Conn, Praeger. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=192595.
HARTMAN, L. P. (2002). Perspectives in business ethics. Boston, McGraw-Hill.
FISHER, C. M., & LOVELL, A. (2006). Business ethics and values: individual, corporate and international perspectives. Harlow, England, FT Prentice Hall.
The Ten Principles | UN Global Compact. (n.d.). Retrieved from https://www.unglobalcompact.org/what-is-gc/mission/principles
HAERENS, M., & ZOTT, L. M. (2014). Corporate social responsibility.
MOON, C. (2001). Business ethics. London, Economist. http://public.eblib.com/choice/publicfullrecord.aspx?p=305725.
BENNETT, C. (2003). Ethics in business. Mason, Ohio, South-Western.
FRISCH, A. (2009). The story of Nike. Mankato, Minn, Creative Education.
GRAHAM, G. (2011). Theories of ethics: an introduction to moral philosophy with a selection of classic readings. New York, Routledge.