Corporate Social Responsibility: The Nike Company

Эссе, посвященное тому, как компания после скандала запустила программу КСО, чтобы восстановить свою репутацию. Оценили, как скандал и давление общественности повлияли на отношении компании к КСО.

Объем работы: 2 страницы текста (без учета титульного листа, списка источников) одинарным интервалом 12 шрифтом.

Эссе - достаточно свободный формат, в нем высказана субъективная точка зрения и защищена. ...

- Introduction
- Roots of a Scandal
- Situation in Indonesia
- Scandal in Pakistan
- Misconduct in Vietnam
- Consequences
- Nike’s Reaction
- Corporate Social Responsibility (CSR)
- Nike’s Reputation Today

In the whole world a few large companies exercise control over the athletic footwear industry. In fact, over 70% of the global athletic market is controlled by top-ten main companies. In the 1990s, Nike became the largest and most important athletic footwear company in the world.
The early history of Nike’s success says that the costs of manufacturing Nike’s products in Japan and the US increased significantly by the early 1980s. In 1982 Nike decided to establish its production line through Asian suppliers. Korea and Taiwan produced 86% of Nike’s athletic footwear. As time passed, Korea and Taiwan began to develop; manufacturing costs started to rise in these countries as well. This resulted in Nike’s persuasion of its suppliers to re-locate their operations to other, lower cost-countries. The company worked with its lead suppliers to open up manufacturing plants in Indonesia, Pakistan and Vietnam.

According to Maria Eitel, Vice President and Senior Advisor for Corporate Responsibility at Nike, “this represented a “critical event” for the company in terms of its understanding of globalization, international labor standards and corporate responsibility”.Misconduct in VietnamErnst & Young’s audit report revealed serious health and safety problems at the Tae Kwang Vina plant in Vietnam. Toluene concentrations exceeded from 6 to 177 times acceptable standards in some sections plant. The report also stated that plant chemical releases caused innumerable cases of skin and heart diseases, and due to excess dust - respiratory illness. In accordance with the report, “the lack of control of this substance in other areas of the plant, the lack of personal protective equipment at the factory and overloaded work hours at the plant were in violation of Nike’s code of conduct”.ConsequencesAll these events completely affected Nike’s reputation and as Locke said, “the scandals fueled anti-globalization movements that started investigating the potential risks and problems related to multinational companies”.In Indonesia and Pakistan, the scandal involved Nike’s brand image in a critical event related to international labor standards and child labor. However, Nike representatives claimed that “in the case of Ernst & Young, the report didn’t mention the problems related to health and safety, it only provided briefly information about poor working conditions” (The Economist). Progressively, labor and environmental problems at Nike’s suppliers’ factories were becoming a major problem for Nike itself. However, as a consequence of a bad image publicized through media at the moment, Nike has been hurt by falling stock prices and weak sales even as it has been pummeled in the public relations arena (Montero, 2006). Nike’s reputation was untrustworthy and sales figures lowered to a great extent.Nike’s ReactionAt first, Nike denied to admit any responsibility for the numerous labor and environmental/health problems revealed at its suppliers’ factories. The major argument was “the workers were not its employees, and then Nike had no responsibility for them” (Nike’s web site, 2010).However, in 1992 the behavior of the company greatly changed as Nike formulated a Code of Conduct (Nike’s web site, 2010) for its suppliers that obliged them to keep some basic standards related to labor, environmental and health conditions.In 1996, “Nike had joined Bill Clinton’s “Apparel Industry Partnership”, and later it signed up to UN Secretary General Kofi Annan’s “Global Compact”, both political initiatives aimed at reconciling the demands of multinationals and campaign groups” (Connor, 2001). The company also started to pay more attention to environmental and health problems, insisting on the use of water-based solvents in its factories and producing shoes from recycled materials.The next step to answer the criticisms was creation of a few departments (e.g.: Labor Practices in 1996, Nike Environmental Action Team (NEAT) in 1993) which, by June 2000, were organized under the Corporate Responsibility and Compliance Department.Corporate Social Responsibility (CSR)In 2001 Nike issued its first Corporate Responsibility Report using the Global Report Initiative (GRI) guidelines, “to assess and communicate the impact of how the company runs its business” (Oxfam Australia, 2010).