Nike in Southeast Asia

plume Nike is the world deplumateer in the manufacturing of sports wear and gear. So at first, Nike didnt counterbalance attention to the criticism it was receiving because it was coming from a small group of activists, although after on, the social pressure became very lavishly that Nike was forced to take around measures to quiet down the public who wanted to endure what was going on. In this paper we will examine the various difficulties Nike faced as they tested to balance both, the lodge performance and good corporate citizenship. We will withal discuss what I would have done if I was in that position.Summary Nike, was founded in 1964 by Phil Knight, Nikes business model was developed by Knight mend attending Stanford Business School in the early 1960s. In 1998, Nike was the leader in the sports shoe industry, with annual sales of $9. 5 billion and a 40% share of the Ameri suffer sneaker market. It became a lightning rod for fend when alleged sweatshop conditions wher e happening in Southeast Asia. May 1998 is when Phil Knight, the founder and CEO, admitted that the Nike convergence has became synonymous with slave wages, forced overtime, and arbitrary abuse. What people couldnt guess was how Nike could get associated with deplorable labor practices. The strategy that Knight developed knobbed outsourcing all manufacturing to contractors in low wage countries and pouring the companies resources in high profile marketing. They where trying to take the blame off by axiom that We dont have a go at it the first thing of manufacturing. We are marketers and designers. They did argue to be marketing a lot by placing the Nike swoosh on the uniforms of athletes such as Michael Jordan and Tiger Woods.When manufacturing started it was done in Japan, but as wages rose, they transferred performance to Korea and Taiwan. Later on, in 1982 more than 80% of Nike blank space where made in those two countries. But once again as wages went up they moved to Southeast Asia, by 1990 most production was based in Indonesia, Vietnam, and China. Young Indonesian woman who were working in Korean-owned plants under contract with Nike started at 15 cents an hour. Mandatory overtime was a good deal imposed, and workers with experience might make $2 for an 11-hour day.In 1991 Indonesian wage went up from $1. 06 to $1. 24, only two cents to a higher place what the government calculated as demand minimum physical needs. Workers often toiled in crowed, poorly ventilated factories, ring by machinery and toxic chemical all because the government was eager to attract foreign investment. Nikes initial response was to deny any responsibility for the practices of its contractors. They tell that these were depended contractors from which Nike merely buys shoes from.That the workers are not Nike employees, and that their wages are above legal minimum and the prevailing market rate. When asked about labor engagement in some factories supplying Nike, J ohn Woodman, the Companys general manager for Indonesia verbalize I dont know that I need to know. he defended Nike by saying that yes they are low wages, but they have given(p) jobs to thousands of people who wouldnt be working otherwise. At the end of the cheek it says he might have added giving employment to Michael Jordan, whose reported $2 million fee in 1992 was larger than the payroll for that year in Indonesia.I dont agree with the way Nike handled this case, there where other ways of taking alimony of the situation not just by saying that they didnt know and trying to wash their hands from the ongoing dilemma. If I was to be in their shoes I would have been regarding into what was going on in the factories since they are handling our product. Yes they did just some money but at what cost, their name was tarnished for a while and having people that supposedly didnt know what was going on didnt help them at all.One of the few things that I would have done was gave the workers some sort of incentive since, I supposedly didnt know what was going on in the factory. Yes you want to save money but you dont want to lose your consumers for such a reason like this. That is where ethics comes in and they have to wee-wee a meeting and figure out a way to look like the good guys once again by helping make the problem and prevent it from happening again, like setting up veritable laws that their subcontractors should go by.Through reading this case study I became aware that many things go on with a product, behind the consumers eyes that sometimes arent very ethical of the company that is selling to the consumer. It also teaches that no librate what, when a company is trying to cut expenses and they push the envelope a little to much a big chaotic scene can happen. Which if not handled right away can lead to the falling of the company that might have taken many years to build up.