Cross Cultural Perspectives of the Nike Corporation

Cross-Cultural Perspectives: The Nike Corporation

LaShonda Howard

ETH/316

September 19, 2016

Professor Denise Antoon

Cross-Cultural Perspectives: The Nike Corporation

Corporate globalization is a reality for many companies in the United States.  As businesses venture to the vast horizons of the foreign market, ethical code of conduct management is a balancing act for the new international company. The company must elevate to the task of maintaining principles resolute to the United States rules and regulations and not bowing in submission to cultural practices and norms that often immoral.  In the world of commerce, financial priorities frequently abound over beliefs of social conscience in business and corporate due diligence as conglomerates attempt to diminish expenditures and generate global effectiveness. Throughout the years, the Nike Corporation is a company that has found themselves in the hotbed of criticism for blurring the lines cultural issues and the company’s core ethical perspectives.

Nike’s Defined Issues

Since its launch in 1964, Nike has become the most overtly distinguishable company in the global sports gear manufacturing market. Nike quickly launched themselves as a corporation with a celebrate persona – an identity that its “brand name and image associated with positive social values ranging from athleticism and fitness to social and environmental responsibility and patriotism” (2004, p. 152). United States corporations that are corporate social responsibility champions in America have found it problematic to garner those same praises in their international manufacturing campaigns. Nike like many other worldwide companies finds themselves in a struggle not to compromising on such issues of providing safe operational conditions, paying a viable salary, eco-friendly efforts, avoiding bribery, ensuring ethical accounting practices and adhere to their business code of conduct (Markgraf, B. 2016). Nike driven to by aspirations to make manufactured goods at a small percentage of the cost expands and establishes plants in the third world countries of  South Korea, Vietnam, Indonesia, China, Pakistan, Malaysia, and Cambodia where access to a cheap labor and unjust labor laws are the norm. After expansion, Nike finds a new label attached to the corporation, one that showcases a stigma that they will find hard to shake as concerns of child labor laws violations, wages infringements, lack of health and safety in factories, and ecological insolence arise. “There exists a significant gap between the image Nike bestows upon itself as a socially responsible corporation and the realities of the “hidden abode” where foreign workers toil” (2004, p. 154).

        In 1997, the CBS new documentary 48-hours highlighted what Nike should “just not do it” (Voung, 1997), in their race to the bottom to take up the adage – “when in Rome, do as the Romans do” philosophy. Nike would change its work strategy to include:

• Subcontracting the manufacturing to foreign-owned factories;
• Global sweatshops
• Modern day slavery
• Workers being physically abused
• Forced overtime

Nike had lost its way but held the resolve that working environments in contractors’ sweatshops are not its liability (Guthrie, 2012). It was hiding behind the company’s commercial image. Organizations such as Campaign for Labor Rights (CLR) see the importance of making visible the hidden, the examining behind the masks presented for everyday consumer goods (Bigelow, 1997). The company must be held responsible as American companies have an ethical responsibility unhindered by geographic and political borders, or cultural practices and ways of life.

Nike’s Ethical Perspective and Response

        Nike was not ready for the media nightmare that could ruin its corporate goodwill. Nike’s factories were embattled for their factory floor practices, especially the use of underage laborers, physically abusing workers – hit by shoes, mouths taped shut; working for monthly salaries of forty-two dollars (three dollars below the forty-five-dollar minimum of Vietnam) and forced overtime (Voung, 1997). The backlash across college campuses is immense. Consumers are staging boycotts and picket outside of Nike headquarters. The LA Times reports that protesters demand Nike “take measures to ensure that overseas workers have the same rights as those in the United States” (Voung, 1997).

        Initially, Nike places the blame on subcontractors.  However, after Chief Executive Officer (CEO) Philip Knight and the board of director at Nike are given the 1997 reports concering the violation of human civil rights along with labor violations done in their Asian markets, there was resoundingly assurance that swift action was needed to remedy the situation to repair the tarnished reputation of the company. It resolved to draft a new code of conduct which included all stakeholder in Nike including its contractors. No longer was the catch-phrase "Just Doing It" is just not enough (Voung, 1997). With sales plummeting, they come up with several new corporate responsibility standards “that Nike factories globally were to be required to obey” (The Nike Controversy - Stanford University).

• Zero tolerance for underage labor
• Expansion of education programs in factories
• Corporate philanthropy to the community’s overall development by the expansion of the Micro-Enterprise Loan Program in international nations where they conduct business (The Nike Controversy - Stanford University).
• Transparency for open inspections and accessibility of facilities abroad

Philip Knight says, ''These moves do more than just set industry standards. They reflect who we are as a company'' (Cushman, 1998).  Nike address many issues of their accusers but fail on two major components: 1) of a commitment to pay workers a living wage, and 2) right of free speech to organize. Aside from its corporate initiatives put in place, Nike is a significant contributor to establishing the formation of the Apparel Industry Partnership (AIP). AIP partnerships with others in the apparel industry to what many views as an undertaking “to protect corporate reputations and to prevent a backlash against free trade, not to protect worker rights" (The Nike Controversy - Stanford University). Many civil liberties and human rights organizations, conversely, are not confident that Nike will ever close all its loopholes or make the changes to its ethical perspectives allowing it to uphold social responsibility abroad. Bob Herbert says Nike and celebrity figures like Michael Jordan will continue to enjoy wealth only