Cultural Issues of Nike

Cultural Issues of Nike

There are many companies that choose to do business in a foreign country because the cost of manufacturing their items is more expensive in the United States than in a foreign county. One of the cultural issues that American companies face when doing business in a foreign country is dealing with work conditions that are poor, low wages, and children that are exploited by being forced to work at such a young age. Because there are no rights for workers in many third world countries, especially children, it is often times not until a major catastrophe that little is done to try and protect the rights of these workers. While labor laws and regulations have been established in the United States that protect the rights of its workers, it is not so in many foreign countries and they often still deal with unfavorable work conditions and the continued use of under-aged children in the workplace.

Nike Corporation

Currently Nike is considered to be one of the largest manufacturers of sportswear for athletes all over the world. Started under the name of Blue Ribbon Sports in 1964 by a runner from the University of Oregon, Phillip Knight and his coach Bill Bowerman, Nike first got its start sell shoes out of a van at high school track meets (DeTienne & Lewis 2005). In 1972 they decided to change their name and since then the company has continued to grow into a multi-billion dollar corporation (DeTienne & Lewis 2005).

Slippery Slope Operations

As Nike continued to grow the company decided to outsource its supplying needs to foreign companies that included Taiwan and Korea, which provided cheaper operation and labor. As the company continued to grow even more Nike outsourced even more by using countries such as China, Vietnam, Thailand, and Indonesia (DeTienne & Lewis 2005). By the year 1999, Nike was estimated to have employees in over 500 factories in over 45 different countries (Nike 2004). As Nike continued to outsource its supplies to foreign companies their control over labor procedures and unawareness of the working conditions in their factories became a major issue in the eyes of the public (DeTienne & Lewis 2005).

Allegations

According to the article, “The Nike Case”, in 1996 a New York Times columnist by the name of Bob Herbert, reported Nike to be building their fortune by using Asian women to work in what he called “Sweat Shops” in deplorable conditions, also stating it was something close to “Slave Labor” (DeTienne & Lewis 2005). Nike was also accused of abusing human rights, letting their workers work in dreadful conditions and reports of violence in their Asian factories (DeTienne & Lewis 2005). Because of the reporter’s allegations, Nike soon found itself involved in a whirlwind of accusations that