Nike Case Study

Nike Case Study

Think about the complexity of managing standards in companies that your company does not even own. What can be done to ensure that suppliers (and, for that matter, distributors) are meeting your own company’s standards?

What kinds of systems would a company like Nike need to put into place to ensure that its own code of conduct is being adhered to throughout the supply chain?

Nike seems to have been targeted by activists in part because it is the largest company in its industry. What are the implications of this type of activism for corporate citizenship? What does this type of targeting mean for companies?

OL690: Responsible Corporate Leadership

October 24, 2010

Abstract

Nike’s global business uses about 600 factories in 46 countries with nearly 800,000 employees and yet its direct employees are a little over 6,000. This can result in a very complex task in managing practices of independent contractors who manufacture its products.

Nike has become one of those global companies targeted by a broad range of campaigning NGOs such as the activist group Global Exchange and journalists as a symbolic representation of the business in society. The issues are those of human rights and conditions for workers in factories in developing countries but some NGOs such as the Global Alliance and Corp Watch have acknowledged the progress in the past decade.

In the face of constant accusations, Nike has developed a considered response, supported by corporate website reporting. It now has a well developed focus for its corporate responsibility on improving conditions in contracted factories, aiming for carbon neutrality, and making sports available to young people across the world. In the past decade, Nike has embraced a business model of sustainability which is defined on their website as a business that brings people, planet and profit into balance for lasting.

Nike may not own its suppliers or factories that manufacture its products, but Nike is the face of brand and their contact with customers. Manufacturers and suppliers have interests in listening to Nike’s concerns and no one can survive without the others. Nike being the face of the brand has to take leadership and make sure all the players have a common understanding of the company vision and work together to implement the vision.

The common understanding is the first step forward, but a number of other measures need to be in place such as compliance tools, code of conduct, education and resources. In contracting other companies most emphasis has been on product quality for years, it is time the emphasis is put on people and the environment as well.

Complexity of managing standards