Nike Case Study

Nike: Corporate Citizen. The Evolution and Impact of Nike’s Labor Practice Reforms

As the power of states declines in the modern era of globalization and because of powerful lobbying for less government intervention in social services and health care, corporations are increasingly expected to take on additional responsibilities in the communities in which they operate. Nike Inc. is the largest marketer of athletic apparel and footwear in the world. Its business model, pioneered within the sports apparel industry in the 1960’s, of outsourcing manufacturing of its products to developing countries for marketing and sales in North America and Europe for large profits, has become standard business practice for the industry. The object of this paper is to discuss the role of the multi-national corporation within the context of globalization by using Nike as a case study to better understand the expectations of society, the extent to which companies can successfully comply with these expectations, and determine the conditions under which optimum corporate citizenship can be achieved.

The examination will chronologically trace Nike’s journey through these steps and evaluate the work it has done to improve its labor conditions, by reviewing Nike’s rise in the apparel industry, its business model, and charges of abuse in its labor practices, Nike’s early response to these criticisms, observers’ continued criticisms, and Nike’s bid to be the industry leader in corporate responsibility. It will then present an overview of ‘organizational learning,” the 5 stages through which a company passes through as it learns to handle increased corporate social responsibility, and show how this applies to the case of Nike.

Nike’s experience shows that serious efforts at corporate responsibility can improve labor conditions. However, the most significant improvements carry with them a real financial cost. As Nike’s initial response to its critic’s demonstrates, corporations will only make the necessary investments in social responsibility if the cost of not doing so will be greater than the cost of doing so. Consequently, some important but costly reforms, such as a significant increase in wages, are unlikely.

The Birth and Growth of Nike

When Phil Knight and Bill Bowerman founded Blue Ribbon Sports (BRS) in 1964 most athletic footwear was produced in the United States and Germany. Knight saw that cheep appliances were being manufactured in Japan. He decided to use the same approach to break into the athletic footwear industry by investing in design, development, marketing and design, and contracting with Onitsuka Tiger of Japan to manufacture