And There Was

Nike has faced many accusations of using “sweatshops” as means of production. The case study NIKE: The Sweatshop Debate, we see the legal, ethical and cultural changes affecting Nike due to these accusations, as well as the roles the governments play in the business of these sweat shops. It also showcases the operational and strategic challenges that the Nike corporation has been facing.

Nike is the original designer and marketer of their products, but they also contract the actual manufacturing of their products through a global network of over 600 factories which are found throughout the world. These factories employ on average as much as 650,000 people. The reason why Nike faces so many legal, ethical and cultural challenges is due to the fact that there are so many accusations against them using sweat shops as means of production. The sweat shops employ children who are working in terrible and many times hazardous conditions for long hours and at very low wages. They choose to manufacture their products in very poor countries which in turn means cheap labor increasing profits.

Nike has been accused many times on targeting the lower class groups and countries of the world with unethical and illegal subcontracting practices. The people people being preyed upon do not realize that they are working on such low wages because of the cultural differences from where the Nike Corporation conducts operation. Most of these people seem to be thankful to be employed. There are reports of employees working six days a week for only $40/hour, that means they are working for basically 20 cents an hour. Many managers do not even get paid minimum wage. Nike does not admit to any of these accusations and claims that these are just complaints. There needs to be a median in the standards that prevail in the United States and the other developing countries where Nike undergoes production. If Nike is forced to follow the standards that prevail in the US, it