(Nike) Corporate Social Responsibility

Nike (Corporate Social Responsibility)

Introduction

Nowadays, the concept of business is not longer the same as it has moved from focusing profitability to the concept of Corporate Social Responsibility (CSR) by benefiting the society with their profit earned. CSR is about how companies manage the business processes to produce an overall positive impact on society. (MallenBaker)The number of companies such as Nike reporting their social and environmental influence on social has risen immeasurably. (Fraser 2005) Company should aware of existing standards and global initiatives as they relate to CSR and use it to measure Company’s performance.(Nieuwlands 2003) Later on, the changes of Nike will be shown from the history until today. It is widely known as a world leading brand of sport shoes and sports outfit.

Past performance

There have been some critics for Nike on exploitation of kids as labour at Pakistan since 1996; this has been directly affected to the working conditions and the product of Nike. The case of child labour was impacting the authority of government.(NIKE: Nike Shoes and Child Labor in Pakistan) This causes an impact on the image of that particular country towards the visitors of that country. The living standard too will decrease as the income of households is not much and the bad reputation of country.

''There's a lot of forced overtime, there's a lot of mistreatment and physical punishment,'' (Writer 1996) There are incident that the employees have been abused by the staff member of Nike factory and also low pay to those young children as labour. According to the interviews, 80 percent of the workers don’t have safety and protections for their jobs. Many accidents had occurred during their working time. The labours had lost their human rights and nobody dares to protest about the mistreatment of Nike.

The social contract has evolved over time, especially with the rise of special interest groups such as Fair Labour Association (FLA) against the employ of child labour especially in the Third World to get back the right of employees. Besides, individual such as Californian Marc Kasky had gone against Nike by suing corporate under California consumer protection law deceptive about its practise that they had cleaned up its subcontractors.(Milchen 2003) He had argued against Nike to return the wages that employees suppose to get.(Rudolph 2005)

“Why have the rich gotten richer while employee income has stagnated? Because that’s the way the corporate is designed”(Kelly 2001). In the contrast, Nike has plants at the third world and United Kingdom (UK) .Stitching same pair of shoes is to be paid $UK20 per day in UK but in the third world only paid for 20 cents, although the product is selling at the same price at different area. Question rose among customer regarding to fairness of this action. Their product is selling at a high price even with low cost of production. The trace of their profit is questioned if they did return to the society.

Nike Companies that establish in the developing country are having a low wage of labour and also lacking of human rights appeal and union movement as there is such a huge amount of population but only few jobs are available, therefore, no one will complain about the low payment and the rules of law.

“More than 1/3 threaten employee health and safety” (Writer) As big company like Nike, they should set a model role for all the small companies; yet, they are abusing the authority of the company to get cheap labour such as child labour for making profit by employing cheap labours to work for them. Nike is more concern about minimize the production cost and get the highest amounts of profit. They have not been implementing their rules and regulations effectively which affected their international standard.

The violations of labour rights and child labour are rising attentions from public, Nike finds their reputations at stake as they are trying to prevent these things from happening again which Nike then operates sewing centers where there is no child labour.A department is established with a trustee to monitor and continue to upgrade conditions for workers in subcontractor factories (D.Joseph/Knight-Ridder/Tribune 1996) For the wages rate, Nike established constitutes for estimate a “fair” wage. (MallenBaker).These incidents had told us that, Nike is making effort to change for a better reputation of the company.

CSR of Nike Company

After the years of changed, Nike had changed from maximizing profit to adopting concept of CSR. Further on, Nike is involved in Global Compact to arouse corporate participation in the promotion of human, labour and environment. (Steve Kent May)

By doing the steps of recycling and re-using the old sports shoes’ material, they had turned it into the material which can manufacture into Nike shoes. Renewable raw material is used for production which will minimize the impact to the environment, reduces the use of toxic substances will also minimize the impact of product ingredients throughout the life cycle to help the environment and planet from continuously losing its balance. Nike content box is made from 100 percent recycled fiber which can also benefit by saving millions in packaging costs. In this way, it not only lessen the cost of production of manufacturing but also benefits the econ-friendly consumers and environment.

Furthermore, the sales of NIKE RED laces, NIKE will contribute 100% of the profits from the sale to The Global Fund to help fights against AIDS in Africa. There is funds to fight against tuberculosis and malaria which they also emphasize the necessary of everyone to remove these diseases with their cooperation’s.(NIKE(RED):DESIGNED TO FIGHT AIDS IN AFRICA). CSR is about business giving back to society. (MallenBaker)As this is Nike did, giving back the profit to the society.

Impact towards the environment and stakeholders

In history, Nike act of focus hiring child labour with a very low paid and also abusing employee to maximizing profits into now, implementing CSR concept towards the social which they balancing the cycle of environment by reuse old material to make a new pairs of shoes, apply organic cotton and biodegradable materials for shoes making and funding for HIV/AIDS, tuberculosis and lastly, malaria. This has given an impact of increasing recognition of company name by public. They closing the loop allow used material to nature and thriving communities by enable all the stakeholders along their value chain to meet their needs and lead fulfilling lives. Nike is creating a sustainable approach aimed at providing higher returns to the stakeholders and contributes to the society itself.

The decision and behavior of company may have influence to the stakeholders. For the case of child labour, they may have affected due to the long working hour which indirectly impact the quality of Nike product as the employee cannot concentrate while they are working. The act of the management abusing the employee may influence the image of company as they are using their authority to use violent.

Recommendations

Action has to be taken to further decline the rate of child labour. Sophistication of technology has to be increased which means higher productivity and wages. It will then reduce child labour.

Nike should strictly enforce of no employ of child labour and should strengthen the penalties of child labour fining a great amount for offender in each country’s of NIKE plants. Besides, legal minimum paid for workers is to be stated and paid clearly to ensure the level of equality.  In order to prevent the officer from abusing the workers, those who found guilty of abusing workers should be suspend from work. Besides, tighten the standard of safety and health measurement of the factory which means improve factory’s condition regarding to dust, noise, and fumes so the workers health won not get infected. Benefits for welfare are to be implemented towards the workers such as meals, transportation, sick leave and other insurance.

The cost of million dollars that saved from using recycle fiber content box should giving the benefit of incensement of wages, especially in third world country.

Anti sweatshop campaign should be held, particularly emphasize on labour and human rights.

Nike should also take more effort to enforce the Code of Conduct by interpret the importance of this Code to their employee. Communication is a very important step to further understand the problems and need of the workers. Nike should allow complains and compliments from workers to improve the working conditions.

Conclusion

Today, Nike is one of the most progressive global corporations of CSR, because of the past mistakes and attacks by NGOs, Nike have become more proactive in debate the positive effect of its product worldwide. Nike Company has been practicing CSR for many years to maintain the balance of the nature by recycling and using biodegradable materials. Doing CSR not only set a role model for those small company, but also does marketing for the company , gives benefit and rebates to the social for what they are earning, keep the business sustainable and minimize the negative impact on stakeholders. CSR is known as sustainable development involves the rise of recognition by public. Although there is negative news about Nike in the past for cases such as Child Labours, but they are now improving and prevent it to happen again. They do make the effort to make for better changes.

References

 D.Joseph/Knight-Ridder/Tribune, J. 1996. Our purchases keep children in chains. http://www.viet.net/~nike/childlabor.htm (accessed 5 April 2010).

Fraser, B. W. 2005. Corporate social responsibility: many of today's corporate stakeholders are calling for increased sustainable development. More and more companies are heeding that call, while simultaneously realizing performance gains. http://www.allbusiness.com/management/352719-1.html (accessed 4 April 2010).

Kelly, M., ed. 2001. The Divine Right of Capital.

 MallenBaker. Corporate Social Responsibility http://www.mallenbaker.net/csr/definition.php (accessed 30 March 2010).

 --------. Corporate Social Responsibility- Companies in the News. http://www.mallenbaker.net/csr/CSRfiles/nike.html (accessed

 Milchen, J. K. a. J. 2003. Just Don't Do It. http://www.globalpolicy.org/component/content/article/221-transnational-corporations/46920.html (accessed 30 March 2010).

Nieuwlands, H. 2003. Heeding the call: more and more, stakeholders are demanding that corporations live up to their social responsibilities and institute practices that value people, communities, and the environment. http://www.allbusiness.com/management/627414-1.html (accessed 5 April 2010).

  NIKE(RED):DESIGNED TO FIGHT AIDS IN AFRICA. http://inside.nike.com/blogs/gamechangers-en_US/2009/12/01/nike-red-designed-to-fight-aids-in-africa (accessed 6 April 2010).

  NIKE: Nike Shoes and Child Labor in Pakistan. http://www1.american.edu/TED/nike.htm (accessed 27/3/2010).

Rudolph, P. H. 2005. Reporting and the law - the Nike vs. Kasky legacy. http://www.allbusiness.com/legal/laws/1060950-1.html (accessed 3 April 2010).

Steve Kent May, G. C., Juliet Roper, ed. The debate over corporate social responsibility.

 Writer, B. J. H. A. P. Behind Celebrity Labels, a Problem Retailers Say They Can't Control. http://www.viet.net/~nike/ap-child3.htm (accessed 28 March 2010).

--------. 1996. Behind Celebrity Labels, a Problem Retails Say They Can't Control. http://www.viet.net/~nike/ap-child3.htm (accessed 28 March 2010).