It can be seen from the passage that Nike’s Asian factories audited hundreds of factories in 2003 and 2004 and found cases of abusive treatment in more than a quarter of its South Asian plants.And in 2005 Nike returned to report its social and environmental practices. It said that staffs and employees work in a poor environment .Between 25% to 50% of its employees and staffs in the region restrict access to toilets and drinking water during the workday. Besides , a lot of staffs have to work for extra hours per week and wage level is lower than other industries. These kind of social and environment issues not only happen in Nike ,but also in many other industries. However , Nike start to report the detail of all its factories and in fact Nike devote more to improving conditions than its competitors. New method to solve CSR problems are needed. Nike come out a new realization. This new realization lead to a new strategy,which involves the company engaging labor ministries, civil society ,to establish companies’ standards of social and environmental performance.
Nike have realized that the responsibility of one is to work towards the accountability of all. The strategy is that instead of the closed system , company will establish an open system. Nike also realize that the company’s future depends on the way customers, suppliers, investors and others relate to it. Leadership is another challenge that Nike is facing. Traditional leadership make the manager only do their duty, but not thinking about other fact. New Corporate leadership require managers be ‘leaders beyond borders’,which means they should reach across such borders to engage others in dialogue and action to address. In addition ,Nike should consider wider issues of trade flows, governance, media, financial markets and politics,if it wants to survive in new open system. Nike’s efforts will be meaningless if Nike do not make changes in financial markets
Q1: In referring to the opening profile and the closing case for this chapter, discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world?
There have been cases reported abusive treatments in more than a quarter of its South Asian plants. Another report is that 25%-50% of factories in the region restrict access to toilets and drinking water during the workday. The same percentage that was reported also applied to factories denying workers at least one day off of the seven days they already work.Nike’s CSR Challenge highlighted that difficulty of bring wholesale to change to a company that isn’t centralized. Instead the challenge is now to reform the way business is done. Leadership was traditionally seen as guiding employees towards the goal of the company. What is needed is a more open form of leadership that calls for collaboration among mutually parties in order to solve systemic problems.The challenges are too reshape the signals being given out by its supply chains group to itself and its competitors. So that the companies can operate in a sustainable and just way, which is also financially viable
Q2: Discuss the meaning and implications of the statement by a Nike representative that“consumers are not rewarding us for investments in improved social performance in supply chains.”
Nike start to create a positive environment and change system for upgrading.As a result ,Nike will attract more consumers and bring feedback from consumers. This will help Nike continue going forwards.
Q3: What does it mean to have an industry open-systems approach to social responsibility?What parties are involved? Who are the stakeholders?
It depends on the way consumers , suppliers ,investors and other related to it. It means all the groups of company need to consider social and environment problems.The open system involve labor ministries, civil society and competitors.The stakeholders are customers, suppliers, investors, and others relate to it.
Q4: What is meant by “leadership beyond borders”?
It means people who can see across borders created by others,such as the borders of their jobs,and reach across such borders to engage others in dialogue and action to address systemic problems.
Q5: Is it possible to have “a compatibility of profits with people and planet”? Whose responsibility is it to achieve that state?
Yes ,it is possible. Companies’ first aim is profit. Through making profit a company can survive .However ,at the same time ,company should take care of their staffs and employees,or they will fail to make the profit. In addition ,environment is also very important. Company should protect the environment as well as making profit.Environment should not be neglected. People, environment and profit should be balanced.It’s all consumers, suppliers and investors,and employees responsibility to achieve that state.
This case talks about CSR challenges that Nike are facing. The fact is not only Nike ,but also other industries are facing these challenges. However,Nike devotes itself to making a new strategy. It makes a positive environment. Besides, leadership is also a challenge for Nike and other industries. Companies should focus on “leadership beyond borders”, which means management is expected to beyond borders created by others such as the borders of their job, and reach across such borders to engage others in dialogue and action to address systemic problems. In a word ,environment, profit and human should be balanced.
How many Nike products do you own? How much do you know about where they come from? Nike is a multinational company and one of the most widely-known brands of athletic wear. It’s no wonder that achieving Corporate Social Responsibility (CSR) in all aspects of their business is crucial to their success.
Consumers have begun to care more and more over the past few years about where their products are coming from. Whether it is the chicken nuggets they’re having for lunch, the latest tech gadget they use to check the scores , or the shoes they wear for their morning run.
This trend is only going to grow. This is because millennials takes CSR into heavy consideration when making purchase decisions. A 2013 study shows they’re89% more likely to buy a product or service if it came from a CSR company. This was proven in the 1990’s when Nike was under accusations for tolerating sweatshops and child labor.
With all this in mind, it is fitting that we explore one of the biggest media blow ups relating to this issue in recent years. Not because it was a huge disaster that nearly destroyed a company, but because a lot can be learned from Nike’s response. Since then, Nike has been continually improving and promoting CSR in their supply chain and otherwise.
Nike believes that “In sustainability – as in sports – what counts is how you perform on the field.” A sound game plan or strategy is essential to success.” Since 2005 they have been consistently updating consumers and the general public on their commitments, standards, and audit data as it relates to CSR in their operations.
Problems began for Nike in 1991 with reports about poor working conditions at the Nike factories in Indonesia. At this time, Nike’s response was to deny responsibility for monitoring malpractice for suppliers. Nike became a target of campaigners, and because of this a global boycott began. This campaign quickly caught wind and had a significant impact on the Nike’s demand.
It wasn’t until 1996 that Nike finally started addressing the issue in a productive manner. They began by putting a department in place tasked solely with improving the lives of factory workers. Nike started progressing as a company in their efforts towards CSR.
However, unrelenting criticism was still taking a toll on their brand image. In 1998, Nike finally began to see positive feedback. Their CEO at the time gave a speech announcing big changes in working standards. Shortly after this, Nike began the creation of the Fair Labor Association to help improve their operations. Then, they started regular factory audits and publishing detailed factory info.
Nike took responsibility for the monitoring of the operations within every link of their supply chain. Moreover, they were able to provide visibility to consumers. As a result, Nike made a comeback from a potentially disastrous situation to restore their public image.
What We Can Learn From This? Visibility is Key.
First and foremost, you need to understand what is going on within every step of your supply chain. Companies need to have full visibility into not only their own supply chain networks, but also their supplier networks beyond the first tier. Having access to this not only allows you to better manage potential risks, it also empowers you to better select suppliers.
Now you may be wondering: how can we gain access to this info? Well, that is the first lesson we can take from Nike. By performing audits, Nike was able to pin-point areas where factories were failing. As a result, they knew what changes needed to be made. Also, they were using metrics to reflect these changes and the overall company vision. Thus, they were able to measure each factory’s performance. Continuing audits on an ongoing basis ensures they are following policies and meeting expectations.
What’s the next step?
So, what do you do when you achieve this visibility? Well, you need to communicate this to consumers. The only way they’ll know about your CSR efforts is if you are actively informing them. Sharing milestones with your consumers is a good place to start. They can see your efforts and start to build trust in your brand image. Next, you can publicly publish data on your operations. Giving access to this data shows that you have nothing to hide. As a result, you can further build brand trust.
How did Nike do this? By publishing a complete list of their factories, along with details on each location. They continue these transparent updates and being “committed to building deeper community connections and spurring positive change around the world.”
Putting a plan in place for the future is the final step in bringing CSR into your supply chain. A critical part of this is selecting which suppliers to do business with. It is important that you can have trust and their company’s vision and values are aligned with yours. Once you set your supply chain up for success, you need to keep it going. Regular audits and re-evaluating performance criteria can help you to achieve this.
Nike now strives to have strong relationships with their suppliers and take an active role in monitoring their factories. They are constantly looking to improve their operations in a way that has a positive impact. Nike is “on track to meet [their] manufacturing commitments and have begun to look ahead, redefining what manufacturing will look like for NIKE in the future.”
This article is the third in a series about supply chain disasters. Check out the first in the series on Target Canada and the second on Atari.