Nik:e The Sweatshop Debate

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Week Four ~ Nike: The Sweatshop Debate

University of Phoenix

MGT 448~Global Business Strategies

March 30th, 2009



Nike: The Sweatshop Debate

This paper, based on the case study Nike: The Sweatshop Debate authored by Charles W. L. Hill in his book International Business. Competing in the Global Marketplace (2009) will describe the legal, cultural, and ethical challenges confronted by global business, determine the roles that host governments have played in Nike, and summarize the strategic and operational challenges facing global managers at Nike.

Founded in 1972 by Phil Knight, a former University of Oregon track star, Nike is one of the leading global designers and marketers of athletic shoes and apparel (Hill, 2009). The organizations "swoosh" logo and "Just Do It!" marketing phrase are among the most recognizable logos in history. Nike has annual revenues of $15 billion, sells its products in over 140 countries, and employs over 650,000 people (Hill, 2009).

The Nike Corporation does not manufacture any products but designs and markets the product then contracts the manufacturing worldwide. Nike has a network of 600 factories throughout the world. (Hill, 2009). For the past decade, Nike has become the target for allegation that products were manufactured in "sweatshops" using child labor. Accusations were also made that Nike pays less than standard wages to the workers and the work environment is hazardous (Hill, 2009).

Legal, Cultural and Ethical Challenges

Nike is faced with legal, cultural and ethical challenges.

Legal challenges Nike faces when manufacturing shoes and apparel overseas is working conditions, labor laws and minimum wage pay. For example, one of Nike's Korean owned subcontractors employed workers as young as 13 years old. This is in violation of Chinese Labor law...