Nike in China
Case study
Word count : 2896
Part A : Ethical Dilemma Essay
According Gasmi and Grelleau (2005), Many multinational companies outsource some of their production activities in countries where ethical standards differ from those in developed countries, which often is the majority of their consumer market. This is particularly the case of multinational producing sporting goods, such as Nike, Reebok and Adidas.
Nike is the multinational leader in the world of sporting goods with 40% market sports shoes in 2000, before Adidas (15.1%) and Reebok (10.9 %). Paul Bowerman and Phil Knight founded the firm in 1964 in the USA under the name Blue Ribbon Sports (BRS). In the early 1970s, BRS began designing his own line of shoes, manufactured by Japanese subcontractors. In 1972, the company achieved a turnover of around $ 2 million and change its original name by the launch of the famous Nike brand.
In 1978, due to the macro- economic environment (including the oil crisis) and economic development of Japan, Nike began to look for other countries cost of labour low to manufacture its shoes, as the Indonesia and Thailand , and then it goes to China and Vietnam.
The quote at the beginning illustrates the problems faced by multinational companies that have chosen to outsource in a country other than the ethical standards of their country of origin. Nike was not scandalized by one incident. However, it is a rather comprehensive review of the political subcontracting conducted by Nike in Asia in general and China in particular. Indeed, Nike was criticized by players defending human rights of lacking ethical practices in outsourcing in China. These actors have insisted that Nike does not meet certain international conventions, inter alia, freedom of association, working conditions, forced labour, child labour and wage issues.