Business Ethics 2010 Nike This paper analyzes the commitment to Nike’s internal and external stakeholders. Their marketing operations, corporate social performance, special interest groups, as well. Stephanie Wallace Nike Inc takes pride in being an ethical company. Nike places their responsibility to their stakeholders, internal and external, at the top of their priority list. They expend great of time, money, and resources to ensure that they are fulfilling their ethical duty, and achieving the highest standards of ethical responsibility.
Because of Nike’s efforts to maintain their ethical integrity, Nike is a good corporate citizen. Nike’s motto says that Nike Inc was founded on a handshake. Their goal from the beginning was to build business with their partners based on trust, teamwork, honestly, and mutual respect. “Nike has a commitment to management practices that respect the rights of all employees, including the right to free association and collective bargaining, a commitment to minimizing their impact on the environment, providing a safe and healthy work place, and promoting the health and well-being of all employees. This is Nike’s code of conduct; which is translated and posted in all major Nike workplaces across the world, which exemplifies the commitment to ethics and the Nike stakeholders (“Nike’s Labor Practices. ” , ICMR. 2002). Nike views all of its stakeholders as important components to the success and sustainability of Nike Inc. According to the Stanford Research Institute in 1963, a stakeholder is a member of a group whose support is necessary for the firm to continue to exist. In other words, a stakeholder is any group that has a vested interest in operations of a firm (Stanwick 35).
In Nike’s code of ethics, three stakeholders are mentioned. The stakeholders that are mentioned in the code of conduct are management, employees, and the environment. If it were not for those three components, Nike would not be able to continue to exist as a firm. Nike Inc, being one of the most well known companies in the world, has many external stakeholders. Some of the most important external stakeholders to Nike are the environment, and the community. “In the Nike code of conduct, (Nike’s New Game Plan for Sweatshops, 2004), Nike Inc stats that one of their goals is to minimize their impact on the environment. In partnership with the World Wildlife Fund, Nike Inc is part of an alliance called Climate Savers with other leading global corporations supporting global action on climate change. Nike is committed to supporting a new energy future for our nation and the world. Nike was recognized for leadership in climate change from the World Wildlife Fund in 2007 for reducing its annual C02 emissions to 18 percent below its 1998 levels (“Nike Ethics” Slide Share Present Yourself, 2007). The company is committed to building awareness of the impacts of climate change and leading its voice to the call for urgent global action.
Nike is very committed to the local and global community. “At the core of the Nike brand is passion for sport and the role it can play in life. ” It’s a belief that sport plays a critical role as a source of empowerment to help people reach their full potential. In particular, Nike sees sport as a means of challenging racism, resolving conflict, building leadership and teamwork and enhancing life skills for youth. Used positively, sport becomes a powerful tool for youth inclusion, helping them fully participate in the social and economic opportunities in their community,” (“Nike’s Labor Practices. , ICMR. 2002). Nike Inc is trying to make a world impact by using sports as a tool for social change. In 2008, Nike held the Homeless World Cup in Melbourne Australia. As another example of the impact Nike is trying to have on the global community is the work Nuke is doing in Africa against HIV/AIDS. Nike was commended by the Global Business Coalition on HIV/AIDS for its campaign in South Africa to help the nation address HIV and AIDS. Nike was voted South Africa’s “coolest brand. ” So, Nike created a campaign aimed at showing that it is “cool” to know HIV status and practice safe sex.
The slogan that Nike came up with is, “Life is not a game, wear a condom”. These efforts illustrate how good corporate citizens value their external stakeholders. Internal Stakeholders are just as important to Nike Inc as external stakeholders. The most important internal stakeholder to Nike is the employees. “It’s not a single product model, nor a single manager, nor one ad, nor a single celebrity, not even a single innovation that is key to Nike. It is the people of Nike, and their unique and creative way of working together. ” These are the feelings of chairman of the Board, nd Co-founder of Nike, Phil Knight. Nike’s code of ethics states that providing a safe and healthy work place, and promoting the health and well-being of all employees is one of their main goals. The feelings of Phil Knight and the statement in Nike’s code of ethics is evidence of how important employees are to Nike Inc as internal stakeholders. Employees did not always seem to be the most important stakeholder to Nike. In the 1990’s, Nike was being criticized about sweatshop conditions in low wage countries. Since then, Nike has constructed a program to improve these labor issues.
Today, a staff of 100 inspects several hundred factories a year, grades them on labor standards, and works with managers to improve problems. Nike also allows random factory inspections by the Fair Labor Association, which is a monitoring outfit founded by human rights groups and companies such as Nike, Reebok, and Liz Claiborne. Nike has implemented this program with the intention of eradicating the sweat shop problems they have encountered in the past. Although these efforts did not clean up the problems one-hundred percent, they have done a great deal of good for the Nike sweatshop employees.
Nike Inc is a good corporate citizen because of how much they value their stakeholders. They do a world class job of interacting with, and supporting their stakeholders. Moral managers treat their employees as human resources, of just a means of production. “Moral managers treat employees with dignity and respect and ask that they make not only a physical contribution, but also actively participate in the strategic decision-making process within the firm. The managers treat the employees fairly and respect their rights, privacy and freedoms” (Carroll and Buchholtz, 2008).
Mangers view the community as a valuable asset to be protected by the firm. Because of this, managers take a leadership role in being actively involved in helping promote education, environmental initiatives, recreational groups, and philanthropic groups (Stanwick 37). These are attributes previously explained on a day to day basis. They make it a priority to make sure that these management styles are actually being practiced throughout the company and in order to maintain their ethical integrity. The management styles perfectly summarize Nike’s commitment to their internal and external stakeholders.
Nike Inc seems to have a great design on how they plan to interact with and commit to their stakeholders. Nike receives awards and honors for being a very ethical company around the world. It is not easy to recommend a plan to improve the corporate performance of a company like Nike. They have proven themselves to be a great corporate performer throughout the years. When Nike did have a problem in the past with their sweatshops, they implemented the program preciously explained. This seemed to have a major impact on not only Nike’s corporate performance but also improved the worlds view of Nike looking from the outside in. o, in turn, this drastically improved corporate performance for Nike. If one recommendation had to be made, it would be to have an external monitoring system on Nike, not just external monitoring of the sweatshops and factories, but external monitoring of every aspect of the company. Nike should implement a system where external auditors come in every quarter and make sure that every reviewable aspect of the company be reviewed, and assessed. After the review and assessment, Nike should have someone go over the results and make sure that the results are concurrent with Nike Inc’s code of conduct.
After the results are reviewed, Nike should hold a meeting with workers or worker representatives to go over the results of the audit. This will insure that the results of the audit at the top level of the corporate structure get down to the lower levels of the corporate structure. If there are any problems with the findings of the audit , things can be changed from the bottom up, starting with the workers who actually, “put the wheels to the road” and make Nike Inc as successful as it can be. Although this recommendation may take a while to get feedback from, it would not be difficult to evaluate.
Nike Inc and its staff would have waited for the information of the audits to get down to lower level management. Since Nike is such an enormous company with facilities all over the world, this will take some time. After the audit information gets down to the lower levels of the company, changes can be made. If the audit found any problems to the lower level managers would implement the proper changes to cultivate better results next quarter when the auditors review the company again. This process would also take a while for the results to get back up to the top levels management since Nike Inc is such an immense company.
But, this process would be very useful in finding problems in the Nike organization as far as ethics are concerned. Although Nike has pretty good corporate performance, this process would improve Nike Inc’s corporate performance to an elite company level. There aren’t any examples in action today; it’s just a speculative idea. Works Cited “Basketball” on Nike. com. Retrieved April 02, 2010, from <http://www. nike. com/nikeos/p/nikebasketball/en_US/> “Feature. ” Nike Biz. (2009, 11 12). Retrieved April 02, 2010, from <http://www. nikebiz. com/#> “History. ” Nike and the American Body. (n. d. ).
Retrieved April 02, 2010, from <http://xroads. virginia. edu/~CLASS/am483_97/projects/hincker/nike. html> “Nike Ethics” Slide Share Present Yourself. (2007, 11 01). Retrieved April 02, 2010, from <http://www. slideshare. net/eonemo/nike-ethics> “Nike’s Labor Practices. ” ICMR. 2002. Retrieved April 02, 2010, from ICMR Center for Management Research: <http://www. icmrindia. org/casestudies/catalogue/Business%20Ethics/BECG018. htm> Archie B. Carroll, Ann K. Buchholtz (2008). Business and Society: Ethics and Stakeholder Management. South-Western College Pub; 7 edition. Nike’s New Game Plan for Sweatshops. Online Extra. 004, 09 20. Retrieved April 02, 2010, from Business Week: <http://www. businessweek. com/magazine/content/04_38/b3900011_mz001. htm> Poulomi, S. (2004, 11 08). “Nike develops a ‘balanced scorecard’ for ethics integration. ” Ethical Corproration. Retrieved April 02, 2010, from <http://www. ethicalcorp. com/content. asp? ContentID=3117&ContTypeID=EC-MIDDLE> Pugatch, T. (1998, 04 28). External Monitoring Recommendations. Retrieved April 02, 2010, from <http://www. unc. edu/~andrewsr/ints092/group1/monitor. html> Stanwick, P. S. (2009). Understanding Businnes Ethics. Upper Saddle City,NJ: Pearson Prentice Hall, 2009. Print.