Nike’s CSR challenge

Case Study #2

Nike’s CSR challenge

               Many Japanese new graduates want to work for Nike. According to the case study in International Management Managing Across Borders and Cultures, recently Nike was reported to have abusive labor practices in Asia. As a result Nike has decided to make a new strategy to stop these abuses. Their thoughts must change to moral universalism from ethnocentrism and their leader has a concept of “leaders beyond borders”. In the apparel industry, Nike is a leader. Other companies follow their lead. This is why they feel responsible to correct their practices.

              Nike has had many problems. It has been found that they use child labor, restrict access to toilets and drinking water during the workday and pay less than legal minimum wage in some part of South Asia. I wouldn’t expect this from Nike because this company is famous worldwide and reliable company. They have many branches and it can’t be helped if occasionally there are problems. However their misdeeds are on an extremely large scale. Their loss of creditability is much more than I expected.

              They are trying to redeem their image. They no longer regard the company as a closed system and they have understood its future depends on the way customers, suppliers, investors, regulators and others relate to it.

              Their leadership has changed as part of their new strategy. “Leaders beyond borders” means transcending their limited situation. The implication is globalization of company policy and practices. For globalizing their company, they have to consider the host country’s system and culture. In Japan and Europe, they tend to make moral judgments based on general rules. Their worker has to do ethical behavior in compliance with the law. Their corporate governance also must be based on compliance with the law. To transcend their borders, they have to make a sophisticated rule and system before starting up activities overseas.

              To open their system, they must resolve their issues of trade flows, governance, media, financial markets and political impact. They need to specialize in finance to analyze financial markets and protect their company from a foreign buyout.  When they make such abusive labor decisions, many hedge funds will try to do a merger and acquisition. Nike needs to protect itself from these attempted buyout, and preserve its good name and history.