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Assignment Questions

Nike vs Univ of Oregon Corporate Social Policy

Corporate Social Policy:

Nike’s dispute with University of Oregon.

Nike Case Nike, as many other companies do, facilitates production in other countries to help grow sales in those particular regions. In the case study Nike vs. University of Oregon ,this issue became a heated topic at campuses throughout the United States. Student groups at dozens of campuses held sit-ins and demonstrations to pressure their universities to join the Workers Rights Consortium, instead of the Fair Labor Association. The Workers Rights consortium, was set up by students with the backing of several labor unions, to monitor the overseas factories that make hats, T-shirts and other apparel that are made under license and carry a university’s logo. Nike along with many other apparel manufacturers makes several products that are sold at university bookstores. Nike, which has faced criticism for working conditions in its overseas factories, often has faulted the consortium for being unfriendly to apparel and footwear manufacturers. Nike is a member of another monitoring group, the Fair Labor Association, a Bill Clinton White House-backed organization that, unlike the consortium, has apparel companies on its board. The students asserted that the Fair Labor Association was dominated by corporations and would not be strict enough and thorough enough in their monitoring of overseas subcontracting facilities When the University of Oregon backed the Workers Rights Consortium, Nike President withdrew all is promised donations in protest.

Nike, a globally recognized symbol for sports and apparel, emerged from meager beginnings. Indeed, with a handshake and a $500 investment, Nike, originally known as Blue Ribbon Sports, was born. Today, Nike employs over 20,000 people and generates over $9 billion each year. The company’s marketed oriented strategy coupled with a fresh vision for growth was – and still is – a large part of Nike’s success.
Nike also found a cost effective strategy for production that largely contributed to the firm’s financial success. From the start, Nike outsourced production of its shoes and apparel to subcontractors outside of the United States, mainly in the Asian region. By doing this they saved a significant portion of its capital on the cost of labor and materials. Labor such as this has been commonly know as “Sweatshops”. The term “sweatshops” has been used to describe subcontracting factories that employ thousands of people in facilities whose conditions can be described as worse than hell. Nike has hundreds of these facilities, also know as factories spread throughout the world with poor working conditions, forced wages and long hours. Over the past ten years the conditions for these subcontracted workers has been a source of heated debate, with allegations made by campaigns of poor conditions, with commonplace harassment and abuse. Nike has sought to respond to these allegations by putting into place a code of conduct for all of its suppliers, and working with the Global Alliance to review around 21 of these factories, and to pick up and respond to issues.
Starting in 1993, widespread criticism of the use of sweatshop labor cast a negative shadow on Nike Inc. Vivid descriptions were used to display the conditions in which over half a million people had to work every day. The media brought these detailed descriptions of working conditions in Nike run factories that completely ruined a once choose to exploit these poorer third world countries. Nike’s production method was also, however, the main source of a corporate ethical and social problem. Because it had numerous subcontracting factories that operated largely in its own respective terms, there were not enough rights given to workers, and in some cases there were no rights to speak of at all. Workers in the chemical section were not provided with enough protective gear, the working hours were not fairly set, and overall conditions that employees were subject to were extremely poor. It was not too long before such poor conditions that Nike workers were subject to became public knowledge, and, not unsurprisingly, such knowledge hurt the firm’s corporate image.

Using the case study please answer the following..
The fair Labor Association and the Workers Rights Consortium differed on how to establish and enforce fair labor standards. Which approach, if either, are more favorable, and why?
Consider how to answer the question if you were representing the following:
Nike Shareholders
a human rights organization
a U.S. labor union, the government of a developing country

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