Nike and Labor Issues Essay

Nike and Labor Issues Essay


Nike was established in 1972, a young business school student, Phil Knight. The basic theme to establish Nike was to manufacture sneakers with latest trends for teenagers as well as to focus street smart athleticism. Nike is considered to be USA top footwear brand as it has captured more than 41% of the total market share of footwear products.

Since 1990, the image of Nike has been damaged due to the child labor issues. As the Knight from the beginning adopt the strategy to reduce costs by manufacturing the products at developing countries. This will help the company to reduce its cost and focus more on marketing. But this strategy, and lack of effective strategy to save the company repute overall, develop a negative image of the company. This not only brings a financial loss for the company but the company failed to regain its repute among its valuable customers. Here we will give few strategic options which the company adopts so that the company can regain its previous repute.


The basic problem the company faces is it has to faced a severe opposition in terms that the company is a greedy company and doing well by exploitation of labor. Furthermore, few of the media persons and the human right activist aggressively played their role to damage the image of the company. Unfortunately the company does not appropriate and timely policy which worsened the situation. And the result is the company not only suffered a severe financial loss but stake its repute as well. Now the image of Nike is that a company which is engaged in activities which enhances labor exploitation and it only considered its own profit and has no ethical value for business.

As far as my observation is concerned, Nike has not adopted a proper strategy to overcome the issue. Rather few of its strategies turn out against Nike. The need is to focus on certain points which I am elaborating below. This not only helps the company to regain the consumer confidence but also help the company to earn more and capture a huge market as done in past.

  • First thing the Nike has to do is to review its current contract with the suppliers and manufacturers and enter into new contract which clearly mention the clauses that the company don’t want to any worker which is against 18 years of age. Apart from this clause, another clause should be added that if the company found any labor activity which is against the labor laws, then the company will immediately cancelled all the dealings and contracts with such manufacturers.

  • After entering into this new designed contract, the company should publish the new copies of contract in leading newspaper and give press coverage so that consumer gets to know what actually Nike has been doing to protect the labor rights. And how serious Nike is to be a ethical business entity and care for its workforce If media can give create negative image about the company, then the same medium can be used to create a positive image of the company among the masses.

  • Apart from it, company can create its own employee team, the job of such team is that they visit on surprise basis on different supplier’s and manufacturer’s factories at their respective areas, take photoage what’s actual happening at their side and report directly to CEO. This will help the company to make things better before the media cover it and exploit things. This team could be a kind of internal auditor. This gives a great benefit to the company and company can publish its own articles in the leading newspaper as how company checks its supplier’s and manufacturers to work with in labor standards and laws.

  • Moreover, the company can bring improved labor policy for its employees which include free education to one child of the labor, medical facility within factory area, short term loans to the employees and improved wage rate. Though the company has to bear the additional huge cost for this but in return the company not only succeed to improve it image for long term basis but also help the company to increase its sales and revenue and retaining the skilled and loyal workers. It also helps company to capture a huge market of loyal customers as they will believe in NIKE products and its policies.

  • Furthermore the company can once a year, give best employee award, worker awards at their own country and give open invitation to media. This not only help company to create a positive image for the company but increase the moral of good and skilled workers and in a long term the company will be succeeded in gaining high yield for its owners.

A good strategic policy does not only have to focus on gaining high turnover but also has to focus on gaining good repute for the company in long run. In this way NIKE not only succeeded in rebuilding a new and refined reputation for the company but also help the company to expand its business and increase its turnover as the company can win the confidence of the masses again.

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