Nike's Labor Practices

 
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Case Details:

Case Code : BECG018
Case Length : 12 Pages
Period : 1996 - 2001
Pub. Date : 2002
Teaching Note : Available
Organization : Nike, CBS News, Vietnam Labour Watch
Industry : Apparel and Footwear Industry
Countries : USA, Vietnam

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

The VLW Report

According to surveys and interviews carried out by VLW, workers in Nike's factories in Vietnam were exploited in many ways. Nike's Code of Conduct (see Exhibit I) was being violated consistently by its contractors.

Though Nike claimed that it was trying to monitor and enforce its Code, it did not have an effective system in place for monitoring and enforcement. There were not enough Nike supervisors in all of Nike's factories in Vietnam to ensure that its contractors were complying with the Code of Conduct on a day-to-day, shift-to-shift basis...

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Nike's Reaction

Nike constantly denied that it used unfair labor practices. The company sent representatives to college campuses in the US in an attempt to convince students that Nike's treatment of foreign labor was fair.

In addition, Nike targeted journalists in countries in which they had factories to report their side of the story.

Vada Manager, Nike's senior spokesperson, explained the rationale for this move, "Unlike US-based reporters, who are writing about factories they have never visited, journalists working in those countries understand the local conditions."

Nike offered a 12-minute online video tour of its contracted shoe facilities in Vietnam...

Three Years Later

In May 2001, a report prepared by a labor rights group claimed that even after three years, Nike had not delivered on its promises. The report said that Nike used to warn its factory managers about inspections by its own inspectors in advance, allowing them to minimize toxic fumes by the time they arrived...

Exhibits

Exhibit I: Nike's Code of Conduct
Exhibit II: Nike's Track Record (1988-1996)
Exhibit III: Nike's Five Year Financial History

 

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