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