Discuss about the Report for New Management Style and Policies.
This paper seeks to analyze the importance of adopting a new management style and policies by Nike after finding itself in a reputational crisis after the sweatshop scandal. For a large corporation such as Nike any scandal will definitely affect the perception and trust that the consumers of its products have. We will use qualitative analysis in this paper and also analyse the various initiatives that Nike has come up with to restore stakeholders confidence and use qualitative analysis in our methodology.
Introduction
NIKE, Inc., is a design company based Oregon, Nike is among the leading companies involved in design, manufacture, distribution and marketing of shoes , equipment and apparel for sporting and physical activities all over the world. Nike has subsidiaries such as Cole Haan, which is involved in manufacturing and distribution of luxury items such as handbags, shoes and coats another subsidiary is Converse Inc., which also is involved in the design of accessories and distribution of athletic footwear, apparel and accessories(Aras & Crowther, 2009). There is also a subsidiary called Hurley International LLC, which designs apparel and accessories for action sports and youth lifestyle and Umbro Ltd., which is a leading football brand company based in the UK. This paper focuses on the the management style and unethical issues that Nike has been involved in and why.
Research methodology
The paper covers ethical and unethical practices that Nike Inc. has been involved in. Data collection will be from past literature about Nike as well as the graphs and financial results of Nike in previous years. The research uses qualitative analysis of data concerning Nike Inc. the data will be obtained from journals, Nike’s financial statements to analyze Nike’s policies as well as the measures that they have put in place for improving CSR in the regions that Nike operates in. as a result, data collection will not take a long time since all Nike’s information can be easily accessed in various mediums such as the internet
In 1992, Nike had developed a code of conduct and a year before the report, had signed its adherence to the Global Compact which was launched by the UN Secretary General, Kofi Annan. Following this agreement Nike agreed to respect principles such as freedom of association and protection of human rights. By joining this initiative, Nike acquired a commitment to both consumers and with international organizations(Carbasho, 2010). So when reports were issued that Nike had engaged in unethical issues there was a serious reputational crisis. This was the labor practices in Bangladesh known as the Sweartshop scandal.
This showed not only the social impact of a multinational company in the countries where it stands, but also the high cost that may involve not closely monitor all activity of Nike operated. Consumers reacted and Nike had to get going to keep the credibility of your brand. As a textile leader Bright business career in the industry began in the seventies when its founder, Phil Knight, director devised a revolutionary new model of sneakers that caused a sensation among athletes. Soon, the firm managed to gain a foothold in the textile sector reaching sufficient capacity to expand its product offerings. The market share of Nike has grown steadily to achieve the level it enjoys today.
Today, Nike is at the top of the sports equipment industry with approximately 37% market share. It is also the most production jobs have moved outside North America. According Setem, a federation specializing in issues of cooperation and development NGOs, this American company makes 99% of its production in the Third World.
For many companies such as Nike, Developing nations are attractive for factories due to the fact that they offer labor that is cheap in an environment that has free social legislation. Big companies preffer to work with local factories in order to develop a certain product, the main reason behind this is so that they can leave everything relating to employees, , salaries, and working conditions in the hands of native producers(Simpson & Taylor, 2013). The inadequate transparency that describe this production method has caused Nikeand other large multinationals, be closely watched by the critical eye human rights organizations that are integrated into the anti-globalization movement.
Nike social responsibility
Consequently, Niketried to address the problem by arranging various activities improve social work and dignity in the countries the factories were set up. Nike also decided to launch a communication campaign whose goal was to get people and moreso consumers end up associating and relating the brand to values ​​of justice, dignity and equality. Nikeformulated a new code of conduct which outlined their business principles which endorsed its serious improvement purposes: (DeWinter-Schmitt, 2007). Moreso, the code would ensure continuity of its commitment to social values and also required that all its working partners adhere to these code., Nike is mainly committed to:
1. Respecting employees rights , this includes the right to free association and collective bargaining.
2. Ensure minimal negative impact on the environment in general.
3. Guaranteeing a safe and healthy workplace to the workers.
4. Prioritize on the health and welfare of all workers.
Nike also gave a very significant when publishing the list with the names and locations of its 700 suppliers and subcontractors plants worldwide step.This activity had never done before in the history of the textile sector and has come to be a milestone that unions and labor rights associations consider decisive. Nike said in a statement that any damage caused by competition following the publication of this list would not harm the potential benefits that the brand could acquire(Business as usual? The mobilization of the anti-sweatshop movement and the social construction of corporate identity, 2008). The report coincided with the publication of the second CSR report.
role management function and how it is impacted by politics and the social environment;
Effective management aims at ensuring that the company achieves its set objectives. Management function is affected by politics and social environment, for example in the case of Nike, the company was forced to adopt a new style in which it would manufacture its products while ensuring that they adhere to safeguarding the workers interests including provision of a good working environment. The politics of how multinationals violate human rights in developing countries played a key role in ensuring that the management observes this aspect without negatively impacting on the bottom line(Ferrell, Fraedrich, & Ferrell, 2010). Politics are behind the managements decision to change on the ways they were doing production.
Also, Nikes management has promoted its plan of using soccer as a movement to enhance social change. This is inline with the managements focus on the social environment . For example, An example of a program the company partners with is Grassroots football . This is a community program that directly addresses an extreme social need through awareness especially in deveoping countries.
The report notes that during the supplier audits supervised by inspectors of the FLA, four areas of breach of code of conduct were detected: freedom of association, wages, working hours and harassment in their factories. However, improvements were seen in the areas of child and environmental work(Simpson & Taylor, 2013).
Looking ahead, Nike confirmed in the document their commitment to advance in three different direction.It is increasingly common to find a responsible CSR within the structure of Nike or see codes of conduct drafted and enforceable also extensible to suppliers(Morsing & Beckmann, 2006). Companies are becoming interested in training their employees on human rights as well as working on improving their systems testing and evaluation work in subcontracting factories.
It is clear that these large multinational companies remain leaders in their respective areas despite having chosen a committed CSR policy.Already it is seen that the fact of adopting labor principles in line with the new social demands is not at odds with the pursuit of profit.Turning pointIn October 2000 a reporter for the BBC, Paul Kenyon, traveled to Cambodia to investigate working conditions in factories. Subsequently, a report with the Nike& Gap No sweat name issued in which the harsh working conditions in subcontracted factories are kept awake by these companies(Morsing & Beckmann, 2006).
Children under fifteen years working in endless shifts and sexual abuse by officials of the factory were some of the practices that the BBC brought to light. The impact of the scandal made both Nikeand Gap closed down factories in Cambodia. As a result, the country lost 10 million dollars in contracts and hundreds of natives were fired from their job.
Most of the texts have served as a basis for designing this course, they use different terms: policy, strategy and tactics. In general the term “politics” and its different meanings, set standards for the management of Nike and its behavior in the market, and sometimes cover a period of ten years(Ferrell, Fraedrich, & Ferrell, 2010). Covering the objectives of Nike as well as methods for their behavior.
Nike is a strong company when it comes to sustainable and innovative business (Sustainable Business and Innovation, ). This approach was integrated consistently with Nike’s business strategies of , this was aimed at generating greater income for Nike and a more sustainable business model to cater for the communities, consumers, factory workers e.t.c. Politics and social environment determine how the management formulates their policies; this is because the policies should not go outside the policies of the government(Visser, 2011).
The management style ensures that Sustainability and innovation is key to innovation and growth of the products as well as revenues of Nikeaccording to Mark Parker, CEO of NIKE, Inc. politics and social environment made Nike change how they were going to operate going forward in terms of Making the business sustainable and beneficial to customers, and have a low impact on environment, the factories workers will enjoy a good environment in production and employees growth and shareholders’ value who will be rewarded from the management style.
The management report announces progress Nikeregarding the five-year objectives that were established in 2007. Nike has made considerable progress in many aspects, for example the execution of training in efficient management which is also known as (Lean Management) in factories that have been contracted, use of environmentally preferred products and reduction of waste and toxics and increasing in all high performance considered Design of materials.The management has also moved towards removing the most challenging aspects of progress regarding the purpose of Nike, for example, the how to deal with overtime in contract involving the workers. Nike and management has the objectives in some to reduce the complexities which is a change in strategy in how to manage Nike(Micheletti, Føllesdal, & Stolle, 2004).
Efficient Management (Lean Management) and human resource management. One of the management strategies is to train factory workers with an aim of creating and implementing efficient manufacturing in Nike hence there is need to have a good human resource management programme.. efficient management decision-making principles are critical as they bring the worker closer through skills, understanding quality and teamwork understanding.
References
Aras, G. & Crowther, D. (2009). Global perspectives on corporate governance and CSR. Farnham: Gower.
Business as usual? The mobilization of the anti-sweatshop movement and the social construction of corporate identity. (2008).
Carbasho, T. (2010). Nike. Santa Barbara, Calif.: Greenwood.
CSR handbook. (2001). [Washington, D.C.].
DeWinter-Schmitt, R. (2007). Business as usual?.
Ferrell, O., Fraedrich, J., & Ferrell, L. (2010). Business ethics. Mason, OH: South-Western Cengage Learning.
Green, S. Nike.
Micheletti, M., Føllesdal, A., & Stolle, D. (2004). Politics, products, and markets. New Brunswick, N.J.: Transaction Publishers.
Morsing, M. & Beckmann, S. (2006). Strategic CSR communication. Copenhagen: DJØF Publishing.
Reviews, C. (2013). Studyguide for business ethics 2009 update. [Place of publication not identified]: Cram101 Incorporated.
Simpson, J. & Taylor, J. (2013). Corporate governance, ethics, and CSR. London: Kogan Page.
Sutherland, A. (2012). Nike. London: Wayland.
Visser, W. (2011). The age of responsibility. Chichester, West Sussex: John Wiley & Sons.
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