Direccin Estratgica Estefana Gonzlez Carbonell

What could Nike have done to prevent the bash of negative publicity on
the forefront?

Nike had been criticized for low wages, poor working conditions and major human rights
issues such as the use of child labor around the world.

1. PROBLEMS
1.1. Safety and health regulations
The first aspect that Nike has to work on is safety and health standards, because in many
of its facilities, working conditions are a danger to the health of the workers. Workers in
some sections of the plant face overexposures to hazardous chemicals, and to heat and
noise levels. Respiratory illness rates remained a concern. The Ernst and Young audits
confirm that "77% of employees have respiratory problems."
1.2. Stress
Special attention should also be paid to the stress factor. Workers suffer from high-
pressure and often abusive work environments. Moreover, they suffer from the stress of
failing to produce the expected quality standards.
1.3. Working hours
The long hours of work of the majority of its workers, together with the fulfillment of the
expected quality standards are a threat for the workers.
1.4. Remuneration
Another example of the inhumane conditions is the low wages that only covers 78% of
the basic need of one individual. The companies have argued that Pay is oriented on the
minimum wage for the respective country to defend themselves. The majority of the
profit goes to the retail industry and brand profit, and only 0.4% goes to the wages. In my
opinion, paying only the minimum wage is not what the consumer expects from a global
player and it will damage the reputation of the company.
1.5. Freedom of association
A solution would be the possibility to form unions to give employees the chance to
negotiate with the management to improve wages and working conditions.
Direccin Estratgica Estefana Gonzlez Carbonell

2. THE MISTAKES
Nike made mistakes like ignoring bad publicity. Nike responded that they were not
owners of factories and therefore were not responsible for violations of labor and human
rights. Nike said he had no knowledge about manufacturing.
In addition, Nike's response to all criticisms is very superficial. Nike hired many public
relations to improve its reputation instead of making reforms that address real problems.
On the other hand, Nike spends a lot of money on advertising and promoting the
reputation of its products. By comparison, the money spent on working conditions are not
even 1% of the money spent on advertising and promoting. Therefore, Nike should have
used part of this money to improve the working conditions in the countries where its
products are made.

3. CONCLUSION
Nike takes advantage of the fact that workers in developing countries need to work
overtime because otherwise they cannot survive. I would argue that the idea of someone
working overtime, just to survive, should not be acceptable in this century.
In my opinion, Nike should have external auditors as internal, to know the real situation
of their workers and to act as quickly as possible. In case of non-compliance, Nike should
compensate its workers for the damages caused.
My analysis shows that Nike has to improve the work conditions in the production
facilities. Otherwise the media will continue to point out the situation there and this can
cause effects on the company's image, damaging its reputation.