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Nikes Example of Business Ethics
Business ethics is the business way of doing things within its environs and when interacting with the world as a whole, or with a single customer. Good and admirable business ethics should be observed in every business, some businesses have been fined for not following their intended business ethics (Brennan & Mullerat, 2005, p. 230). Corporate social responsibility entails how the company controls the overall processes of the business to give a positive impact on society. In this report, we shall be looking at the business ethics and the corporate social responsibility implications in the Nikes industry.
Nikes case study
The case is about the undesirable treatment of the Nikes employees and the bad conditions of sweatshops in its Asian factories. The research done shows that in most Asian countries Nike did not adhere to the intended local laws of labor (Brennan & Mullerat, 2005, p. 235) The Vietnam labor organization reported that, workers were not paid their minimum wages as expected, the working conditions were disastrous, and the health and the safety measures were not taken into account within the normal operations in those factories. Moreover, in the Nikes industry, there were some cases of child labor reported and sexual harassment.
Due to all those mistreatments, some interviews were aired by the CBS news program with the team leaders to inquire more on the reasons behind those conditions. For CBS to anchor its claims they based it on a copy of the labor contract (Brennan & Mullerat, 2005, p. 240). These reports initiated an act of the Vietnamese Americans to consult labor groups and some journalists in Vietnam. Meanwhile, the Vietnam labor watch was appointed to make deep investigations of the working conditions of the employees, and the labor practices within the factories. VLW made an appointment with the workers, the executive board, representatives of the labor union, and the legal experts within the factories.
Some form of differences were observed between what Nike told the American consumers about the labor practices in his factories and what was happening in the real practice (Carroll & Buchholtz, 2008, p. 550). The analysts made a conclusion and reported that, Nike industries had a very good image in the US but very different in Vietnam and other Asian countries. The surveys which were conducted proofed that the laws of labor were violated by the Nikes contractors. Nike defended itself that; it was trying to monitor its ethical codes.
However, Nike industry did not have an effective managerial system for monitoring the ethics. This was as a result of few Nike supervisors in Vietnam to ensure that the code of conduct was adhere to (Carroll & Buchholtz, 2008, p. 560). After the intervention of the labor bodies the industry put some efforts to improve the situations. Their efforts did not succeed in neither improving those bad working conditions nor ending the ill treatments of its employees due to the fact that Nike was defending itself overall those accuses.
Several studies have proofed that, its much crucial for the disclosure of the information regarding the relationship between the corporation and the society (Carroll & Buchholtz, 2008, p. 565). The companys stake holders are always in dire need of this information so as to benefit the company and the public. The following report will be focusing on the most effective ways in which the company can use to disclose corporate social responsibility contents to the public. Using Nike Companys case as our reference, the business ethics and the corporate social responsibility reporting consequences are discussed. While advertising the corporate social responsibility to the public, the Nikes Company was faced with some consequences (Hartsman, et al 2003, p. 120). The theoretical viewpoints regarding those complications are discussed. The report finally gives some possible solutions which the companies can adopt while trying to improve the quality of the corporate social responsibility reporting.
There are employees ethical behaviors in every company. In Nikes Company there are measures which the management could have adopted to enforce the ethical behaviors (Hartsman, et al 2003, p. 130). Some of the ways used which can be used by the management are the reward systems, coaching, training sessions, and the applications of ethic codes. The corporate social responsibility in the Nikes industry which involves quality of management, the work place, its market place, the environment and the community. Therefore, its implications to the government, shareholders, financial analysts, customers, local communities, employees, and to NGOs will be deeply focused.
The ethical and CSR issues arising out of Nikes case
There are twelve common business ethics and seven corporate social responsibilities which are applied to the business to improve the relationship within the business and with the outside world (Hartsman, et al 2003, p. 95). Through a health relationship the company is capable of utilizing its resources well, have an excellent networking with the external world especially the customers, and finally enjoy an increased profit. The Nike industries started moving along an ethically challenging path, when they started using the traditional advertising methods as a way of responding to the activist criticism. According to the corporate social responsibilities, ethics of traditional way of advertising is insufficient as it does not match with the higher ethical standards of the citizens.
There are companies which act on behalf of a social interest known as corporate citizens and they rarely affect the companys revenue (LEtang & Pieczka, 2006, p. 418). These actions are meant to bring some social benefits of raising the ethical standards instead of the usual company purpose of making profits. The level of ethical expectations by the corporate citizens in the companies with social interests is high especially the way they communicate about their practices. Its always difficult for any company to match the expectations of the shareholders and the activist with their ethics of corporate social responsibility.
For any company to remain competitive in the market place it must then be very careful when making advertisements and other reports (LEtang & Pieczka, 2006, p. 425). Like what happened to Nikes industries, it is had and challenging to maintain its integrity when advertising to respond to the criticism. The management of the Nike Company had a great role to play so as to ensure that the information was disclosed ethically, legally, and effectively while still maintaining a positive image to the public.
A recent research concerning ethical issues concerned with the corporate social responsibility shows that, companies are ethically obliged to its stakeholders of interacting and getting engaged in deep dialogue about the corporate social responsibility. Its considered as a socially responsible behavior in any company to have a widened corporate social responsibility disclosure (LEtang & Pieczka, 2006, p. 437). This gives the public more information about the company and as well the company is in a position to meet their intended responsibilities to its stakeholders.
Companys mere expression of its set goals and objectives is considered insufficient because anything confessed by the company concerning its corporate social responsibility its therefore obliged to perform as stated. Incase its actions are seen to contradict with the stated behavior its whole functioning becomes questionable to the persons in charge (LEtang & Pieczka, 2006, p. 477). When Nike decided to make an advertisement concerning its good corporate conduct as a way of responding to the negative public perception about its code of conduct, a lot of ethical concerns were raised. Its argued that, marketing of the company products is not as crucial as first of all marketing the ethics of a good corporate conduct.
The product advertising of any company should occur after the marketing of the favorable corporate conduct (LEtang & Pieczka, 2006, p. 490). Products advertisements are just meant to appeal to the emotions of the public without creating a deep impression like the corporate social responsibility advertising would create. For any company to make decision on the moral actions to be followed, a very careful decision making is needed, and accessibility of all the facts to be based on.
Nikes industry promoted the good conducted purposely for profits which is very unacceptable in the business world (Hartsman, et al 2003, p. 75). This action exploits the good conduct something of much higher value and on the other hand promote money something of lower value compared to the right conducts. When it advertised its good conduct through he traditional ways the condition became worse as this was considered as pretending to deceive the consumers. It was trying to repair the already damaged reputation by its bad ethical codes.
The management of the Nikes industry failed to put into consideration the alternative methods of social disclosure (Werther, & Chandler, 2006, p. 260). Most companies make use of responsibility reports and codes of ethical conducts to make reports regarding their practices. The companys reporting of good corporate conduct goes hand in hand with the openness to the external body in charge of auditing. This external body enhances a complete report of the company deeds as it act as a witness. Moreover, a study was done concerning the morality and the impacts of the corporate code of ethics which are ways through which the company can express social responsibility intentions.
Nikes ethical codes were made available to some factories and were abandoned to others. Codes are considered to be ethical when they are made to meet some set criteria. They are supposed to be available to all employees, have some persons to enforce them, and be monitored on regular basis (Werther, & Chandler, 2006, p. 268). Nike industry used its ethical codes mostly for image and publicity rather than to be incorporated in the working place, to this view they become unacceptable. If code of conducts in any organization are made aware to the employees, and seriously enforced, it can be seen as an ethical standard to a company.
When Nike decided to use a public relation campaign to rebuild its image, this could not be ethically acceptable (Werther, & Chandler, 2006, p. 314). This was seen like just a desire for revenue, willingness to meet the expectations of the stakeholders, and to promote the transparency. In all the companies especially the current world, all kinds of the stakeholders such as the partners, customers, employees, and the government among others are always in need of being acknowledged about sustainability issues. Its their duty and responsibility to monitor how the company is working and making decisions.
Through this, the stakeholders get into a position to improve the performance of the business as well as the social effect of the business to the society (Werther, & Chandler, 2006, p. 306). They also ensure that they reduce environmental consequences through maximizing their operations and concerns in the business. In the Nikes company there is a big gap observed between the companiess set sustainability goals and whatever the company is seen doing to achieve their objectives. The failure of their performance in achieving these objectives is as a result of some underlying factors according to several studies done (Carroll & Buchholtz, 2008, p. 830). Nike Company and other like it which have been faced by this challenge are observed to lack competent individuals to collect and analyze the information which is required and hence why they can not be in a position to implement real changes therefore reduced efficiency. Only few companies are observed collecting enough and the needed data from their global suppliers, out of these they are missing great opportunities which could have been used to increase the efficiency.
Some companies are seen to misunderstand the needs and the concerns of their key stakeholders especially the customers (Carroll & Buchholtz, 2008, p. 840). Companies are obliged to getting actively engaged with their customers so that they can be in a good position to determine their needs. Nike Company is recorded among the companies which miss the knowledge of the employees which could have helped it to improve their efficiencies and lead to new opportunities.
The companies which are willing to acquire a high level standard of sustainability are active in seeking information from the relevant groups such as; from the customers, NGOs, and the industrial groups (awpagesociety.com). Through this they are capable to acquire more knowledge and attain a competitive position against their competitors. Through interactions with their suppliers, partners, and the competitors they try and come up with a common standard for sustainability. Set standards are very essential with regard to the effectiveness of a long term corporate social responsibility.
Business ethics policies are created in the companies which are willing to instill ethics in their workplaces to ensure justice is practiced among all the employees. These are the companies which specialize in training the employees on those business ethics and the corporate social responsibility (awpagesociety.com). In Nikes Company, the subcontractors in Asian countries violated the ethical issue by making use of the child labor who were the ages of teenagers and below. After the spread of this bad reputation, Nikes management team had to organize a global public relations campaign to rebuild back their reputation against that controversy.
Although this was taken to be against the corporate social responsibility due to the use of traditional ways, on the other hand it was also considered to have some strong business ethics (Brennan & Mullerat, 2005, p.528). To cover up the negative media attitude towards the Nike Company, it was the initiative of a proper management team in the Nike Company which was in charge of leading and planning which fought against the child labor issue. Through this, they demonstrated their business ethic philosophy.
The productivity and the success of the company are determined by both the external and the internal factors (awpagesociety.com). In addition, these factors have consequences in the way in which things are organized, and the way the company resources are utilized. Through this the management is able to measure the accomplishment of the companys set goals and objectives. The management plays a great role to assess these factors as part of their planning function.
Conclusion and recommendation
The Nike case has shown the made decision by the company to rebuild its spoiled image (Brennan & Mullerat, 2005, p.520). The company responded by the use of tradition public relations tactics which was considered to be against the morals of corporate social responsibilities. This report has made no judgment concerning the contents of the Nikes statement but provides the possible solutions which can be used in communicating the companys practices to the public. As the number of the companies which are entering the international business is increasing in the developing countries, the public develops the need to know the corporate social responsibility sufficiently. Though the law governing this is not yet established the Nikes case have led to the national attention need for better standards.
There is need for the corporate America to be involved in the idea of social responsibility practices complete disclosure (awpagesociety.com). This can ensure that all the responsible companies, consumers and investors have made the social responsibility the first priority while producing, making decisions of purchasing, as well as when using finances. Some researches done have proofed that the functioning of the company within moral practices is profitable as this builds the reputation of the company hence widening its consumers coverage.
The case of Nike Company as it uses the public relations as away of responding to the negative information about its company, gives a clear dilemmas of what the company goes through when disclosing its practices to the public (awpagesociety.com). Nike has brought these legal issues to light as a good example of deciding on how to communicate to the public. The management should always ensure that the standard ethical behaviors are made aware to every employee and are enforced. Through this the company will be able to achieve its set goals.
Reference
Brennan, D, & Mullerat, R, 2005, Corporate Social Responsibility: The Corporate Governance of the 21st Century, Kluwer Law International.
Carroll, B, A, & Buchholtz, A, K, 2008, Business and Society: Ethics and Stakeholder Management, 7th ed, Cengage Learning.
Hartsman, L, P, et al 2003, Rising above Sweatshops: Innovative Approaches To GlobalLabor Challenges, Greenwood Publishing Group.
LEtang, J, & Pieczka, M, 2006, Public Relations: Critical Debates and Contemporary Practice, Routledge.
Werther, B, & Chandler, D, 2006, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, SAGE.
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