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Dita KovaříkováDoan Thi Van

Team Assessment

MGT 255/2 Business Ethics

Spring 2014

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TopicIs it fair to make the comparison between the amount Nike pays its factory workers in Vietnam and the salaries of its CEO and the athletes that endorse the

company‘s products?

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TABLE OF CONTENTS

I. Introduction

II. Nike company

III. Timeline

IV. Top Salaries

V. Promotion

VI. Globalization

VII. Problems in Vietnam

VIII.Question Time

IX. Conclusion

X. References

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Introduction

“Just Do It.” Three simple words, yet together they

represent one of the most popular sports apparel

companies in the world: Nike. However, over the years their great success has come with an even

greater cost to those who suffer under their inhumane

sweatshop practices.

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Nike employs more than 1 million workers 

in approximately 841 different factories. The U.S. is currently home to 66 of these factories, and employs

8,151 men and women.

Comparatively, Vietnam, a smaller and poorer country, has only 40

factories, yet employs 171,276 workers — the majority of which are young women and children.

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1991: Problems start in 1991 when activist Jeff Ballinger publishes a report documenting low wages and poor working conditions in Indonesia.

1996: Nike establishes a department tasked with working to improve the lives of factory laborers.  

1998: Nike faces weak demand and unrelenting criticism. It has to lay off workers, and begins to realize it needs to change. 

Timeline

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2005: Nike becomes the first in its industry to publish a complete list of the factories it contracts with.

2005-Present: The company continues to post its commitments, standards, and audit data as part of its corporate social responsibility reports. 

Timeline

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Guess who it is ?

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Top Nike‘s Executives Salaries• Mark G. Parker - President and Chief Executive Officer

$15,425,608• Charles D. Denson - President, NIKE Brand

$13,782,464

• Donald W. Blair - Executive Vice President & Chief Financial Officer $7,758,432

• Trevor A. Edwards - Executive Vice President, Global Brand & Category Management $9,943,431

• Eric D. Sprunk - Executive Vice President, Merchandising & Product $9,943,934

Source: www1.salary.com

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Biggest athlete endorsement deals

Maria Sharapova (tennis) – $70 million from Nike

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LeBron James (basketball) –$90 million from Nike

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Tiger Woods (golf) – $100 million from Nike

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 Rory McIlroy (golf) –$200 million

(estimated) from Nike

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GLOBALIZATION

= is process of interaction and integration among the people, companies and governments of different nations

Their profit Their Cost

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WHY DID NIKE CHOOSE VIETNAM?

• Vietnam is developed country

• Nike sets minimum wages to Vietnamese workers

• Vietnam is cheaper than other countries

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WHAT WENT WRONG • Vietnamese workers endure physical, mental abuse

• Poor and dangerous working conditions

• Long work hours

• Hired children

• Workers cannot go to the toilet more than once per 8-hour shift and they cannot drink water more than twice per shift.

• Workers with skin or breathing problems were not move to department without chemicals

• Inadequate heath and safety measures

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WORKERS CANNOT LIVE ON NIKE FACTORY WAGES?

47 $ per month -> 1,6 $ per day

A simple basic meal costs 70 cents

(like rice, vegetables and some tofu)

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The problem here has to do with ethics

• American companies should be concerned with human labor conditions, but ultimately it is the government, in which the contracted factories exist, that is responsible for the mistreatment.

• Companies like Nike are allowed to seek the least expensive avenue of manufacturing, or the idea of outsourcing would be nullified.

• Companies like Nike must keep the idea of cultural relativism in mind

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Although a job in Vietnam is better than no job, it is still unfair for these workers in developing countries to be treated in such horrendous way when compared to the way we are treated. This global inequality needs to be stopped and many groups which some have been mentioned previously exist to help stop this

Conclusion

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Questions

• Nike pays low wages to the Vietnamese workers – do you agree that it is unfair and unethical?

• How should Nike change their working conditions in Vietnam in the future?

• Do you think that people would stop purchasing Nike’s products if they know more about the unfair behavior to the Vietnamese workers?

• Do you agree that Nike deserves reprimand for inhumane working conditions and overpaying of their executives or celebrities?

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THANK YOU FOR LISTENING

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REFERENCES

• Target and Performance. www.nikeresponsibility.com . Nike,INC. Web. 5 Apr. 2014.

• Theater, David. „Nike lists abuses at Asian factories.“ 14 Apr. 2005. www.theguardian.com . Web. 5 Apr. 2014.

• Spar, L. Debora, Lane T. La Mure. „The Power of Activism, Assesing the Impact of NGO‘s on Global Business.“ www.people.fas.harvard.edu . Web. 30 March 2014.

• Nisen, Max. „How Nike Solved Its Sweatshop Problem.“ 9 May. 2013. www.businessinsider.com . Web. 30 March 2014.

• Hase, Grase. „Column: Nike deserves reprimand for inhumane working conditions.“ 8 Feb. 2013. www.themaneater.com . Web. 30 March 2014.

• „Nike workers‘ hided, slapped and verbally abused at factories making Converse.“ 13 Jul. 2011. www.dailymail.co.uk . Web. 30 March 2014.

• Nike, INC. Annual Report on Form 10-K.www. investors.nikeinc.com . Web. 30 March 2014.

• Vietnam Labor Watch, Nike Labor Practices in Vietnam. www.saigon.come. 20 March, 1997. Web. 30 March, 2014.

• Birch, Simon. „How activism forced Nike to chang its ethical game.“ 6 Jul. 2012. www.theguardian.com . Web. 20 March, 2014.

• International Business Machine Corporation. www1.salary.com. Web. 30 March, 2014.

• Said, Sammy. „ Top 10 Current Biggest Athlete Endorsement Deals.“ 14 Apr. 2013. www.therichest.com. Web. 5 Apr. 2014.