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The sweatshops issue that Nike Inc. was facing was made clear by the low-cost Asian industries that were developed. Nike would abuse its employees by paying them poorly, using child labor, and having them work long hours in stuffy conditions (Harrison & Scorse, 2004). Although Nike has a code of conduct outlining their relationship with laborers, the community, and the environment, the industries did not take these policies into consideration, which resulted in public protests calling for a boycott of Nike's products (Dion, 2012).
The primary practices Nike Inc. engaged in at its sweat shops are discussed in this research paper, along with how the company handled the backlash.Nike had exposed their employees to poor working conditions that include beating them, lack of protective gear which exposed them to harsh chemicals, constant firing and even withholding their salaries (Harrison & Scorse, 2010. The chief executive officer, Phil Knight, admitted the sweatshop allegations and promised to implement and reinforce better policies. To overcome the obstacle, Nike formed the Fair Labor association that would safeguard the employee’s rights (Harrison & Scorse, 2010). The company also reimbursed the worker’s salary and also followed the human rights laws regarding employment. Nike also conducted company audits which helped to keep their industries in check (Harrison & Scorse, 2010).
The article also highlights alternative measures that Nike would have taken to salvage their image and theoretical applications to good leadership practices (Abrhiem, 2012). Nike, for instance, should have sponsored the children’s education and conducted proper investigations on the employee’s documentations to avoid hiring children. Additionally, this essay proposes different ways leaders can avoid similar challenges and how they can ensure that they always adhere to good ethical and legal standards set in place.
Abrhiem, T. H. (2012). Ethical leadership: Keeping values in business cultures. Business and Management Review, 2(7), 11-19.
Dion, M. (2012). Are ethical theories relevant for ethical leadership? Leadership & Organization Development Journal, 33(1), 4-24.
Harrison, A., & Scorse, J. (2004). The Nike Effect: Anti-Sweatshop activists and labor market outcomes in Indonesia. Ann Harrison (UC Berkeley and NBER) and Jason Scorse (UC Berkeley).
Harrison, A., & Scorse, J. (2010). Multinationals and anti-sweatshop activism. The American Economic Review, 100(1), 247-273.
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