Honesty in business
Honesty in business is one of the continuous issues that have increased in the current business society. Due to globalization, firms that entail in production techniques and Multi-National Companies (MNC), that have increased continuously, find themselves in a dilemma of adhering ethics, or not in different countries that they operate. Reputation of a company depends on its ethical procedures used. Ethics is a term that involves recommending, defending, and systematizing concept of wrong and right conduct. This helps to establish the model that the company can undertake for it to thrive over time, even when it diversifies. In the current business environment, most companies aim at acquiring high profits. To achieve this, they find themselves using shortcut means. As culture requires companies to protect the environment and create a great, better-paying work deal, quite a few companies like to get more profits by creating activities not tolerated by society. Also, Organizations are experiencing customers who have a growing need to buy everything, product, or services at a lower price. As a result of that, most of these organizations find themselves a typically inevitable contradiction that arises during the organization’s ethics concept resulting from different particular interests associated with investors, buyers, and business risk holders. Nike Inc. is one of these multinational corporations that find it facing this ethical scrutiny first hand, making it the focus of this essay.
Nike Inc. is one of the world’s famous franchises that sell all age sportswear. The company is most famous for its apparel and athlete shoes. It is also the major world’s manufacturer of sports equipment and was founded in Oregon, the United States, in the year 1962. Its founders were Bill Bowerman and Philip Knight. The company has over 700 retail outlets spread all over the globe, and an approximate of 45 offices located outside the U.S. Nike inc has employed more than 30,000 workers all over the globe. In the year 2007, the company recorded an excess revenue of 16 billion dollars. Don't use plagiarised sources.Get your custom essay just from $11/page
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Mistreatment of the employees
The international attention has aimed at the company’s activists and on Colin Kaepernick’s Nike ad, where most people using social media have pointed to the Nike Company’s well-documented forced labor, poor working conditions, long hours, abuse, and low wages documents. These documents entailed on what the company’s workers endure.
Forced labor
The company’s ability to grow fast was by outsourcing cheap labor from underdeveloped countries such as India, Pakistan, Vietnam, and Indonesia. Mostly, most of the companies motivate their employees by giving them free food and bonuses so that they can work better and produce excellent results. This was not the case in Nike Company. A Nike contractor, based in Sukabumi, Indonesia, used a different approach to make sure the employees work better. He used extreme measures to bring some of the employees in line. A report from a nonprofit Educating for Justice in the United States reported claims made by employees from Nike shoe factory of allegedly deploying Indonesian high-ranking military officers to help them keep the workers in line. The military officers forced employees in the company for less pay than that of the country’s minimum wage, which had recently risen. The military officers allegedly pressured reluctant employees into signing a petition that stated that the contractor would not pay them the country’s new wages. These workers were paid 3.70 dollars per day instead of the country’s salaries of 4 dollars. According to the report issued by Jakarta Globe, laborers activists claimed that the forced labor in the Sukabumi factory wasn’t an isolated incident. It stated that most Indonesian Nike factories systematically pressured their employees to give up their rights to get the new country’s minimum wage.
Poor working conditions
There were poor working conditions in the factories. The workers, especially in Vietnam, a factory located in Tae Kwang Vina, were exposed to the toxic chemicals in the factory. These chemicals included dimethyl fumarate, chlorinated phenols, chlorinated paraffin, and tribromphenol. The workers were not provided with protective gear and did not have safety training; that’s why they got infected. They suffered high levels of respiratory illness.
Factories in Vietnam had poor ventilation. There was poor fire safety in factories in Indonesia and Vietnam. The workers worked long hours in the factories without been given drinking water. Some factories in Vietnam had limited or no bathrooms for the workers.
Long hours
The company took advantage of the low employment levels of the developing countries. Despite the Nike Company paying its workers fewer wages, it exploited them to working long hours. In the sweatshops set up in South Korea, Taiwan, Vietnam, and China, workers were forced to working long hours. They had a target of producing over 300 shoes per day. They were forced to work for nine to thirteen hours per day and over 62 hours per week, and those who neglected to do so were severely punished. According to a report given by The Guardian, one of the company’s factories located in Serang, Indonesia did not pay its overtime hours. The company did not pay the workers overtime of over two years, where it summed up to over 600,000 overtime hours. Associated Press released a report stating that the Serang factory paid the laborers a total of 1 million dollars of the two years unpaid overtime after the company got pressured.
Abuse
This is one of the unethical issues practiced in Nikes factories. Their supervisors abused the workers. According to the Association Press report, most of the workers reported physical and mental abuse. The company’s critical stakeholders did absolutely nothing to prevent this psychological and physical abuse. The physical violence involved in the factories included the supervisors kicking the workers and slapping them. In extreme cases, these supervisors would scratch them until they bled. The mental abuse that happened in the factories, especially in Serang, Indonesia, where the workers claimed that the management threw shoes at them, slapped them, and screamed at them while calling them names such as dogs and pigs. Sometimes the mental abuse was severe to the point that the workers did not dare to speak up about the awful things that they were experiencing.
Low wages
The company criticisms about its Sweatshops existed since the 1970s, but it was until the 1990s while the company’s overseas factories drew the attention of the media. During this period, the company had started taking advantage of the lowly paid workers in developing countries such as South Korea and Taiwan. At this time, the two countries were in a difficult situation of economic destitution. The company took advantage of the situation and set up factories where the laborers would work for them at a low cost. After a long period of being underpaid, these two countries’ economies started to develop. Many better-paying job opportunities emerged. People moved from Nike factories to these better-paying jobs. This forced Nike to explore its additional options. Taking advantage of the Chinese lagging economy, the company opened up factories in the country. It also found solace in Vietnam after its post-war environment. These two nations had a record of lax human rights, and protecting the rights of its employees was the list of their priorities. This allowed Nike to pay its employees less wages and spend less on keeping this situation in order. This exploits facilitated in the slow growth of these two nations.
Environmental pollution
Everyone and every organization should strive to keep the environment safe for living. The polluted environment poses numerous threats to the well-being of our planet. Many companies have found themselves being scrutinized for releasing harmful fossil fuels, chemicals, and toxins into the environment. These toxins are detrimental to any humans and wildlife that get into contact with them, which later causes them health problems. Nike Inc is one of these companies under scrutiny.
Nike Company has found itself under yet another unethical saga. Investigators have found that the company releases toxic pollutants into the environment, which has latter affected its inhabitants. The company requires chemicals and large amounts of machinery to manufacture shoes. For these machines to be powered, they require massive amounts of fossil fuels. When these fossil fuels burned produces greenhouse gases that the company releases to the environment. The company also uses coal as another source of energy. Nike Inc prefers to use this source of power rather than oil or any other source of energy as it is quite cheaper. When coal is burned, it produces carbon dioxide. The company has adopted no measures in preventing this carbon dioxide contributes negatively to carbon dioxide from being released into the atmosphere. This carbon dioxide impacts the environment negatively as it contributes to the greenhouse effect. The company releases high amounts of carbon dioxide; there is 30-pound carbon dioxide produced from manufacturing one shoe, and the company makes more than 15 billion shoes each year. The company has concentrated on setting up their factories to the third world countries. This is because there is cheap labor in these countries, making the production cost to get low. The shoes produced are shipped to the retailers by use ship. The ship emits carbon dioxide into the oceans, harming the habitats. These toxins have affected the people and wildlife living near the sweatshops set up in South Korea, Taiwan, Vietnam, and China. They have reported health issues resulting from the greenhouse effect. The hunger strike has prevailed in these areas leading to slow economic growth.
During the process of shoe manufacturing, Nike Company uses several chemicals. These chemicals have a negative impact on the environment. The company uses tanning chemicals and many chemicals adhesives in processing different parts of shoes. Nike Inc uses chemicals such as dimethyl fumarate, chlorinated phenols, chlorinated paraffin, and tribromphenol, which the company uses to preserve shoe materials such as leather. These preservatives chemicals are then released into the water and environment through the factory’s discharge. These chemicals are harmful both to wildlife and humans who may drink the infected plants or water. Nike company has been accused in Indonesia, Vietnam, India, and China to have released these chemicals, which have affected the people and wildlife living in these countries. These unethical practiced have resulted in the bad reputation of the company’s name. Hunger has struck in areas where these factories are. This is because the chemicals released have affected food production. Farmers within these areas use the contaminated water for irrigations. This has resulted in a poor harvest or no harvest at all.
Nike factories also dispose of the leftover materials into the rivers or the land as it no longer needs them. The river carries these materials into the oceans. These materials affect habitats living in both the ocean and the rivers. The leftover material disposed on the land degrades it.
Child labor
Nike Company has found itself yet in another unethical scandal. Despite all these unethical practices in the company, the most vexing issue of all was child labor. The company had deployed young children to work in their factories. There were reported cases of Nike contractors in Pakistan and china employing underage children to work in their factories. This was after a reporter takes a picture of children working in one of Nike factories in Pakistan. The contractors took advantage of these countries’ low economy to employ children. The Chinese law states that a child below 16 years should not be allowed to work. At this age, he or she is entitled to be educated. This was not the case in China. Children were allowed to go to work for them to get money for food. The Pakistan law stated that a child below 18year should not be allowed to work. Nike factories did not abide by these laws. As the countries were third world countries, they did nothing to protect the children’s rights. What motivated the Nike factories to practice these unethical acts was in seek of cheap labor. Children in these countries were paid low wages compared to adults. The cheap work resulted in low production costs. Through this Nike, Company was able to generate billion dollars in revenue. Due to the high sales made and huge revenues earned by the company, it was ranked one of the best profit-making companies in the United States.
Recommendations
The company management should focus on employment practices. The administration should make sure that the company’s policies are followed. The management should make sure that before recruiting their workers, they should first check on their identification card to make sure they have the right working age. The following policy should be that the workers should be adequately trained about the work. They should be trained on how to handle the chemicals used. The safety of employees is an important policy. They should be provided with safety gear to prevent them from contacting toxic chemicals. The management should also uphold the welfare of their workers.
The management of Nike’s Company should oversee environmental practices practiced in the factories. They should make sure that the factories follow the right procedures in disposing of their waste. These procedures should be responsible in terms of energy input, waste avoidance, and disposal. The company should adopt safety measures for disposing of their waste. They should try to use renewable energy in running their manufacturing, heavy machinery. This will ensure that there is no fossil fuel released in the atmosphere. They should try to treat their waste before releasing them into the water bodies.
The company should design and conduct employee training programs. The development and training efforts will enable the laborers to assume greater responsibilities and expand duties. The management should also ensure that the jobs provided have an effective design; employee’s placement and selection are essential activities that the company’s HR department should consider. This will help the employees to work better.
For the company to reduce the level of toxicity in the factories, it should employ scientists to test the amount of toxins in the factories. By doing this, the company will ensure the safety of the workers. The scientists will make sure that there are no harmful toxins in the factory, and if there is, they are treated accordingly.
The company should identify performance standards and set targets. With the help of this, the management team will be able their workers’ skills for them to achieve their capability in satisfying the company’s ambitiousness and also to increase their profits.
Conclusion
Nike management should know the reasons as to why ethics are required within a company. Ethics are necessary for the management of an organization in making decisions. They should also be considered in cases where the company needs to take action that will help in the interest of the organization and society and grow the company’s welfare. Lack of ethical practices has dramatically affected the people, countries they operate in, and the environment. These unethical have resulted in the company harming their employees. These incidences were mostly portrayed in Vietnam and Indonesia, where the workers worked in poor conditions. Workers were forced to sign a petition against their will, and they were also forced to work in toxic factories. This resulted in them suffering from respiratory illness. The workers were also physically and mentally abused. This led to the workers’ low self-esteem. They had no courage to fight for their rights. The company also engaged in child labor. This led to the slow economic growth of third world countries. This is because instead of children going to school, they went to work in these factories. The toxic chemicals released in the environment negatively impacted the habitats. Any human or wildlife would get infected when they drink the contaminated water. This led to the emergency of numerous diseases.