Reference no: EM133046505

Nike Inc., the world's leading apparel and footwear manufacturer, outsources the manufacturing part of the production to a number of factories in Asia where there is plenty of cheap labor available.

Usually, it chooses countries where cheap labor is available, where there is an authoritarian government, and the lack of union rights appeals and union movements. Since the 1970s, Nike, Inc. has been accused of using sweatshops to produce footwear and apparel. It was built on the business model of finding the lowest cost of labor possible which led to child labor and exploitation

As to remain competitive in the market, Nike searched for cheaper resources and markets. Therefore, Nike had shifted its production to lower manufacturing cost countries such as Japan, Korea and Taiwan. Later in the 1980s, production had moved to Southern China. However, as Japan's economic started expanding, the manufacturing cost increased. Therefore, Nike shifted its contracts to Vietnam, Indonesia and China.

Nike has the highest number of contract factories in China followed by Thailand, South Korea, Vietnam, Pakistan, Bangladesh, and India. By opting for such places, Nike has made huge margins due to cheap labor... Starting from the mid 1990s, there were criticisms from human right protectors and media regarding labor health and safety conditions, low wages and discrimination in the hiring and firing process. Therefore, Nike started to take actions as to rescue its reputation.

a. Briefly describe the ethical issues involved in sweatshop conditions and the treatment of workers in Nike's factories.

b. Nike has failed to follow the labor laws of the countries it operates in and has not succeeded in effectively implementing its Code of Conduct. What measures must Nike take to convince the public that it really wants to put an end to the maltreatment and exploitation of workers in its Asian factories?