Brady Shiplet

Business Ethics
February 4, 2010

Nike: From Sweatshops to Leadership in Employment Practices

1. What were Nike’s mistakes in handling the negative publicity?

Negative publicity came Nike’s way via public protests, headlining articles in newspapers, and through
universities cancelling deals with the company. In wake of the scrutiny Nike made several mistakes.
First, Nike developed a code of conduct. However, the code was simply a plaque on a wall, never
actually enforced. Further, Nike continuously ignored criticisms and never took responsibility. Their
final mistake was to launch a public relations campaign with virtually no backing for its claims. During
this negative period, Nike was acting egotistically. They felt conditions in factories they do not own
was not their problem.

2. Discuss the intent of their public relations tactics.

Nike sought to counter allegations about labor and human rights violations through an extensive public
relations campaign. However, the campaign was just a reaction to scrutiny. Many felt the company’s
messages were altruistic. Although many negatives can be found, the campaign was a turnaround point
for Nike, especially after Mark Kasky’s landmark allegations about the company. These events spurred
Nike to rethink corporate citizenship and responsibility.

3. Do you think Nike is doing enough to improve conditions in its contract factories? What might they
do differently or better?

Recently, the company has been making numerous changes while using an open-minded approach.
Nike no longer focuses solely on itself, but towards developing standards throughout the entire
industry. They now use three types of monitoring systems in their factories. They are also involved in a
movement towards increased transparency. Nike hopes by disclosing its supply chains it will encourage
other companies to do the same.

Nike has finally moved away from its egotistical perspective. This is probably the most important
change the company could make. They now seem to have the ethical capacity to continuously improve
conditions in its contract factories.

4. How would you rank Nike’s improvements?

The improvements and turnaround of Nike is remarkable. The company is now setting industry
standards, rather than simply reacting to them. Nike is now a company to be looked up to, not down
upon.