Hitting the Wall: Nike and International Labor Practices Harvard Case Solution & Analysis

Many college students as a protest raised up the issue against Nike and asked the colleges to stop using Nike products until they changed their manufacturing procedures. On the other hand, Nike keeps on issuing the conventional statements which are related to the enhancements in age limits, safety requirements and lowering down the pollution levels. But at the similar span of time these steps sound just a bunch of lies because several critics figured out that Knight (CEO of Nike) had failed in this regard and done nothing to fix the matter of wages and other concern issues.  Additionally, what makes the issue more critical is the deal that was signed between the Nike and the University of North Carolina amounting $7.2 million. This deal blows the wind of an enormous protest and controversy on the entire campus. At the similar span of time the assistant coach Mr. James openly quit his job rather than using the Nike product. Basically, this shouldn’t have been signed by the Nike because they have been under the observation of several activists and media groups which might boost the concerns related to the wages and ethical issues faced by the workers on the Nike’s contracted factories, specifically Indonesia.

The element that needs to be appreciated here is the series of steps that were initiated by the Knight. For the first time, Nike accepted their fault and presented them as pioneers in enhancing the working standards of the labor force in the factories. Additionally, Nike gets enormously involved in the Washington-based reforms to overcome this issue on an immediate basis because it’s never too late till then. Meanwhile, Nike also initiated several programs to enhance the productivity of employees and managers. Moreover, the Nike’s step of drafting the series of regulations was a reasonable step to make the working better for workers. These steps were appreciated by several observers and human rights organizations, but they also said that Nike has been failed to overcome the issue of wages because they kept their focus on ages instead of wages.

In a factory in Vietnam, the research students found that these factory workers, after meeting essential requirements can generate a substantial amount of discretionary income. This income was later on used to purchase other specific items such as wedding gifts or bicycles. But in Indonesia, outcomes were different with the labor demographics. A massive figure of 91% workers stated that they are just able to support themselves exclusively, on the other hand, 49% stated that they somehow support their dependents. Additionally, irrespective of the demographic element, a gigantic number of 82% workers in a country like Indonesia, hardly save their wages or somehow passes it to their families each month. From an economic perspective, the companies like Nike were fostering growth in the emerging countries, offering jobs and wages to locals who previously had neither. From the general public point of view, however, the social assessment was unescapable. As per the Tuck’s study, the average labor in a Nike factory in Vietnamese earns approximately $1.67 each day, but a pair of basketball sneakers (Penny Hardaway) retailed at around $150 which simply boost the criticism.


To avoid this kind of situation in the future, it is recommended to immediately raise the wages of workers and to come up with a new working standard.The new working standards should be based on maintaining the proper environment at contracted factories, the revised pay scale should meet at least the benchmarks set by the government of the respective country. Moreover, being at Nike, it would be suggested to make sure that  Nike must keep the insurance of the labors up to date, so that a conflict can be avoided at the time of emergency. These all elements should be a part of a new code of conduct.

Nike must make sure the implementation of its own Code of Conduct by making a committee of three members who would keep a certain check on the subcontractors that either they are following the agreed guidelines or not.  This Code can be amended time to time, but its proper implementation should be a real challenge. Another alternative that might be workable for Nike is the contract with a local U.S. shoe manufacturer. The core advantage of having its suppliers abroad has been lower prices for the finished products, Nike can grab an advantage by offering jobs for the people at home. The famous tag of “Made in USA” is remarkably important to countless Americans. Also, the mixture of job offerings with reasonable or market compatible wages and several other benefits for its labor as per the American labor laws might decrease the noise about its pathetic labor practices, particularly among the youth....................................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.

Share This


Save Up To




Register now and save up to 30%.