Running head: Case Study: Nike CSR Challenge

Case Study: Nike CSR Challenge

Case Study: Nike CSR Challenge

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Abstract

The purpose of this paper is to describe the challenges faced by Nike in regards to Human
Rights. After a couple years of silence due to legal reasons, in 2005 Nike disclosed their
corporate social responsibility (CSR) activities. The reports reveled numerous troubling
conditions at their factories in the South Asian region. Conditions such as restricted access to
toilets, underpaid workers and forced overtime. This paper will answer the questions listed after
the Case Study.

Case Study: Nike CSR Challenge

Case Study: Nike CSR Challenge

Companies in the apparel industry around the world, such as Nike, face numerous
challenges regarding corporate social responsibility. These challenges include lack of support,
working conditions and lack of transparency. CSR requires monetary support and can be
extremely costly for a corporation. Without support from consumers, corporations have a hard
time allocating already limited funds to CSR. A second challenge is working conditions.
Manufacturing plants have to meet high demands on limited resources and often turn to overtime
and sub-par working conditions to meet production requirements. Lastly, transparency is a
challenge because corporations sub-contract their production to local factories which result in
abusive treatment of the workers without any knowledge of this occurrence to the corporations
itself.
Lack of support is a big reason why CSE is not a concern for a lot of corporations. Nikes
vice president of corporate responsibility, Hannah Jones, said consumers are not rewarding us
(Deresky, 2014). What she means is a company who wishes to invest in CSR projects would
have to use a portion of their profit thereby cutting profits and ultimately being outperformed by
their competition. Consumers or customers are not supporting companies for these CSR projects
so for a conglomerate such as Nike it difficult to justify such practices.
An open-system approach to social responsibility is a system in which in addition to the
internal parts of the company; employees, managers, equipment etc.; the environmental elements
are also considered. Elements such as competition, suppliers, and distributors. Additionally, the
system serves as a model, in which a company notes that input is the direct result of the
environment and output are place back in to the environment. The parties involved are generally
everyone; the company itself, the consumers, the people who make the product, the local

Case Study: Nike CSR Challenge

government, the local residents. All of these parties and more are considered in an open-system
approach. The stakeholders are investors whose interest in the company must be maintained, the
lenders in which a solid relationship must be maintained, the consumer who without there is no
company, the employees who make the product, the suppliers and the government.
Leadership beyond borders refers to people who are able to see past borders created by
others. Borders such as the ones created by their job. Seeing past these borders allows the
individual to engage other and take or influence actions to address a systematic issue. This is
referred to as transcending leadership. This form of leadership transcends the boundaries of
one professional role and engages people on community goals. Its changes the concept of self to
the greater good.
Compatibility of profits with people and planet is an idea that those who can help, should
help. Unfortunately, the business framework that many corporations currently follow do not
allow for this. For many corporations the end goal is to maximize profits. It is everyones
responsibility to bring about social change but a strong start would be through means of
government regulations and enforcement to change the working conditions of factory workers.
As it is now some work for social justice and others only capitalize of the suffering of others.
Until we can change the ways of those individuals capitalizing, whether by force of by
conviction, we cannot bring about compatibility of profits and people.
Since reporting on its social and environmental practices in 2005, Nike has made massive
leaps in improving its CSR. One of which being, after Hannah Jones appointment to vice
president of corporate responsibility she visited a production plant on Bangladesh where they
received reports of sub-par working conditions. After viewing first hand, all ties with the
production company were severed. Nike also worked with its contract facilities to improve its

Case Study: Nike CSR Challenge

human resources and adjusted their material development to reduce water usage and climate
change. These actions and countless more were taken and turned Nike from a villain to a hero in
a matter of a decade.

Case Study: Nike CSR Challenge

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References

Deresky, H. (2014). International management. Boston: Pearson.

Newell, A. (2015). How Nike Embraced CSR and Went From Villain to Hero. Triple Pundit:
People, Planet, Profit. Retrieved from http://www.triplepundit.com/special/roi-ofsustainability/how-nike-embraced-csr-and-went-from-villain-to-hero/