Topic > Nike Case Analysis - 1614

Nike Case AnalysisWith increased monitoring and enforcement of working practices; Nike, being in the public spotlight and subjected to negative publicity about subcontracted factories, is forced to readjust the working conditions of workers in factories across the ocean to comply with appropriate regulations. This caused Nike to change factory standards and employee working conditions; limit the maximum number of hours worked per week, implement adequate ventilation systems to filter toxic fumes, increase worker access to protective equipment, and increase the capacity of medical facilities and medical personnel for their workers. Another area of ​​concern is the discrepancy in the differences in East Asian worker regulations and wages compared to North American standards. Much speculation has gone as far as attacking Nike for its blatant disregard of the American work ethic, but Nike has difficulty explaining the justification for meeting offshore requirements. For example, in Indonesia the legal age was 14, the age at which compulsory schooling ends. Nike was criticized for apparently having girls of this age work in their factories (which wasn't true), and was shunned for inhumane labor practices by American standards. Economic Analysis Nike's Asian operations had previously continued to grow generating $300 million in 1994 and revenues amounted to a whopping $1.2 billion in 1997. However, due to the Asian economic crisis, this had negatively affected on revenues, while regional layoffs were inevitable. Nike also performed well in the European market, generating approximately $2 billion in sales and good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic recession. In the Americas (Canada and USA), Nike has recorded a growth rate for several quarters. The United States alone generated sales of approximately $5 billion. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with "great potential for the future". Social Analysis With growing awareness and publicity of poor working conditions in subcontracted factories in East Asia, Nike has spurred an uprising of activist and watchdog groups working to see these conditions changed. With Nike in a negative spotlight, various organizations have worked to generate a negative view of Nike's socially irresponsible practices. Some campaigns such as the “National Days of Conscience” and the “International Day of Protest” were organized to educate people about the deplorable working conditions in Nike's Asian manufacturing plants and were designed to involve more people in global employment issues..