Ethical Companies with Unethical Practices Essay - 1514 Words

Ethical Companies with Unethical Practices Introduction American business should not be permitted to claim it is an ethical firm if it ignores unethical practices by its international suppliers. For the purpose of this assignment I will use the Nike Company to highlight its unethical practices. Despite the popularity of Nike in the American market, it has been accused of exploiting employees abroad. The corporate social responsibility stipulates that a company should maximize its profit and minimizes its cost in operations and manufacturing, also at the same time benefit the community it operates in. This paper will further elaborate on the global strategy employed by Nike Company as it outsources its goods and the unethical issues its†¦show more content†¦During the late 80s and early 90s Nike was faced with a series of labor strike back at home due to unethical labor practices by its independent countries in third world countries. It is well known for Nike to outsource almost all its production from third world countries at che ap prices and sell them in U.S. market at an abnormal profit. The company began outsourcing its products from Japan where labor was competent and wages were very low. The living standards were raised which prompted Nike to outsource its products from Thailand, Pakistan and Indonesia since wages in these countries were extremely low and labor for these products were competent due to rapid development of the Japanese economy. The outsourcing of footwear products from Asian countries enables Nike to earn high profits and enjoy a competitive advantage over its rivals in the footwear industry. The company invests the high profits realized in marketing its products through celebrities. For instance, Michael Jordan was used to advertise the positive image of Nike Company (Lipschutz and James, pp. 87-96). Nike should not be allowed to claim they are an ethical company especially when they are still outsourcing to impoverished countries in Asian. The company takes advantage of low living sta ndards and lack of democracy in those countries. There was nonexistence of labor movements in countries like Indonesia. The government never allowedShow MoreRelatedIts a Good Business by Solomon1525 Words   |  7 Pageswith regard to business management. He does not believe that business management must include unethical or illegal methods to be able to succeed. Solomon preaches that business management is not as simple as obtaining revenue. â€Å"Businesses need to abide by fair policies and their owners have to be ethical in dealing with their customers† (Shaw p. 37). 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