Case Study: Nike

Theme 3: Economic Development

Pro impacts:

• substantial employment
• pays slightly higher than other countries
• Improves skills
• Contribution to local tax will give the government opportunities ie improving infrastructure
• trade of unions able to protect workers

Con impacts:

• child labour
• poor working conditions
• sexual and verbal abuse
• the exploitation of the environment and pollution. As there is a huge demand for water 
• wage below minimum wage

     Positive impact for Nike and US:

• Cheap labor and manufacturing

         Negative impact for Nike and US:

• company image negatively impacted
• doesn’t manufacture in the US so there is a loss of jobs and negative implants of balance of payments
• trade unions complain due to poor working conditions

Ways in which Nike fixed their image:

• by boycotting and protesting by the public Nike had to change its image
• they became transparent and publicly addressing the issues and labor practices
• improved working conditions (improved oversight and made sure they had clean air)
• Nike also raised the minimum wage up

 Nike TNC image Background:

• Two decades ago the country was under major fire for abusive labor practices after outsourcing labor overseas because it was cheaper.
• The public was shocked over Indonesian Nike workers earning as little as 1/4 cents an hour. Disturbing allegations of abuse included stories that a Vietnamese sub-contractor ran women outside until they collapsed for failing to wear regulation shoes. Customers staged embarrassing public protests at the olympics and at Nike stores. People began boycotting the brand in droves.

Nike Basic Facts:

Headquarters – 

• Beaverton Oregon, US

Location of manufacturing – 

• Almost all Nike shoes are manufactured outside of the United States. The leading manufacturer of Nike shoes is China and Vietnam each accounting for 36% of the total manufactured world wide. Indonesia accounts for 22% and Thailand for 6% of the Nike shoes that are being produced world wide.Nike is hesitant to disclose information about the contract companies it works with.

Global revenue – 

• In 2020, Nike’s global revenue amounted to about 37.4 billion U.S. dollars.