Nike’s defence against worker abuse
Nike’s Defense of Its Vietnamese Factories
Like many other American apparel makers. Nike uses various subcontractors in Asia to manufacture its products. Some 150 Nike subcontracted factories employ more than 450,000 workers, In Nike’s early days, before orders shifted to lower-cost suppliers in Taiwan and South Korea, the company imported its shoes from Japan. Soon, even Taiwan and South Korea became too expensive for this highly competitive market, and suppliers moved their factories to China and Indonesia. Then Nike found Vietnam. Soon Nike became Vietnam’s largest single employer. Ets factories in Vietnam are run by the company’s South Korean and Taiwanese contractors, who employ tens of thousands of Vietnamese. By 1998, one out of every ten, pairs of Nike shoes came from Viet-nam. Shipments of Nike shoes alone accounted for 5 percent of Vietnam’s total exports.1 One of Southeast Asia’s poorest economies, Vietnam aas an official rural unemployment of about 27 percent in some regions. It seeks foreign invest-ment to create jobs and bring in manufacturing expertise. However, unlike many governments that do not investigate worker abuses, Vietnam pays close attention to the practices of its foreign investors and has some of the region’s toughest laws aimed at protecting workers. It ensures a minimum wage, sets overtime limits, and permits strikes. Vietnamese government officials, how-ever, have divided priorities. While union leaders say that they are duty-bound to defend workers, investment planners want trade unions to not scare away foreign investors. If Nike were to pull out of Vietnam, 35,000 Vietnamese would be out of work .2
ALLEGATIONS OF ABUSE
In the mid-1990s, allegations of worker abuses in factories that contracted with Nike began to mount. An investigation of Nike labor practices in Vietnam was launched in 1998. The report found that by not directly running the factories where its products were made, Nike had little control over internal labor condi-tions, The report, focusing on factories in and around Ho Chi Minh City,
This case was prepared by Sasha Lyutse, under the supervision of Tom L Beauchamp. Not to be duplicated without permission of the holder of the copyright, 0 200313 by Tom L. Beauchamp.
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1/ DESCRIBE the DILEMMA in the CASE. Instead of describing what happened in the case, try to describe the dilemma and the cultural (organizational, national, ethnic, gender, etc) and ethical problems faced by the different people who are involved in the case. Describe the different alternatives that people faced in this dilemma, and the potential consequences for them in light of these alternatives.
2/ IDENTIFY the POSITIONS of the different people who are involved. Describe in detail any particular actions or words that were said, how they were said, the values that were in conflict, and the concepts which can be brought to light by examining this dilemma. Please make reference to any concepts/models/frameworks from both the ethical part as well as the intercultural part.
3/ ANALYZE the ACTIONS and ORIGINS of the different stakeholders. Address sections a and b below and the response should answer the questions they raise.
a/ Who acted on this ethical dilemma?
Who acted, and what was done? Did some people in the case act and others did not? Were there pressures to act or not to act? On whom? What was said, to whom, when and how? Consider what enabled people to act: a conversation, some research into the issue, an organisational enabler? Were people able to change their circumtances so that they could act (or re-act) on their values? Did some people give justifications to unethical behaviour? How did others counter these arguments? (Some of the above questions may or may not be relevant, but the questions are there to guide your thinking.)
b/ How does this dilemma reveal any specific cultural concepts and values? What can you identify here which is specifically linked to national culture and what can you identify which is specifically linked to organizational culture? What were the specific cultural ‘artefacts’ or symbols you can identify in the situation? What were the specific cultural biases that each person in the case brought to the table when facing the situation. How do their reactions reveal their own values/assumptions/beliefs?
4/ Possible ways to RESOLVE the ISSUES. In light of the above questions, extrapolate some possible solutions for the various stakeholders in this case. How might they resolve their differences? If you think a visual representation could help you represent and discuss the resolution process, then please include it.
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