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Governance And Sustainability At Nike A Case Solution

Solution Id Length Case Author Case Publisher
2072 753 Words (4 Pages) Lynn S. Paine, Nien-he Hsieh, Lara Adamsons Harvard Business School : 313-146
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Nike has a significant amount of leverage over its suppliers due to various reasons. Primarily, Nike is immune from any competition from suppliers because its suppliers are based in 42 countries, being nearly 600 in number and are mostly small in size. This does not allow them to pose any threat to Nike's business in the form of any type of integration or merger. Nike has the authority to exercise significant control over its suppliers. This is because Nike is a strong brand and suppliers hold to lose a major source of revenue if they do not adhere to Nike’s standards, owing to low switching costs (Crook and Combs).

Case Analysis for Governance And Sustainability At Nike A Case Solution

Apart from this, Nike is also involved in conducting frequent audits of all its suppliers. It has outsourced the auditing function and it ensures that the suppliers are in compliance with the set quality and safety standards put forth by the company to avoid getting its reputation damaged in the eyes of the public. It is for this reason Nike is now engaged in educating its suppliers in terms of managing working conditions and wages for their employees as well as training them to positively influence the environment by cutting the release of hazardous substances in an attempt to conserve the environment. Hence, it can be understood that Nike has a strong influence over its suppliers which are aimed at protecting its brand image and ensuring success of CSR initiatives (Pratap).

2. Among all the goals and targets stated in the case study, the most important, in my opinion, is Nike’s goal to have a sustainable future, which can only be achieved through the integration of CSR into the business, and is highlighted in the company’s annual report as well. (Adamsons, Hsieh and Paine). The recent trends show that businesses are moving towards sustainable practices in response to the changing customer tastes and preferences. People are now more concerned with the carbon footprint of the firms especially the young generation. Hence, to tap the target audience, it would be crucial for Nike to evolve and shift towards sustainable operations (Hahn and Kühnen). As Nike has been subject to many allegations concerning the violation of ethics and law regarding the treatment of labour, sweatshop conditions, poor wages, etc., its goal of achieving sustainability through CSR will help overcome the allegations and improve its public reputation, which will in turn contribute towards the sales and the profitability growth of the business (Hammond and Slocum).

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