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The ethics of international sweatshops Case Solution
The ‘international sweatshops’ is one of the most widely discussed controversial issues in international business and work ethics. These sweatshops are the huge factories with hundreds of labor that work under strict and exploitative work conditions. This essay is focused to discuss the ethics of sweatshops specifically in the case of Nike; one of the biggest sports shoes company in the world (Lagerie, 2013). The essay is divided into seven sections. The first two sections briefly explain what sweatshops and Nike are. The third section includes sweatshop cases at Nike and how it raised ethical issues. The fourth and fifth section include arguments about how sweatshops exploit labor and how Nike overcame it. The last two sections include recommendations to avoid it and the conclusion.
Following questions are answered in this case study solution
What are Sweatshops?
Labor Demands; How Nike Satisfied them to Overcome the Ethical Issues?
How to avoid it in future?
Case Analysis for The ethics of international sweatshops
1. What are Sweatshops?
Sweatshops are big factories manufacturing several products for international customers including multinational firms in which hundreds of people work. The companies get a major part of their production work done in these sweatshops because of cheap labor. The reason these sweatshops are notorious is their strict and humiliating work conditions. Most of the times, these workers working in the sweatshops work on very low wages, and the work timings are normally very tough. Moreover, the physical environment of the factory is not very favorable for the labor, and the workers are also not provide security and report being sexually, emotionally and physically abused (Mtholyoke, 2015).
Nike is one of the biggest companies in the world that deal with designing, manufacturing, and development of sports footwear, apparel, and other sports accessories. Accused of contracting with sweatshops several time, this American company is based in Portland and was founded in 1964. It has one of the largest supply chains of sports shoes and accessories in the world with more than 40,000 employees. In 2012, the revenue of Nike was $24.1 billion (Nike, 2015).
• Sweatshops Case at Nike and Ethical Issues Raised
Production is never a very cheap process; especially when you are producing something on such a big scale as Nike. Several international companies always try to minimize their cost of production so that higher revenues can be generated and higher profits can be earned. In this act of reducing their production costs, several international companies including Nike have been accused of contracting with factories that are involved in sweatshops where labor work on lower wages under compromised circumstances (Wazir, 2001).
Due to the allegations of moving production units to countries where sweatshops are common, many policy makers and business ethics analysts criticized Nike for this malicious activity (Wilsey & Lichtig, 2015). It was reported that the sweatshops had no ethical grounds and the labor working in these sweatshops were being abused and insulted several time, had to work for long hours on lower wages and majority of the labor was still facing extreme poverty (Wazir, 2001). They reported of being abused emotionally, physically, sexually and verbally while working at the sweatshop. Some of them also reported that they did not have the courage to speak about the abuse to someone or report it because they were afraid that the only outcome would be that they’ll lose their job. These examples of the terrible condition of ethical norms at the sweatshops did give a boost to a stirred up debate on an international level. Many critics, humanitarians, social workers and business ethics analysts argued that these conditions are not only bad for a business but are horrible examples of exploitation of ethical grounds, labor and human rights. Some also said that based on the size and power of the company (Nike), it is almost impossible to believe that the company does not have any control over the condition of the labor that is manufacturing for it and are responsible for a major part of the company (Dailymail, 2011).
2. Labor Demands; How Nike Satisfied them to Overcome the Ethical Issues?
After the accusation and protests in the international business and consumer market, the labor came out with a few demands to be satisfied; higher wages being one of them. They also demanded the right to group up in the forms of labor unions that most sweatshop employees are not allowed to do. There were some interesting demands that the labor put in the line and many critics stated that these are going to transform the ethics of international sweatshops. These included that the labor wants the company to structure a complaint process system where labor who have been harassed can confidentially file their complaints. Moreover, it was also demanded that short-term contracts should be abolished. The reason behind this demand was that the firm can’t shift whenever it likes because in this way, the local labor gets terribly affected (Oxfam, 2015).
Nike took a prompt step to come clear. It announced that Nike is going to set higher standards for working conditions for its employees and going to apply some action plans to deal with the problems of its workers at all manufacturing plants in the world. The official said that they would be visiting the production plants and monitor the standards of the physical environment to see if it’s favorable for the labor and would also involve non-governmental bodies in the task (Birch, 2012). They also promised to set a minimum wage for its labor and make sure that they are paid the set wages.
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