Applying ethics and all of its principles should always be a part of a good program or any form of management. Ethics rather has a lot of branches, each of them dealing with more specific principles of a particular industry. An example that would be more widely used and addressed in this paper is business ethics. Simply, business ethics has a lot of correlation with the general meaning of ethics so let’s start by defining what ethics is first.
Ethics is quite simply the way or the manner how people behave. These manners could be based on several factors including their beliefs, the culture where they grew and the norms (Anonymous, 2009). A person will only do what he thinks is right and ethical; this is why ethics is an important subject to talk about in the first place. The rightness and wrongness of an act will indeed influence behavior.
Therefore, business ethics is merely the application of ethics and its principles in the industry of business and corporate governance. To be more specific, it has something to do with the moral values of the managers and if possible, the entire workforce of a specific company (Chinwieke, 2010). Application of ethics in business also means that that specific company is geared towards a more professional way of dealing with clients. Transparent business dealings will always be a part of an ethically oriented company’s priority list.
Included in business ethics should also be taking into consideration the wants, the needs and the impression of the clients about the company’s available services and goods. Additionally, customers are not the only primary concerns when you talk about business ethics, the stakeholders would always play a significant role too.
In this case, I will try to describe some pertinent and significant ethical issues that are allegedly violated by the said company. Also, I will try to focus more on the ethical side by using the published code of conduct as the main reference point.
In the third world countries where looking for a stable and decent income is one of a family’s priorities, there are credible evidences that could prove Nike’s provision for child labor. What’s alarming about this fact is that despite knowing that it is unethical to employ a minor or a child under a workforce, some companies are still committing the act.
Perhaps one of the reasons why Nike, a large premium shoe-producing company, keeps on committing such practice is because there are currently a lot of conflicts and discrepancies about the issue of child labor. According to a journal entitled “Ethics in International Business: Multinational Approaches to Child Labor” by Kolk and Tulder (2004), there are different ethical dilemmas that could be encountered in managing companies across multiple borders. In fact, there are a lot of contrast between ethics researchers and their works regarding child labors. Kolk & Tulder (2004) actually cited some work examples that deal with child labors but with different point of views.
It was also supported by authors Wolfe and Dickson (2002) on their work about child labor that sectors with the highest likelihood of committing child labor acts are the apparel and retail industries (Kolk & Tulder 2005). Nike is a massive shoe-producer with tons of profits generated because of the brand awareness of customers towards their shoes and apparels. However, it still wouldn’t be an enough reason to disregard their code of conducts. This company have grown enough to be a massive producer of different products and if they indeed committed such unethical practices in the past, perhaps it’s time for them to stop their child labor practices if there were really cases like these in past up to the present. In some third world countries, child labor is not literally allowed nor prohibited.
A common procedure used in such counties is that they inform the minor applicant’s parents or guardian about his desire to work and then the family will then request for approval to work from the department that handles the employment matters in their country. Should the minor applicant be approved to work by this governing body, the employer will then be safe from any legal or ethical misconduct and its consequences? Yes. To further this argument out, Nike’s code of conduct states that it only employs employees that are aged 16 and above. Meaning, it could be awfully true that they do hire minors to work for their company factories, an act which is deemed unethical by many (Nike, 2010).
Compensation and Payment Issues
Nike is a multi-million dollar industry—I even think about sometimes whether their net worth already reached the billion marks or they are still somewhere in millions. Nevertheless, there are reported instances in third world countries about Nike’s unreasonably low compensation for its workers. If you are going to take a look at Nike’s code of conduct, you will basically see that they clearly stated that the contractor (they) do not discriminate and in the last part of their code of conduct they fully capitalized the words “Fully Implemented”.
So what does this mean? Are they violating their own code of conduct? If this continues, and if a lot of people are made aware about some of Nike’s ethical disputes, it would of course be harmful for their business. Another thing stated in their code of conduct is the words “Harassment and Abuse are not tolerated”. Well, there are many kinds of abuse and for me, underpayment is a much worse than any form of abuse. Workers are investing their time and effort in order to keep a high productivity rate for Nike’s firm.
However, how come Nike, a multi-million dollar shoe and apparel company abuse their employees by giving them a wage that is far too low than what they deserve? According to Tim Glenn (2004), one of the reasons why Nike Corporation closed its last factory in the United States is for it to move its entire production force and efforts in Asia to take advantage of the cheap labor there. Because of this, a huge number of shoe workers in the US lost their jobs, which for me is an unethical practice in itself. Apart from the low wage, most of the shoe makers that this company employs are young men and women aged 17 up to 30.
I really think Nike has to do something about their reported unethical workforce and human resources management issues because if not, it would definitely have a huge impact on their reputation although I think it wouldn’t be enough to bring their company down to the ground. Nevertheless, it would be strong enough to bring their sales down to a significant level.
The main reason why ethics is being studied and implemented is for companies and clients to have something to follow. It would be totally useless establishing a code of conduct that is and will not be followed and enforced. As for Nike’s reputation in the third world countries, it will surely drop if their alleged abuses and violations of their own code of conduct continue.
Anonymous, 2009. Definitions of Values, Ethics Resource Center, [online]. Available at:
http://www.ethics.org/resource/definitions-values. Accessed October 2011.
Chinweike, 2010. Importance of Business Ethics/Importance of Ethics in Business Investment,
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Nike, (2010). Nike Code of Conduct. [e-book]. Available at:
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf. Accessed October 2011.
Glenn, T., 2004. Nike’s Cheap Labor, Campaign for Labor Rights. [online]. Available at:
http://www.clrlabor.org/alerts/1997/nikey001.html. Accessed October 2011.