TMA02

Nike And Its Environment
:Introduction
Training shoes are global product. And there are
three companies dominate sales of training shoes
.worldwide: US, Nike and Reebok
,In this report we will talk just about Nike company
Nike is the biggest shoe company in the world and that
has created a great influence, which could effect and be
affected by its surrounding environment. This large force
of control over the market is one of the environmental
.effects
Managing the book emphasized that; “All organizations
are affected differently by their external environment.”
It has gathered the environmental affects under five
:factors
Communication technology Regulation and deregulation Globalization Competition Working practices The outcome of these elements can directly or
indirectly be measured in the economy, the society, the

. The performance of Nike and every other global company in the 21st century will be measured as much by our impact on quality of life as it is by revenue growth and profit ”.”state and the system which are so called “Environment Nike is a global company operating world wide as being mentioned by PHILIP H.  Its social divisions. “Global citizenship is important to our company and to our consumer. particularly in terms of the distribution of wealth.margins To gratify out ambition in answering the abovementioned question to its highest extend we need to start talking about each environmental factors and their . KNIGHT the Chairman and CEO of Nike when he once said.effects :The Body :STEP Analysis :1 a) Society. :Relevant factors from Nike's perspective might include  The values and expectations of (a particular) society.

c) Economic Factors.  The changing nature of technology in the world at any given time. especially as regards freedom of information.  Preparedness of local rivals. etc. Its degree of freedom.  Economic growth (nationally and internationally).com sector’ .  Public/market confidence in the ‘dot.  Projected stability of the economic situation. the national/international infrastructure of cables.  The level of education would be important both for the recruitment of suitable local staff (if the company has an office there) and also because literacy is a basic requirement for computer-usage. b) Technological Factors.  Crucially. telephone lines.

and its analogues elsewhere in the world. New.  The Federal Communications Commission. of course.  Local states’ desire to control and regulate their telecommunications. which apply to all businesses regardless of type. Globalization has fashioned a shift in the apparent size and shape of our world.  International treaties. a. Society. 2: Exploring the impact of these forces. Consumer confidence (for the purchase of expensive computers!) d) Politics/Law.  Local laws such as the companies act in the UK and laws such as the law of contracts. more rapid forms of transport .

This is mainly relevant insofar as it affects educational standards and aspiration. too. by a mushrooming of telecommunications and by new agreements between nation states. might be impaired (as Hutton (1995). of course. as well as the more general kind. (How they have shifted. although how they will alter the lives of the new global citizens is unclear. as well as incomes. Class structures. leading to a poorly trained pool of potential workers. while income differentials have an effect on potential markets. among others would argue) by the current trends in UK education. Computer literacy. These processes will almost certainly continue.have brought this about. Striving to achieve our long-term aspiration goal of 100% recoverable product leads us to focus on ways to "close . have shifted. depend on how you define class).

from outsoles and manufacturing byproducts.the loop" on a product's life cycle. Nike Grind Fluff. (Nike licensee Field Turf uses Nike Grind material from manufacturing byproducts exclusively. In our case. we also now use some of the byproducts from the manufacturing of outsoles of new Nike shoes as Nike Grind rubber material. worn-out athletic shoe. is used in synthetic basketball courts. chemists and others contemplating the fate of an old.  Nike Grind Rubber. weight room flooring and running tracks. . we want to use them to make new ones. A shoe just about to be thrown away. from mid soles. That is. tennis courts and playground surfacing. In addition. baseball and soccer fields. helps make football.)  Nike Grind Foam. from textile and leather uppers is used for padding under hardwood basketball floors. as well as golf products. rather than throwing away old products. it's a process that begins at the end-with designers.

By experimenting with material made from recycled athletic shoes. Schools get improved learning environments and reduced operating costs. are challenged to create their most effective recycled product. Nike is redirecting $1 million of its state income tax liability directly to Oregon public schools. The Business Energy Tax Credit (BETC) reduces tax bills for companies that invest in energy-saving projects. Join the 6.until now. The Air to Earth curriculum includes lesson plans. paying for 27% of an energy-efficiency upgrade in schools across the state.b) Technological Factors. rather more hindsight available from a lapse of 26 years. Bell’s (1973) description of an information society was largely flawed. it must be said. activities. and Nike gets to dedicate a portion of its state taxes to help schools. since the program began in 1998 c) Economic Factors .000 teachers who have taught the ATE curriculum to an estimated 450. In 2002. and discover the benefits of a sustainable environment. Mackay et al. Using an innovative mechanism devised by the Oregon Office of Energy. the reductions are meant to offset some of the higher initial costs of a more efficient system.S. Nike began giving what would have been state taxes directly to schools.000+ students in the U. materials and a video. with. Because public schools don't pay taxes. they've missed out on the incentive .. students study recyclability.

000 in Nike product) grants to 32 after-school programs designed for. a pilot program designed to increase the quality and quantity of physical activity in schools across the U. Employees in the United States who travel for Nike business have the option of choosing Delta Air Lines to allocate a portion of their ticket cost to a fund established by Nike and Delta Air Lines.In the United States. NikeGO launched in 2002 with $50. Nike introduced NikeGO.E. happier and more likely to make positive life choices. The Eco-Class fund is aimed at mitigating the .000 ($25. NikeGO and SPARK (Sports. programs have been reduced or eliminated. the program's mission is to get kids moving and to give them the means to get active. Aimed at 8-to-15 year-olds.S. In Fall 2003. and with the help of. The intended result: kids across the country who are healthier. kids in Boys & Girls Clubs across the country. Play and Active Recreation) launched PE2GO. where P. a program designed to battle a national epidemic of inactivity.000 in cash and $25.

to change its fuel source from oil to natural gas. a Portland. ATE encourages students to think about the Earth's cycles and relates it to the "stuff" we use every day. with the first fund enabling a local middle school near Nike's world headquarters in Beaverton. In the future. we continue to reduce the . Eco-Class began in 2001. Nike Travel hopes to expand on the EcoClass program's success by growing Nike's portfolio of environmental travel partners to include other preferred suppliers.-based non-profit organization committed to reducing greenhouse gas levels through a portfolio of projects aimed at offsetting carbon emissions. Ore.annual climate impact of Nike's air travel on Delta flights by offsetting the equivalent carbon emissions. the Eco-Class funds were donated to The Climate Trust. Ore. Nike is acutely aware of the need to drive sustainability in everything we do and strives to minimize the environmental impact of our products throughout the product lifecycle. In 2002 and 2003. d) Law: Government Programs in the US At our world headquarters in Oregon.

our drivealone rate was 76%. This is a very complex issue and one that is a long way from being solved. In 2001. through its "Commuter Choice Leadership Initiative. called the SmartWay program. yet put a completely different spin on them. as both sides acknowledge the facts. save fuel. and protect public health." suggests that leadership company drive-alone rates should be no more than 86%.improving but still has a ways to go .percentage of employees who drive alone to work. Nike and other Smart Way partners have agreed to work with the EPA to develop performance measures or goals to improve air quality. reduce greenhouse gas emissions. Our USA Delivery organization has a voluntary agreement with the EPA focusing on ground transportation. do you believe Nike when they say that they are giving workers in these countries wonderful opportunities to raise their standard of living? The consensus answer to this question by all sides seems to be that Nike is . It is very difficult to determine which side of this argument to defend. Do you believe Nike's critics who say they're exploiting workers? Or. The US Environmental Protection Agency (EPA). Essay a bout Nike There has been much debate and controversy recently concerning Nike's Asian labor practices. a drop of 22% from our first measurements in 1992.

In order to incorporate this plan in to Nike's business structure. They do. Over the last five of years. Phil Knight. however. and Nike was forced to expand production from the United States to countries such as Taiwan and Korea where their products could be manufactured at the same relatively low cost that Nike enjoyed through the Tiger Sports partnership. To ensure good labor practices. and subsequently they do not directly employ the workers or management. In lieu of the rapid economic growth in the pacific rim. and cofounder. Tiger Sports would manufacture shoes for Nike in Asia then shipped them to the United States to sell. In the 1980's however. this aspect of Nike's partnership with Tiger Sports was dissolved. VN Fact Sheet) Nike does not own any of the factories that produces its products in Asia. (VLF. caused the cost of labor to increase dramatically. The CEO. Nike has moved more into countries such as Vietnam and China where the labor is cheaper and labor laws less stringent. a partnership was set up with a Japan based company called Tiger Sports. have a massive amount of leverage when dealing with these factories because of the huge contracts they supply. in turn. They contract out work to factories that make all of the products and run all of the factories. the production numbers for these countries have been decreasing at an alarming rate due to the fact that their economies expanded at a very rapid pace.Nike's Asian ties can be traced back to the birth of the company. wrote his masters thesis at Stanford University in the 1960's on the prospects for using Asian labor to produce goods cheaper and more effectively. and the increased production cost. This. and therefore Nike could no longer produce their product as efficiently as before. Nike has a Code of Conduct that . however. chairman of the board of directors.

earlier this year Nike commissioned Andrew Young.every contractor must agree to abide by in order to get a contract.specifically the Code of Conduct adherent The most consistent criticism of Nike is that the workers in the factories contracted by them are not aware of the Code of Conduct that was agreed upon. Young's conclusion proved not only to be uninformative. There are 1000 Nike employees worldwide monitoring operations at the subcontractors and . Indonesia. imposes caps on the days and hours a worker can be forced to work. and China for three to four hours each led by Nike's people. This is one reason offered by Nike in defense of the factories failure to comply with the Code of Conduct. force too many overtime hours. but could do better" was the statement released by Young at the end of the . and fail to make the workplace as clean and as safe as standards dictate. To look into this issue. Critics contend that the factories pay less than minimum wage at times. The Conduct Code in theory condemns and prohibits child labor. and recognizes and respects the workers right to freedom of association. prohibits mistreatment or discrimination of workers in any form. Many of the factories that are contracted have workers and management from different countries. causing some problems in communication. and/or it is not enforced (especially the wages and overtime aspects) by the factory officials. a former civil rights leader and United Nations ambassador to do an analysis of how well the Code was working. Some factories in China have Taiwanese Managers while factories in Vietnam have Korean managers. "Nike is doing a good job. Young and his staff visited four factories in Vietnam. requires that workers be paid fair wage. obligates factories to implement programs that benefit worker's health and safety. but somewhat aggravating to the public due to its elementary tone.

" (Good Works. well-lit. Nike commissioned a study by graduate students from the Amos Tuck School of Business at Dartmouth College to determine if workers in Indonesia and China were earning a ." This report makes it appear that Young's report was strictly for public relations and had no real impact on rectifying the situation. disclaimer) yet they were . In it was information about dangerous levels of carcinogens. This information directly contradicts Young's statement of "clean. Another aspect of the inquiry that bothered the public was the fact that Young chose not to look into the issue of wages.surrounded the situation Recently. not spending enough time in the factories. a prime component of the Code. Young even admits that he and his company are not "labor practices experts" (Good Works. He states. ventilated factories. or bringing to light any of the issues that . marred not just by shoddy methodology but by frequent misrepresentations" (Glass).' it was also a classic sham. "But if the Nike report was 'classic Andy Young. as well as overtime abuse suffered by workers. The reason for this being "such an exercise was well beyond the technical capacity of our small firm. He criticizes Young and Good Works International LLC (Young's company) for not using their own interpreters. and using this report as a public relations ploy for his new company. Executive summary) Stephen Glass calls into question Young's work in his article.chosen to do this job About a month ago a secret internal audit performed by Ernst and Young was leaked to press (Audit). not consulting with "experts" on the issue.report.

and at the end of the study. Nike contract factory worker wages are typically used to increase or augment total household income to raise overall household living standards" (Nike. sometimes in front of management. and food." The second conclusion states. Although these conclusions support Nike's insistence that they do not sacrifice their workers well being for their own financial gain." The third conclusion. Nike’s web sites. The intent of this study was to shed some light on the areas that the Young report failed to cover. "workers living on their own can generate discretionary income in excess of basic expenditures such as housing. The students spent three weeks interviewing workers in each country. three main conclusions were found. which doesn't allow the worker total freedom of . . The first conclusion. transportation. Press Conference).speech :References Environment Book. "for workers living in extended family households. critics bring to light a valid point when they argue that it is impossible to paint an accurate picture of the pay scale in three weeks time by interviewing approximately 1% of the workers. Supporting Notes.livable wage. "Nike contract workers consistently earn wages at or above government mandated minimum wage levels.