THE UGLY

1.     A brief overview of the organization, the action, and the context in which it

took place

Since the 1970s, Nike has been accused of using workshops to produce footwear and

clothing. It is based on a business model that finds the lowest possible labor cost, which

leads to child labor and exploitation. However, it was not until 1991 that Jeff Ballinger

published a report detailing the low wages of workers and poor factory conditions that

these sweatshops were attacked. Nike has received a lot of media attention and

brought huge problems to the business.

2.     A brief explanation of whether the action was good, bad, ugly, or a

combination

Here's how Nike could turn things around after it became a global symbol of abusive

labor practices.

• After rising prices and organizing labor in Korea and Taiwan, Nike is starting to urge

entrepreneurs to move to Indonesia, China and Vietnam.

•1991: Trouble begins in 1991 when activist Jeff Linja published a report documenting

low wages and poor working conditions in Indonesia.

• For the first time, Nike has officially responded to complaints with a factory code of

conduct.
• 1992: Ballinger publishes a talk about Nike. His article in Harper highlights an

Indonesian worker who worked for a Nike subcontractor for 14 cents an hour, well

below the Indonesian minimum wage, and documented other abuses.

• 19921993: The protests at the 1992 Barcelona Olympics, a 1993 CBS interview with

workers at the Nike factory, and the Ballinger NGO "Press For Change" caused a wave

of attention. of the mainstream media.

• 1996: Kathy Lee Gifford's clothing line is made by children in poor working conditions.

His tearful apology and activism made him a national problem.

• 1996: Nike establishes a division responsible for improving the lives of factory

workers.

• 1997: Publicity efforts become an opportunity for public outrage. The company has

expanded its "Niketown" retail stores, only to see growing protests. Sports media have

started to challenge spokespersons like Michael Jordan.

• The abuse continued, such as a report alleging that a Vietnamese subcontractor

kicked women out until they collapsed for not wearing the right shoes.

• Nike tasked activist and diplomat Andrew Young to review his overseas work

activities. His relationship has been criticized for being gentle with Nike. Critics

protested that he did not address low wages, used Nike interpreters to translate, and

was accompanied by Nike officials on factory tours. As Young's report was

overwhelmingly favorable, Nike was quick to announce it, which raised a backlash.

• 1997: Students across the country begin to protest against the company.
• 1998: Nike faces weak demand and relentless criticism. He must have laid off workers

and started to realize he had to change.

• The real change began with CEO Phil Knight's speech in May 1998. “Nike products

have become synonymous with slave wages, forced overtime and arbitrary abuse,”

Knight said. "I really believe that American consumers don't want to buy products that

are made under abusive conditions."

• During this speech, he announced that Nike would raise the minimum age for

workers; significantly enhanced surveillance; and will meet US OSHA clean air

standards at all plants.

• 1999: Nike creates the Fair Labor Association, a non-profit group that brings together

businesses, human rights and labor representatives to establish independent oversight

and a code of conduct, including minimum age and the 60-hour work week, while

encouraging other brands to join.

• 20022004: The company carried out approximately 600 factory inspections between

2002 and 2004, including repeated visits to problem factories.

• 2004: Human rights activists recognize that increased surveillance efforts are

addressing at least some of the worst problems, such as locked factory doors and

dangerous chemicals, but problems subject is still there.

• 2005: Nike becomes the first company in the industry to publish a complete list of

factories it contracts with.

• 2005: Nike publishes a detailed 108-page report revealing conditions and wages at its

factories and acknowledging widespread problems, especially at factories in South Asia.

• 2005 Present: The company continues to publish commitments, standards and audit

data as part of its corporate social responsibility reports.

3/ An analysis of the action using appropriate and relevant

management concepts.

In terms of management, crisis management is quite common with large corporations

like Nike, because just a small scandal loses the brand, the shares of these
corporations immediately evaporate billions of dollars is normal.

Specifically, Nike has been plagued by sweatshops, allegations of exploitation, low

wages, poor working conditions and especially child labor to maximize their profits.

=> this caused a huge wave of public boycotts and accusations from lawmakers.

In extreme situations, it is extremely important to apply the principles of crisis

management and need to be careful. Specifically, Nike chose to be silent at the
beginning, but it did not work.

The wave of boycotting Nike products is getting stronger, so they choose to defuse the
situation and appease the communities that are angry with them such as Nike
increasing the minimum salary for their workers, pay more attention to workers' working
conditions and terminate contracts with Nike material suppliers that use child labor.

In addition, every detailed action on Nike's error correction process is transparent, and
they even publish information about workers' salary and working conditions that are
more transparent than competitors.

=> In conclusion, above is an example of one of Nike's great crisis management

techniques.

4/  A discussion of the action's effects or consequences on the

organization's employees and any other relevant stakeholder
groups.
The relevant stakeholders groups of Nike are customers, employees, government and
communities.
In 1991, an activist named Jeff Ballinger emerged, who published numerous results in a
comprehensive article on Nike's misconduct in particular, poor factory working
conditions, low wages and to maximize profits, they also used child labor in Pakistan
and Indonesia, Soon after, the brand became the subject of attention by all the media
and alleged by United Students Against Sweatshops . 

At first, Nike ignored it until the wave of boycotts and anger from customers forced them
to speak up and admit their mistake with a promise to stop Sweatshops.
IMPACTION:
Employees: 

 The low pay leads to inadequate living needs of the workers. Specifically, in
Pakistan, Indonesia the salary of underage workers is only about 10,000
VND/hour. Moreover, giving a low salary for children led to the criminal
percentage becoming younger and younger.

 The use of child labor brings bad consequences for workers: first, children are
the force that needs to go to school, not sit for hours at production sites.

 second, the use of child labor leaves them vulnerable to abuse by adults and
their guardians and deprives them of their freedoms - rights recognized by
international law

Community: 
As a giant in the sports shoe industry, Nike is leading the problem of child labor
exploitation. 
Unknowingly or intentionally, Nike has in the past led an unethical act of exploitation
that, if this is not intervened by legislators and the public, will become a stain on the
industry in the sport shoe industry.