Nike: Profits come from low labor and the price differences
Nike is one of the world’s leading sportswear and equipment manufacturers. It leads the world in sales of athletic shoes and sportswear. The company was founded in 1964 by Bill Bowerman and Philip Knight. It is famous for its slogan, “Just Do It”. High standards of manufacturing and labor management make up the code of business ethics for Nike. A world famous company should be the model of all the companies and behave well, however, some ethical problems happened these years which leads Nike to a serious situation.
Nike has been reported using child labor during their production of their soccer balls which has taken place in Pakistan. There are relevant laws in Pakistan against child labor, but the government did not take any actions to prevent the abuse of child labor. And many organizations appeal to stop the importation of goods made by children. Nike was condemned of abusing the child labor to reduce the labor cost in order to get high profit. Nike use the situation that in these third world countries, child are expected to work and help their families, and Nike provide the chances to them, compare with the labor cost in the developed countries, the cost in the third world countries is much lower. Nike does not launch production directly in Pakistan. It is subcontracted through a local firm, which has to abide by Nike’s international rules and regulations when producing its goods. Nike has the duty to monitor the subcontracted firm.
Another ethical issue about Nike is the price differences between China and USA. China is one of the biggest market of sportswear, many companies want to take the opportunity to expand their shares in China, Nike has made many advertisements to promote their sales, based on some culture influences, Nike is a very popular band in China, and it even became a fashion logo. China is also a manufacturing country which has many low price labor. Nike has many factories in China, but it was reported that there are price differences in many productions. A pair of shoes may sell 129 dollars in USA, but 200 dollars in China. Nike found