跨国管理:教程、案例和阅读材料(第5版)求：hitting the wall:nike and internationa

In the mid-1990s Nike, one of the world's most successful footwear
companies, is hit by a spate of alarmingly bad publicity. After years of
high-profile media attention as the company that can "just do it," Nike
is suddenly being portrayed as a firm that relies on low-cost,
exploited labor in its overseas plants. Nike officials vigorously deny
the charges, claiming that Nike has no control over the independent
contractors who manufacture Nike shoes. But the activists will not
retreat. Eventually, Nike must learn to deal with the activists' claims
and with the tangle of conflicting data that surrounds the concept of a
"fair" or "living" wage.
1. By Ngoie Joel Nshisso
International Business
Ph.D. program
Northcentral University
December 2010
Hitting the Wall: Nike and International
Labor Practices
Company overview
Just like
McDonald with its most recognized hamburger - a flat patty of ground
meat, usually beef, that is broiled, grilled, or fried and usually
served in a bun- is a symbol of American pride all around the world,
Nike with its footwear, apparel and all other sport product embodied of
swoosh logo is a symbol of American business success in sport, athletic
and fashion industry. The company history recall that
The
Nike athletic machine began as a small distributing outfit located in
the trunk of Phil Knight's car. From these rather inauspicious
beginnings, Knight's brainchild grew to become the shoe and athletic
company that would come to define many aspects of popular culture and
myriad varieties of 'cool.' Nike emanated from two sources: Bill
Bowerman's quest for lighter, more durable racing shoes for his Oregon
runners, and Knight's search for a way to make a living without having
to give up his love of athletics.
In 1963, Phil Knight
traveled to Japan on a world-tour where he met with a Japanese running
shoe manufacturer, Tiger--a subsidiary of the Onitsuka Company,
presenting himself as the representative of an American distributor
interested in selling Tiger shoes to American runners. The Tiger
executives liked what they heard and Knight placed his first order for
Tigers soon thereafter. By 1964, Knight had sold $8,000 worth of Tigers
and placed an order for more and ended up hiring a full-time salesman,
Jeff Johnson. After cresting $1 million in sales and riding the wave of
the success, Knight devised the Nike name and trademark Swoosh in 1971
and went from $10 million to $270 million in sales. Beside the swoosh
logo, Nike was also personified by its motto: just do it (Nike 2010,
para 1).
Company business strategies
To be
competitive, low price seller and maximize profit, Nike had to find a
way to keep its labor cost as low as possible. The company adopted a
strategy that will take advantage of the new trend offered to many
multinational enterprises by trade agreement, technology and
communication sweeping developed and developing countries alike by
outsourcing production to low labor cost countries. As noted by
Christopher, Sumantra, and Paul (2008), “the company would shave costs
by outsourcing all manufacturing and has all products made by
independent contacting factories” (p. 102). Another strategy which is a
logical consequence of the above mentioned was that Nike chose not to
have “physical assets” (Christopher, Sumantra, & Paul 2008, p.
102).
Before to look at how outsourcing ruined the company
reputation and operations, the next section will explain the outsourcing
concept and look at its advantages and disadvantages.
Definition, advantages and disadvantages of outsourcing
Definition of outsourcing
In its early beginning,
outsourcing is a business strategy by which a company is “purchasing
from someone else a product or service that had been previously provided
internally” (Wheelen & Hunger 2008, p.198). In general, products
manufactured in repetition and routine sequence are outsourced within
the country or overseas.
Advantages of outsourcing
By the end of the twentieth century, the world was becoming a
global village, term coined by Levitt who noticed that “the world’s
needs and desires have been irrevocably homogenized with the commonalty
of preference leading to standardization of products, manufacturing and
institution of trade and commerce”( Christopher, Sumantra & Paul
2008, p. 91). The birth of internet will add to this trend quick, cheap
and variable means of communication, video conference able to establish
live-conversation between persons at distant miles away and finally
electronic mail will help transmit large volume of data and information
that previously could have been done only by regular letter sent by
express mail.
As the world globalizes, less
government regulations and trade agreements between nations will start
to dominate the trading environment and they will be enforced
international bodies. The mostly named is the World Trade Organization
for which Tomas (2009) gives the following brief explanation:
Since 1995, the world trade organization has overseen the global
rules of government policy toward international trade and provided the
forum for negotiating global agreements to improve these rules. The WTO
subsumed and expanded on the General Agreement on Tariffs and Trade
(GATT). The WTO (like the GATT before it) espouses three major
principles: (1) liberalization of trade; (2) nondiscrimination, or the
most-favored nations (MFN) principle; and (3) no unfair encouragement
for exports (p. 168).
The above advantages laid a way to
outsourcing by companies in developed to developing countries. The
destinations of choice were “Eastern Europe, Asia and Africa” (Schaffer,
Agusti & Earle 2009, p. 30-31) for a clear reason admits Thomas
(2009)
Poor workers in poor countries: many of the world’s
people are very poor. Many work in the informal sector, scratching out
an existence. Even those who have employment for pay often receive wages
that are very low in comparison to wages in the United States, Western
Europe, and Japan (p. 3-4).
Some poor countries have even
gone too far by using under age children and slaves in the workforce to
perpetuate a low wage policy. A study initiated by the United States
made an astonishing discovery in Africa and reported that:
Child labor and slavery are used in this part of the globe for
economic reasons because they provide free or cheap labor in the
demanding work of oil drilling and mining for which statistics show that
“Oil imports (crude and non-crude) continued to dominate imports from
Sub-Saharan Africa with $71.2 billion in oil imports in 2008, accounting
for 82.8 percent of all U.S. purchases” (U.S.-Africa trade profile
2009, p 13).
Advantages of outsourcing
Saving on
wages lures company with intensive labor cost to choose countries with
low wages as the best place to outsource part or all operations and if a
location grew richer with rising cost, the delocalization would be an
inevitable decision. Nike gives a perfect illustration of the practice
according to Christopher, Sumantra and Paul (2008). They recall
that
Nike signed its first contacts with Japanese
manufacturers but eventually shifted its supply base to firms in South
Korea and Taiwan. As these bases grew richer, costs rose, Nike began to
urge its suppliers to move their operations to lower cost regions. To
remain in the company’s good graces, most manufacturers rapidly
complied, moving their plants to China and Indonesia (p.103).

The practices of chasing low wages suppliers in developing
countries seemed to pay huge dividends to Nike. Indications from
Christopher, Sumantra and Paul (2008) shows that the company’s gross
margin remained largely above “37% from 1989 to 1999” (p. 110), with a
markup of 50% per shoe from factory price to Nike. Labor cost per shoe
in 1999 was only “$ 3.37” (p. 111) representing 0.76% of the profit made
by Nike.
Disadvantages of outsourcing
Riding
the waves of outsourcing is not free of risks. Wheelen and Hunger (2008)
published a study of efforts conducted by European and North American
firms that lists these seven major outsourcing errors or risks:
Outsourcing activities that should not be outsourced: companies
failed to keep core activities in-house.
Selecting the wrong
vender: vendors were not trustworthy or lacked state-of-the-art
processes,
Writing a poor contact: companies failed to
establish a balance of power in the relationship.
Overlooking
personnel issues: employees lost commitment to the firm.
Losing control over the outsourced activity: qualified managers
failed to manage the outsourced activity.
Overlooking the
hidden costs of outsourcing: transaction costs overwhelmed other
savings.
Failing to plan an exit strategy: companies failed
to build reversibility clauses into their contacts (p. 199).
Problem that affected Nike
One of the problems that
affected Nike is a lack of qualified managers that failed to understand,
manage outsourcing regulations and deals with communication when
critics started. Nike seemed not to have an international marketing and
communication manager whose job description would be “to develop market
strategies and plan, to capture marketing insights, to connect with
customers, to build strong brands, to shape the market offerings, to
deliver values, to communicate value and to create long-term growth”
(Philip & Kevin 2006 p. 29-30). These responsibilities lead to
marketing audit before and during outsourcing operations.
In
fact, Christopher, Sumantra and Paul (2008) revealed that it was only
when the company found itself in the hot seat because gross violations
“it hired Dusty Kidd in the public relations department to draft a
series of regulations for its contractors” (p.105) and Andrew Young, the
respected civil rights leader and former mayor of Atlanta, to conduct
an independent evaluation of its code of conduct” (p.107), also
“arranged for students at Dartmouth’s Amos Truck School of business to
conduct a survey on the suitability of wages and benefits paid in its
Vietnamese and Indonesian contract factory workers”(p. 108).
Unfortunately, it was too little and too late.
Key issues
impacting the problem
Not having at the executive level
managers to develop global marketing and communication strategies
created many issues within the company. The present study will focus
only on corporate culture and ethics.
Corporate cultureOne good definition of corporate culture comes from Wheelen and
Hunger (2008) who said:
Corporate culture is the collection
of beliefs, expectations, and values learned and shared by a
corporation‘s members and transmitted from one generation of employees
to another. The corporate culture generally reflects the values of the
founder(s) and the mission of the firm. It gives a company a sense of
identity. Corporate culture shapes the behavior of people in a
corporation. Because these cultures have a powerful influence on the
behavior of people at all levels, they can strongly affect a
corporation’s ability to shift its strategic direction (Christopher,
Sumantra & Paul 2008, p. 116).
Nike, like any other
corporations in business was very interested on profits but at the very
high level of the company, a destructive culture of non interest on
working conditions, no respect to safety and health standards, no
regard for the environment, corruption and intimidations was one of its
beliefs. When critics mounted about low wages, coerced overtime and work
safety in plants under Nike contracts, the company response was: “labor
conditions in its contactors’ factories were not – could not – be
Nike’s responsibility” (p.104).

Problem of
ethics
In the philosophy of Knight’s original plan probably
rested ethical problems: “not only would Nike outsource, but it would
outsource specifically to low cost parts of the world,” (Christopher,
Sumantra & Paul 2008, p. 116) was a statement that will preside to
the company’s attitude of ignoring any problem requiring amelioration of
working conditions.
Corporate America knows that there is
“the fair labor standards act of 1938 that prohibit child labor, limits
working hours and establishes working safety conditions” (U.S.
Department of labor 2010, p. 1-54). Multinational enterprises choosing
to outsource know also that since “1970, the United Nations, the trade
organizations and private organizations have laid out regulations
against worker exploitations, child and slave labor” (Schaffer, Agusti
& Earle 2009, p. 72-73). Deliberately, Nike chose to walk-away from
them. To make matter worse, it threatened its foreign contractors to
move business somewhere if they don’t keep wages down and also kept
blind eye to “bribery” of public officials (Christopher, Sumantra &
Paul 2008 p.103). At this point, Nike bears responsibility for actions
of its partners because
Ethical or unethical behavior is
not entirely a matter of the character of individual employees; it is
determined at least in part by factors in the organization. People are
influenced by the forces surrounding them: their peers, their superiors,
the reward system, group norms, and organization policies and values
(Cynthia, Lyle, & James, p. 22).
Alternative
solutions
Nike and its CEO Knight were weaken by the scandal
but did not lose spirit. They have learn not to be stubborn anymore but
to comply, to change, to improve, to regain leadership in sport and
apparel business under swoosh’s logo. In the search for solutions to
their failure, they run for external marketing audit. This part of
marketing audit is important but presents itself as a second opinion
that confirms or corrects the internal audit. In essence, what is global
marketing audit and what are its components? The next section attempts
to respond to these questions.
Global marketing audit
Outsourcing is now days a major task to undertake. Because of it
advantages and disadvantages, developed and developing countries with
assistance of bodies like United Nations, activists and scientists are
coming together to regulate competition, working conditions, environment
and more. Companies that decide to outsource need to do their homework
in order to learn external forces that will impact operations and define
internal strategies to be competitive. The task that can help gather
external and internal data is global marketing audit. this managerial
function need to be performed before and during all the period of
outsourcing. According to Warren (2002) global marketing audit isA comprehensive, systematic, and periodic examination of a
company’s or business unit’s marketing environment, objectives,
strategies, programs, policies, and activities, which is conducted with
the objective of identifying existing and potential problems and
opportunities and recommending a plan of action to improve a company’s
marketing performance. The global marketing audit is a tool for
evaluating and improving a company’s global marketing operations. The
audit is an effort to assess effectiveness and efficiency of marketing
strategies, practices, policies, and procedures vis-à-vis the firm’s
opportunities, objectives, and resources. Its components are 1)
marketing environment audit, 2) marketing strategy audit, 3) marketing
organization audit, 4) marketing systems audit, 5) marketing
productivity audit, and 6) marketing function audit (p. 525-527).

If Nike performed marketing audit to learn or know existing
national and international regulations, the role of not for profit
organizations to defend human rights and environment, and the
lawlessness of some developing countries, it could avoid its misfortune.

Recommendations and Conclusion
Nike case
illustrates decisions of a company acting to remedy the problem of
negative criticism in a legally protected and defended global village
where company’s social responsibility can no longer go unnoticed or
uncensored. As many structured entities (companies, governments,
international organizations, and activists) enter multinational arena
and the public become more aware of social and environmental conditions
in developing countries, the need for sufficient, honest disclosure of
corporate conduct will continually increase and put pressure on
companies practices.
Nike started working on its culture to
turn things around but the damage was so severe that it need to keep
working to buy in the idea of full disclosure of social responsibility
practices, using internal and external audit to show to consumers,
competitors and the world that it is carrying along with them the trend
of making social responsibility a priority in production, finance and
purchase decisions. As advised by Philip and Kevin (2006) for whatever
Nike will plan to do for its success, “adapting and conducting business
practices that protect the environment and human” (p.22) will avoid him
to be its own enemy and will provide him tools to defend against
detractors.
References
Christopher, B.,
Sumantra, G., & Paul, B. (2008). Transnational management: text,
cases, and readings in cross-border management. New-York, NY.
McGraw-Hill Irwin
Cynthia, D. F., Lyle, F. S., & James,
B. S. (2006). Advanced human resource management. Boston, MA
Edward, B., (2005). The Bhopal disaster and its aftermath: a
review. Retrieved from
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/
Nike.
(2010). Company overview. Retrieved from
http://www.nikebiz.com/company_overview/
Philip, K., &
Kevin, L. (2006). Marketing management. Upper Saddle River, NJ. Prentice
Hall
Schaffer, R., Agusti, F., & Earle, B. (2009).
International business law and its environment. South-Western Cengage
Learning. Mason OH
Thomas, A., P. (2009). International
economics. The McGraw-hill Irwin N.Y. New York
U.S.
Department of labor. (2010). The fair labor standards act of
1938.Retrieved from
http://www.lawupdates.com/pdf/resources/employment/Fair_Labor_Standards_Act_of_1938,_as_amended.pdf

U.S. Department of commerce. (2009). U.S.-Africa trade
profile 2009. Washington, DC: Author
Warren, J.K. (2002).
Global marketing management. Upper Saddle River, NJ. Prentice HallWheelen, T. L., & Hunger, D. J. (2008). Strategic management
and business policy (11th ed.). Upper saddle river, New Jersey 07458:
Pearson education, Inc. (Original work published 2000)

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再问： 不是这个。。。
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