Nike faces many challenges that are due to all of the accusations being made about their products being made in "sweatshops". The case study will show the description of the legal, ethical, and cultural changes affecting Nike and the claims made of them running a sweatshop. This case study will decide the roles the host governments played in the business of Nike sweatshops. The case study will summarize the operational and strategic challenges that the management of Nike Corporation is facing. .
Legal, Ethical, and Cultural Changes.
Although Nike is the designer of their products and markets them; Nike contracts the manufacturing of their products through a "global network of 600 factories scattered around the globe. The factories employ some 650,000 people (Hill, 20013). The fact that Nike has so many accusations against them of using sweat shops to manufacture their products is why Nike has so many Legal, Ethical, and Cultural challenges. The sweatshops employ children that are working in hazardous conditions for many hours and paid wages that are below-subsistence wage level (Hill, 2013). Nike appears to choose very poor countries to manufacture their products in and pays very poor wages that people cannot even live on.
Nike is accused of preying on the poor of the world with unethical and illegal subcontracting practices. The people that are being preyed upon do not really realize that their wages are far from fair because they are from different cultures than the Nike Corporation is operating from. Most of the people that work in these shops are just happy to even have a job. Some literate and disciplined people that work for Nike are desperate for a job and they work as much as six days a week for $40.00 per month which is only 20 cents per hour (Hill, 2013). Some of the workers that have management positions do not even get paid minimum wage. Nike does not admit to any of the claims above and claims they are compliant to the laws of illegal and ethical practices.