Global ethics concepts and frameworks

Marketing Ethics at Nike

Crossing the Line of Corporate Social Responsibility (CSR)

Throughout the 1990s Nike began to outsource the majority of their apparel and shoe production to Asian nations, with the most preferred strategy being the use of contract manufacturing. Today contract manufacturing represents over 90% of all Nike apparel and shoe production globally (Nike Investor Relations, 2012). Nike has however learned several painful and costly lessons about both safety and child labor practices and the implications of downplaying them from a marketing standpoint (Boje, Khan, 2009). Where Nike crossed the line was during a series of court injunctions to stop contract manufacturing in Vietnamese contract manufacturing locations where safety violations and child safety had been routinely practiced, yet the company attempted to say it was part of their Corporate Social Responsibility (CSR) initiatives (Doorey, 2011). In short, Nike was confusing compliance to the CSR guidelines it had in place with giving the public (and U.S. courts) the impression they were effectively dealing with the contract manufacturer's lack of compliance to international standards of safety and health labor (Lewis, 2005). The fall-out was a continual boycotting of Nike and a call for the resignation of founder and CEO Phil Knight (Nike Investor Relations, 2012). This never occurred yet the magnitude of these infractions for a single brand shows how detrimental it is to not abide by ethics on a global scale. Nike later estimated the lack of brand loyalty and trust allowed Adidas and other competitors to successfully enter the market as consumers looked for brands more attuned to their own sense of ethics and values (Boje, Khan, 2009). Today Nike has an extensive Corporate Social Responsibility initiative in place to ensure there is a much higher levels of compliance and transparency within their contract management operations (Boje, Khan, 2009). There is also a more accentuated focus on how to measure contract management supplier quality over the long-term to ensure that mistakes the nearly cost Nike millions in fines from the U.S. Court Systems don't happen again (Lewis, 2005).