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ΕλληνικάCASE STUDY
Nike’s forced labour scandals
Source: https://www.nike.com/
Context:
Nike could be identified as one of the most famous textile functional brands in the world. Its core activity consists in selling footwear and sportswear around the world via wholesale customers that distribute the brand everywhere. Nike is a leading company in its market. Its revenue in 2021 was 47.149 billion dollars. In 2020, about 63% of the revenues of Nike came from footwear, and 28.8 % from apparel. Nike declared vision is “to bring inspiration and innovation to every athlete in the world”, while its mission statement is to “do everything possible to expand human potential”
Description:
Over the years, Nike has been confronted with several scandals that have affected the image of the brand.
In 1991, Jeffrey Ballinger, an American labour activist, published a report on abuse made by Nike in Indonesian factories. He was showing up child labour, employees working long hours below minimum wages, as well as hazardous working conditions. Over the 90’s several reports of this kind showed developing countries’ sweatshops, where workers was exposed to the hardest working conditions.
Despite the scandals, experts denounced that Nike was treating these cases as public relation issues rather than serious human right matter. In 2007, Nike started to embrace the corporate responsibility and published the list of factories operating for Nike over the world, allowing other to check the working conditions.
In a 2018 report by the Clean Clothes Campaign, Adidas and Nike still pay poverty wages to workers.
In 2020,l a Report from the Australian Strategic Policy institute revealed that over 80.000 Uyghurs were transferred out of Xinjiang by the Chinese authorities to work in factories across China between 2017 and 2019, some of them being sent to detention camps, and obliged to work in factories that are in the supply chain of well-known brands in several sectors, among which Nike.
Lesson Learned:
Nike’s business model is strong and has enabled the firm to have a strong position on the market, before its main competitors Adidas, Asics, or Puma.
However, it still faces global risks linked to the global condition and changes that can have either positive or negative impacts on sales. Nike will need to adapt to the raising environmental and social concerns, and increasing policies in the field, as well as to trade regulation, data security and privacy, etc. as main challenges for the future.