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Hitting the Wall

Hitting the Wall. Nike & International Labor Practices. CSR…and Nike?. Keady vs. Nike and St. John's University http://www.youtube.com/watch?v=vaK0-q97m18 http://www.teamsweat.org/2011/10/20/video-are-nikes-factory-workers-paid-a-living-wage/ NIKE

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Hitting the Wall

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  1. Hitting the Wall Nike & International Labor Practices

  2. CSR…and Nike? • Keady vs. Nike and St. John's University http://www.youtube.com/watch?v=vaK0-q97m18 http://www.teamsweat.org/2011/10/20/video-are-nikes-factory-workers-paid-a-living-wage/ • NIKE • http://www.youtube.com/watch?v=iXsaYR1Izqw • http://www.youtube.com/watch?v=jPjE42aCico&NR=1 • http://www.youtube.com/watch?v=rwCfPVz_ddY&NR=1 • http://www.teamsweat.org/

  3. Debate the Case from one Role • Does Ballinger have a convincing argument? • Does Nike have a convincing response? • How well has Nike handled the publicity surrounding its labor practices? • Could/should Nike have done anything differently? • What is a “fair” wage in Vietnam? How should Nike think about it? • What role do consumers play? Do we have any power? Have we used it to shape unfair practices globally?

  4. Debate • Count off by 3 and join your group • Get organized • ID Key points from your role Nike (Phil Knight, CEO and corporation) General Public (consumer, shareholder, stakeholder, constituents) Jeff Ballinger (NGO critics) • Each team shares (10 mins each) • Opportunity for rebuttal (5 mins each, 2-3 rounds) • Closing arguments (5 mins each)

  5. Segue to Class Lecture • Review key issues in the case • Post hoc analyses • CSR reporting • Value chain ethics • Links to OB • Final thoughts

  6. What’s “fair” labor wage? • How much? • Location? • Age? • Benefits? • Rights? • Responsibility for conditions?

  7. Nike Sees theLight… • Gave $7.7M to Intl Youth Foundation to establish the Global Alliance for Workers and Communities (w/Gap, World Bank, and Penn State) to monitor sub-contractor practices. • Quadrupled employees working on labor practices • Issued corporate social responsibility report

  8. Social Responsibility Report “By June 2000 Apparel/Footwear had taken full responsibility for the product creation process, and our material supply chain related issues.” *Nike Corporate Responsibility Report, FY 2001, p. 6.

  9. Examples: Value Chain Ethics • Ford and Firestone • Apple suppliers and bribery • Starbuck’s and Fair Trade coffee • Hershey’s and slave cocoa • China and _________ • Wal-Mart, Albertsons, Ralphs, Vons etc. • McDonald’s (suppliers and customers) • Tobacco, Casinos, Guns, Fast Food, Glue, Computers, Tracking Chips, Ephedrine, Private Security…

  10. Steps Forward orBack? • Apple Follows Suit • FoxConn suicides • http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive • U.S. relies heavily on goods produced in – and often at the expense of – people in the developing world. • We lost 28% of our high-tech manufacturing jobs in the past decade to overseas labor. • Seems we’ve OK w/this, because we’re unwilling to effect change with our wallets. Nike sales increasing and Apple is now the most valuable company in history. • Honduran Factory • Shut down w/o paying workers • Nike “has not done enough to help” • University actions • Cornell protests, U WI cuts ties, NYU reviews Nike contract, U WA pressure • Excessive O/T in China • Openly burning scraps • Sales up in China • Currency/export issues

  11. Value Chain ResponsibilityConnection, Control, Knowledge • Connection • Where, when, how, why • Control • Ought implies Can • Parker Principle: “With great power comes great responsibility” • Voice or Exit • Knowledge • Plausible Deniability • Obligation of Active Monitoring

  12. Remember OB? We can explain behaviorUnethical decisions are NOT INEVITABLE • Fairness & Equity • Collective Action Problems • Goal Displacement • Escalation • Separation Fallacy • Self-regulation • Emotional Intelligence • Groupthink • Cultural Relativism • Self-biasing • Diffusion of Responsibility • Plausible Deniability • External Locus of Control • In-group favoritism • Psychological Egoism • Fundamental Attribution Error • Value Chain Responsibility Labor Rights, Human rights, Natural Environment

  13. What you’ll say to yourself just prior to a questionable ethics decision… • The ends justify the means • I have a right to… • Someone else will do it • It’s how things are done in this [company, industry, country] • Just this once • They should have known • It’s not lying it’s [bluffing, puffery, marketing, selling, etc.] • Everyone’s doing it • I deserve this because… I’ve earned it… • I’m just doing my job • I don’t discriminate against anyone • I’m just doing what I was told • It’s someone else’s responsibility [parents, law, government…] • Not as bad as… • That’s a business decision, not an ethics decision

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