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Labor Conditions in The Extended Supply Chain

Workers in the extended supply should be treated equally to workers in the host company. We believe that all businesses should take the initiative to have a fair system of auditing for all suppliers, to ensure they maintain a fair and safe working environment. . Andrew Paulson- Accounting

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Labor Conditions in The Extended Supply Chain

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  1. Workers in the extended supply should be treated equally to workers in the host company. We believe that all businesses should take the initiative to have a fair system of auditing for all suppliers, to ensure they maintain a fair and safe working environment. Andrew Paulson- Accounting Graduating May 2013 Wesley Cannon- Administration Graduating May 2013 Labor Conditions in The Extended Supply Chain

  2. Wal-Mart Supplier Accused of Sweatshop Conditions • Wal-Mart was accused of buying school uniforms that were made in extreme sweatshop conditions. • “Found that workers at the factory work up to 19 hour shifts to finish Wal-Mart’s orders under tight deadlines; are made to stand for hours as punishment for arriving late to work; and are frequently subject to verbal abuse and kicking or beatings.” • Wal-Mart asked group not to publish report and “proposed using a third party to work with factory management over the next twelve months to monitor factory operations.”

  3. Nike’s Code of Conduct “As we evolve our business model in sourcing and manufacturing, we intend to work with factories who understand that meeting these minimum standards is a critical baseline from which manufacturing leadership, continuous improvement and self-governance must evolve. Beyond the Code, Nike is committed to collaborating with our contract factories to help build a leaner, greener, more empowered and equitable supply chain. And we will continue to engage with civil society, governments, and the private sector to affect systemic change to labor and environmental conditions in countries where we operate.  We expect our contract factories to share Nike’s commitment to the goals of reducing waste, using resources responsibly, supporting workers’ rights, and advancing the welfare of workers and communities. We believe that partnerships based on transparency, collaboration and mutual respect are integral to making this happen.” • Nike has established new minimum standards for factories overseas • Nike’s Code of Conduct contains the ethics principles of Personal Virtues, Religious Injunctions, Individual Rights, Universal Rules • Transparency

  4. Guidelines for Ethical Behavior • Any single person involved with Nike must be over 16 or legal working age of that country if higher than 16 • Suppliers should only be contracted and remain a supplier if they comply with the explicit minimum standards set by host companies • Workers in supply chains must not work excessive hours • Management puts systems in place to ensure that factories are safe, hygienic, and healthy • Code of Conduct placed in all factories and all workers informed of their rights • Transparency in all aspects of business

  5. Advantages to Ethics Governance • Nike will appear more reliable to stakeholders • Consumers are ensured that products are manufactured in an ethical manner • Increases competition between companies with similar ethical stances

  6. Disadvantages to Ethics Governance • Specific examples of standards not stated • Nike encourages “self governance” in factories which does not always happen • There are not specific consequences for companies that fail to meet standards

  7. Recommendations to Improve Ethics Management • Post specific minimum standards in all supply factories and include all rules and procedures to follow these standards • Have representatives of Nike responsible for making frequent random standards checks • Have a written set of consequences in place if any suppliers fail to adhere to these standards • Hold workshops so that all workers in the supply chain know their employee rights and responsibilities

  8. Works Cited Gogoi, Pallavi. "Wal-Mart Supplier Accused of Sweatshop Conditions." Business Week. N.p., 09 Oct 2008. Web. 20 Mar 2011. <http://www.businessweek.com/bwdaily/dnflash/content/oct2008/db2008109_219930.htm>. Hosmer, Larue T. Brief Summary of Ten Ethical Principles. The Academy Of Management Review. 18 Mar 2011. "Nike, Inc. Code of Conduct." Nike. N.p., Aug 2010. Web. 21 Mar 2011. <http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf>.

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