Nike Case Analysis Study Example | Topics and Well Written Essays - 1250 words

Nike Analysis - Case Study ExampleFor fiscal year May 31, 2009, the conjunction has reported revenues of more than $19 billion. These figures include sales for affiliate businesses such as Converse, Umbro, Cole Haan and Hurley International. While the participation has recorded a 6% pretermit in its return on investment (ROI), Nikes performance between 2005 and 2009 is so much better compared to the top 500 S&P companies. Nikes success may be traced back to capacity to tap into the international market, which accounts for more than half of the companys sales. Aside from this, Nike has chosen various Asiatic countries for their contract manufacturing base, allowing them to take advantage of low usable costs and even lower wages. Known best for its Just Do It Campaign which started in 1988, Nike has struggled with caters involving violations of humane and labor rights, and deficiencies in health and safety conditions (Ferrell et al., 2011, p. 387). Like most companies that had t o face human rights allegations, Nikes response was slow and ineffective. According to an Amnesty International (AI) report, the companys response may be summarized in four stages denial, blame others, damage control, reassert control over damaged corporate image, and give coming into court of compliance (Avery, 1999). At the beginning, Nike reiterated the efforts the company is making to improve working conditions and raising wages in countries where their factory is located. In a statement, Philip Knight said, every Nike subcontractor is undefendable to systematic, unannounced military rank carried out by Ernst & Young and that our own reviewshave shown that the Code of conduct is complied with in all material means (as cited in Avery, 1999). Unfortunately, the review evaluation carried out by Ernst & Young did not reveal how may factories were actually audited and what tools were used to carry out its evaluation. Moreover, hiring its own evaluators to assess the companys operat ional practices was counterproductive, according to the companys detractors. For one, how can a company release a negative report against the same people who are providing them with business? Moreover, as a growing company, Nike was too busy fulfilling client orders, its hiring and standard operating procedures were not yet a subject of scrutiny until the Asian employees started their strike, that is. With thousands of people in their employ and hundreds of factory locations around the world, Nike failed to institute an internal auditing system (and an internal auditor) which could have helped them ensure the highly viable working conditions they wanted to provide. Another issue that led to Nikes failure to address corporate responsibility earlier is the presence of a contract manufacture base denuded the companys ability to monitor the activities in all its subcontracting plants. In addition, because many of the contracting plants were located in Asian countries, Nike should have installed an in-house representative who is tasked of ensuring that the new manufacturing plant has espouse the Code of Conduct. Transitions should have been made, and regular audit should have been scheduled to monitor the plants performance and adherence to the Code. Aside from its labor issues in the Asian territories, Nike has also earned the disagreement of several thousand people who were formerly employees