The Nike Inc. company was founded by Philip Knight in 1972 (Nike Inc., 2013). The company is headquartered near Beaverton, Oregon in the United States. The company which is listed in the New York stock exchange market primarily deals in sportswear. Nike is a world leader in the sports industry with Adidas being its main rival player in the industry. Under the leadership of Mark Parker, the Nike Inc. continues to register impressive performances in the sports business. For instance, in 2007, Nike had a turnover of roughly 12 milliard of Euro (Brettman, 2013). It is worth noting that Phil Knight ordered the designing of the company’s famous logo (called Swoosh) from a design student. It is also important to note that Nike’s main market is in the United States of America since the market accounts for up to 56% of its market share. Nike’s turnover is mainly distributed into shoes (60.6%), clothing (32.5%) and equipment (6.9%) (Nike Inc., 2013).
Just like any other company, developing its brand requires much effort. Towards attaining the goal, Nike Inc. has sponsored sports stars such as Roger Federrer and Rafael Nadal (tennis players), football teams such Juventus and Arsenal among others (Porter, Harris & Yeung, 2002). In using the sponsorship approach, Nike has poached many markets from its rival Adidas. The company was, however, accused of using child labor in its production activities (Porter et al., 2002). This sent the company into a crisis since using child labor is unethical and unacceptable. Similarly, the company focuses its production activities in Asia where it pays workers cheaply. As an example, Nike has a designer plant in Saigon, where employees are paid five dollars in an hour, yet a pair of shoes is sold for one hundred dollars.
External Stakeholder Ethical Communication Analysis
Going by the information on the Nike Company’s website, it strives to better its performance. The company always seeks to dominate by providing quality products. The company approaches social responsibility with excellence being the objective. The company seeks to create value through its supply chains, in addition to creating innovations that serves the world better. Based on this finding, the company’s stakeholders include its suppliers, customers and the larger society.
Further, the company recognizes that economic, social and environmental challenges continue to increase. Hence, improving its performance to cater for the needs of the concerned stakeholders becomes a primary concern for the company. Based on the latter assertion by the company, environmentalists are also a part of the stakeholder community of Nike Inc. In order to satisfy the company’s objectives, it relies on its strength of the brand, the passion and energy of the people and its wide business scale. The company proceeds to acknowledge that despite the challenges, the current environment offers an array of opportunities that can be tapped. Following through various strategies, the company indicates that it priorities sustainable goal pursuit. In addition, the creation of community and consumer relationships and positive social-environmental change remain primary aspirations of the company.
Taking the perspective of a primary external stakeholder various contentious issues emerge. For instance, as a customer, Nike appears as a leading manufacturer of sportswear. From the introduction, it is evident that it is only Adidas that rivals the company. Thus, it appears that Nike is doing well on the quality front. However, on its website, the company emphasizes the need to observe several interests such as economic, social and environmental. Despite the communication from the company that it values ethical conduct, its actions reflect a contrary picture. For instance, the extension of minimal wages to its workers, and its use of child labor are in contravention with the company’s communicated aspirations. To be specific, the company presents a false picture that it cares for the society, while it underpays its workers. Equally significant, hiring children as workers negates it communication that it values social wellbeing of the society since such a move (employing children) is a violation of societal expectations.
The information about the company is easy to find since it is posted online. However, the genuineness of the information is questionable. What is presented is what is good for the company. It portrays a good picture about the company, but fails to highlight instances where the company has failed or has acted unethically. For this reason, it is arguable that accessing the company information is easy; although, searching other sources of information would be significant in order to access a true reflection of the company’s practices. In brief, the company is not entirely transparent. As May and Mumby (2005) observed, employing a deceptive approach is unacceptable.
Regarding doing business with the company, it is worth noting that several factors are considered (Todd, Sitthichok, Mottus et al., 2008 and Paul & Elder, 2006). Personally, I emphasize ethics. Thus, the decision to transact business with an organization depends on its ethical conduct. From the above, the Nike Corporation has violated ethical expectations despite having a detailed ethics code which purports that it seeks value for the society. In practice, it does contrary practices such as underpaying workers and hiring underage workers. For that reason, I would decline an opportunity to do business with the Nike Corporation.
Based on May’s ethical model, an organization needs to align personal, professional, and organizational aspirations and behaviors (May, 2013). From the above, it is evident that Nike has not attained this threshold. For instance, the company does not align personal aspirations/behaviors with professionalism. This is based on the company’s attempts to use employees for selfish gains. The company is also expected to build trust among all stakeholders. It has also failed on this expectation because of using underage workers and underpaying its workers. The model also advocates for using an inclusionary approach in decision-making. Based on the allegations about working conditions, it is evident that Nike does not satisfy this expectation. The other aspect of May’s Model is establishing transparent structures, policies and procedures. For the same reasons, Nike does not satisfy this condition. While responding to ethical crises, May’s model calls for accountability. In responding to the issue of employee mistreatment, Nike established a behavior code. The behavior codes outlines what company subsidiaries are expected to do in regards to employees. However, the measures were deemed insufficient, leading to the boycott of the company’s products. The company encourages efforts to identify and respond to ethical concerns by demonstrating courage as outlined in May’s model; although, it does such for purposes of public relations.
Employee (internal stakeholder) Ethical Communication Analysis
Taking the perspective of an internal stakeholder paints a more negative picture about the company. It should be noted that Nike does not own any production unit (Todd, Mottus & Mihlan, 2008). Instead, the company relies on subsidiaries for its production purposes. The company is known negatively about the sweatshops spread across Asia. From the 1990s, public opinion about the company was negative. This was based on its respect for human rights.
As an employee, I see Nike as an exploitative entity that is concerned only with its profits. It concentrates on creating shareholder value. Thus, it pursues that objective, ignoring other players such as employees and the society at large. Information about the company is not easy to find since the organization gives pieces of information deemed good for public reception. Put differently, Nike does not give accurate information about its operation in relations to working conditions. Hence, it is only an insider who understands what goes on at the organization. Before the 1990s, employees were treated badly. However, following a public outcry coming late during the 1990s, the company attempted to adjust its operations in order to protect its business which was in jeopardy. The creation of a code of behavior and condemnation of worker mistreatment shows positive signs; although, much remains are still to be done.
With the introduction of the behavior code, and the promise to adhere to Fair Labor Association provisions, the Nike Company became a better place to work at. Hence, working for the company is not a bad idea for now. However, involvement of employees is not encouraged at Nike. Employees are relegated to their routine duties. Identifying ethical issues rests with the Work Conditions department. In the past, ethical concerns identified bordered on working conditions. Although, the company gave a promise of offering normal work conditions, the working premises proved unfit for people (Todd, Mottus & Mihlan, 2008).
Based on May’s ethical model, an organization should align personal, professional, and organizational aspirations and behaviors. From the above, it is evident that Nike made efforts to achieve the expectations. This is because the company introduced many changes to address employee’s concerns. The company is also expected to build trust among stakeholders. The model advocates for using an inclusionary approach in decision-making. The inclusionary approach has improved while the extent to which employees are involved remains unclear. The other aspect of May’s Model is establishing transparent structures, policies and procedures. Similarly, agreeing to obey Fair Labor Association’s conditions, the company improved significantly in meeting the expectations. Agreeing to an independent entity’s (Fair Labor Association) labor provisions, setting a department in charge of ethical issues, and creating a behavior code, the Nike Company handled the dilemmas in a professional manner. While responding to ethical crises, May’s model demands accountability. In responding to the issue of employee mistreatment, Nike established a behavior code which outlines what company subsidiaries are expected to do. The company encourages efforts to identify and respond to ethical concerns by demonstrating courage as outlined in May’s model; though, it took the measures in order to satisfy public expectations.
Overall Assessment Nike’s Communication Ethics
For an organization to be deemed ethical, it must abide by all ethical requirements without necessary having to yield to public pressure (Paul & Elder, 2006). Based on May’s ethical model, an organization must align personal, professional, and organizational aspirations and behaviors. The paper demonstrates that Nike has not attained the ethics threshold. For example, the company did not align personal aspirations/behaviors with professionalism. Nike only attempted to do it out of public outcry. The company should also build trust among its stakeholders. The company failed on this requirement as it relied on underage workers and underpaying workers. It is notable that the model advocates the use of an inclusionary approach when making decisions. Nike Inc. did not employ the approach until public outcry became unbearable. The other aspect of May’s Model is using transparent structures, policies and procedures. As demonstrated, initially, Nike did not satisfy this condition as well. In responding to ethical crises, May’s model underscores the need for accountability. When addressing the issue of employee mistreatment, Nike established a behavior code outlining what company’s subsidiaries are expected to do regarding employees. Nonetheless, the measures were deemed inadequate, leading to boycotts on the company’s products. It is important to note, however, that the company encourages efforts to identify and respond to ethical concerns by demonstrating courage as underscored in May’s model. However, it is deduced that the company adopted the changes for the purposes of public relations.
Overall, the company’s organization’s communication and strategy choices are plausible. Based on Nike Inc. (2013), the company has a crisis communication team headed by a CEO. The decision to have the CEO is because of his presence value as he represents major stakeholders. The team also comprises the Chief Public Relations officer, organizational Lawyer and Senior Manager. Experts from the communication department are also tasked with receiving phone calls and replying to questions about a crisis. The company approaches crises by explaining a crisis to the media by presenting facts. The organization endeavors to express the truth instead of concealing vital information which maybe deemed damaging to the organization.
It is evident that the company has encountered some problems with its ethical standing. In particular, the company did not respect human rights since it employed minors and engaged in unacceptable practices such as poor working conditions and extension of below-par salaries. It is recommended that the organization considers working with ethics-based organizations to provide support to its working conditions. Getting the support of an independent entity in implementing ethical requirements would be an improvement since relying on an internal department may be deficient.
Similarly, the organization should consider opening up its decision-making process. Such a move would allow employees to share their ideas concerning work and other organizational operations. An inclusive environment facilitates better performance since workers own the decisions made (Gatti, 2011). Another issue to improve on is identification of ethical dilemmas earlier than external stakeholders. Thus, the organization should take a proactive approach instead of being reactive as demonstrated in the paper.