Posted: November 27th, 2013
Corporate Social Responsibility: The Nike Case
Corporate Social Responsibility is a form of self policing intergrated into the business context. It acts as a self regulating technique where an organisation ensures its active adherance with the ethical standards, law and international norms. It is the intergration of social and environmental concerns. The main goal of Corporate Social Responsibility (CSR) is to create a positive impact to the society, it’s consumers, employees, shareholders and the entire public at large.It helps build trust in businesses, which is very vital for any social market economy for example the European market economy (Visser, Dirk and Manfred 284). The Corporate Social Responsibility acts as a measure of an organisation’s performance against social, environmental and economic parameters. This encourages community growth and development, since it is included in the desicion making of an organisation while analizing the budget. It makes a significant contribution to competition and towards sustainability.
The Nike company produces footwear,sports acccessories, clothing and sports eqiuipment. It has fully exercised Corporate Social Responsibility by establishing a Board of Directors who are responsible for corporate governance as per the United States’ laws and the interests of the stakeholders. The board is composed of independent non-excecutive directors, whose responsibilities are to develop strategic policies and approve them together with corporate investments and plans. They also make recommendations concerning community affairs, environmental practises and equal job oppurtunities.
The Nike company views Corporate Social Responsibility as a catalyst for growth and innovation, an integral part of how they use the power of their brand, the passion of their people and the scale of their business to bring change to the society. It is no longer a staff function but a part of how they operate and they have made it a sourcing and consumer function. The company has layed down strategic targets that are tough but achievable. The first issue is to improve the working conditions in their factories by hiring human resource management so as to create job opportunities and to eliminate overtime to avoid stressing workers. Secondly they are to create a social impact by setting targets around their projects to give youth worldwide access to the benefits of sport by using the power of their brand name. Lastly, they have set a goal to minimize the global environment footprint through sustainable product creation and will increase use of environment preffered materials and also make footwear that emmits carbondioxide. Lastly, the Nike company has planned to increase its contributions towards its programs.
It has however been able to achieve most of its corporate goals through many ways. First, it has created job opportunities for a large number of people through outsourcing excluding the factor of racism since it has companies in many countries hence employing people from different cultures and countries. In addition, it has improved the working conditions of its labour force scrapping out overtime and creating a communication channel by which it can reach its employees at the lower levels. Nike has employed its work force on a non biased context for it has employed more women as compared to other companies thus embracing gender equality. Diversity of cultures and ideas brings about brand innovation and creativity. Different people have different ideas and if their ideas can be assessed, some are an essential key in organisation building.
Secondly, it has joined in coalitions like The Sustainable Apparel Coalition with other organisations, manufacturers, retailers annd footwear brands in an effort to reduce social and environmental impact of their products around the world. Transparency is also a key source to building trust among its stakeholders who are the businesss partners, employees, consumers and the general public. Nike has fully exposed its company’s details. Bueble describes stake holders as an important group in the decision making process (Bueble 101). Nike has build schools worldwide but especially where their is adequency of education at an affordable rate, in areas where there is a large population of unskillled people. On the other hand, it has not been able to achieve some of its goals due to issues like the kasky lawsuit, the global crisis causing the poor economy worldwide and bad reports from countries it has subsidiary companies at. The bad reports expose their lack of good working conditons where workers claim that the company maintains poor working conditions and poor wages to attain high profit margins and they are also acquised of pulling out causing high unemployment when salaries are raised. Thirdly, it has not found the complete process of producing orgarnic products, which do not cause environment degradation. Lastly, the schools it has set up are low income schools that offer low quality education which restricts growth within the area limiting the habitants knowledge.
Nike’s community investment over the few past years has increased annually making good progress. By the year 2007, it had given out 51.3 million dollars. In the year 2008, it increased to 58.6 million dollars, which was an increase of 7.3 million dollars and in 2009, it had risen to 58.9 million dollars (Nikebiz.com 2011). All this included cash and product contribution.The large percentage of the investment was in the Asian continent. The target they had set by the year 2011 was 315 million dollars but they only achieved 168.8 million dollars, which was fifty four percent of their original target (Nikebiz.com 2011). The main reasons for the company to practise Corporate Social Responsibility was first, to avoid pressure from the Govenment and NGOs or to encounter public relations problems. The second reason was to avoid further regulation than the state they were in because the company was keen to avoid interference through taxation. Thirdly, the company wanted to save its public image from destruction since there were many complains about their performance, working conditions of their workers and underpayment of the third world workers. The other reason was brand distinction to differentiate their company from the competitors. The fifth reason was to appeal to the ethical consumer, investor and employee. Lastly, they were evading strikes, lawsuits and boycotts that cause financial crisis to the company.
Corporate Social Responsibility has become a fundamental business necessity, which has gained much attention from the board of directors, chief executive officers and the management teams (Bacher 46). It is a major factor to be considered by every company, which aims at achieving effective leadership and in maximizing returns to its shareholders but a company should claim to promote CSR while engaging in unlawful and harmful business acts. The Nike corporation for instance should pay workers well and ensure safety measures are observed within all their companies.
Bacher, Christian. Corporate Social Responsibility. München, Germany: GRIN Verlag, 2007. Print.
Bueble, Elena. Corporate Social responsibility:CSR Communication as an instrument to Consumer Relationship Marketing. München, Germany: GRIN Verlag, 2009. Print.
Nikebiz.com. “Nike Company Overview.” NikeId. 20 Jan. 2011. Web. 21 Apr. 2011.
Visser, Wayne, Dirk Matten and Manfred Pohl. The A to Z of Corporate Social Responsibility. Chichester, UK: John Wiley and Sons, 2010. Print.
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