Nike Sweatshop Allegations

Sellnow and Brand remind us that there are "five image restoration strategies: denial, evading responsibility, reducing offensiveness of the event, corrective action, and mortification" (Sellnow & Brand, 2001, p. 280). Nike strategically called for corrective action in response to public scrutiny. Did Nike select this image restoration for ethical reasons or was it because studies conclude that corrective action is the most effective option for image restoration (Sellnow & Brand, 2001, p. 281)? Cleary Nike was aware of their violations and utilized this approach because it was the most effective. Ethics are quickly tossed aside when profits are at stake.

In times of organizational crisis, corporations have the unique opportunity to inspire their industry through model and anti-model principals. It was evident in Knight's speech that Nike intended to avoid direct responsibility for their violations. Nike strategically placed blame on the industry and demanded transformation from the entire athletic shoe industry. By raising the "threshold for acceptable business practices in the global economy" (Sellnow & Brand, 2001, p. 282), Knight was able to use Nike's six initiatives both as models and anti models to the industry.

During the late 1990's, Nike was criticized, for poor ventilation found in its manufacturing plants. The harmful chemical toluene, which is a component of common rubber sole athletic shoes, was at fault. During his speech, Knight "admitted that concentrations of toluene found in Nike's Asian factories exceed the limits established by OSHA" (Sellnow & Brand, 2001, p. 285). However, Knight tactfully eluded to elaborate on toluene levels; which exceeded the "local legal standards by 177 times .. and that 77 percent of the employees suffered from respiratory problems" (Greenhouse, 1997, para. 2). Knight was also aware of the private manufacturing audit conducted by Ernst & Young, which reported numerous Nike employees with respiratory problems. Ernst & Young's report noted that workers "had not been transferred to departments free of chemicals and that more than half the workers who dealt with dangerous chemicals did not wear protective masks or gloves" (Greenhouse, 1997, para. 16).

By not addressing the severity of Nike's air quality and toluene problem, Knight maneuvered around the fact that Nike employees were 177 times more likely to experience liver, kidney, and central nervous system problems (Greenhouse, 1997). Instead of elaborating on Nike's violations, Knight reminded us that every major athletic shoe manufacturer in the world violates U.S. OSHA standards. Knight also "emphasized a corrective action, developed by his company that could revolutionize the sportswear industry" (Sellnow & Brand, 2001, p. 289). Fortunately, Nike was able to revolutionize the athletic shoe industry by producing one of the first marketable water-based solvent athletic shoes. By responding to their critics, Nike established a positive air quality control model for their competitors.

Nike also received an enormous public outcry for violating U.S. child labor acts. Nike quickly responded by "raising the minimum age of all footwear factories to 18" (Sellnow & Brand, 2001, p. 286). However, Nike defended their previous age requirements by noting that it was the typical practice in the footwear and soccer ball manufacturing industries. Therefore, by raising their age requirements, Nike established themselves as a positive model to their competition. Knight did remind us that key manufacturing sectors (i.e., soccer ball stitching centers) were not in the public eye, thus had minimal incentive to follow Nike's lead (Sellnow & Brand, 2001, p. 287).

Although the child labor outcry was apparent, I question its validity. Is it our responsibility as American citizens to determine the cultural norms of another country? Some family's livelihood is dependent on their teenager's employment. Who are we to rob that family of a supplemental income? Sure, it's generally accepted that children under the age of 15 should not be working extensive hours. However, in some countries they are already married by that age. Should we deny one's right to work? NO! If Nike is compliant with local age regulations and rules, it should be accepted. Unfortunately, the child labor public outcry contributed to Nike's quarterly profits falling 70 percent, thus they had to enforce new age requirements and deny some the right to earn a living.

In his third initiative, Knight publicly recognized the need for the independent monitoring of his manufacturing facilities. Nike's previously implemented "code of conduct" for Asian countries met severe criticism's for its deficiencies. This initiative "served not as a model argument, but as an anti-model argument to establish monitoring as a minimum standard" (Sellnow & Brand, 2001, p. 287).

At the time of Knight's speech the monitoring system was still in development. The monitoring system was the most important initiative, since it established a means of public accountability. By alluding to immediately establishing a structured monitoring system, Nike was implying that their current working conditions sufficed. Working conditions, for example, when employees fainted, they were "slapped with shoes, and had been forced to lick the floor as punishment for poor performance" (Sellnow & Brand, 2001, p. 287). Sellnow and Brand's journal article, which was written three years after Knight's announcement, failed to address Nike's monitoring system. You would think a system would be apparent three years after the initiative was created. In 2004, Business Week issued an article titled "Nike's New Game Plan for Sweatshops." In this article Nike's Vice President Maria S. Eitel noted that Nike hasn't been subject to sweatshop publicity since "we've had our head down doing it the hard way. Now we have a system to deal with the labor issue" (Bernstein, 2004, para. 3). Of course this doesn't mean that Nike, eradicated all working violations from their respective sub contractors, but they were tying. "Nike has performed about 600 factory audits since it built up its in-house monitoring staff two years ago, including repeat visits to those with the most problems" (Bernstein, 2004, para. 8).

In his fourth initiative, Knight announced that Nike was establishing an educational program that would provide middle and high school equivalency courses (Sellnow & Brand, 2001). Clearly this initiative publicly displayed Nike's model of commitment to ongoing education. I question how a Nike employee could take equivalency courses while working 70 hours a week. An equitable initiative would allow Nike employees the option to take equivalency courses on the clock; once their shifts were completed.

In his fifth initiative, Knight outlined Nike's plan to stimulate local manufacturing plant economies through micro-enterprise loans. Nike's micro-enterprise loans would provide Vietnamese and Indonesians the funds to support micro swine farming and rice paper enterprises (Sellnow & Brand, 2001, p. 289). What could be seen as an act of corporate philanthropy and positive modeling is in fact deception. In lieu of providing Nike's 530,000 workers a living wage, Knight proposed lending money to a few thousand (Connor, 2001). Nike's corporate responsibility is to their employees and not to local swine farmers.

In his sixth initiative, Knight pledged to "fund university research and open forums to explore issues related to global manufacturing and reasonable business practices" (Sellnow & Brand, 2001, p. 289). By allowing credible universities the opportunity to explore Nike's global business practices, Knight attempted to establish Nike as a model to their competitors. If Nike was generally interested in establishing open forums for academic purposes, they should have created an "independent committee of reputable and independent academics" (Connor, 2001, para. 6). This committee would serve as a model to the entire industry.

Sellnow and Brand effectively applied model and anti model arguments to Knight's six initiatives. However, Sellnow and Brand's journal article was published three years after Knight's public address and contained little follow up research. By presenting follow up research, Sellnow and Brand may have altered some of their model classifications, but for the purposes of Knight's address their conclusions were accurate.
I believe Nike made a good faith attempt at reforming the shoe industry. Unfortunately, they are subject to a macro global economy that demands an economical product. When costs are at stake, irresponsible manufactures tend to violate worker rights.