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Business Ethics of NIKE

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Introduction

Business ethics is the study which comprises the environment of business in consideration of the policies, morals and ethic-related problems (George, 2011). These are the standard values of an individual or a group in an organization. Ethics are concluded as the standards or rules which are used to govern the daily decision policies of the business. The present report is based on NIKE which is a large multinational corporation situated in the UK. The company presents a large and diversified variety of athletic products. The major range of dealing products are athletic footwear, apparel, sports equipment and recreational products (Nike news. 2016).

The below-written report deals with business ethic and also assesses the role of the company as a moral agent. Furthermore, it will help in presenting the current ethical issues which can affect the business organization. In addition, the report will help the company to improve its ethics and also ensure the employee-employer relationship.

nike logo

1.1 Role of the company as a Moral agent

Every organization should have morale and accordingly, it performs business in order to create a competitive edge in the marketplace. Businesses are responsible towards many things like the environment, local community and workforce who are associated with the business. The support from corporations to all these parties tends to give upward direction to business so as to ensure long survival of the same with an increased rate of return. However, some of the corporations might adopt a negligence approach towards ethical conduct but they have to suffer from its negative effect in the long run. It is because the local community do not allow corporations to pollute the environment as it affects their health to a great extent. Owing to this, every corporation gives a return in terms of corporate social activities and employment as well as other related practices by working ethically. NIKE acts as a moral agent in the business environment. The company sets some ethical practices which are as follows:

Justice Practice:- Companies collaborate with their employees and make justice for any wrong deed practised in the workplace.

Integrity Practice:- NIKE practices integrity which courage the right work despite the majority population. Integrity practice supports the employees to get involved in morally right workings (Trevino and Nelson, 2010).

Confidentiality and Privacy Practices:- The company ensures the security of the information generated by the employee's personal and customer's personal data.

Self-Control Practices:- NIKE creates an environment where they practice self-control among the internal and external forces. A self-controlled and disciplined workforce can enhance more productivity and profitability for the company (Weiss, 2014).

Revolution in Motion:- NIKE has brought a revolution in the footwear industry. The company is again and again involved in creating innovation in their products which are attracting customers.

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1.2 Employee involvement and empowerment

NIKE can enhance the ethics in the workplace by the involvement of employees and also by empowering them in the decision-making process (Hoffman, Frederick and Schwartz, 2014). Companies can develop these practices by entertaining some basic activities. Some of those activities for both employee involvement and empowerment are discussed below:

Development of employee involvement: Employee participation brings the motivated staff to actively react to the current job and also to improve the future production by the company (Shaw, 2016). This also enhances the employee's potential to work which made the way easier to reach the goal faster. For initiating employee involvement, NIKE can create an environment where employees can make informal communication and can also have direct communication with the higher authorities of the company. This direct contact will help the company in developing the employee's participation (Tseng and et.al., 2010). Similarly, NIKE can also arrange general meetings where employees can put their ideas in front of the top management of the company. Under this meeting, the company can inform the employees about the supreme goal of the company and can also disclose their innovations to the employees. In addition, NIKE can organize social events like sports events or get-together parties for employees. This initiative will bring employees involvement in the company.

Development of empowerment among employees: Empowerment means recognising the power of the employee and assigning the most suitable job (Brenkert, 2010). For empowering employees, the management of NIKE plays a vital role as they oversee the work of the employees. First management ensures that the employees are well-educated about their job and also aware of the issue-solving strategies then only do they assign them the power of decision-making. For developing empowerment, NIKE can involve practising welfare programs and development programs. Under this management, authorities can train their employees about their jobs and also about other practices of the company. These programs include the goodness of employees which is proven to be an ethical practice by the company. Innovation in techniques of company can bring empowerment among the employees (Grassl and Habisch, 2011). The company can establish specific responsibilities and roles for the employees so to initiate coordinated and clear work at the workplace. By appreciating the efforts of the employees, the company can enhance employee empowerment. NIKE can make an effort to celebrate the achievements of the employees of their company. Management can also develop empowerment by assigning the right job to the right and efficient employee (Fassin and Buelens, 2011).

1.3 Unethical practices by NIKE

NIKE although being a brand name has involved itself in some unethical issues till that time. Some of the issues are as follows:

Ethical Dilemma: In 2013 Indonesia, workers were forced to work overtime. They had to work for 60 hours per week and if refused to work then they were punished for the same. NIKE had hired Indonesian military officers for the employees to work overtime at minimum wages at that time. The workers of Converse shoes ( Owned brand of NIKE) had also claimed that the supervisor was involved in unethical practices by slapping the labourers, throwing shoes and using abusive language at the workplace for the workers.

Issue of Sweat Shops: Sweatshops are the places where employees of NIKE company do not get a hygienic and safe working environment. This type of environment causes workers to faint from heat, exhaustion, poor nutrition and fumes during their working time period. Women employees of NIKE were also the victim of the unethical practices. While wearing regular shoes at the workplace women were punished to run around the factory area on a hot sunny day. Women found harm and hurt in the practice and were admitted to the hospitals. NIKE was involved in this sort of unethical issue and made the people revolutionary against themselves (How Nike Solved Its Sweatshop Problem, 2016).

NIKE entertaining Child Labor: In Pakistan, NIKE was found guilty of practising child labour. There was a strict law against child labour and slavery in Pakistan. Officers of Pakistan found that more than 200 children were working the NIKE factory where some children were below the age of 5 years. Many people and organizations in the country and worldwide have protested against the company. The student groups had also organised the campaigning event which also showed their protection against NIKE's child labour practices.

The darker side of NIKE: The other unethical issues practised by NIKE involve the shifting of jobs from the parent nation to overseas which enhances the unethical issues and also makes the millions of labour unemployed in the nation. Some other acts of NIKE were harassment of labour at the workplace by supervisors and social injustice.
Furthermore, other organizations also have unethical practices which affect their operation to a great extent. For instance, British Petroleum affected the environment due to its oil spill disaster many times. Here, the company lost many of its employees and wild as well as sea and marine life were affected due to continuous oil spills. However, British Airways broke down the rule of government related to competition policy. It was involved in unethical practices like price fixing which created a negative environment in the market, Therefore, the unethical practices of several corporations has a direct impact on their image. This might have a negative impact on the firm for a longer time for which banks may also face issues in granting loans or finance.

1.4 Improve the ethics of their operations whilst meeting objectives and ensuring good employer/employee relationships

The company can improve their ethical practice in meeting the objectives and also in managing healthy employee and supervisor relationships by solving their unethical controversies. To rectify the deeds, the company can follow below practices:

The company was before involved in the issue of sweat shop which is against health and safety practices. The company should set guidelines for health and safety measures where a safe, secure and hygienic environment should be provided to the employees for working (Ma, 2010). The company should provide safe residential facilities to the employees who are working as migrants. Before company was seen entertaining low wages working labour where employees were not getting compensation according to their work. The company should now ensure that they are providing compensation according to the work done by the employee. In 2013 company was seen forcing their labour for 60 hours work per week which is more than enough work by the employees. To rectify this companies can now set their working hours according to legal working hours set by the national government (Giacalone and Promislo, 2013). The company should also provide remuneration for overtime work. NIKE can set rules for the supervisors that they can not force the employees to work overtime. The company can provide legally mandated benefits to the employees. NIKE can also provide them with facilities like housing, meals, transportation, health care, child care, paid leaves, vacations, no discrimination and social security.

Companies can make more use of Eco-friendly products which have a good impact on the environment. Companies should follow the laws made by the government to maintain the balance in the environment (Dierksmeier, 2011). They can also conduct improvement sessions to minimize the impact on the environment of the concerned nation. In the past company supervisors were claimed to the abusive and violent leaders. To ensure good supervisor and employee relationships management can initiate practices where they can develop employee involvement and also empower their employees to be the best (Provis, 2010). By this practice, NIKE initiates individual dignity in the workplace. They should also practice no harassment activities and provide the employees with the right to free association. The company can form an environment where employees can get involved in informal communication with the employers which will help in enhancing their relationship. The company should make documents like a code of conduct which presents the information regarding the company's ethical policies which are to be discussed by the internal and external environment of NIKE.

Furthermore, the company should focus on its strategies and tactics in order to order to behave ethically. It will further assist the corporation in enhancing the overall rate of return with ethical conduct and meeting the expectations of buyers associated with the business. Similarly, businesses can focus on employment law and accordingly, child labour be prohibited strictly. It can be critically evaluated that the inclusion of such kind of unethical practices must not be allowed in the workplace as it affects the performance of the business by destroying its image. In addition to this, CSR activities should be conducted by the firm as it pollutes the environment by operating high-tech machinery etc. Owing to this, the HR of the corporation must follow effective strategies to contribute towards making the environment clean and safe. At the same time, personnel must be provided training to address issues of customers and offer them quality products. They should be misguided by placing the wrong advertisement. Hence, appropriate information must be placed in advertisements and all so as to ensure ethical conduct of business in the marketplace.

1.5 Code of Ethics

An ethical code is a set of written documents which is used as a guideline for the management and employees of the company. These documents help the workforce of the company to get their action to be more indulgent in ethical and primary standards. On the basis of unethical deeds by the company, a suitable code of ethics is conducted below:

1. Ensure confidentiality: NIKE, to sustain the ethical code can ensure the privacy of their employees and customers. They can not entertain any misuse of private information to go out of the company premises (Norman, 2011). Companies can form standards which can help them take strict actions against the person at fault. These standards can ensure the confidentiality of the information and data of the employees.

2. Professional Conduct: NIKE's employees can entertain a high standard of professionalism and responsiveness at the workplace. Companies can use ethical marketing practices under which they have to present real facts in front of the general public. They can also organize time to time general meetings where they can inform their stakeholders about the original current financial position of the company (Goodstein and Butterfield, 2010). Any false or unethical practices can not be entertained by NIKE.

3. Quality of Services: NIKE has involved itself in many controversies which affected the goodwill of the company. By serving the best quality products and services can bring the fame name back. Quality of service also includes the ethical efforts made by the company in the context of their employees and clients (George, 2011).

4. Moral and Legal Standards: The company should entertain the moral and legal standards which can allow the company to involve ethical practices in the workplace (Trevino and Nelson, 2010). There are many unethical deeds of the company which are to be rectified. For example, NIKE have made the unethical practice of child labour in Pakistan where they used children below 5 years for factory work. Companies can make standards where they should not employ labour below the age of 15 years. Even they can make the same strict regulations for every subsidiary company.

5. Impartiality and objectivity- Employees are the main link between the customer and the management. Companies can organize programs where they can educate their employees to maintain healthy relationships with their customers (Hoffman, Frederick and Schwartz, 2014). NIKE can train their employees on how to convince buyers and how to present their products in front of the customer. Furthermore, the objectives of business must be communicated with personnel without any kind of partiality.

just do the right thing

6. Meeting users' needs- Nike needs to behave ethically by offering products and services in accordance with the requirements of the business. At this juncture, research and developing activities are used to incorporate the views of users in producing proper products and services.

7. Integrity- Integrity refers to the association of different parties involved in business such as employees, customers, shareholders and suppliers as well as other related parties. Here, the corporation ensures take views of all parties in making decisions related to the implementation of any corporate strategy.

8. Proportionate Burden- The burden of NIKE is shared among all workforce such as middle-level, lower and upper-level management, Unethical practices are avoided so as to enhance the satisfaction level of personnel.

9. Resources- Here, the company need to employ necessary resources on a regular basis such as raw materials and finished goods. Along with that, other basic amenities should also be provided to the workforce through which they get a comfortable environment and render good quality to end users.

10. Frankness and Accessibility- Here, the workforce must be provided authority to share their issues with management. Owing to this, organizational culture must be developed accordingly thereby personnel become frank and raise their queries to get their issues solved.

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Conclusion

The aforementioned report concludes the facts about the unethical practices of the company in the environment. It presents the impact on the working of the company which made them settle the controversies. In addition, the report will show the improvement which is to be taken by the company so as to ensure more ethical practices in the workplace which will also create a good relationship between employer and employees.

References

  • Brenkert, G. G., 2010. The limits and prospects of business ethics. Business Ethics Quarterly.
  • Dierksmeier, C., 2011. The freedom-responsibility nexus in management philosophy and business ethics. Journal of Business Ethics.
  • Fassin, Y. and Buelens, M., 2011. The hypocrisy-sincerity continuum in corporate communication and decision making: A model of corporate social responsibility and business ethics practices. Management Decision.
  • George, R. T. D., 2011. Business ethics. Pearson Education India.
  • Giacalone, R. A. and Promislo, M. D., 2013. Broken when entering: The stigmatization of goodness and business ethics education. Academy of Management Learning & Education.
  • Goodstein, J. and Butterfield, K. D., 2010. Extending the horizon of business ethics: Restorative justice and the aftermath of unethical behaviour. Business Ethics Quarterly.
  • Grassl, W. and Habisch, A., 2011. Ethics and economics: Towards a new humanistic synthesis for business. Journal of Business Ethics.
  • Hoffman, W. M., Frederick, R. E. and Schwartz, M. S., 2014. Business ethics: Readings and cases in corporate morality. John Wiley & Sons.

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