Business Ethic Research Assignment: Nike on Child Labor

Nike on Child Labor
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Introduction
Child slavery is one of the oldest practices and can be traced throughout the human history. Ideally the practice has been tied to children working as servants and apprentices. However, during the industrial revolution, the practice reached new heights, with most of the entities taking the form of slavery (Child Labor Education Project, 2016). Most of the practices during this era involved children working for long hours and in the most dangerous conditions. One of the main aspect that led to the use of the children was their size. Ideally the children had the ability to move around within small spaces, especially in operations such as mining (HISTORY.com, 2016). But the most important part was the fact that, they were easier to manipulate and could be paid much less for more work. It was not until the great depression that the market opinions changed. Most of the people now wanted the jobs to go to the adults. However, there have been some incidences in the recent past that have been a highlight of the child labor ethical violations (Micheletti, Føllesdal, Stolle & International Seminar on Political Consumerism, 2004). There is an estimated 211 million children under the age 15 whose rights are being violated across the globe. This is relative to the fact that, child labor is global problem that. It is further estimated that, there are more than 2.5 million children working in the developed economies (Srivastava, 2012). Most of the developed economies have also been involved in this trade, where they startup companies in the developing nations and take advantage of the child labor economies to their advantage to boost their economies of scale. Nike is an American footwear manufacturing company, that has been involved a in a child labor scandal. The company was involved in a scandal that can be traced back to the 1970s (Srivastava, 2012). The company was involved in quite a number incidences that spread from South Korea, Taiwan and China. In the earlier years, most of the economies were developing and so most of the people moved up to the higher paying jobs and thus most of the less paying jobs were left to the children. Nike took advantage of these practice to make billions of dollars of children. Business ethics is a crucial part of conducting business, by ensuring that the business practices are not exploitative. This paper looks at the various ways that Nike as a global company played a role in the child labor economy (Edmonds & Pavcnik, 2005). These are addressed relative to the legal and ethical business practices along with research findings evaluation on the case study.
Thesis Statement: By using the underage children in the production lines, regardless of franchise arrangements, Nike violated the children rights and business ethical practices.
Identification and discussion of ethical, legal and industry related business issues at controversy in the case at hand.
Poor working conditions have been a common practice in the business practices, where workers are exploited through long hours and poor pay. This is a common practice especially in the developing countries where the legal framework is not as strict. Developing countries tend to have cheap labor relative to the fact that most of the policies in place are not properly implemented and in some of the cases they are not existent. It is for this reason that most of the companies in the developed nations move most of their productions lines to the developing countries (Wilsey & Lichtig, 2016). Quite a number of American manufacturing companies have moved their production lines overseas where they are assured of cheap labor. This way they are able to maximize on their profits. Some of the most common culprits of such business maneuvers within the developing nations are China, Taiwan, South Korea and Vietnam among others.
Before addressing the issue of Nike moving the production processes to the developing nations, it is crucial to understand that much of these efforts were geared towards profit making. This is to mean that, most of the untapped markets across Asia presented profitable ventures and as such, this was a great opportunity to make sure that they could capitalize (Chatterjee, 2008).
The plight of the company came after the exposure over the issues regarding using children in the shoe and apparel production lines. This brought about criticism from the general public and resulted in a dented image along with a slump in the sales. Much of the ethical aspects are related to the fact that, the company had for several decades used this platform to boost its world success. The company was outsourcing most of the manufacturing processes in places such as Taiwan and Korea (Wilsey & Lichtig, 2016). This was followed by a rise in the prices of the raw products in these two countries after which, Nike moved it production systems again. This time, the company moved the production systems to Indonesia, Vietnam and china.
The first highlight of the child labor violation perpetrated by the company were 1991, when Jeff Ballinger published a report documenting poor working conditions and the low wages in Indonesia (Nisen, 2016). The report mentioned incidences where workers would be paid less that 14 cents which was less than the minimum wages in Indonesia (Nisen, 2016). Later on in the year 1996, there was an expose by Kathy Lee Gifford, which documented child labor. One of the most crucial aspect of the scandal is related to the 2001 response that the Nike director at the time, Todd McKean where he indicated that the company was not responsible for the actions of the franchises (Nisen, 2016). This was an approach that indicated the flawed commitment of the company towards the eradicating the child labor practices. Ideally, this was an approach that indicated that company was taking on a section of responsibility and assuming another. It is rather irresponsible for the company to use one part of their business operations to exploit children simply because they are not in their mother country. Sweatshops as they are commonly called were an illegal entity relative to the fact that they violated the rights of the children. In a report by the Daily mail, there were highlights that the company was also engaging in activities such as emotional and physical abuse towards the workers wh...