Week 11: Financial Ethics

Nike Child Labour Case in Third World Countries


Nike is a world known company as a sporting industrial company that provides their customer footwears, apparels, and accessories in various sports. As according to Statisca (2018), there are 1182 Nike retail outlets worldwide which show that Nike has successfully established its brand to not only the customers located in the United States but worldwide.

With the number of retail stores worldwide it's obvious that Nike requires a huge amount of labour to manufacture every product that Nike has to offer to the customers. As a world known brand, it's important for the shareholders and owner that the brand Nike is perceived as a brand that brings positivity to not only the customer but also to the whole society/community.

But did you know, that in the year 1995 that Nike was caught hiring child labour at third world countries in Pakistan and Cambodia to decrease the overall cost so that the company can maximize its shareholder wealth? (Boggan, 2001) As according to Boggan (2001), the total amount of child labour calculated in both countries that are employed by Nike is up to 3800 children in total. This means 3800 children wouldn't have the opportunity to actually earn a proper education but instead, they have to work at a company with a very poor wage and treated poorly every day.

As someone that believes in the healthy lifestyle and exercise regularly, I was disappointed at the action by Nike. I heard about this child labour news around the year 2013, during the whole year I was committed to not use any Nike products. Although in the end, Nike made some community events that require Nike to give poor children t-shirts, pants, and some footwears for them to be able to attend school, which makes me re-think that Nike has learned from its mistakes back then.

I believe child labour is a very huge crime no matter where the case happens. Doesn't mean if a child is living in a third world country that they would be label 'useless' or 'trash' compare to children living in the first or second world country. I believe everyone has a purpose in their life and if Nike is using child labour in third world country, this will vanish any dreams that the children might have in the future, as I can clearly see that labouring child labour wouldn't give them any sort of hope in their future path. If the shareholders wanted to decrease the overall cost of the expenses for their products changing normal labour to child labour is not the answer, there are plenty more ways to decrease the expenses of the company. Nike can use a cheaper material for example or use pieces of machinery instead of labours to cut down wage cost. As I see that using child labour is every unethical and everyone should be disgusted about what Nike has done.

I believe that the government should shut down Nike based on the child labour act that is going on now from 1995 (First time caught) till today, a total of 23 straight years that Nike has use child labour silently without the government putting a serious act on it. For the 23 straight years of abusing child labour, Nike has only been fined and warned by the government as no further actions were taken by the government in trying to stop this act. The government should also know that this kind of act is very unethical and will have to do anything for Nike to stop it even if having to shut down the whole Nike operation.

Although that Nike is still the most leading company in the world in terms of the sports industry. There are still some people arguing about the use of child labour in the production of Nike products, this means that sales are obviously not being maximized by Nike yet. To increase sales maximization, Nike can provide more community work and obviously cut down child labour. I believe even some of the shareholders wanted to shut down the existing child labour issue in Cambodia and Pakistan.

What do you guys think? After hearing about this case, will you guys still use Nike products daily or will you guys change your mind about using Nike products? Will Nike's brand image ever change by the view of the society or will the company Nike will always be remembered as a company that outsourced child labour in third world countries. Will Nike consumers do something about this case or just ignore it?


Refrences:

-Boggan, Steve (2001), 'We blew it': Nike Admits to Mistakes Over Child Labor, Retrieved from https://www.commondreams.org/headlines01/1020-01.htm
-Statisca (2018), Total Number of Nike retail stores world wide from 2009 to 2018. Retireved from https://www.statista.com/statistics/250287/total-number-of-nike-retail-stores-worldwide/
-Google Images




Komentar

Posting Komentar

Postingan populer dari blog ini

Week 9: Disney & 21st Century Fox

Gambar
Merger and Acquisition  As of July 11th 2018, Disney has been reported purchasing 21st Century Fox assets with the form payment of cash and stocks. It is set that Disney has purchased Fox for the amount of $71.3 billion for the partial assets of Sky TV and Indie TV. As the factor that cause Disney in the acquisition of 21st Century Fox is that Disney wants to open a new streaming industry to create a new target market for more audience/viewers to increase Disney's brand image. As according to Statisca (2018), the numbers mention that over the years the amount of streaming user has increased consistently. It is so consistent that it's a bad decision if a investor actually decides to not invest at a streaming industry. As this is why Disney wants to start a streaming industry as due to the reason as today millennial are often addicted to games and online movies, as the 2012 data shows that there are 171.6 million users of online streaming in the US. While it is pre...
Baca selengkapnya

Week 5: The Big Short, 2008 financial crisis

Gambar
The Big Short: 2008 Financial Crisis During the time of 2016 a movie was released called "The Big Short". The movie is basically explaining how the 2008 financial crisis in the United States actually happens and the result after the financial crisis occurred. Basically the movie explains about the economy crisis that is happened during the year 2008, it's cause by over investment on the collateral debt obligations and poor family issuing mortgage that they can't pay. In the end of the movie, tons of low income people are not able to pay which leads to the load becoming default, which results to the bank confiscating the houses they lived in. Although the houses have been confiscated, the banks are not able to sell the houses since no one will buy them which leads to depreciation in the future. The leads to banks on debt to themselves as investors have invested 1 billion dollars on credit default swap. as the Bank can't pay the investors this leads to...
Baca selengkapnya

Week 7: Dividend Policy

In this week 7, the topic that i have chosen is dividend policy. The dividend policy that i would be talking about this week is about Modigliani & Miller's famous dividend policy which is the dividend irrelevance. As according to Modigliani & Miller said that dividend irrelevant means that shareholder getting dividend doesn't mean anything, and shareholder not getting dividend doesn't also meant that the business is failing or the company's share is worthless. A company is more than just receiving dividend, it is also judge on if the company can create a effective investment policy which can result to an increase of Net Present Value (NPV), share price, and definitely shareholder wealth. A case that once happen to my parents as an investor is that 6 years ago my dad decided to invest in a company that provide electronic products such as laptops, cooking machines, and television. The first 2 years was a mess as my dad would not receive any dividend or sometim...
Baca selengkapnya