What Is Nike's Responsibility For Harms in Its Supply Chain?

Problems began for Nike in 1991
with reports about poor working conditions at the Nike factories

in Indonesia. At this time, Nike’s response was to deny responsibility for monitoring malpractice for
suppliers. Nike became a target of campaigners, and because of this a global boycott began. This
campaign quickly caught wind and had a significant impact on the Nike’s demand.
It wasn’t until 1996 that Nike finally started addressing the issue in a productive manner. They began
by putting a department in place tasked solely with improving the lives of factory workers. Nike
started progressing as a company in their efforts towards CSR.
1. What is Nike’s responsibility for harms in its supply chain?

 Sourcing its production line to factories in developing countries to get the benefits of
lower cost labour so the failure in nike despite focusing only on product development
the corporate trends now focusing more on green environment which was away from
their intentions
 https://www.change.org/p/cadbury-schweppes-stop-cadbury-using-child-labour
 https://www.pg.com/content/pdf/01_about_pg/01_about_pg_homepage/about_pg_to
olbar/download_report/guidelines_for_supplier_relations.pdf
 Most of big multinational companies standardize its work regulations and style within its
supply chain processes whether in up stream or down stream processes of supply chain
 Lack of training given to the third party
 Improper auditing especially, it was made once in yearly basis
 Failure of confessing the public and their response was denial to their responsibility
towards the act of their supplier which affect their demand
 A 2013 study shows they’re 89% more likely to buy a product or service if it came from
a CSR company
 They had been late in responding to solve this boycott
2. What is your assessment of Nike’s push to have suppliers take more ownership of
working conditions?
What they do?
1- Company establish CSR and compliance division which report to public relation unit
2- Changing org, structure to a senior director of CSR to report to the president anfd it
was the first time to add this position in board level so they empower their
responsibilities and authorities
3- They publish names of their factories and supplier to be arole model on the industry
of being honest and transparent as they think it increase the efficiency and
remediation of industry
4- Corrections to the violation of code of conduct and responding quickly to any
misbehave or violence behavior
5- Continusely update their code of conduct with any inappropriate behave like what
happen in malysian factory
6- Better selection of the country of any supplier based on the country risk index and
determine many pillars to select based on it labor – environment – individual safety
– cargo – property – business – economy – corruption
7- Project rewire combined of some measure upon each supplier in evaluated based on
it so they design specific matrices based on environment and social aspects
8- Updating structure with sustainable manufacturing & sourcing
9- Providing a serious check and balances that include dotted line reporting of SM & S
and the creation of a separate function designed to audit the auditor
10- Create manufacturing index including 4 measure cost , quality , delivery and
sustainability and assess supplier over a rating from 1 to 100 and if the supplier got
red or yellow low scores in sustainability so some action taken towards them
 Only one time audit over the 12 months is very short notice
 In house training in NIKE the original company to understand the main concept also
increase sense of loyalty and ownership
 Support financial recognition to the sustainable acts not only increasing their production
plan
 Transmit the best practices of the role model from the supplier to increase the
competition
 In their audit protocol there is no any element related to training
3. How should Amanda Tucker handle the specialty supplier and the possible opportunity
in the Caribbean or Central America?
4. Amanda Tucker can perform more frequent compliance auditing for its specialty
suppliers and provide incentives for adhering to corporate responsibility policies. To
incentivize suppliers to look for and disclose efficiencies themselves will reduce the risk
of corruption and increase supply chain transparency. If the supplier is unwilling to
cooperate or is issued several warnings then the relationship with Nike is terminated.
This can also apply to the Carribean or Central America suppliers. With these particular
markets, Amanda Tucker can collaborate with non-governmental groups to facilitate
monitoring and help sub tier suppliers self-identify any problems.

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Problems began for Nike in 1991

with reports about poor working conditions at the Nike factories

1. What is Nike’s responsibility for harms in its supply chain?

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