Nike Corporation Overview
Nike Corporation is an American multinational corporation involved in the process of designing, developing, manufacturing as well as marketing and sales of footwear, sports equipment, and accessories for sports, clothing and products for athletic market throughout the world. Nike is considered as biggest seller of such products throughout the globe. It sells somewhat 19000 retail accounts in US and within 140 nations internationally. The firm was established on 25th January 1964 named as Blue Ribbon Sports, by Phil Knight and Bill Bowerman and formally known as Nike Inc. on 30th May 1971. Nike acquired many clothing and footwear firms with passing time. The firm believes that innovation refers to elevation of entire human potential. The firm fascinates the requirements of best athletes from the world and uses their insights to make products that are beautiful as well as valuable for everyone. At Nike every single individual is an explorer. The firm brings together varied views and ideas of scientists as well as designers of shoe and also coders and aims to produce a well-accepted product.
Corporate social responsibility- it has two meanings. First, it is common name for any theory of the firm that emphasizes on liability to make money as well as on responsibility of the firm to interact with the community in an ethical manner. Secondly, CSR is even a detailed idea of that responsibility towards profit whilst playing a vital role in wider queries of welfare of the community (Alexander & Sinnett, 2005).
Stakeholder theory- This theory was given by Ian Mitroff. It is based on organizational management as well as ethics of the business and addresses morals plus values intended towards managing firms. It actually explains about such people and group who get affected by firm’s activities. In brief, this theory assures that those people, whose lives get affected or are touched by a business, carry a right to take part in directing the same (“Read Nike’s Mission Statement and find information about NIKE, Inc. innovation, sustainability, community impact and more”, 2018)
Business ethics theory- this theory is on the basis of broader social obligation and general duties that a firm has to undertake for the benefits of the society. It justifies CSR on some grounds mentioned below:
- Varying as well as evolving proper social responsiveness plus some social expectations towards specific problems within the society.
- Intrinsic or eternal ethical values stirred by Kantian ethics as well as represented as few normative plus universal principles such as fairness, social justice and human rights.
- Corporate citizenship, which considers firms as better citizen within the society, that contributes towards social wellbeing.
The shareholder value theory – this theory was given by Milton Friedman. He says that there exist a single social responsibility of a business which refers to use of the resources with an aim to get involved in actions designed towards enhancing firm’s profitability so long that it stays within rules of game, which means that firm gets involved in open competition, without any fraud. Concept of this theory is all about managers chiefly having an obligation towards maximizing shareholder’s benefits (“Things Hardly Anyone Knows About Nike”, 2018).
Corporate Social Responsibility
Issues management- It is a preventive, procedure of strategic management, which helps an organization to detect and later respond appropriately to emerging changes as well as challenges within the society. Such alterations and trends might later result in a problem for the firm and create a big “issue,” which would be a situation to attract attention plus anxiety within the firm as well as stakeholders. Prior management and avoidance of such issues can be a step towards building, carrying, maintaining as well as repairing of a good and healthy relationship with stakeholders of the firm (Argenti, 2017).
Theory of issue management – As there exist several models for issue management within a firm, most of them say that the entire process of issue management involves five major steps and they are
- Issue identification
- Issue analysis
- Strategic process of decision making
- Taking the action
- Evaluation
Issue management and corporate social responsibility- Issue management being an attempt towards defining tactics, which a firm needs to follow, lays down the basic ground for CSR. Issue management actually handles situations in a way, which makes it easy for the firms to understand what to do, how to do, when to do and for whom to do. This later helps the firm carry its CSR process smoothly and with good results. Issue management helps a firm to deal with its critics thereby making it easy for firm to work by creating a peaceful and healthy ecology all around. CSR involves all actions undertaken by the firm with an aim to abide by its duties and responsibilities towards the society and while undertaking such actions, the firm needs to ensure that no hurdle takes place and the firm delivers what the environment demands and society wants. Here, comes the role of issue management (Corporate communication, 2013).
CSR practices undertaken at Nike–
- Nike keeps its labors and their opinion at priority. Apart from innovating worker’s role, this brand even has emphasized uponinvolving novel technology in its supply chain.
- The firm is worried regarding the carbon footprint and thus has constantly worked on reducing them through investing within innovative goods & functions
- Nike already carries a code of conduct for all its suppliers. The firm only maintains relations with suppliers who are focused more as compared to just compliance (Droese, 2015).
- Technologies such as Flyknit and Pegasus have also helped the firm control its carbon emission.
- Most Majority of ecological impact of Nike shoes is emerged from its materials used. This brand emphasizes on creating materials that have lower affect on environment.
- The brand is moreover trying its best innovate so much that waste materials could be reused towards creating value as well as the designers of the firm have already accumulated a palette of some 29 higher performance material gathered from brand’s waste.
- Regarding staff welfare, Nike focuses vastly upon building a cooperative culture as well as comprehensive workforce, which would help the firm, maximize its efficiency plus impact (Goodman, 2009).
Nike being a well-known brand communicates its progress and developments to all its stakeholders, through its website, backgrounders, electronic newsletters that are published quarterly. Firm even publishes its annual reports as well as a specific report named “CSR report” and also “community investment report” to convey its actions to its stakeholders. Nike has a commitment towards its society as well as its stakeholders and firm understands it well. The firm’s pledge towards Global compact is revealed through the firm’s website as well as in some specific backgrounders plus also within the firm’s CSR report. This business even engages its stakeholders straightforwardly through one-to-one meetings and some other types of collaborations (Harjoto, 2017).
Stakeholder Theory
It was some 20 years back that buyers protested outside the stores of brand and casted Nike as a villain between sweatshop allegations and child labour crimes. It is thus difficult to believe how the actions and plans under CSR activities of the firm has helped it attain back its status and name and fame within just 10years. The firm that faced public backstabs and boycotts throughout in the 1990s is now a well reputed firm and the credit goes all to CSR actions undertaken by the firm. “Transforming the firm like this took time was actually considered a long-run commitment.” CSR now is involved in each and every facet of this firm, starting from how the firm designs and makes its goods till the way in which it engages its staffs plus several other firms and helpers in its value chain (Harris & Bryant, 1986).
Nike thorough use of CSR issue management shows its strong commitment towards improving life’s quality of people within the society in which the firm functions. Also, CSR issue management helps the firm constantly investigate about new technologies as well as novel tools and techniques for waste renewal or reuse in order as to minimalize the firm’s environmental emission. CSR issue management also helps Nike to invest in good quality and more effective materials as well as methods of production that decreases the amount of waste plus enhances firm’s efficiency (May, Cheney & Roper, 2007). Because the firm in past has faced many criticism regarding several issues use of CSR issue management ensures that Nike remains away from controversies and comes up as a good and well known as well as socially responsible brand. CSR issue management has helped Nike a lot towards managing its reputation as well as has even reduced its bad impact upon ecology. Instead of working towards avoiding merely the well-known risks, the firm along with its CSR issue management activities works towards understanding actual place where the risks as well as opportunities might evolve and also the it required to address those risks and chances plus enabling novel types of innovation within the business (Onkila, 2013).
- Poor Working Conditions –
- Low Wages
- Child Labor
- Expensive Endorsements
- Expensive Products
- Lack of Development Work at Factory Locations Health Hazards in Factories (Ott, 2017).
Media is a major part of society and has played vital role in Nike’s bad reputation. Firm lacks the capability towards building good relation with the media and this has been its major drawback. Michael Moore criticized Nike for subcontracting the jobs in lower cost areas. As a result, Phil Knight had to go for a faceoff with Moore where he justified his form of carrying the firm. This interview amid Moore and firm’s chairperson got presented in a film by Moore named “The big one” where Phil Knight was shown mentioning in his talk that the firm doesn’t upkeeps about a 14year old working within firm’s sweatshops. This obviously indulged the firm in a big trouble and in evil light. This can be seen as a big instance of how bad was Nike in managing its relations with media, which resulted in firm’s negative publicity (Sherman, 2005).
Business Ethics Theory
Area of CSR issue management came in the firm like a tool that helped the firm build as well as maintain a good social as well as business reputation plus fame and also has ensured safeguarding the firm against any time of reputational harm or damage. Nike having an extraordinary CSR program has been able to start a journey of earning good name and fame within the society because of emergence of human rights and several ecological disasters. It has become easy for the firm with use of CSR issue management to be properly answerable to activists and media against any claim or blames. This tool has been supreme powerful incentive for the firm towards its attempt of showcasing a properly institutionalized and decent behavior towards society (Simonsen, 2009).
- Consistency of company corporate communication messages
The firm believes that building as well as refining the listening skills is actually major part of its success. Because the firm has faced many criticisms due to decisions it made for manufacturing, it fought and came out as a hero out of all. Nike communicates through all possible channels and maintains a proper consistency in its messages. Firm’s strategy for communication involves branding, via which Nike properly and smoothly communicates all its messages and directions as well as aims to all its staffs (Trong Tuan, 2012). Nike has also recognized its post and position amongst its potential customers and general population. Contract staffs working for Nike have set policies pertaining to them. Staffs at Nike can straightforwardly report to the locations or also to the regional manager of human resource and in return the manager reports to senior global headquarters. Nike also has facilities of newsletter periodically that mentions achievements of the firm regarding innovation, new attainments, sales, community development or tributes received. On a website named “nikeresponsibility.com,” the firm addresses problems as well as initiatives regarding the workers plus contract factories making Nike goods environmentally sustainable. Nike uses proper mix of promotional tools and marketing communication mix for delivering message and communicate to target buyers in international sports apparel, footwear and accessory industry. Nike is a very good example of organization that uses several types of tools for communication in promotion tasks. The firm delivers consistent message through all its channels (Visser, 2012). Nike’s communication mix of marketing is effortlessly visible within the industry and market, in the method of advertisements plus other actions. Nike’s success lays emphasis upon advantages of effectual communications of marketing. The firm involves its stakeholders straightforwardly via one-to-one meeting and several other types of collaboration. The firm vigorously communicates with all its stakeholders as well as encourages them to give feedback. This business involves its stakeholders via several forums as well as firms. Amongst several protuberant ones existed Global compact. Additionally, the Global compact, this serves as major member of the firm’s social responsibility (Yoo & Lee, 2018).
Shareholder Value Theory
To make sure that its approach is smooth and sound; it works with Ceres to convene and exterior stakeholder panel as well as carries several dialogues to guide development of the firm. Ceres is a properly sustainable non for profit firm working with several investors as well as firms to handle the globe’s largest sustainability challenges, involving changes in climate, pollution, water scarcity, and also abuses of human rights. Nike has also worked with this organization on several diverse sustainability tasks and projects since 1990 (Feingold, 1987). Nike has distributed a draft of financial year 2012/2013 sustainable business performance summaries via forum and chosen experts are given opportunity to review the same (Abrahams, 2015). The forum consolidates the feedback synthesizes it to themes as well as is areas and then presents it to the stakeholders during workshops arranged at Nike world headquarters. These workshops also permit all participants available they’re to engage themselves straight within Nike and to give there reverts via reporting, changes in the system as well as innovations, if any. Feedback provided remains consolidated (Khan & Lund-Thomsen, 2011).
The strategy for communication of the firm remains in line with the goods as well as services it produces. The tactic also communicates to the customers as well as stakeholders and also the entire also interior staffs its mission of firm and values for which Nike stands for. Interior branding as well as communication amid staffs is very imperative because communications to exterior customers as it is the staffs that build a brand and then communicates the good and bad about the products as well as services to buyers (MacLeod & Parkinson, 2006). Being a well-known multinational Nike has amalgamated the values of sports such as perseverance as well as teamwork and ahs also accepted them within the firm’s culture. Also Nike infuses emotions in its day-to-day operative of staffs so that the firm remains modest and competitive with an aim to keep the firm alive maintains the spirit of sportsmanship within its staffs and stakeholders. Therefore every staff in Nike could recognize himself/ herself as a part and parcel of firm’s team, which is known as Nike Corporation. Organizational communications in Nike are designed in way so that the firm and its stakeholders feel as a team of the firm (Yoo & Lee, 2018).
Nike must take care of the information it sends through several different channels of communication like television, radio stations.
Issues Management
Every staff and stakeholder in the firm must obey its rules and must not give speech to media without firm’s concern.
The firm must supervise whatever media transmits. Since there have been several deviations, and the firm has faced problems, Nike must emphasize on this and take proper care of what is communicated to staffs and further what they communicate to the media.
Nike must not hide any data or information from media, because when media finds out, Nike might lose its relation with media. Thus the firm must provide same data and information to each of its media agents similarly.
Spokesperson of the firm must get well prepared before any talk or interview.
Conclusion
Though Nike has been a well-known brand, it has yet faced several accusations of engaging people within both developed as well as under-developed locations. The firm has made people work at lower wage rates and also within poor working situations for a substantial time period. Through constant efforts of building relations with media and proper handling of issues, through use of CSR issue management Nike has been able to overcome the hurdles and has gained back its reputation within the market. Regarding staff welfare, Nike focuses vastly upon building a cooperative culture as well as comprehensive workforce, which would help the firm, maximize its efficiency plus impact. To attain the impossible, firm needs to rethink its fundamentals. Nike does that via sustainable innovation and its aim is to double its business, whilst cutting its ecological impact in half. Nike for betterment needs to emphasize on its communication strategy as the firm like any other company depends on its stakeholders for its success and fame.
References
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Things Hardly Anyone Knows About Nike. (2018). Retrieved from https://www.businessinsider.in/11-Things-Hardly-Anyone-Knows-About-Nike/articleshow/45037954.cms
Onkila, T. (2013). Pride or Embarrassment? Employees’ Emotions and Corporate Social Responsibility. Corporate Social Responsibility And Environmental Management, 22(4), 222-236. doi: 10.1002/csr.1340
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Read Nike’s Mission Statement and find information about NIKE, Inc. innovation, sustainability, community impact and more. (2018). Retrieved from https://about.nike.com
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