Nike Case Study: The Outsourcing Of Nike's Production

The outsourcing of Nike’s production spurred a lot of criticism. The company had seen it

fit to outsource production to countries with cheap labor as a way of minimizing production

costs. South Korea, South Korea, China, Taiwan and Indonesia were the main countries from

which the company outsourced cheap labor. This strategy even though worked well for the

company, it gave it a bad name in the eyes of the society spread across various countries. Low

production costs meant high profit for the company at the expense of the laborers who were

subjected to lower wages and bad working conditions.

Human rights groups such as Free Labor Association of South America protested against

the strategies used by Nike Corporation. Economists from reputable

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heightened the protests to a point that Nike’s CEO Phil Knight could no longer deny the charges.

Nike Corporation was also criticized for its pollution of the environment. The corporation

also faced issues of health and security in the 1980’s and the 1990’s. For instance, in 1997, a

worker by the name Thi Thu Phuong died following an explosion of a co-worker’s machine.

ANALYSIS OF NIKE CASE STUDY 3

Other health problems were also reported which included a factory in Ho Chi Minh City in

which workers suffered from respiratory ailments resulting from ventilation problems and

exposure to toxic chemicals. These issues added to the corporation’s many problems to include

health and security issues.

The corporation was also criticized of forced overtime especially in the Chinese factories

and the corruption that made it hard to regulate the operations of the factories. Critics would

argue that the huge sums of money paid to the corporation’s athletes Michael Jordan and Tiger

Woods for representation of the brand would have been used in improving the working

conditions in the factories.

Question 2

The accusations over the corporation were at the peak in 1992 when the