Nike's Code Of Conduct

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State Power Before the 1990s, governments held the power of authority and, in collaboration with unions and international private organizations, could enforce human rights regulations in manufacturing. Rapid growth brought by globalization, however, “has led to an institutional mismatch” (Wettstein and Waddock, 2005, p.305) between MNCs and the State, resulting in MNCs possessing increased power, thus representing the decline of the regulating state hypothesis. As MNCs expanded and dispersed their authority, governments lost their “ability to enforce regulations upon private sectors”, leading to “a weakening or transformation of the State” (Crouch, 2011). As a result, debates have arisen over the extent to which States still possess authority…show more content…
Consequently, MNCs are increasingly affected by indirect responsibility as their activities transcend national boundaries, leading to control of many nation states. Following Crouch’s (2011) neoliberalist view, the market inefficiencies (in this case, the poor working conditions) self-corrected without the interference of the government or any state imposed regulation. The improvement was brought about by Nike conceding to the negative advertising created by consumers, consequently establishing its own Code of Conduct in 1992. As seen, without the pressure from consumers, the development of Nike’s Code of Conduct would not have been established. In this case, it seems that the State does not play a pertinent role in enforcing human and labour rights. Moreover, Wawryk (2003) claims that voluntary approaches are only effective in promoting human rights when “enforcement mechanisms are lacking for mandatory standards”. In other words, governments forcing corporations against their will to promote human rights will result in less compliance and decreased improvement in working conditions, once again, suggesting that the State is no longer involved in enforcing the development of…show more content…
The ambiguity established through the M-Audit and CR are amongst the key problems encountered with Nike’s voluntary auditing system, which make it inefficient at measuring positive changes in working conditions in the long-run. For sustained improvements to be implemented in Nike’s global supply chain factories, an institutionalized downstream pressure must be implemented. NGOs’ creation of guidelines is important to guarantee uniformed labour standards across countries and states. However, without combined pressure from the State, the guidelines remain as advices. Henceforth, NGOs and States must collaborate in exerting increased pressure to Nike. In turn, Nike exerts pressure on its manufacturing companies by threatening the end of contracts, resulting in the companies having no choice but to improve their working conditions, through lean manufacturing techniques, for instance. Hence, voluntary and mandatory approaches should coexist. Without the external forces, Nike and its suppliers may do the bear minimum to sustain long-term improvement in working
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