Nike And Globalization Case Study

This essay/assignment chronicles the promises and the threats/dangers of globalization using Nike, the sportswear manufacturer as a case study. It is essentially an extract from a presentation to Sloan School of Management by Richard M. Locke and Alvin J. Siteman.

First and foremost, it’s important to we recall that globalization has continued to take the center stage in business discourse since the past two decades or so. This probably was as a result the growth and expansion in Information Communication Technology and development in global infrastructure. From business dictionary.com, globalization is essentially about the global movement towards economic, trade, financial and communication integration. But Investopedia, an online business/investment

Locke and Alvin J. Siteman Nike started by developing a strong working relationship with companies in Asia where there was lower labour cost like I said earlier. And in some cases, business units and choice of contractors were sited with proximity to the target market in mind. The sustenance of lower production cost and cheaper distribution strategy could be said to be among the positives of this strategy of Nike. Some other positive included the ability to maintain common standard, as an approved design could easily be communicated through the existing communication/technological channel to all the business outlets and contractors of Nike. Thus while the corporate head office maintained the responsibility of developing design and consistent marketing, the business units and contractors located far and wide were easily kept abreast of development and strategy. Another positive impact was the fact that, while Nike had only 22,658 direct worker, well over 500,000 workers in 51 countries and 71 factories were all helping to promote the Nike brand. The result was that Nike was able to move up from just the production of shoes to the production of wears and sporting equipment. And sales were expanded beyond, United States, Europe, Latin America and Asia. What an

Locke and Alvin J. Siteman. First with the popularity, Nike was no longer invisible but rather easily spotted in the global radar of politics, competition/competitors, activism, journalism and labor unions. The effect was that the activity of Nike’s contractors were no longer viewed on their own but were rather linked to the global Nike. For instance, the wage and working condition of direct and indirect workers of Nike became not just public knowledge but also public interest. The underpaid worker in Indonesia, the under aged ones in Cambodia and Pakistan, and even the poor working environment at China and Vietnam were all used to tarnish the image of Nike as a company and as a brand. The media/press, labor unions, non-governmental organizations, and indeed the general public all poured their venom of criticism on Nike with some even calling for a boycott of one of Nile’s products – Sialkot-produced soccer balls. And when the Nike managers tried to distant themselves from being responsible for the actions or inactions of its contractors, the criticism only grew louder. What a lesson on globalization and corporate responsibilities it turned out to be for