Nike’s CSR Challenge Case Study

In 2005 after reporting on its widespread abusive treatment in factory plans Nike’s came back to report on its social and environmental practices. Some of the Challenges that Nike and other apparel industries face in its supply chains around the World are many. Companies like Nike needs to consider people, planet and profit from now on. Nike understood as well as other competitors that seeking good societal relations should be seen as both good to society and good for profitability. The company understands now that the strategic shift for Nike’s Management can not only been seen as a close system.

Its future depends on the reshaping the signals that are being sent to customers, suppliers, investors, so that the company can also operate in a sustainable way, which is also financially viable. Just changing rules and regulation at the factory’s plants is not enough, companies also have to engage in Leadership and by this I don’t mean the traditional Leadership which involved leading people towards goal of the employer. Employees should engage in transcending leadership and get in a dialogue, action to address systemic problems and resolved them, or engage people on collective goals.

The only sad thing is that without changes to the financial markets, Nike may find its efforts in vain. The Statement by a Nike representative that “consumers are not rewarding us for investments in improved social performance in supply chain”. It meant that although Nike improved conditions and outcomes for its employees and sub contractor and that they slightly better working conditions to their third world employees and banned the hiring of children, they thought people in general would buy more stuff from them, just because Nike decided to be a bit nicer to employees and cost them money.

Apparently Nike is saying it wasn’t worth investing money into being more humane because at the end it did not resulted in more shoe sales. A stakeholder must be distinguished from a stockholder. They own a share of the corporation. A stakeholder is any group or individual that has a vital interest in the doings of the corporation. There are several other stakeholders of the corporation. These may include employees, customers, suppliers, local community to name a few. Managers need to understand the open systems approach in order to construct support Systems.

Examples of changes in practices of abroad factory plants like in this case Nike made some changes and are examples of the adaptation that organizations have to exercise to respond to the demands of the open system. This means that firms need to watch their customer needs, their employee’s needs, and the needs of the community. In international ventures, understanding the local culture and relying on the network of relationships created in that subsystem will be keys to increase their success. What they mean by “Leaders beyond borders”.

All it is is people who can see across borders created by others, take action and address systemic problems within an organization in this case. The social and environmental challenges are known and numerous. But by rethinking they also represent some of the best opportunities for business. I don’t think there is a perfect science to achieve a compatibility of profits with people and planet, but I think it is the responsibility of all, as a business, as a consumer to try to meet a middle ground in which all three people, profit and planet gain a decent benefit from one another.