Introduction:
Nike is a large multinational corporation that employs some of the most recognizable people in the world as its spokespeople. Therefore, Nike will be in the public eye and will receive criticism for any business practice that is in the least bit questionable. As a result, Nike has in recent years received a large amount of negative publicity for the working conditions and wages in factories that produce their products. Human rights activists are concerned that Nike may be taking advantage of workers in poor countries to add to their own wealth. The real argument is not whether this is true, but whether Nike is truly violating human rights in these countries.
When the sweatshop debate first started, I believe Nike was rightfully being criticized. The company outsourced to developing countries because of the extremely low labor costs and took no real notice of the conditions in their factories. Nike had to be called out before they took any real action and for that they should be criticized. However, following the criticism, Nike has taken actions to ensure that workers employed in factories producing their goods are treated well.
It should also be noted that Nike is not the only industry member to produce goods in developing countries. Virtually all of Nike’s competitors have similar factories in similar countries. However, the competition is not such an easy target because they are not industry leaders. The fact that Nike is such a recognizable name makes them vulnerable to criticism. If these factories are truly a problem, they are an industry problem, not just a Nike problem.
By outsourcing clothes to developing countries, Nike is simply participating in a global economy with global competition. Nike is helping the economies of these countries not hindering. The company cannot be expected to raise the standard of living in a country just because its apparel is manufactured there. Developing countries will benefit in the long run by having companies just like Nike located there. By allowing global businesses into their borders, they will earn more money and begin to build wealth. That is when living conditions and wages will begin to increase.
Following the implementation of foreign labor codes of conduct and the use of monitoring organizations, I believe Nike is completely justified in employing low wage workers in low wage factories. Nike is producing their goods globally at the cheapest price possible and workers in developing countries are being employed with reasonable wages. Nike should be admonished for basically “turning its head” in the early 90s, but there has been little evidence of worker mistreatment at Nike factories in recent years. As long as Nike continues to enforce its code of conduct, the company should be able to utilize workers in developing countries.
Nike is not responsible for working conditions in foreign countries because the subcontractors are the ones who set wages and salaries according to the minimum wages margin in that countries but the main point is that Nike corporation (mother company) can play an important role in setting wages in that foreign factories. many examples are given in this case like what happened in Indonesia when Nike terminated its relationship with four Indonesian subcontractors when they refused to comply with the company’s standards for wage levels and working conditions. Relationship with Seyon subcontractor for example was terminated because the refused to meet a 10.7% increase in the monthly salary, to $70.3 declared by the Indonesian government in April 1997.
Nike and all multinational companies invaded Far East in order to produce at lower cost. we know that the highest cost in the united states and Europe is labor cost because there are standards in that countries that must be obyed.this is not true in far east workers in the far east are not working according to standards that must be set by the local government and if the local government did not issue such legislations and law, Nike is not guilty about that issues because Nike is not the party who charges workers who talk during working hours but the subcontractor who is aware on the working environment in the far east which is different than in Europe and the united states. Nike must force the subcontractors to work according to the local standards concerning the wages, overtime and working environment and not according the American standards. The subcontractors who will not meet those standards must be terminated in order to protect the mother company from critics.
The local economy of Indonesia is facing a big problem according to salaries and wages. The minimum wage is about $1 per person per day. This economic problem is a local problem and the government is responsible to regulate this rate. Multinational companies is finding an opportunity in such countries especially those where raw materials and resources are available so that they can produce at lower cost. Multinational companies can only force their subcontractors to abide by the local countries law and implement the new legislations and laws such as salaries raises. If the subcontractor refused to abide by the rules, Nike must take a corrective action such as pressing on their subcontractor to adjust his policy and abide by the governmental legislations. Nike subcontractors are paying double the minimum wages in Indonesia so I do not find any reason for criticism in this case but if they are forcing their employees to work unpaid overtime hours this must be heavily criticized.
Nike did almost what can they do according to eliminate the effect of such bad publicity using there strong public relations such as Andrew Young a formal U.S ambassador in the United Nations. But this guy is highly criticized by human rights and labor groups for not taking his on translators and doing slipshod inspections, an assertion he repeatedly denied. They are also engaged in the fair labor association alongside with market leaders to find a way to organize the workers rights in the Far East. They also worked with Ernst and Young, PWC for foreign factories auditing and inspection but all of this did not put an end for that debate.
In my opinion Nike did what it is necessary for them to protect their company but the main issue is that sometimes the human rights associations say things which cannot be achieved. Nike cannot alone put an end for poverty in the Far East and especially in Indonesia but to cope with the standards given by the local government of Indonesia such as weekly working hours and minimum wages. The first criminal in this personal issue is the Indonesia government who is responsible for such bad economic situation of the country. Low wages is not a problem in Indonesia only but all over the Far East especially in Indonesia and china. The huge number of people in the Far East is the major problem for those economies and the companies who are searching for profits must invest in those countries to produce at lower costs.
I believe Nike was rightfully being criticized. The company outsourced to developing countries because of the extremely low labor costs and took no real notice of the conditions in their factories. Nike had to be called out before they took any real action and for that they should be criticized. However, following the criticism, Nike has taken actions to ensure that workers employed in factories producing their goods are treated well.
It should also be noted that Nike is not the only industry member to produce goods in developing countries. Virtually all of Nike’s competitors have similar factories in similar countries. However, the competition is not such an easy target because they are not industry leaders. The fact that Nike is such a recognizable name makes them vulnerable to criticism. If these factories are truly a problem, they are an industry problem, not just a Nike problem.
By outsourcing clothes to developing countries, Nike is simply participating in a global economy with global competition. Nike is helping the economies of these countries not hindering. The company cannot be expected to raise the standard of living in a country just because its apparel is manufactured there. Developing countries will benefit in the long run by having companies just like Nike located there. By allowing global businesses into their borders, they will earn more money and begin to build wealth. That is when living conditions and wages will begin to increase.
Following the implementation of foreign labor codes of conduct and the use of monitoring organizations, I believe Nike is completely justified in employing low wage workers in low wage factories. Nike is producing their goods globally at the cheapest price possible and workers in developing countries are being employed with reasonable wages. Nike should be admonished for basically “turning its head” in the early 90s, but there has been little evidence of worker mistreatment at Nike factories in recent years. As long as Nike continues to enforce its code of conduct, the company should be able to utilize workers in developing countries.
If Nike did so they will not loss their potential for competing with their competitors because price is the only factor that affects people to buy a certain product or not but there many factors that may affect the customers’ buying decision other than prices.
Due to the emergence of globalization companies are forced to go internationally in their production and sales. Products are not only produced locally but also produced through subcontractors, franchisees, joint ventures…The degree of control over quality and labor is lower in subcontracting rather than wholly owned businesses abroad. The mother company forces the subcontractor to work according to its international standards and do several inspections during the fiscal year but there are some problems that cannot be inspected but the mother company due to the type of foreign investment.
Let’s take an example in Lebanon. Let’s suppose that Nike is interested in opening a new factory in Lebanon and signed a new subcontract with a local Lebanese investor. The company can force the Lebanese subcontractor to pay for the employees the minimum salary for his employees which are in Lebanon 300,000 LBP and work 48 hours per week according to the Lebanese labor law. The Lebanese subcontractor forced his employees to work additional unpaid working hours otherwise they will fire him from work. I think that he will do what his manager said to him because he will be sure that he will not find another job. Businessmen in undeveloped countries knew the economic problems in their countries and knew well about the high unemployment rate so they are participating on their own without referring to the mother company although the mother company knew that they are working according to the local laws. Nike is paying their employees in Indonesia double the minimum wages set by the government, where the problem here is, is Nike building its empire on the backs of poor people. I don’t think, Nike is only searching for the best place to invest and read about the labor law in Indonesia and they are paying double than others.
The ones who are criticizing Nike for their behavior must set a global agreement with all multinational companies about the salaries of the workers, working hours, working environment and everything else related to the labor forces in the targeted country so that to avoid further debates about this issue because poor people have the right to live peacefully and companies have the right to generate profits.

This article is identifying the suitable to manage in a border-less world, it identifies the purpose for the companies to go abroad and trying to invest in foreign countries regardless of the way to enter it, like joint ventures, wholly owned businesses, licensing …but effective global operations require a genuine equidistant of perspectives. But even with the best will in the world, managers find that kind of vision hard to develop and harder to maintain.

One of the factor that encouraged companies to go abroad is that so many things have changed from the past, today people of course everywhere are more and more able to get the information they want directly from all corners of the world. they can see for themselves what the tastes and preferences are in other countries, new fashion styles, the sports and their lifestyles and so on.

Managing effectively in this new border-less environment does not mean building pyramids of cash flow by focusing on the discovery of new places to invest. nor does it mean tracking our competitors to their lair and preemptively undercutting them in their own home market.

Most managers in all big companies are trying to increase their sales and market share, but the only way nowadays is to search for new market where there are new opportunities (especially in the far east) in order to expand their businesses.The major purpose to go internationally is due to the intensive and huge competition the companies are facing in their local markets, domestic and foreign competition.

The other factors that lead managers to manage in a border-less world are the cost factor that all companies care about because it will identify the profit margins. We all know the economists are seeing china is the future vacancy to invest in due to the huge population there, in spite of the availability of very cheap raw materials and very low labor cost which is very interesting for these companies.

By this way so many companies did that like Sony which has now factories in Malaysia and china where the production cost is very low and they can provide their customers with cheaper products at the same level of quality thus they can quarrel with Aiwa and Sanyo.

There are some threats that every management must take into consideration before investing in any country abroad like, the economic situation of that country, the currency rate, interest rates, inflation rate and unemployment rate…that’s why this article is trying to teaches us that there is a lot of danger if we decide to invest in any company, sometimes our company may incur a very big loss because they did not understood the culture of a certain country. the major and deadly action that may end our existence in any country in trying to change the culture and traditions of a certain nation like what nestle was trying to do in Italy which is a major fault which caused their market share to be only 1%.

We have few multinational Lebanese corporations that are in need to expand internationally but this concept of investing internationally is an opportunity for the Lebanese companies to find bigger markets than Lebanon which is a very small market .Some companies see Lebanon as an opportunity for them to invest in like KFC,Starbucks,Dunkin Donuts…in addition of the hospitality chains which invested their money in Lebanon depending on the tourism season that will cover the low season losses which is in my opinion a very big mistake ,hotels number is increasing year after a year and the Lebanese market is becoming saturated.