What Could Nike Have Done to Prevent the Bash of Negative Publicity on the Forefront?

Case 1: What could Nike have done to prevent the bash of negative publicity on the forefront?

The problem in consideration arises from the allegations, coming from various NGOs and similar entities, of Nike’s unethical behaviour regarding the working conditions in their manufacturing subcontractors’ facilities.

As it is pointed out in the second page of the case study, Nike started subcontracting its manufacturing in South Korea and Taiwan, moving to Indonesia, China and lately Vietnam as soon as the former countries workers gained bargaining power. From this pattern, it can be established with quite a high degree of certainty that finding underdeveloped countries to exploit their lower labour costs in order to maximize profit was a precise strategy of Nike, rather than something happening without its approval.

That being stated, several different strategies could have been implemented in order to prevent the bash of negative publicity:

• Nike could have, obviously, avoided prioritizing its own profit over the living conditions of its indirect workers. This way no one would have had anything to complain about and no negative externalities would have been created.
• As soon as the first big scandals erupted, Nike could have improved the workers’ working and living conditions, promptly stating its regret for how it treated them, or even saying it never did anything in the first place. One strategy included in this category is the one which calls for internalization of the manufacturing process and thus direct regulation of the working conditions, even though it would probably come with a huge raise in both operational and managing costs.
• It could have implemented any kind of miscellaneous strategies with different mixes of “window-dressing” and solving the matter for real. For example, assume Nike has 10 manufacturing facilities, it could be arranged that in nine of them the working conditions are excellent, while in the tenth facility they are abysmal; but in the first nine facilities there are just a minimal part of the total workers, while the vast majority of them works in the other facility, where the working conditions and wages are terrible. In this way, while Nike can still say that most of its facilities are top-tier ones, and could use the 9 excellent facilities for publicity, it would still contain greatly most of its labours costs in the tenth facilities.

In conclusion, none of the aforementioned methods seem to me very realistic, nor very likely to be implemented; not even the last example, which should be the most realistic one. In my opinion, this is because any strategy which could be implemented to solve this problem, and thus avoid the negative publicity, would result in a great increase in costs, whether they are relative to the wages, to the facilities conditions or to the supervising of the whole process.