IT’S A COMPLICATED WORLD FOR CORPORATE LEADERS, ISN’T IT?

Each day’s news flow across this commentator’s desk brings a series of news reports that point to the complicated world in which executives and boards make decisions – and which stakeholders and stockholders in some way react to!  Globalization has its bright and dark sides.

 

Nike, the Oregon-based sporting goods company, has been working hard to get right with an array of stakeholders who object to certain of the Company’s manufacturing practices.  For too many years, Nike was a favorite target of protesting students, NGO leaders, human rights groups, media, and public officials.  Beginning in the early 1980s Nike was one of the first companies to extensively use Pacific Basin and Far East factories for the majority of its production.  (In the USA the company designed product / marketed the products / developed partnerships / extended the brand, but didn’t “build” the products in the US of A.  No domestic American jobs were involved in manufacture.)

 

Today there are literally hundreds of factories around the globe turning out Nike-branded (“Swoosh”) gear.  And that brings us to today’s headlines.  In Malaysia, the country’s Human Rights Commission (“Suhakam”) just came out in support of suggestions by NGOs and trade unions to allow foreign workers (in the country) to form joins / or join existing unions.  This is a big deal; travelers to the Far East and Middle East know that millions of migrant workers travel from country-to-country in search of work.)

 

“Suhakam believes a worker, local or foreign, deserves to be treated the same and enjoy the same privileges [as local workers], said Commissioner Datuk Siva Subramaniam.  Recent headlines called attention to a Nike contract t-shirt factor – owned locally – was “abusing its foreign workers (hailing from Vietnam and Bangladesh)…”

 

The International Labor Organization (ILO, a UN body) encourages sovereign nations to treat all workers fairly, and that includes joining a union.

 

Nike responds:  We can’t change all local working conditions. Other companies have to join in the effort, as well as NGOs, local governments, and worker rights groups. The real way to address the situation is to develop a core set of standards everyone can agree on and live up to.  Nike had moved quickly after an Australian TV station criticized worker conditions in Malaysia.

 

Local NGOs say this:  Nike picks plants on the basis lowest cost, so if you drive costs to the basement, working conditions will follow.  Don’t hide then behind contractors and plants you don’t own (700 plants / 50+ countries turn out Nike gear).  The reward and incentive systems are set up for the lowest common denominator of worker interests.

 

We’ll be reading more about this in the weeks ahead.  Before we cluck / cluck about American companies, Asian working conditions, outsourcing, anti-union campaigns, PR snow jobs of media and NGOs…and more…let’s keep in mind the reward and incentive system that we in America as consumers have established.

 

Give me the lowest price you can on the goods I want.  If you don’t or won’t or can’t, I’ll find another store that will.  Two pair for the half-price of one pair of sneakers sounds good to me.  Should I care about the conditions under which these branded footwear are made?  That’s a question each of us should be asking…ourselves.

 

What’s your view on this?


 

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