Pros

With knowledge about labor concerns in house, Nike is better able to proactively investigate their own plants where a complaint may arise. They will also be better prepared to address problems and quickly negotiate equitable solutions. This will reduce the amount of downtime associated with production interruptions due to strikes, walkouts or boycotts.

Cons

The level of administrative employees increases overhead and costs for the company. Though these teams labor and environmental oversight professionals are necessary they do not contribute to the revenues of the company directly.

Solution to the Problem

A detailed Ethical Code of Conduct or Corporate Governance Policy that must be adhered to would be a first step in changing organizational relations between suppliers and Nike. As a first step it will provide a guideline that can easily be monitored for compliance. This is the best solution as it can be implemented rather quickly using third party auditing firms already established and known by reputation for handling such issues. This ensures unbiased oversight and provides the additional staffing without adding excessive costs. It will also be a more media friendly solution rather than using Nike staffs which may not have the experience or expertise to handle such major issues.

Expected Results and Rationale for the solution

The leadership and suppliers at each plant will have to meet individually to discuss the compliance policy and explain its objectives as well as any problem areas or conflicts. It will be necessary to share this with all employees within both Nike and the contract suppliers location. In house meetings with representatives from Nike to facilitate meetings to roll out the mutually agreed final compliance requirements with...

A detailed schedule and timeline should be developed with each individual supplier to handle implementation of the new ethical plans. Consideration will need to be given to the local customs and culture of the supplier site. Perhaps hiring individual and managers with a similar cultural background can assist Nike in handling this aspect of drafting the Corporate Compliance document.
In handling the media it is wise to hold a press conference to talk to all the major PR at once. Explaining the strategy to roll out the Corporate Governance Policy Plans.

Positive and Negative Results

Positive results will be acceptance and adherence to the corporate policy. Explaining that the policy is a living document that will need to be modified as new issues come up that need to be addressed by either side.

A quarterly follow-up to review any open issues or complaints that have surfaced will ensure ongoing process improvements occur.

Negative Results would result in losing many suppliers that fail to comply. However, it is certain that there will be competition that is willing to work with Nike. After all they are still the one of the most successful retailer of footwear and sports wear in the world.

References

Global Exchange. (1999). Nike: what's it all about. Electronic memo, Global Exchange.

Locke, R.M. (2011). The problems and perils of globalization: case nike. Publication Siteman: MIT

Navran, F. & Pittman, E. (2003). Corporate ethics & sarbanes oxley. Retrieved June 2,

2011 from http://www. ethics. org/erc-publications/staff-articles. asp?aid=759

Spar, D.L. (2002). Hitting the wall: nike and international labor practices. Harvard Business School. 9700047.