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...
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