csr report on case 17

reek

• Founded in 1964 as Blue Ribbon Sports• Named for the Greek goddess of victory• Just Do It!• Employs 33,000 people worldwide• Reported earnings of $19.2b at the end of

fiscal year 31-05-2009• Ranked the 31st Top Brand (2006)• 1st Sports Brand on the list

So What Happened?

So What Happened?

• Salaries less than minimum wage• Poor working environment• No overtime pay• One bathroom break• 2 drinks of water each 8-hour shift• Child labor scandal

Child Labour Scandal

June 1996

So What Happened?

• Child Labour in Pakistan• 12 year olds were paid 60c/day to make

footballs• Company had factories in South Korea,

Indonesia & Thailand• Children worked 12 hour days in sub-standard

conditions

Why should Nike be responsible for what happens on the factories that it does not

own?• Hold the brand name of Nike• Protect reputation• Pay wages to the workers

Is it ethical for Nike to spend so much on its endorsers?

• No.• 20 million dollars/ endorsement• $2.43/person wage

Is it Nike’s responsibility to monitor its subcontracted factories?

• Yes• Environmental, social and economic risks• Subcontracted– obligation to perform a

specific task

What could Nike have done, if anything to prevent the damage to its corporate

reputation?• Improve management team– replace or train• Provide better facilities• Lessen budget allocation on profit-based

corporate endeavors• Increase priority in corporate social welfare

The Solution

• Code of Conduct: all suppliers must agree to it• Creation of an Excessive Overtime Task Force• Wages: Nike, Other Brands, NGOs to effect

change• Short-term results poor, hope for success in

the Long-Term• Nike’s CSR website: nikebiz.com

FLA Assessment

Critique

“The CSR cost for Nike is about $10 million to $12 million a year, just for the CSR staff and expenses, to go to these sustainability meetings all over the world. They have two or three Nike people at every meeting. That’s part of the CSR game.

“I figure 75 cents per pair of shoes to the worker would fix the problem. If Nike instead paid workers 75 cents more per pair of shoes, do you know what that would cost Nike compared to the CSR cost? That would cost them $210 million a year.”

Jeffrey Ballinger, Anti-sweatshop activist

CSR as Crisis Management?

In June 2007, Nike apparently renounced its use of CSR as "a risk and reputation management tool“

It was to become a core "business objective.“

Source: “Nike back in responsibility rehab” by Steve Bruin The Oregonian, 3rd June

So what is CSR?

• A commonly used term to describe CSR in its current evolutionary state, CSR was mentioned on national television news for the first time in early 2004. Appears to promote the social at the expense of the environmental dimension so Corporate Responsibility has emerged in preference to CSR

Source: Rebecca Collings

Discussion

Is CSR as a crisis management tool really CSR?

Kantian approach

• The motive behind the programme matters• CSR should be governed by duty not self-

interest• CSR programmes would exclude evaluation of

programme’s benefit to the organisation• Focus on Corporate duties & beneficiaries

allowed to define scope of the relationship

The Public Relations Handbook by Alison Theaker (pp. 115-116)

Friedman Approach

• Social responsibility of business is to be successful

• CSR programmes should be governed by the self-interest of the corporation

• Businesses aren’t governments (risk to democracy)

http://www.suite101.com/content/opposition-to-corporate-social-

responsibility-a146829

Short Run and Long Run

VS

Sources• Seeger, M. W.; Sellnow, T. L., & Ulmer, R. R. (1998). "Communication, organization and

crisis". Communication Yearbook 21: 231–275.• Macroeconomics by N. Gregory Mankiw• The Public Relations Handbook by Alison Theaker (pp. 115-116• http://www.suite101.com/content/opposition-to-corporate-social-responsibility-a146829• “Nike back in responsibility rehab” by Steve Bruin The Oregonian, 3rd June• http://www.gdc.net/designers/features/articles124.php• http://www.slideshare.net/MsNikki/csr-case-study• http://www.sourcewatch.org/index.php?title=Nike#.22Social_Responsibility.22_as_Cheap_PR• Nikebiz: Company Overview: History: 1960s, Nike, Inc., Retrieved on August 12, 2010

Any Questions

Any Questions

Any Questions

Any Questions

Thank You!