Nike Slides 2


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Nike Slides 2

  1. 1. Nike Corporation Jumping the Hurdles of Social Responsibility Disclosure
  2. 2. Background <ul><li>Nike is the biggest manufacturer of sportswear in the world, and employs almost 1 million people. </li></ul><ul><li>Nike outsourcing contracts 500 factories in 45 countries. </li></ul>
  3. 3. Accusations <ul><li>In 1996, Nike was accused of labor violations and human rights abuses in foreign countries. </li></ul>
  4. 4. Nike’s Response <ul><li>Nike responded with </li></ul><ul><ul><li>Labor Codes </li></ul></ul><ul><ul><li>Personal Letters </li></ul></ul><ul><ul><li>Campus Visits </li></ul></ul><ul><ul><li>Newspaper Releases </li></ul></ul>
  5. 5. Litigation <ul><li>Marc Kasky, a San Francisco resident, sued Nike for false advertising, saying the statements were a marketing charade. </li></ul>
  6. 6. Nike’s Response <ul><li>Nike said its speech was protected by the First Amendment. </li></ul><ul><li>The company won the first trials, but lost in the California Supreme Court. </li></ul><ul><li>Nike successfully appealed to the US Supreme Court. </li></ul>
  7. 7. Consequences <ul><li>If Nike were to lose on the grounds of false advertising, companies everywhere would be liable for almost any public statement, muzzling corporations. </li></ul><ul><li>If Nike were to win on the grounds of First Amendment protection, companies would be legally empowered to mislead consumers. </li></ul>
  8. 8. Supreme Court Decision <ul><li>The US Supreme Court decided 5-3 to postpone ruling on Nike vs. Kasky. </li></ul><ul><li>Groups on both sides complained about the decision, having hoped for a solution. </li></ul>
  9. 9. Charity Settlement <ul><li>Nike made a charity settlement, giving $1.5 million to the Fair Labor Association. </li></ul><ul><li>Groups on both sides of the issue complained about the settlement. </li></ul>
  10. 10. Ethical Considerations <ul><li>Product advertising ethics are more lenient than responsibility advertising ethics. Was Nike ethical in the way it promoted its responsibility campaign? </li></ul><ul><li>What methods of communication should companies use to promote social responsibility? </li></ul>
  11. 11. Corporate Social Responsibility Statements: A Possible Solution <ul><li>CSR Statements would require companies to report labor and environmental information like the financial information in balance sheets. </li></ul>
  12. 12. CSR Reporting <ul><li>CSR Information is widely sought and used: </li></ul><ul><ul><li>Investors screen companies for violations </li></ul></ul><ul><ul><li>Consumers more loyal to responsible companies </li></ul></ul><ul><ul><li>CSR information improves corporate image </li></ul></ul><ul><ul><li>Companies are more likely to improve if information is disclosed </li></ul></ul>
  13. 13. CSR Reporting <ul><li>CSR reporting would remove legal ambiguity from companies seeking to improve transparency. </li></ul>