Nike Case Study

Nike was begun in 1964 as Blue Ribbon Sports; the name was changed to Nike in 1978. It began as a partnership between an MBA candidate and a former track coach who had manufactured running shoes in his spare time. The company built its reputation on its technological breakthroughs in athletic shoes, and helped to introduce specialized shoes for different sports. Prior to companies such as Nike bringing forth this concept, most athletes used general purpose athletic shoes regardless of the sport in which they were participating, or the strains it put on their feet.

In addition to technology, Nike also brought comfort and fashion to the industry, although Reebok, a competitor, was more closely attuned initially to the effect that stylish shoes could have on fashion-conscious consumers. The company has a high profile in the international market, and ranked number one among American athletic shoe manufacturers in 1990. Annual rates of change for the five years ending 1997 were an impressive 17.5 percent for sales and 13 percent for profits; over the ten-year period ending in 1997, sales increased at an annual rate of 18 percent while earnings increased at 28 percent, a trend which indicates that the company is well managed and able to turn new sales into strong earnings (Chappell, 1998, p. 1669).

The proposed study will research the factors contributing the causes of negative publicity associated with Nike's labor relations and what effect, if any, it

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, it turned to Andrew Young to conduct an independent study regarding its practices. Young, a human rights activist, took on the project after securing assurances from Nike that his group (GoodWorks) would be independent. The report is itself is wellbalanced, citing areas for improvement with regard to workers being able to voice complaints, and Young himself points out some of the problems that critics have made. These include the idea that Young would only be shown "good" Nike facilities. Young also points out that Nike does not operate these plants itself, but contracts for their operation, which limits the actual control that Nike can exert over the plants (Report on Nike, 1997, pp. 10-12). The publicity regarding Nike's activities in Asia has come from a variety of sources. Vietnamese activists have called for a boycott of Nike products because of the company's activities which "exploit and violate" Asian workers. Gary Trudeau, who writes Doonesbury, called attention to rallies that were planned around the United States in mid-1997 in support of Nike's critics. Television news programs have broadcast reports in which workers claim low pay (as little as $2.50 a day), long hours (up to 17 hours a day) and child labor (

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