Rosas 1
Jacob Rosas
Business Ethics
Final Paper
11/17/2016
Term Paper
“Nike’s suppliers in Vietnam” is a case of big franchised companies moving its labors to
countries of extreme poverty and overpopulation for monetary gain. In this sense, we are talking
specifically the famous athletic apparel and how they violated basic human rights to promote
their brand even further.
Before expanding into other territories, Nike had their shoes manufactured by the
Japanese in the Hiroshima and Fukuoka during the 1960’s. By 1970’s, the costs and prices
increased in Japan due to “a combination of a tighter labor market, the impact of the first Oil
Crisis on Japan’s economy, and a shift in the dollar/yen exchange rate as a result of the so-called
“Nixon-shock”” (Panigrahi). At the same time, Nike had its own factories in Maine and New
Hampshire to show the public they were making high quality products within the United States.
Unfortunately, the cost to produce the apparel also went up as well. The company soon started to
look for potential new locations somewhere in Southeast Asia. After relocating production to
places such as Korea and Taiwan, the owners shut down the locations in the United States and
began to produce over 80% of its athletic footwear from those countries throughout the 1980’s.
The costs began to rise in these countries as well, which resulted in suppliers to open up
manufacturing Indonesia, China, and Vietnam. Of course, planting a company like Nike in
Vietnam would produce job growth and help people make wages to provide for their family,
especially after being isolated from the rest of the world for nearly two decades. Also, according
Rosas 2
to the case, Vietnam was a terribly poor country that had “unemployment of 27 percent in some
regions” (Panigrahi). Despite being a company that was at the height of “cool” and “hip” back in
the 1990’s, reports of mistreatment, a horrible work environment, and underpayment began to
emerge from subcontractors in Vietnam. In a report conducted by Ernst & Young, it was found
that workers were exposed to carcinogens that “exceeded local legal standards by 177 times in
parts of the plant and that 77 percent of the employees suffered from respiratory problems”
(Greenhouse). It was also found that the workers were forced to work 65 hours a week for $10 a
week. Other problems found within these factories were the lack of protective equipment, the
lack consideration of people with skin and breathing problems, and poor air circulation. Such
treatment can be blamed on the government and the lack of labor laws in Vietnam. The country
lacked freedom of association, meaning that workers were not able to form unions or strike at
