Case 15: Nike, Inc. and Sweatshops
1. What are the ethical and social issues in this case?
Ethical issues revolve around the issue of economic fairness: what constitutes fair compensation
2. Why should Nike and other companies be held responsible for what happens in factories that
they do not own? Does Nike have a responsibility to ensure that factory workers receive a
“living wage”? Do the wage guidelines of FLA or WRC seem most appropriate to you? Why?
Because Nike contracts with the manufacturers, it is essentially in the position of the employer of
that company. Because of the work Nike creates for them, they create a reciprocal relationship,
3. Is it fair for Nike to pay endorsers millions, while its factory employees receive a few dollars a
day?
Linking these two categories is tempting, but not helpful. Doing this confuses a one-and-many
issue. That is, if there were 5000 Michael Jordans, the endorsement of any one of them would
not be worth millions of dollars. However, there is only one and we seem to be impressed with
his endorsement to the point that we will buy products with his name on them. The ethical
question here is whether Mr. Jordan actually believes those products he endorses are actually
many Americans.
4. Is Nike’s responsibility to monitor its subcontracted factories a legal, economic, social, or
philanthropic responsibility? What was it ten years ago? What will it be ten years from now?
5. What was behind the turnaround at Nike? Is it “good business” for Nike to acknowledge its
past errors and become more socially responsible?
Nike needs to walk the line between pandering to domestic critics and maintaining the economic
6. What are the motivations of student organizations when they get involved in the anti-
sweatshop movement? Why is their activism present on some campuses but not on others?
The student organizations believe that there should be universal standards for wages and worker
safety. These groups also would like to get manufacturing jobs back to the USA, because U.S.
7. Nike seems to be a much more respected company today than it was back when the anti-
sweatshop movement began. What has changed in Nike and the world to explain this?
Nike has actively taken measures to improve its reputation. It hired a CSR manager and