NIKE: Managing Ethical Missteps for its success



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Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike. 1

Describe an ethics training and communications program that may have kept Nike from encountering the ethical issues it did in this scenario Ethical training program.. 2

Determine and discuss how Nike could have benefited early on from ethics auditing. 2

Create a high-level outline for what the ethics auditing process should look like at Nike. 6




While Nike is a giant manufacturing company specializing in the production of indoor and outdoor footwear’s and sweatshirt, it is also among the best managed companies in the world. However, this is from the economic point of view. There are many cases that might lead to the fall of manufacturing giant, and these cases were mainly ethical despite the fact that the company has not been in the limelight for ethical and professional malpractices (Gray Owen & K. Maunders, 1997).

Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike

Bernstein, (2004)n argues that Nike failed to  that fail to implement internal programs aimed at detecting and prevention of violation of law are eligible for a significant increase in penalties, therefore, had Nike developed a compliance program before the offenses, they would Have averted most of the ethics related problems that the company faced. A viable code of ethics does not only act as a deterrent but also a guideline for ethical operations and activities within a company. If the company had a viable code of ethics, the employees would have been more aware of the impact of their practices on the environment as well as, on the community.  The management would have been more strict with its employment rules before absorbing employee and would have ensured that all the document used by the company, is genuine and up to date (Greenhouse, 2011)

Describe an ethics training and communications program that may have kept Nike from encountering the ethical issues it did in this scenario Ethical training program

An effective ethics training program has offers a number of benefits that can be instrumental in detecting any unethical behaviors that are likely to devastate an organization. For example, issues like child labor and corporate social unresponsiveness experienced in Nike are some of the unethical activities that could have brought the giant company down.

An ethics and training program must communicate standards and the integrity vision of the company. In this way, the identified integrity risks are reduced, and open communication lines are created and a transparent work environment. A program must create a work environment that is free from any form of retaliation and intimidation. On the other hand, an ethics and, communication program should set clear, expected standards of behaviors and the communicating channels to be used for conveying the integrity messages across the company. It should also set rules on how the stakeholders can become engaged in the process (Thottam, 2005)



Determine and discuss how Nike could have benefited early on from ethics auditing.

According to Ferrell, &, Fraedrich, (2008), ethical auditing, the process by which company’s measures internal and external consistency of their value base. This is a value linked process by which stakeholders are incorporated into the organization. For example, Nike incorporated the stakeholder into their value base and considered how their practices were aligned to their stakeholder. Nike stakeholders do not only refer to the shareholder but also the communities in which the company operates the employee, customers as well as suppliers.             Ethical audit is intended to ensure accountability and transparency to all the stakeholders of the company. This process is also important in ensuring that the company meets its ethical objectives. Though this process is mainly an internal control measure, it focuses more on the external factors such as the community response, the social welfare as well as the stakeholder interest. Ethical audits are mainly meant to captures nukes ethical profile. Ethical profiles combine financial profile, service profile and employer profile to investors, customers and employees respectively. All the factors that might have an impact on the Nikes reputation are put into perspective by an ethical audit. If Nike had taken a picture of its value system in time, it would have:


1) Clarified the definite values to which it operates:

Nike has a number of flows in its supply chain; these flaws are easily identified if all the publics are considered. If the company had established an ethical audit before, the company would have streamlined its supply chain and clarified the actual value within which it operates and not just remain vague.  These ethical audits communicates to the employees the ethical training objectives, ethical code of conducts, Hotline usage, Ethical issues, Conflicts of interest, Kickbacks, Accounting irregularities, Protection from retaliation, Internal theft as well as employee responsiveness

  • Learnt how to establish and provide a better baseline for measuring the future improvement.

Factors such as corporate social responsibilities that mike is facing and is still likely to face in fiture are some of the things that the company should give proper considerations to. While the company is in fault for employing underage workers, having unpaid wages for employees, and using falsified documents for worker permits. The company could have steered clear of all these by benchmarking and ensuring that all the regulations are met properly before implementing any program and ensuring that there are internal policies and ethics officers charged with ensuring that the policies related to employment and working conditions are always footed.

  • Leant how to meet the societal expectation that it did not meet at that time:

Nike would have employed and trained more CSR specialists in all plants. This is to uphold compliance and societal focus into the company mainstream objectives thereby increasing the company reach to the community and reducing the child labor. By establishing plants in poor areas, the company is set to exploit the cheap labor. Though this is seen as a positive move, the company could have established a proper salary scale for the workers. A realistic salary scale is much more effective in the reduction of employee unrest and the other related problems within the company.

  • Given the entire stakeholder the opportunities to clarify what they expected from the company.

Ethical audit involves the establishment of compromise between the company and the stakeholder, this process offers opportunities form collection of the stakeholder views, which can be instrumental in shaping the strategy goals of the company and setting direction with the stakeholders in mind

  • Identified those problem areas that existed within the company.

Most of these problems include the wages, worker condition as well worker tight. Though this is limited in scope, the company could have joined the global alliance before their problem stated and achieved these goals before

  • Learnt about the issue which motivated the employees as well as, the community?

The community is the backbone of the company in any setting, therefore, their concern is much more important than the company success, it is therefore, imperative for the company to ensure that the community has appositive attitude towards the company to help the company prosper. A slight change in the attitude of the employees is injurious to the company’s reputation and success.

  • Identified the overall areas of vulnerability especially those areas related to transparency
  • Attract more customers:

As the company customer base widen, the number of interested participants increased, the general perceptions of the customer as an ethical company increases the customers positive perception about the company. The number of male, female and fashion oriented customers would increase.

Create a high-level outline for what the ethics auditing process should look like at Nike.



Ferrell, C. &, Fraedrich, F. (2008), Business Ethics: Ethical Decision Making & Cases. Cengage    learning

Thottam, Jyoti (2005). “A New Push against Sweatshops“. TIME

Gray R., D.Owen & K. Maunders, (1987). Corporate Social Reporting: Accounting and    accountability. Hemel Hempstead: Prentice Hall

Bernstein, Aaron (2004). “Nike’s New Game Plan for Sweatshops”. BusinessWeek.

Greenhouse, Steven (2011.). “Nike’s Chief Cancels a Gift Over Monitor of Sweatshops”. The         New York Times.


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