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Nike: The Sweatshop Debate


Nike is in many ways the quintessential global corporation. Established in 1972 by former University of Oregon track star Phil Knight, Nike is now one of the leading marketers of athletic shoes and apparel on the planet. The company has $10 billion in annual revenues and sells its products in 140 countries. Nike does not do any manufacturing.Rather, it designs and markets its products, while contracting for their manufacture from a global network of 600 factories scattered around the globe that employ some 550,000 people.1 This huge corporation has made Knight into one of the richest people in America. Nike’s marketing phrase, “Just Do It!” has become as recognizable in popular culture as its “swoosh” logo or the faces of its celebritysponsors, such as Michael Jordan and Tiger Woods.

For all of its successes, the company has been dogged for more than a decade by repeated and persistent accusations that its products are made in sweatshops where workers, many of them children, slave away in hazardous conditions for less than subsistence wages. Nike’s wealth, its detractors claim, has been built on the backs of theworld’s poor. To many, Nike has become a symbol of the evils globalization –a rich Western corporation exploiting the world’s poor to provide expensive shoes and apparel to the pampered consumers of the developed world. Nike’s “Niketown” stores have become standard targets for antiglobalization protesters. Several non-governmental organizations, such as San Francisco-based Global Exchange, a human rightsorganization dedicated to promoting environmental, political, and social justice around the world, have targeted Nike for repeated criticism and protests.2 News program such as CBS’s “48 hours” hosted by Dan Rather have run exposés on working conditions in foreign factories that supply Nike. Students on the campuses of several major U.S. universities with which Nike has lucrative sponsorshipdeals have protested against the ties, citing Nike’s use of sweatshop labor.

For its part, Nike has taken many steps to try to counter the protests. Yes, it admits, there have been problems in some overseas factories. But the company has signaled a commitment to improving working conditions. It requires that foreign subcontractors meet minimum thresholds for working conditions and pay. It hasarranged for independent auditors to examine factories. It has terminated contracts with factories that do not comply with its standard. But for all this effort, the company continues to be a target of protests and a symbol of dissent.

The Case Against Nike

Typical of the exposés against Nike was a “48 hours,” news report that aired October 17, 1996.3 Reporter Roberta Baskin visitedNike factory in Vietnam. With a shot of the factory, her commentary began:
The signs are everywhere of an American invasion in search of cheap labor. Millions of people who are literate, disciplined, and desperate for jobs. This is Nike Town near what use to be called Saigon, one of four factories Nike doesn’t own, but subcontracts to make a million shoes a month. It takes 25,000 workers,mostly young women, to “Just Do It!”.
But the workers here don’t share in Nike’s huge profits. They work six days a week for only $40 a month, just 20 cents an hour,

Baskin interviews one of the workers in the factory, a young woman named Lap. Baskin tells the listener:
Her basic wage, even as sewing team leader, still doesn’t amount to the minimum wage… she’s down to 85 pounds.Like most of the young women who make shoes, she has little choice but to accept the low wages and long hours. Nike says that it requires all subcontractors to obey local laws; but Lap has already put in much more overtime than the annual legal limit: 200 hours.

Baskin then asks Lap what would happen if she wanted to leave. If she was sick or had something she needed to take care of such as...
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