When one thinks business, the first things that come to mind are money and profit. However, another key element to the long-term success of any company is ethics. Nike is a company that has been a powerhouse in the sportswear industry for decades and although profits have never been a problem, ethics has.

In the article “How Nike Solved Its Sweatshop Problem,” a history of Nike’s poor ethics over the years is explored. It specifically showcases how rough of a past Nike has had with community and family environments, as they have ran sweatshops in Bangladesh with extremely poor working conditions. These working conditions in the sweatshops had gotten so poor that it “badly tarnished the company’s image and hurt sales.(Nisen)” To make matters even worse, Nike would take these large sums of money they saved from low labour costs and spend it on large advertising campaigns featuring prominent athletes, most notably Michael Jordan. So how does this connect to Ed Freeman’s Stakeholder Theory?

Throughout the video, Freeman makes multiple points about how and why a business should consider not only the financiers but everyone else as well, which includes customers, suppliers, and most importantly communities. He states that a firm who does not have high business ethics will decline.. Nike fell victim to this exact concept as they saw the overall success of their company declining when they received negative media attention for their sweatshops. However, since they were able to adapt and fixed most of their ethical issues they have stabilized their position at top of the sportswear industry and have not looked back since. Therefore, proving how Freeman’s Stakeholder Theory is something that is existent in today’s business world.

Works Cited

Nisen, Max. “How Nike Solved Its Sweatshop Problem.” Business Insider. Business Insider, Inc, 09 May 2013. Web. 10 Sept. 2014. <http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5>.