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Words of Nike’s sweatshop problem have spread around the globe like wild fire, resulting in Nike’s brand image to come tumbling down. Nike has tried hard to mend its image and turns things around. It’s acting up on its corporate responsibilities to ensure their employees are treated fairly: e.g. it has created “Fair Labour Association” which establishes “independent monitoring and code of conduct” within the company.

I think Nike has done well in choosing to outsource their production into third world countries such as Vietnam.  As a result, Nike has made use of comparative and absolute advantage offered by other economies, and ensures production is efficient with minimal costs (labour cost). I believe it’s part of the business responsibility that firms should always try to improve productivity and ensure resources of the world are used efficiently.

However, since Nike is such a big part of the sports good industry, I think that another important corporate responsibility they should keep in mind is their brand image. In the transparent and globalized world we have today, brand names are significant so if they want to keep Nike alive and successful, the firm must ensure non-economic values of business ethics are utilized.

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