Picture Credit: Nike is Changing the World

Sienna posted a blog about “The girl effect” that Nike has founded to promote women’s education in developing countries.  Here is a link to her article: Business Ethics

Sienna’s blog, as well as our discussion on corporate social responsibility in class intrigued me to research Nike’s current social responsibility plan. The following is what I have discovered.

After the constant criticism of using child labour, poor working conditions and poor wages, Nike decides to clean up its act.  Nike has increased its wages to above the national minimum wage and no longer use child labour.

Nikes turn around in other aspects relates to the importance of Corporate Social Responsibility. Without social, economic and environmental aspects taken into account, Nike cannot be viewed as a modern, innovative business. Nike prides itself in being the top sporting goods brand, and cannot allow itself to lose customers because of their supply processes. With the implementation of their social responsibility plan, Nike’s profits have soared.

I agree with Sienna that what Nike is doing is socially responsible. With the addition of cutting child labour and poor working conditions, Nike redeems (to some extent) the past unethical things the company has done.

Corporate Social Responsibility News

When economic hardships prevail, what do consumers turn to? Well, cosmetics of course.  During the recession in 2001, Leonard Lauder, of Estee Lauder has observed in times of economic hardships, the demand for cosmetics drastically rises. Consumers find joy through simple pleasures.  Economist David Rosenberg believed these purchases reflect the “era of frugality,” as people are more willing to save. Spending patterns have shifted to sporting goods and hobbies rather than purchasing foreign cars or extravagant toys. The use of shopping coupons is up 27% from 2008. People need to save. It will always be more cost-effective to purchase sporting goods or hobbies or “homemade fun,” as it will lead to happiness. To achieve Maslow’s self- actualization, a consumer would benefit from pursuing a hobby as it is not artificial happiness created by materialism. However, it is hard to differentiate what really creates happiness, owning luxury goods or pursuing a hobby.  It is evident that in times of economic hardship, one cannot purchase luxury goods, therefore must turn to the alternative. It leads to self- actualization rather than self-esteem.  Can one achieve self-actualization materialistically?

Lipstick Index up as American Seek Small Luxuries

Maslow’s Hierarchy of Needs

Abercrombie and Fitch a premium brand feels their brand image is being tainted’, by Mike Sorrentino, a cast member of “Jersey Shore”.  Mike, “The Situation,” has been spotted gallivanting around Europe intoxicated and insane. In response, Abercrombie offered Mike a substantial payment if he agrees to stop wearing Abercrombie. Abercrombie believes that they belong in the luxury brand sector that caters to only high income population. Therefore, Abercrombie believes that their image of elite, aspirational teens is not well represented by The Situation. Their profits were reportedly failing because of him. Is it ethical to disallow someone to wear a brand?  After Abercrombie’s announcement to pay The Situation, their profits have fallen 7%.  Abercrombie alienated their consumers. Abercrombie is too fixated on their brand image to realize that perhaps it’s their product needing a fix. A company cannot arbitrarily choose their consumers! Abercrombie’s elitist arrogance is tainting their brand.  Shouldn’t anyone who pays for a product be allowed to wear it?

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Wal-Mart's Old Slogan?

Wal-Mart dominates the supermarket world but is looking for a change to affect consumer behaviour. Wal-Mart has found that continually reducing prices on their goods has been less successful than anticipated. They are unable to attract wealthier consumers with their bargain brand goods. Therefore, Wal-Mart has decided to offer more expensive brands such as a new food line “Our Finest” and Bauer sports equipment. I believe that this is yet another attempt to change consumer’s behaviour.  By allowing a new target market in their store, Wal-Mart believes they will buy high quality brands as well as Wal-Mart’s existing brands. I believe that this may alienate their old customers. Due to Wal-Mart’s reputation of being a bargain brand, I do not believe that they will be able to attract a new market of elitists. In addition, they will lose brand loyalty from their previous customers. Wal-Mart must stick to selling bargain brands.

Wal-Mart Cashes in on Income Gap