In the early 1990’s Jeff Ballinger exposed Nike as a company that had been exploiting abusive labor. Nike’s business model was, “based on outsourcing manufacturing, and using the money saved on aggressive marketing campaigns.” In Ballinger’s discovery he exposed Nike’s subcontracted employees in Indonesia were earning 14 cents per hour. These accusations led to bad publicity for Nike, which was heightened at the 1992 Barcelona Olympic Games when athletes were criticized for wearing Nike’s brand. This led to a decrease in total profit. Nike exhibited poor business ethics in order to maximize profit, while doing so promoted: child labour, forced labour, sweatshop production, violation of basic rights, and ignored the health and the safety of its workforce.

Nike will forever be associated with these unethical business strategies however; they have altered their ethical decision making which has ultimately reshaped their brand. In 1999, Nike created the “Fair Labour Association,” which produced a code of conduct instituting a minimum age and limited work hours per week. This program led to Nike openly publishing a list of factory contracts as well as preforming factory audits. The advantages of this ethical behaviour by Nike included higher profit/revenue, incentive for employees, and the restoration of the brand name.

In summary, during the 1990’s Nike was a company losing profit and consumers due to their unethical business propositions. However, Nike has now begun to show the global market how ethical behaviour is beneficial. Nike is once again thriving in the global economy but will always be remembered for their unethical acts.

Included is a link to a photo of a protest group rallying outside of a Nike Factory.

Source Used:

Nisen, M. (2013, May 9). [How Nike Solved Its Sweatshop Problem]. Retrieved 
     September 10, 2014, from Business Insider website: 
     http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5