Governance and Sustainability at NIKE
Introduction
Corporate Social Responsibility (CSR) involves a form of global private business self-regulation that intends to commit to the societal objectives of a philanthropic, activist, or humanitarian essence by participating in ethically- centered exercises. At NIKE, sustainability began in the 1990s when an outbreak of opinions over labor exercises at contract companies creating Nike goods jeopardized the company’s brand with its crucial users, especially college students. The users at that time were severely treated and struggling. It is noted that at first, Nike company refuted the claims and mentioned that they were not liable for the suppliers’ payment and working situations (Paine et al., 2013, p.4). Nevertheless, in 1998, Nike’s technique shifted and embraced the need for the head of the CSR department. Thus, Nike’s devotion to enhancing the societal and environmental standards are implemented. This paper aims at presenting a case analysis of NIKE’s CSR and how it has contributed to the financial success of the company.
How NIKE’s dedication to CSR contributes to its Competitive Advantage
Nike’s dedication to CSR has immensely committed to its competitive advantage. There are several probabilities to comprehend the ides of innovation, along with the sustainability. With numerous competitors, Nike encounters excess competition in its operations. One of its principal competitors includes Adidas. Therefore, with the embrace of CSR, Nike considered satisfying the needs of the users first. Adapting the globalization approach makes it being able to meet consumers in other nations other than the host nation (Paine et al., 2013, p.12). Every operation in the firm was assimilated with that of the consumers’ demand. While applying the concept of globalization, Jones initiated strategies that could be used for its efficiency. These include policing strategies, transparency, and assimilating with other states.
Transparency performed by the Nike Company was experienced when Jones suggested to the management that Nike should publish contract companies’ names. Publishing the names was an issue, but the company had to rely on the new CSR management at that time for the changes needed in its brand. Also, Nike joined with other industries that use the same contract companies to correlate investigations, share expenses, apply general principles outlined and expedite the method of factory enhancement (Paine et al., 2013, p.9). The aspect of innovation was also adopted in this case. The company, through the Research and Development department, implemented the use of close loop material and manufacturing. Close loop materials entail the recyclable materials in the market.
Ethical Standards at the Basis of Nike’s Mission and Its CSR Initiatives
Ethical standards at the basis of Nike’s mission links with its CSR schedules. The mission mentions that the company should maintain inspiration and innovation to the athletes. Its ethical standards apply to its stakeholders, who are the communities, consumers, employees, governments, and interests team. To satisfy the consumers’ needs, the company uses the Research and Development department to understand the users’ requirements. Nike, through the Nike Foundation initiative, impacts the communities positively (Paine et al., 2013, 7). The company, since 2005, has enhanced the development initiatives of various communities. The company also donates funds and sports shoes to Youths in the community through different initiatives.
Nike has also considered the need to improve the welfare of its employees since the 2003 scandal. Currently, employees have fair compensation, career development chances, and motivational activities. The motivational activities include talent management through coaching and mentoring, along with team building. Nike also adheres to its initiatives by considering the government’s legal guidelines set. To perform, the company needs a permit. Also, there are limited principles in other states on its products, such as shoes and equipment (Paine et al., 2013, 14). The firm also observes the tax revenue indicated by every nation. Other interest groups are mentioned in CSR initiatives. These include Labor unions and environmental conservation institutions. The labor unions request for just labor exercises, and environmental conservation groups regulate the emissions levels of the company.
Should Nike Revisit the Road to Zero Commitment?
Nike should revisit the road to zero commitment mentioned after the consultation made between crucial departments in the firm. The firm has outlined that by 2020, it will curtail the discharge of unpredictable chemicals worldwide. After the prediction by the UN on the possibility of water shortage in 2025, Nike created the Nike Water Program in 2001to regulate the water supply of different areas (Paine et al., 2013, p. 7). Also, the company launched the use of numerous departments in the company to evaluate innovation that is environmentally friendly and follows sustainability practices. The SB& I is one of the departments created that has controlled the sustainability issues and increased exceptional expenses (Paine et al., 2013, 12). The restructuring determined by SB& I has given independent management on Nike’s application of sustainability on the environment and health guidelines.
The steps followed by the senior leadership are effective since the objective is to enhance the firm’s welfare. The steps include enhancing labor practices and participating in community activities. Joining its competitors in exercising the sustainability agenda. The company shows a promising future since, presently, there is exceptional productivity.
In conclusion, the essence of the CSR department in Nike Company shows that sustainability is significant in a firm’s practices. The CSR exercises had a positive impact on the company’s competitive advantage. The ethical standards outlined and the CSR initiatives also were effective for the firm’s performance. The company should consider revisiting its road to zero commitment, and the steps the company’s senior leadership had formulated were efficient for the firm’s operations.
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