Business Ethics Of Nike : Case Study

This report is based on a "case study of Nike company". The main aim of this report is in regards to Nike which is being a clothing industry and face issue related to the creative advertisement. This report discusses the ethical dilemma “should marketing unit engage in making such advertisement which encourages youngsters to indulge in criminal activities?”. We will discuss here, corporate social responsibilities of Nike. The main aim of an organization to inculcate CSR activities is to manage practices of business in order to create an impact on overall society in a positive manner. We will also discuss here the organizational structure of Nike.

Report on Nike and
their advertisement

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Part A......................................................................................................................................1
Part B).....................................................................................................................................4
Part 2.......................................................................................................................................5
Qualities which are needed for being an ethical leader or manager who can manage ethical
issues of an organisation ........................................................................................................5
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business ethics refers to the study of appropriate policies as well as practices of business.
These policies are related to issues of potential controversies like discrimination, corporate
governance, fiduciary responsibility, social responsibility and bribery (Bonnefon, Shariff, and
Rahwan, 2016). These policies help a business entity in operating their business activities in a
ethical manner. This report is based on case study of Nike company regarding creative
advertisement. They used an advertisement technique which was misunderstood by public.
Moreover two ethical theories are being used under this assignment to judge ethics in a sated
case study . Characteristics for being an ethical manager are also been discussed so that ethical
standards of an organisation can be increased and ethical working environment can be
maintained.
PART 1
Part A
In recent era, the main motive of an organisation is to generate revenue and to hold a
highest rank within a market place. But in order to attain these certain goals may not seem to be
ethical at all costs. So it is required by a business to implement business ethics in order to
performs their operations and activities in an ethical manner. In case an organisation fails to do
this, then it will lead to decrease in base of customers as well as company will have a negative
brand image (Crane and Matten, 2016). Main aim of this report is in regards with Nike which is
being a clothing industry and face issue related to creative advertisement. Under this they
targeted youngsters for selling balaclava but it critics as stereotypes of black youths which are
involved in gang violence. Whereas, company states that they had no intention of encouraging a
serious issue related to gang culture and criminal. Under this case it was found that a young
black model was wearing a T-shirt and a garment which was same as military special forces
webbing. This was appearing as if youngsters are concentrating of inspired look as a gang and
this was being popularised by videos of drill music. Later on Nike had to stop their selling of
balaclava from its website and displayed that this product is no longer available for sell.
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This report is written from middle manager to senior manager in Nike with an aim to
highlight the unethical practices adopted by marketing department in company. This report
discusses the ethical dilemma “should marketing unit engage in making such advertisement
which encourages youngsters to indulge in criminal activities?”. The consideration of this
dilemma holds significance as this would ensure that entity does not make any advertisements or
adopt practices that are against public interest. Also, emphasizing upon this situation is necessary
to make sure that there is no violation of interest as well as power of stakeholders of
organisation. The major objective behind this is to reflect the implications of such misinterpreted
advertisement upon the millenials that are a significant part of the society so that such unethical
actions and practices can be prevented in future context.
A stake holder refers to a person who has an interest or concern in business (DeKeyser,
Ganz and Berkovitz, 2012). Hence, Nike sees its external as well as internal environment in form
of their stake holders. It simply means that any person who have an impact on activities of
business can be called its stake holders. But each stakeholder will have a different role to play in
the process of Nike company. Stake holders of Nike company who are affected by this are
customers, employees, ,business partners and their shareholders. Shareholders as well partners
always wanted Nike to earn profits. While employees would require to have a sense of work
satisfaction and treated fairly. On the other hand customers concentrates mainly on quality,
safety and availability of a product and service for which they spend money for. Moreover, other
comprises of local communities as well as government who involves a special kind of interest in
groups. As per Friedman theory, stakeholders play a crucial role in business, as their decisions
affect performance. They can be affected through organisational policies, actions and decisions
or ethical dilemma. For better understanding the requirement of communication with
stakeholders in making decisions and strategies, interest/influence matrix can be used. Here,
“Interest” focus on terms related to change, while, “influence” indicates the ability for resistance
and stimulates the same as well. This matrix help in resolving issues related to loss of trust and
belief of stakeholders, investment, long term relationship with clients and more.
This issue of Nike has affected some shareholders of Nike particularly as customers will
feel betrayed by their unethical practices whereas shareholders share will decrease as company
will have a negative brand image due to which it decreases its earning in profits. Local
communities will be affected as they will get a wrong image from this advertisement.
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There are many other companies who also faced same issue of misconception of
advertisement by public (Dion, 2012). It includes companies like Marlboro, coco-cola and bonus,
therefore, to pay a special attention while developing promotional strategies. They should decide
and see from every perceptive view point of advertisement in regards to different viewers so that
their message is conveyed in a right manner and properly. Ethics of duty in this regard, is
important for performing roles and duties for entire organisations and individuals. This leads to
conduct business in ethical manner by governing rules and regulations to each associated
member. But there are negative impacts of such ethical question related to business operational
as well as entire functioning, that can be found. It includes intentional or unintentional
advertisement procedure for marketing products.
Corporate Social Responsibilities means companies core business activities. Main aim of
an organisation to inculcate CSR activities is manage practices of business in order to create
impact on overall society in a positive manner. It involves various others factors also which are
developing adequate relationship with customers and its employees, environmental sustainability
as well as protection and many more (Eisenbeiss, 2012). This would help a company to earn
profit and increase productivity. That is the main reason as CSR activities are treated as an
important method for giving and increasing competitive advantage, create trust between
stakeholders etc. Here in regards to Nike, CSR activities are playing an important role for
increasing their business and creating a positive brand image among public. CSR activities of
Nike are mentioned below.
 Company does a commitment to reduce carbon footprint.
 It bring innovation in their manufacturing.
 Keeps voice of human at heart of all its activities which starts from manufacturing and
ends to marketing of products and services.
 Developing innovative and new palette of materials which are sustainable.
 Launching innovations in products which have close loops.
 Whereas for welfare of employees they are creating a culture and inclusive staff members
which will help in increasing impact and efficiency.
 Motivating and investing employees to do investment in communities and market place
where Nike does its operations.
Recommendations
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According to above mention report, it can be recommended to Nike that it should be
careful about message they are conveying through advertisement to people. Advertisement
experts team must be develop or formed so that they can give various suggestions and ideas
about advertisements strategies. Also the Nike company should make advertisements focusing
the entire society and not just a few customers. This will create a brand image among public and
the message which they want to convey through their ads will effective. They should utilise CSR
activities in an ethical way so that they are not being misconception about their ads to public who
are not being targeted. While they can also develop policies and procedures which will help them
to increase productivity and profits of a company. It has also recommended to Nike to operate
their business activities in an ethical manner. It is also necessary for the chosen organisation to
use efficient advertising methods that do not effect their brand image in a business market. In
addition to this, it is also essential to identify the market condition before advertising their
particular products in a business market. They should also develop effective advertising policies
to influence whole society not just few peoples.
Part B)
For ascertaining the views on ethics of present case of Nike, senior managers have used
two ethical theories. It includes Right & Justice and Egoism theory to give the most suitable
solution. Concept of these theories can be explained in following manner:-
Right Justice Theory: This theory is mainly based on adopting fair practice for
conducting all sorts of business activities. This theory is mainly based on two principles : As per
first principle every individual should have equal right to claim equal opportunities and liberties.
Second principle states that every person should be loyal towards his office and position to
achieve further benefits. In context to Nike, it has been analysed that chose a wrong
advertisement to promote their brand. This may lead to a major fall in their brand image. So it
has been assessed that Nike should use fair practices and correct type of advertisement media to
promote their brand. Also people should be fair in their conduct if they see any such
advertisements. They should not act rationally rather use fair ways of conveying their message.
As per the case study, there is a fault from both sides whether it is Nike or the people who are
making this an irrelevant issue. In this regard, it is essential for a business entity to operate its
business activities in an ethical manner, which help them in retaining their brand image in a
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competitive business market. It is also essential for critics to understand both sides of the story
before judging any issue.
Egoism theory: Theory of egoism is a key theory which has been taken into
consideration by managers of Nike. Theory of egoism infuses concept which says that people
should live in such a way that they are able to make most of their skills and abilities without
depending on any person. As per this theory, each and every individual is different from others
and should focus on his skills and their development rather than being competitive from other
individuals (Hassan, Wright, and Yukl, 2014). In respect to this, every person should work
towards his own development and goal achievement in short as well as long term. In case of
Nike come under major fire for selling a product balaclava that depicts image of a youth
involved in a gang violence. Company removed that product from their sale. That product gives
a negative impact and shows that full face covering and extended down to neck. Product that
Nike purposely made to sell aim towards keep person warm in winter. It is basically a warm
wearer. But some critics said that company marketing pictures depicts a young black youth
model wearing a T-shirt and trouser holds a military special force that gives criminal affect of
gang inspired look.
As per this theory, it is essential for every person to improve their skills and knowledge
as per the specified task. This theory will help the chosen organisation in satisfying its short-term
or long term desires. In this regard, it is important for the chosen organisation to operate its
business operation ethically in a dynamic business environment.
Part 2
Qualities which are needed for being an ethical leader or manager who can manage ethical issues
of an organisation
To run a successful business one must have ethical leadership in their organisation.
Ethical leadership is that form of leadership which is led by respect towards ethical beliefs as
well as values and for rights and dignity of others (Lin, Abney and Bekey, 2014). Therefore, it is
linked with concepts like honesty, consideration, fairness, trust and charisma. Ethical leadership
need leaders to be ethical. Ethical leaders are usually individuals who are people oriented and
have understanding of ways their decisions have influenced others. Thus they utilise their
authority and power in order to serve greater good rather than serving self-interests. There is
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various characteristic which are required by ethical leaders. These characteristics are being
mentioned below. Justice: A leader should be just and fair. Through this, I can be fair towards my
employees and will not take bias decisions. By being just towards my followers will help
me in increasing their dependency towards me and my decision. This will assist in
ensuring that my subordinates are satisfied and happy with my leadership and consider
me as an idol while carrying out their work. Also, this will create an atmosphere where
there is no partiality towards anyone on any basis. Respect others: It is an important quality of ethical leader. Through this I can respect my
followers by carefully listening to their ideas as well as grievances, appreciate their
contributions and be polite to them. This will ensure that my subordinates develop a
sense of belonging towards me and the team and work in a more effective and efficient
manner so that organisational goals and objectives can be achieved in a timely manner.
Further, this will reflect that they will abide by what I ask of them and work in a manner
that is desirable and effective.
 Honesty: This skill is must in me because it will help to earn trust of my followers. They
will also get committed to me as well as organisation. This helps in entailing an
integrated and trustworthy team which follows the footprints of their leader and operate
in a manner that is desirable to ensure timely realisation of goals and objectives of
enterprise.
Here there are various conditions in which an organisation feel a need of ethical leader.
To become an ethical leader I should make sure that organisation effectively carry ethical
practices (Pearson, 2017). I also have responsibility of motivating and encouraging followers in
order to do tasks, complete targets on time and behave in a manner which is required by an
organisation. Moreover I need to encourage processes, motivate in case of positive change and
attitudes of followers and enlarge empowerment in their followers. By possessing such qualities I
can become an effective ethical which will also help me in protecting organisation against
malpractices and fraud. It will also help me increasing productivity and profits of organisation.
Moreover by increasing my knowledge and skills related to ethics I can do my work in a proper
and systematic way which will lead to efficiency in my work to achieve organisational goals and
to direct my followers.
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Whereas when I m not able to follow ethical process I can possess destructive leadership
qualities which is a type of worst leaders. As it may lead to ineffective performance of my
employees and can create conflicts among them. I may also pressurise decisions of my mangers
and followers to produce good results for organisation. In case of such situations I need to take
some decisions which will help me to go against my opinion and create a harmonious within an
organisation. Moreover this type of behaviour of mine will also affect my subordinates. It will
create an insecurity among followers related to their jobs and also demotivate them while
achieving goals and objectives of organisation. I may also harass employees and this will lead to
inefficiency of workers performance for achieving goals and objectives. This will also create
confusion between me and my roles as well as responsibilities within a workplace.
In order to develop myself as a ethical leader I must give chances to individuals to
interact with each other and discuss subjects which are related to values and ethics in order to
make them analyse the ways their decisions can fit with an organisations adopted mission and
values. By giving any direction to my employees I should think of it advantages and
disadvantages as well. I should understand various concepts and subject of ethics which will help
me to become an ethical leaders so that I can be aware of what is right and wrong for me.
Through this I can reduce or resolves ethical issues within a workplace. There are certain skills
which can be possessed that will help me to develop as an ethical leader within an organisation.
These skills are being discussed below.
 Define organisational structure: Being a leader, I must give an example related to ethical
leadership. Since each company sets some responsibilities and manner for employees,
therefore in context to this I should give same information to followers as well as
members of teams. It would be helpful in providing knowledge to workers regarding
importance of ethical behaviour during working within an organisation.
 Know personal values: Ethical leaders are one who analyse personal values and follow
them so that they can increase ethical standards.
 Effective communication skills: In order to encourage employees to achieve goals in a
ethical manner it is necessary for a leader to inculcate effective communication skills. By
the help of communication skills I can encourage my followers to work in a ethical way
in order to achieve organisational goals and increase productivity.
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CONCLUSION
From the above mentioned report, it has been concluded that ethical practises will help a
business entity in operating its business activities smoothly. Along with this, there are certain
theories which will help an organisation in improving brand image in a competitive business
environment. In addition to this, it is also important to identify market situation before promoting
their products and services in a business market. On the other hand, it is also important for
people to see both sides of a story and do not create irrelevant issues. In this report, there are
also some key ethical factors which should be undertaken by a business entity in order to operate
their business activities ethically.
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REFERENCES
Books and Journals
Bonnefon, J. F., Shariff, A. and Rahwan, I., 2016. The social dilemma of autonomous
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Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
DeKeyser Ganz, F. and Berkovitz, K., 2012. Surgical nurses’ perceptions of ethical dilemmas,
moral distress and quality of care. Journal of advanced nursing. 68(7). pp.1516-1525.
Dion, M., 2012. Are ethical theories relevant for ethical leadership?. Leadership & Organization
Development Journal, 33(1). pp.4-24.
Eisenbeiss, S. A., 2012. Re-thinking ethical leadership: An interdisciplinary integrative
approach. The Leadership Quarterly, 23(5), pp.791-808.
Goodall, N. J., 2014. Machine ethics and automated vehicles. In Road vehicle automation (pp.
93-102). Springer, Cham.
Hassan, S., Wright, B. E. and Yukl, G., 2014. Does ethical leadership matter in government?
Effects on organizational commitment, absenteeism, and willingness to report ethical
problems. Public Administration Review. 74(3). pp.333-343.
Lin, P., Abney, K. and Bekey, G. A., 2014. Robot ethics: the ethical and social implications of
robotics. The MIT Press.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Schaubroeck, J. M. and et. al., 2012. Embedding ethical leadership within and across
organization levels. Academy of Management Journa .55(5). pp.1053-1078.
Trevino, L. K. and Nelson, K. A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Yukl, G. and et. al., 2013. An improved measure of ethical leadership. Journal of leadership &
organizational studies. 20(1). pp.38-48.
Online
Business Ethics. 2018. [Online]. Available through:
<https://www.investopedia.com/terms/b/business-ethics.asp>.
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