CSR Activities and Issue Management at Nike Corporation

This study on Nike Corporation has been undertaken to analyse the CSR activities undertaken by the firm and to understand how those actions affect the firm’s reputation and brand name. The study analyses the CSR issue management undertaken by the firm in order to understand the real value of the concept and the role that it plays within the firm.

CORPORATE COMMUNIATION
NIKE CORPORATION

Executive Summary
Nike is a firm, which functions majorly within footwear sector. This organization
designs, develops and then delivers athletic apparel, equipment, footwear and other
accessories as well. Firm’s CEO is Mr. Philip Knight. This study on Nike Corporation
has been undertaken to analyse the CSR activities undertaken by the firm and to
understand how those actions affect the firm’s reputation and brand name. The study
analyses the CSR issue management undertaken by the firm in order to understand the
real value of the concept and the role that it plays within the firm.
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Table of Contents
1. Introduction…………………………………………………………………………….4
2. Theory: integrating CSR and issue management…………………………………........4
2.1 Corporate social responsibility………………………………………………...4
2.2 Issues management…………………………………………………………….5
3. The role of CSR within Nike…………………………………...…………………........6
3.1 CSR practices undertaken at Nike…………………………………………......6
3.2 Communication activities……………………………………………………..7
3.3 Affects of CSR on Nike’s reputation and brand……………………………….8
4. The role of CSR issue management within Nike
4.1 CSR issues………………………………………………………......................9
4.2 Nike’s relations with Media……………………………………………….......9
4.3 Affect of CSR issue management on Nike’s reputation…………………........9
5. Consistency of Nike’s corporate communication message…………………………...10
6. Overall evaluation of Nike’s communication…………………………………………11
6.1 Suggestions and Recommendation…………………………………………...12
7. Conclusion…………………………………………………………………………….12
8. References…………………………………………………………………………….14
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1. Introduction–
Nike Corporation is an American multinational corporation involved in the process of
designing, developing, manufacturing as well as marketing and sales of footwear, sports
equipment, and accessories for sports, clothing and products for athletic market
throughout the world. Nike is considered as biggest seller of such products throughout the
globe. It sells somewhat 19000 retail accounts in US and within 140 nations
internationally. The firm was established on 25th January 1964 named as Blue Ribbon
Sports, by Phil Knight and Bill Bowerman and formally known as Nike Inc. on 30th May
1971. Nike acquired many clothing and footwear firms with passing time. The firm
believes that innovation refers to elevation of entire human potential. The firm fascinates
the requirements of best athletes from the world and uses their insights to make products
that are beautiful as well as valuable for everyone. At Nike every single individual is an
explorer. The firm brings together varied views and ideas of scientists as well as
designers of shoe and also coders and aims to produce a well-accepted product.
2. Theory: Integrating CSR and Issues Management -
2.1 Corporate social responsibility- it has two meanings. First, it is common name for
any theory of the firm that emphasizes on liability to make money as well as on
responsibility of the firm to interact with the community in an ethical manner. Secondly,
CSR is even a detailed idea of that responsibility towards profit whilst playing a vital role
in wider queries of welfare of the community (Alexander & Sinnett, 2005).
a) Theories of corporate social responsibility
Stakeholder theory- This theory was given by Ian Mitroff. It is based on organizational
management as well as ethics of the business and addresses morals plus values intended
towards managing firms. It actually explains about such people and group who get
affected by firm’s activities. In brief, this theory assures that those people, whose lives
get affected or are touched by a business, carry a right to take part in directing the same
("Read Nike's Mission Statement and find information about NIKE, Inc. innovation,
sustainability, community impact and more", 2018)
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.
Business ethics theory- this theory is on the basis of broader social obligation
and general duties that a firm has to undertake for the benefits of the society. It
justifies CSR on some grounds mentioned below:
a) Varying as well as evolving proper social responsiveness plus some
social expectations towards specific problems within the society.
b) Intrinsic or eternal ethical values stirred by Kantian ethics as well as
represented as few normative plus universal principles such as
fairness, social justice and human rights.
c) Corporate citizenship, which considers firms as better citizen within
the society, that contributes towards social wellbeing.
The shareholder value theory - this theory was given by Milton Friedman. He says that
there exist a single social responsibility of a business which refers to use of the resources
with an aim to get involved in actions designed towards enhancing firm’s profitability so
long that it stays within rules of game, which means that firm gets involved in open
competition, without any fraud. Concept of this theory is all about managers chiefly
having an obligation towards maximizing shareholder’s benefits ("Things Hardly Anyone
Knows About Nike", 2018).
2.2 Issues management- It is a preventive, procedure of strategic management, which
helps an organization to detect and later respond appropriately to emerging changes as
well as challenges within the society. Such alterations and trends might later result in a
problem for the firm and create a big “issue,” which would be a situation to attract
attention plus anxiety within the firm as well as stakeholders. Prior management and
avoidance of such issues can be a step towards building, carrying, maintaining as well as
repairing of a good and healthy relationship with stakeholders of the firm (Argenti,
2017).
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Theory of issue management – As there exist several models for issue management
within a firm, most of them say that the entire process of issue management involves five
major steps and they are
a) Issue identification
b) Issue analysis
c) Strategic process of decision making
d) Taking the action
e) Evaluation
Issue management and corporate social responsibility- Issue management being an
attempt towards defining tactics, which a firm needs to follow, lays down the basic
ground for CSR. Issue management actually handles situations in a way, which makes it
easy for the firms to understand what to do, how to do, when to do and for whom to do.
This later helps the firm carry its CSR process smoothly and with good results. Issue
management helps a firm to deal with its critics thereby making it easy for firm to work
by creating a peaceful and healthy ecology all around. CSR involves all actions
undertaken by the firm with an aim to abide by its duties and responsibilities towards the
society and while undertaking such actions, the firm needs to ensure that no hurdle takes
place and the firm delivers what the environment demands and society wants. Here,
comes the role of issue management (Corporate communication, 2013).
3. Role of CSR for Nike Corporation
3.1 CSR practices undertaken at Nike–
– Nike keeps its labors and their opinion at priority. Apart from innovating worker’s
role, this brand even has emphasized upon involving novel technology in its
supply chain.
– The firm is worried regarding the carbon footprint and thus has constantly worked
on reducing them through investing within innovative goods & functions
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– Nike already carries a code of conduct for all its suppliers. The firm only
maintains relations with suppliers who are focused more as compared to just
compliance (Droese, 2015).
– Technologies such as Flyknit and Pegasus have also helped the firm control its
carbon emission.
– Most Majority of ecological impact of Nike shoes is emerged from its materials
used. This brand emphasizes on creating materials that have lower affect on
environment.
– The brand is moreover trying its best innovate so much that waste materials could
be reused towards creating value as well as the designers of the firm have already
accumulated a palette of some 29 higher performance material gathered from
brand’s waste.
– Regarding staff welfare, Nike focuses vastly upon building a cooperative culture
as well as comprehensive workforce, which would help the firm, maximize its
efficiency plus impact (Goodman, 2009).
3.2 Communication activities-
Nike being a well-known brand communicates its progress and developments to all its
stakeholders, through its website, backgrounders, electronic newsletters that are
published quarterly. Firm even publishes its annual reports as well as a specific report
named “CSR report” and also “community investment report” to convey its actions to its
stakeholders. Nike has a commitment towards its society as well as its stakeholders and
firm understands it well. The firm’s pledge towards Global compact is revealed through
the firm’s website as well as in some specific backgrounders plus also within the firm’s
CSR report. This business even engages its stakeholders straightforwardly through one-
to-one meetings and some other types of collaborations (Harjoto, 2017).
3.3 Affects of CSR on Nike’s reputation and brand-
It was some 20 years back that buyers protested outside the stores of brand and casted
Nike as a villain between sweatshop allegations and child labour crimes. It is thus
difficult to believe how the actions and plans under CSR activities of the firm has helped
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it attain back its status and name and fame within just 10years. The firm that faced public
backstabs and boycotts throughout in the 1990s is now a well reputed firm and the credit
goes all to CSR actions undertaken by the firm. “Transforming the firm like this took
time was actually considered a long-run commitment.” CSR now is involved in each and
every facet of this firm, starting from how the firm designs and makes its goods till the
way in which it engages its staffs plus several other firms and helpers in its value chain
(Harris & Bryant, 1986).
4. Role of CSR issue management for Nike
Nike thorough use of CSR issue management shows its strong commitment towards
improving life’s quality of people within the society in which the firm functions. Also,
CSR issue management helps the firm constantly investigate about new technologies as
well as novel tools and techniques for waste renewal or reuse in order as to minimalize
the firm’s environmental emission. CSR issue management also helps Nike to invest in
good quality and more effective materials as well as methods of production that decreases
the amount of waste plus enhances firm’s efficiency (May, Cheney & Roper, 2007).
Because the firm in past has faced many criticism regarding several issues use of CSR
issue management ensures that Nike remains away from controversies and comes up as a
good and well known as well as socially responsible brand. CSR issue management has
helped Nike a lot towards managing its reputation as well as has even reduced its bad
impact upon ecology. Instead of working towards avoiding merely the well-known risks,
the firm along with its CSR issue management activities works towards understanding
actual place where the risks as well as opportunities might evolve and also the it required
to address those risks and chances plus enabling novel types of innovation within the
business (Onkila, 2013).
4.1 CSR issues-
a) Poor Working Conditions –
b) Low Wages
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c) Child Labor
d) Expensive Endorsements
e) Expensive Products
f) Lack of Development Work at Factory Locations Health Hazards in Factories
(Ott, 2017).
4.2 Nike’s relations with Media -
Media is a major part of society and has played vital role in Nike’s bad reputation. Firm
lacks the capability towards building good relation with the media and this has been its
major drawback. Michael Moore criticized Nike for subcontracting the jobs in lower cost
areas. As a result, Phil Knight had to go for a faceoff with Moore where he justified his
form of carrying the firm. This interview amid Moore and firm’s chairperson got
presented in a film by Moore named “The big one” where Phil Knight was shown
mentioning in his talk that the firm doesn’t upkeeps about a 14year old working within
firm’s sweatshops. This obviously indulged the firm in a big trouble and in evil light.
This can be seen as a big instance of how bad was Nike in managing its relations with
media, which resulted in firm’s negative publicity (Sherman, 2005).
4.3 Affect of CSR issue management on Nike’s reputation
Area of CSR issue management came in the firm like a tool that helped the firm build as
well as maintain a good social as well as business reputation plus fame and also has
ensured safeguarding the firm against any time of reputational harm or damage. Nike
having an extraordinary CSR program has been able to start a journey of earning good
name and fame within the society because of emergence of human rights and several
ecological disasters. It has become easy for the firm with use of CSR issue management
to be properly answerable to activists and media against any claim or blames. This tool
has been supreme powerful incentive for the firm towards its attempt of showcasing a
properly institutionalized and decent behavior towards society (Simonsen, 2009).
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5. Consistency of company corporate communication messages
The firm believes that building as well as refining the listening skills is actually major
part of its success. Because the firm has faced many criticisms due to decisions it made
for manufacturing, it fought and came out as a hero out of all. Nike communicates
through all possible channels and maintains a proper consistency in its messages. Firm’s
strategy for communication involves branding, via which Nike properly and smoothly
communicates all its messages and directions as well as aims to all its staffs (Trong Tuan,
2012). Nike has also recognized its post and position amongst its potential customers and
general population. Contract staffs working for Nike have set policies pertaining to them.
Staffs at Nike can straightforwardly report to the locations or also to the regional manager
of human resource and in return the manager reports to senior global headquarters. Nike
also has facilities of newsletter periodically that mentions achievements of the firm
regarding innovation, new attainments, sales, community development or tributes
received. On a website named “nikeresponsibility.com,” the firm addresses problems as
well as initiatives regarding the workers plus contract factories making Nike goods
environmentally sustainable. Nike uses proper mix of promotional tools and marketing
communication mix for delivering message and communicate to target buyers in
international sports apparel, footwear and accessory industry. Nike is a very good
example of organization that uses several types of tools for communication in promotion
tasks. The firm delivers consistent message through all its channels (Visser, 2012).
Nike’s communication mix of marketing is effortlessly visible within the industry and
market, in the method of advertisements plus other actions. Nike’s success lays emphasis
upon advantages of effectual communications of marketing. The firm involves its
stakeholders straightforwardly via one-to-one meeting and several other types of
collaboration. The firm vigorously communicates with all its stakeholders as well as
encourages them to give feedback. This business involves its stakeholders via several
forums as well as firms. Amongst several protuberant ones existed Global compact.
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Additionally, the Global compact, this serves as major member of the firm’s social
responsibility (Yoo & Lee, 2018).
6. Overall evaluation of communication-
To make sure that its approach is smooth and sound; it works with Ceres to convene and
exterior stakeholder panel as well as carries several dialogues to guide development of
the firm. Ceres is a properly sustainable non for profit firm working with several
investors as well as firms to handle the globe’s largest sustainability challenges,
involving changes in climate, pollution, water scarcity, and also abuses of human rights.
Nike has also worked with this organization on several diverse sustainability tasks and
projects since 1990 (Feingold, 1987). Nike has distributed a draft of financial year
2012/2013 sustainable business performance summaries via forum and chosen experts are
given opportunity to review the same (Abrahams, 2015). The forum consolidates the
feedback synthesizes it to themes as well as is areas and then presents it to the
stakeholders during workshops arranged at Nike world headquarters. These workshops
also permit all participants available they’re to engage themselves straight within Nike
and to give there reverts via reporting, changes in the system as well as innovations, if
any. Feedback provided remains consolidated (Khan & Lund-Thomsen, 2011).
The strategy for communication of the firm remains in line with the goods as well as
services it produces. The tactic also communicates to the customers as well as
stakeholders and also the entire also interior staffs its mission of firm and values for
which Nike stands for. Interior branding as well as communication amid staffs is very
imperative because communications to exterior customers as it is the staffs that build a
brand and then communicates the good and bad about the products as well as services to
buyers (MacLeod & Parkinson, 2006). Being a well-known multinational Nike has
amalgamated the values of sports such as perseverance as well as teamwork and ahs also
accepted them within the firm’s culture. Also Nike infuses emotions in its day-to-day
operative of staffs so that the firm remains modest and competitive with an aim to keep
the firm alive maintains the spirit of sportsmanship within its staffs and stakeholders.
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Therefore every staff in Nike could recognize himself/ herself as a part and parcel of
firm’s team, which is known as Nike Corporation. Organizational communications in
Nike are designed in way so that the firm and its stakeholders feel as a team of the firm
(Yoo & Lee, 2018).
6.1 Suggestions and Recommendation-
Nike must take care of the information it sends through several different channels of
communication like television, radio stations.
Every staff and stakeholder in the firm must obey its rules and must not give speech to
media without firm’s concern.
The firm must supervise whatever media transmits. Since there have been several
deviations, and the firm has faced problems, Nike must emphasize on this and take proper
care of what is communicated to staffs and further what they communicate to the media.
Nike must not hide any data or information from media, because when media finds out,
Nike might lose its relation with media. Thus the firm must provide same data and
information to each of its media agents similarly.
Spokesperson of the firm must get well prepared before any talk or interview.
Conclusion
Though Nike has been a well-known brand, it has yet faced several accusations of
engaging people within both developed as well as under-developed locations. The firm
has made people work at lower wage rates and also within poor working situations for a
substantial time period. Through constant efforts of building relations with media and
proper handling of issues, through use of CSR issue management Nike has been able to
overcome the hurdles and has gained back its reputation within the market. Regarding
staff welfare, Nike focuses vastly upon building a cooperative culture as well as
comprehensive workforce, which would help the firm, maximize its efficiency plus
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impact. To attain the impossible, firm needs to rethink its fundamentals. Nike does that
via sustainable innovation and its aim is to double its business, whilst cutting its
ecological impact in half. Nike for betterment needs to emphasize on its communication
strategy as the firm like any other company depends on its stakeholders for its success
and fame.
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