Unethical Behavior of Nike in Indonesia

Running head: PRINCIPLES OF MANAGEMENT
Principles of Management
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1PRINCIPLES OF MANAGEMENT
Issues
Nike Inc. was established in the year 1969 and has been one of the leading brands of
sportswear. They design and manufacture athletic apparel, footwear, accessories as well as
equipment. It has many manufacturing units all over the world including North America,
China, Europe and India. Indonesia produces the majority of the Nike products. Here, the
workers in the Nike factory receive dismal salary that only supports two meals a day after
allocating all the other expenses (LeBaron, 2013). This has created widespread resentment
and dissatisfaction among the employees. This unethical behavior of Nike can be explained
with the concepts of Utilitarianism. Despite discussions and debates they are yet to increase
their salary and living standards in Indonesia and thus this matter remains unethical and a
utilitarian approach of Nike.
Evaluation
This unethical stance of Nike can be explained through the concepts of Utilitarianism. It is a
moral theory that asserts the decision of right and wrong on the ground of its outcome.
According to this theory, if the outcome of any decision is profitable then, it must be right.
Nike in this case followed the same principle. They probably saw a better prospect at
maintaining the production of their products from Indonesian factories as it incurs low cost
thus increasing their profitability. This kind of inadequate pay creates both internal and
external problem for Nike. Nike pays the Indonesian workers a sum of 325,000 Rp which
culminates to $37 (Monshipouri, Welch & Kennedy, 2017). After meeting the fixed expenses
and necessities, it leaves about 7000 Rp which is only adequate for two meals in the country.