Ethical Implications of Nike Balaclava Product: A Case Study Report

This report examines the ethical dilemmas faced by Nike following the launch of its balaclava product. The assessment includes a case study analyzing the nature of the ethical issues arising from the product's misuse and the impact on stakeholders such as customers, employees, and shareholders. The report explores the implications of right-based and duty-based ethical theories in the context of the situation, offering insights into ethical decision-making. Furthermore, the report incorporates reflective writing using Gibb's reflective model to outline learning over ethical qualities of leaders and managers. Recommendations for the company are provided to mitigate the negative impact of the ethical issues and improve brand reputation. The report highlights the importance of ethical considerations in business practices and the need for responsible marketing strategies.

NIKE

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1 CASE STUDY...................................................................................................................1
a) Report .....................................................................................................................................1
b) Implications of ethical theories .............................................................................................3
PART 2 REFLECTIVE WRITING.................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Nike is American multinational corporation which is focused on manufacturing,
designing, developing sports foot wear, equipment, apparel, accessories and other services. The
company launched trendy Balaclava on 12th July at 69 pounds which became disastrous for the
business because it led to ethical dilemma where it was used by Youth black leaders of gang
violence. The study will outline report of middle manager to senior manager which will comprise
ethical issue raised from the situation and its impact on key stakeholders such as customers,
media, government, shareholders, etc. Apart from this assessment will make use of Gibb's
reflective model to outline learning over ethical qualities of leaders and manager which play vital
role in managing ethical and responsible practices of business.
PART 1 CASE STUDY
a) Report
Nature of ethical issue and role of business in society
This report includes various ethical problem which are lead due to balaclava product
produced by Nike. This product was produced by Nike to cover the face which is used by black
youths involved in gang violence. This report is made to provide information to senior manager
regarding the problem to in order to reduce the negative publicity of balaclava. Balaclava was
produced by Nike to be used in winters to feel warm. The use of balaclava is a ethical problem as
it leads to reduced in its brand image in the society which affected its profitability to the great
extent. Organisation to improve its brand image in the society relating to its misleading
advertisement which has provided negative impact of the business on the society.
This ethical problem affect Nike business as the competitors will gain more customers
due to reduce in the brand image of Nike. For example, balaclava misleading advertisement has
provided competitors with a competitive advantage to increase their profitability and
productivity by increasing their brand image(Trump and Newman, 2017). This report is
prepared as a middle manager of Nike to its senior manager top address the problem which has
affected the profitability of the business. Due to its uses by black youth the product sale is
reduced as the customers are not purchasing this product.
Nike in order to remove h ethical problem relating to balaclava must provide
advertisement relating to its proper use in order to provide understanding to society relating to
the product uses. The organisation is facing serious problem due to the negative impact of
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society on the product produced by Nike sue to the misuse of these products for wrong purposes.
This ethical problem has caused a great reducing its customers and also on the stakeholders of
the company. Misleading advertisement is the main reason for the misuse of the balaclava for the
wrong purpose that has lead to ethical problem.
Key stakeholders and impact on them of the ethical issue and benefits and limitation of ethical
choice with the help of example
The key stakeholders of the Nike include its shareholders, employees, management,
customers, suppliers etc. this problem of Misuse of balaclava by the black youth has caused a
negative impact on its customers, shareholders, employees , suppliers etc. Employee turnover has
been increased due to the ethical problem faced by the organisation which has caused a negative
impact on its employees and they are leaving the organisation as they feel the firm is working for
terrorist. Due to this problem faced by Nike the investors for Nike want their money back due to
its negative image in the external environment.
Government is taking strict action against Nike for producing products which are helpful
to terrorist. Also, this problem has affected its customers due to which its number of customers
has reduced which is leading to reduced in its profitability in the industry (Cooper And et.al.,
2015) ). Nike in order to reduce the negative impact of balaclava advertising in the mind of
society. Nike must provide its various stakeholders about the actual use of balaclava to reduce its
negative impact and clarify their doubts regarding misuse of balaclava by the black youths.
Ethical issue relating to balaclava produced by Nike has affected its stakeholders due to
which Nike has reduced its numbers of investors and also the investors want their money back
this problem has affected the business at large . Nike can make various decision to reduce the
negative brand image (Burton and Bradish, 2018). Nike in order to solve this problem either
must provide advertising by defining its actual used through use of various promotional tools
such as advertising in newspaper, magazines etc. also Nike can provide information through the
use of various social sites such as Instagram ,Facebook etc.
Nike can make choices which will provide customers with proper uses of balaclava.
Ethical choice will assist in improving business profitability and publicity. For example, Nike
can make use of various promotional tools to provide customers with right uses of balaclava .
Ethical decision – making assist in increasing the profitability of the organisation by making the
right decision for the improving its brand image.
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Nike in order to gain its profitability must stop the production of balaclava to make the
people understand that it is [providing products for them and not for the black youths by creating
their positive brand image in the mind of customers. Ethical choices have various benefits which
include increase revenue, improved brand image , improve employee motivation etc. but it also
provides disadvantages such as higher cost in making advertising etc.
Nike is providing its employees higher wages to retain them in business and also it has
reduced its various product price to attract customers towards the brand to provide them high
quality products to reduce the negative impact caused by the misleading advertisement of
balaclava.
Recommendation for company emerging for analysis
Nike in order to reduce the negative impact of the advertisement of balaclava should make
proper understanding to the society by providing them information relating to the right use of
that product. Nike should provide society with an understanding of their objectives regarding that
product to increase their efficiency(Newman and Trump, 2017). Nike also can create a new
product which will be beneficial for the customers to increase its brand image and profitability in
the market. Nike should provide its employees with higher wages to retain them in business.
Nike should formulate various strategies and planning to reduce its ethical issues by making and
ethical decision – making. Nike should provide its employees with better service quality in order
to retain its customers. The organisation should provide the balaclava to different customers free
of cost to increase its brand image in the market. Nike in order to reduce the negative impact of
balaclava should produce its other product by using high quality inputs to attract more customers
towards the brand. It should also create positive impact by increasing its online presence to make
clarification regarding the balaclava product to the people at large.
b) Implications of ethical theories
Right based ethical theory
This theory provided with an understanding of the right of individuals and society.
According to this theory, The rights are considered to be ethically correct the business must
ensure that the rights of the individual are protected. Ethics involves recommending, defending
concept of right or wrong(Kirchschlaeger, 2017). Right based theory is based upon the ethics.
This theory includes positive and negative rights of the individual or group. Positive right is
related to freedom of one choice to do something whereas negative right is related to freedom of
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speech and privacy. Right based theory include the right of life, the right to pursue happiness,
the right to work, the right to express ideas and opinions, the right to be treated equally.
Negative right imposes negative duties and positive right impose duties which provide
assistance. Natural right under right based theory include rights of humanity which are also
known as moral rights(Kim, Colicchia and Menachof, 2016). Conventional rights which are
included in right – based theory are created by the humans relating to social and political
organisation. Examples of right based theory include the right of health care which is a positive
right and are required to provide products and services by others. Torture is the conventional
right which is not acceptable in any country or government.
Nike must imply right – based theory in order to give priority to the rights of society. The
right – based theory is applied to Nike to make understanding of the rights of people in order to
gain their trust and loyalty(Arnold and Ducate, 2015). Nike in order to reduce the ethical
problem face by the company must give priority yo the rights of the people to reduce the
negative impact of the issue. Right – based theory of ethical theories provide that the
organisation must provide right to freedom of choice to customers in order to provide them
choices on the basis of their decision (Burton and Bradish, 2018). Positive rights in right based
theory are implied in Nike to perform various duties to provide them various products and
services.
Negative right imposes negative duties on the organisation in which others people are not
allowed. This negative right is implicated on the society to make decision for profitability of the
firm . Natural right in right based theory is implied on Nike and these rights are already present
in the society such as right to liberty (Achabou and Dekhili, 2015). There are various other
rights which are made by humans such as conventional rights which have a great influence on
the Nike business. This Right include torture etc. It the organisation is torturing the customer
than action is taken on the basis of this rights by the government.
Right based theory is implied to Nike in order to make the decision by understanding the
rights of society to make ethical decision which are right for the organisation and society. Nike
in order to reduce the negative impact of balaclava on the society must remove that products
from its product line to increase its brand image in society.
Duty based ethical theory
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Implication of ethical theory is the best for the middle manager to determine loopholes of
advertisement which led to controversy with the launch and marketing. As per duty based ethical
theory it is articulated that act of Nike was not wrong on the part of organization because it
depends on person to person how the individual act to certain situation. The Balaclava launch
was with the purpose protecting individual from direct sun light when traveling on two Wheeler.
Further, the designing was done to cover every uncover part of faced when traveling. The launch
was with no negative purpose but as duty based ethical theory it can be stated that Balaclava was
for ethical use of people but it depends on morals of human beings who own unique capacity for
rationality.
As per duty based theory it can be said that some acts are right or wrong because of the
sorts of things they are, and people have a duty to act accordingly, regardless of the good or bad
consequences of certain situation. The theory is known as deontological ethics which focuses
on four aspects that is doing right thing, do right thing because it is the only right thing, avoid
doing wrong things and do not involve in wrong things because they are wrong (About duty-
based ethics, 2014). The theory is based on simple moral rules but still can be argued by people
following wrong morals like Killing innocent people is wrong thing but if asked to murdered it
can be right as per killer rationale. Therefore, it can be said that duty justified every act
regardless of right and wrong.
Duty based ethical theory can be implied to case of Nike because int his launch and
advertisement of organization was not wrong as it was deigned for specific need of people but it
is misused by people according to their moral, rationale and motive. Therefore, it is important for
the people to understand use of product according to own morals. The theory is effective for
justifying ethical issue raised for Nike because it emphasizes on value of every human being.
Further, as per this theory some facts and acts are always wrong regardless of situation and
therefore the company discarded action of young black gang leaders who created violence.
PART 2 REFLECTIVE WRITING
Description
This play a crucial role for the individuals as it helps the person ins deriving difference
between right and wrong of the situation. The judgment over right and wrong of the situation
depends on person beliefs, values, learning and morals. The reflection will outline qualities of
ethical leader and manager which helps in making ethical organization. The writing will also
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outline views of different authors which will help in developing critical understanding the
importance of topic.
Personal feeling
In my opinion ethical leadership and management plays critical role in aligning
employees and organizational activities in one direction. It is based on individual point of view
of managing workforce. I feel it is necessary of the company to have ethical leader because the
person is responsible for coordinating staff members. Leader is the person who depict road map
which is followed by employee. There, in my opinion it is important for the leader o organization
to have clear understanding over right and wrong of decision in order to make staff members
perform ethically. On the other hand, I feel manager is a person who is responsible for planning
and controlling work of employees which implies that motivation of workers depends on
management and that is why it is necessary for the manager of organization to have ethical
qualities of managing.
Evaluation
In accordance with my learning over ethical qualities of leaders and managers I feel it is
basic thing in the organization which helps the business in managing ethically responsible
business practices. These are the responsibilities and way of working which presents value of
value in front of its key stakeholders. According to Johnson, 2017, it is articulates that qualities
of ethical leader comprise, justice which can be related to equal distribution of work among team
members. Further, ethical leaders are humane and honest which is the core characteristic that
assist the person in team building and making employee works in en common direction with
shared beliefs and perspective. However, as per the views of Schwepker, 2018, it is outlines that
ethical leaders and managers are guiding light of the business and helps the company in
managing honorable business performance. On the basis of this study I evaluated that there are
three characteristics if ethical behaviors of leaders and managers which comprise consistent in
which it is important for the leading ad managing person to incorporate use of ethical and good
values which provides fair and equal treatment to all employees. It is based of managing
successful equality and diversity at workplace. Further, I analyzed the importance of respect
which is basic need of stakeholders in which focus of leaders and managers is on being honest
and fair at workplace. It is the quality which supports growth and positive attitude of individuals
towards organizational growth and development. Likewise, I learned about honesty as ethical
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quality among leader and manager which helps the individuals in spotting equality, effective
communication, dignity and diversity at workplace.
As per the views of Crosby and Bryson, 2018, I learned about value driven decision
making which helps the organization in making justified polices and practices at workplace.
From review of different literature I explored the need of ethical organization which assist in
gaining trust of all key stakeholders. Further, ethics are essential part of organization because it
assists the business in gaining trust and loyalty stakeholders. As per the views of Jin, Meng and
Berger, 2017, it is identified that implying use of corporate social responsibility and ethical
business practices helps leaders and managers in corporate continuous improvement in
motivation and in working practices of an enterprise.
Conclusion
In accordance with entire evaluated I learned about three common ethical qualities of
leaders and manager that is consistency, honesty and respect. These are the cores practices which
needs to be incorporated by leading and managing person in order to manage stakeholder
satisfaction. The reflection concluded by outlining the need and importance of socially
responsible practices of organization which helps the business in performing ethically.
Action Plan
In accordance with learning it is clear that it is important for the leader and manager of
organization need be ethical coordinating ad cooperating employee activities. Therefore, with
regard to this my focus on future will be on becoming ethical person where I will imply my
person ethical qualities when working with two or ore people. This will assist me in managing
coordination with other people and will assist in managing safe and ethical practices of personal
and professional life.
CONCLUSION
The assessment summarized by stating about Nike which is multinational American
corporation who develops, manufacturers and design sportswear product. The company own
global reach and has various types of consumers. The study outlined ethical issue arise in
advertising of companies new launch that is Balaclawa which was misused by Black youth for
gang violence. The part 1 of study outline report of middle manager to seniors manager by
outlining ethical implication and issues which impacted stakeholders' satisfaction. Thus, it
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concluded by reflective writing which is based on individuals learning over ethical qualities of
leader and managers which are necessary for ethical organizational performance.
REFERENCES
Books and Journals
Achabou, M.A. and Dekhili, S., 2015. Constraints and drivers of growth in the ethical fashion
sector: the case of France. In Sustainable Fashion Supply Chain Management. (pp.
167-181). Springer. Cham.
Arnold, N. and Ducate, L., 2015. Contextualized views of practices and competencies in CALL
teacher education research. Language Learning and Technology.
Burton, N. and Bradish, C., 2018. Discursive Power in Commercial-Rights Management:
Examining the Origins of Ethical Framing of Ambush Marketing. International
Journal of Sport Communication. 20(XX). pp.1-19.
Cooper, R.W. And et.al., 2015. Ethical Issues for Supply Managers: Then and Now?. Journal of
Business and Behavioral Sciences. 27(1). p.54.
Kim, S., Colicchia, C. and Menachof, D., 2016. Ethical sourcing: An analysis of the literature
and implications for future research. Journal of Business Ethics. pp.1-20.
Kirchschlaeger, P.G., 2017. Sports and Human Rights from an Ethical Perspective: The
Relevance of Human Rights for Sports. In Defending Human Rights and Democracy in
the Era of Globalization. (pp. 337-360). IGI Global.
Newman, K.P. and Trump, R.K., 2017. When are Consumers Motivated to Connect with Ethical
Brands? The Roles of Guilt and Moral Identity Importance. Psychology &
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Trump, R.K. and Newman, K.P., 2017. When do unethical brand perceptions spill over to
competitors?. Marketing Letters. 28(2). pp.219-230.
Johnson, C.E., 2017. Meeting the ethical challenges of leadership: Casting light or shadow. Sage
Publications.
Schwepker, C.H., 2018. Strengthening Customer Value Development and Ethical Intent in the
Salesforce: The Influence of Ethical Values Person–Organization Fit and Trust in
Manager. Journal of Business Ethics. pp.1-13.
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Crosby, B.C. and Bryson, J.M., 2018. Why leadership of public leadership research matters: and
what to do about it. Public Management Review. 20(9). pp.1265-1286.
Jin, Y., Meng, J. and Berger, B., 2017. The Influence of Communication Leadership Qualities on
Effective Crisis Preparedness Strategy Implementation: Insights from a Global
Study. Communication Management Review. 2(01). pp.8-29.
Online
About duty-based ethics. 2014. [Online]. Available through:
<http://www.bbc.co.uk/ethics/introduction/duty_1.shtml>.
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