Ethical Issues and Organizational Culture: Nike in Vietnam Report

This report delves into the ethical challenges confronting Nike in its operations within Vietnam. It begins with an introduction to the growing significance of business ethics in a globalized market, highlighting the impact of ethical practices on a company's reputation and long-term sustainability. The report then provides an overview of the specific ethical issues Nike faces in Vietnam, particularly concerning employee wages, motivation, and working conditions. A PESTLE analysis is conducted, comparing the political, economic, social, technological, legal, and environmental factors between the USA and Vietnam to understand the external influences on Nike's operations. The importance of organizational culture for Nike is examined, especially focusing on how the company's culture impacts its response to ethical issues. The report analyzes these ethical issues in detail, including the impact of turnover rates, the need for innovation, and the importance of diversity. Finally, the report concludes with recommendations for Nike to improve its ethical practices and enhance its organizational culture within the context of its Vietnam operations.

SWEATSHOP : NIKE IN
VIETNAM

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
REPORT..........................................................................................................................................1
Overview of the ethical issue.......................................................................................................1
PESTLE Analysis........................................................................................................................2
Organisation culture importance for Nike..................................................................................4
Analysis of the ethical issues.......................................................................................................6
CONCLUSIONS AND RECOMMENDATIONS..........................................................................7
REFERENCES................................................................................................................................9

INTRODUTION
Business ethics is becoming most contentious issue of the business today. Due to
globalisation of the markets and the production processes multinational companies are facing
ethical issues in different countries in which they are operating. The reputation of company is
dependent over ethical practices which help the business in defining business models that could
flourish over the time even in adversities. In present business environment every company is in
wild race of acquiring greater profits by adopting to shortcut means. Society requires companies
to generate better paying jobs and protecting environment. There are organisations that desire to
earn higher profits by indulging in activities not tolerated by the society. Ethical issues have
significant influence over the multinational companies having overseas operations. The report
will analyse the ethical problems faced by Sweatshop: Nike in Vietnam. Report will cover
overview of the ethical issues faced by the organisation, PESTLE analysis of company between
two countries, organisational culture of company and the response to ethical issues implementing
new strategies improving the situation of company.
REPORT
Overview of the ethical issue
Nike is one of the biggest American multinational corporation company engaged in
producing and manufacturing various innovative sportswear and worldwide presence with new
scale marketing synergy and having wide range of sales in footwear, apparel and equipments
and services onto where there are various synergy developed onto higher parameters. The
company expansion in Vietnam is facing cases of business ethics where employee wages are
weakly structured with less factored importance developed onto their motivation levels and for
developing various analysis onto how determinants are used on for larger productive business
scenario within longer run market scenario, this ethical issue has been strongly impacting in
decline of working horizons and working productive development within new reflective
working hemisphere and there is also less focus on innovation and creative development which
is lacking new potentialities for diversification in activities which also lowers productive
development activities (Irias, 2019)This ethical issue has been widely reported to lose new
working ethics and platforms to bring on actions among Nike where goodwill and transparent
actions are lowered which lowers creativity within employees working operations factoring
lowered synergy and relative working advancement with pace of time. There are major case of
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turnover increase among nike which has lowered creativity and diversity fundamentals among
various levels and also in encompassing major factors of working extension which develops
larger functional horizons onto downward levels.
There is also rapid decline onto skill enhancement goals among employees at company
through which company is unable to deliver growth factored opportunities and for bringing on
keen synergy of factored growth which reduces actions and lowers functional marketing
productive factors for higher profits and new goodwill horizons. This factor also enables us to
analyse how much importance is being given to major development and to technical innovation
within company goals and for training employee further with innovation goals where very
limited focus has been given by company and also Vitenam company stores are unable to
deliver growth objectives among employees skill enhancement parameters and for working with
motivation and ideas to develop their work delivery duties. There has been various analysis
developed onto how new working scenario of high competitive factors is the new demand among
business and for gaining larger creative sectors development among metrics of company
progression, keenly leveraging higher success and long term progression onto wider levels. Nike
shall be actively also focus onto gaining onto analysis for gaining wider platforms for new
synergy of actions which will develop stronger working innovation and also innovatively
conduct larger working parameters of actions which will enhance long term goodwill. This
ethical issue has also made company employees strengths weak and making turnover rate
widely high among employees in company for resourcing onto new working scenario and for
actively reducing innovation. Nike has been also not focusing onto diversity factors among
business avenues and for factoring innovation where employees are unable to yield new research
goals for larger actions and to develop metrics which enhance new form of synergy onto
actions which refreshes actions and will also motivate employees further for gaining new
reflective actions (de Bakker, Rasche and Ponte, 2019)
PESTLE Analysis
Nike is American multinational organisation which is recognised for the designing
ability, manufacturing and sales footwear products, gym accessories and the sporting goods.
Nike despite of growing success is facing criticism due to unethical treatment of the employees
overseas and the impact on environment. PESTLE analysis is the method used for analysing and
monitoring macro environmental factors that are having profound impact over performance of
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organisation. Tool is useful for the business to identify the macro factors so that it could be met
in an efficient manner by the organisation.
PESTLE Analysis of Nike based on comparison between two countries ( USA and Vietnam)
Political Factor
Vietnam is socialist country that operates under leadership of Communist party. Nike does
not face increased regulations but have high political intervention in the business process. There
is high degree of corruption in Vietnam political environment. It has gone under political
restructuring for growth of country and for decentralisations. On the other USA is second largest
democracy of the world (PANDEY, 2017). The political environment of the country is stable.
Nike does not face major issues due to the political interventions in USA as it only requires
companies to complex with laws and regulations that are framed by the parties. Nike has to
remain active with regard to political environment in Vietnam as it has more frequent changes in
regulations as compare to USA.
Economic Factor
USA is largest economy of the world on basis of nominal GDP. It consists of the major
multinational companies that influence the economic environment. However it also faced
situations of recession in 2009 affecting economy. The economy of USA is strong and growing
that also helps NIKE in achieving considerable level of sales target due to purchasing power of
people. In comparison with USA, economy of the Vietnam is also growing at progressive rate of
8% that is attracting investors boosting the economy of country. The rapid development in the
country is enabling the NIKE to reach the sales targets. The county has low cost labour that
enables the NIKE to reduce its cost to considerable extent allowing it to earn higher profits (Han
and Trimi, 2017). Due to the cheap labour it has also faced criticism affecting brand image. It has
to provide the employees healthy and safer work environment where they are not exploited.
Social Factor
Nike in Vietnam has to give increased focus over the social concerns of the people as it is
culturally rich country. It has to ensure that the cultural sentiments of the people are not affected
due to acts of company as it could significant affects sales of company. Groups influence the
demand for products and services. While in USA company do not face cultural issues as the
people are free to follow their beliefs. The people of USA are health conscious and strive for
products that keep them healthy (Bhargav and et.al.,2019).. Most of the people go to gym that
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has increased the demand for the company products as compared with Vietnam. Sales are highly
influenced due to the socio culture in USA as people are highly active with regard to companies
that adopt CSR practices.
Technological Factor
Technological factor analyses the technical developments in the country and advancement
adopted by the companies for meeting the demand of customers. It lays significant impact over
the business. USA is highly developed country and NIKE is having advanced machineries and
equipments that produce products meeting demand of the customers designing new products
(Fashion Industry, 2019). On the other Vietnam is developing in terms of technology and NIKE
faces issues of power supply. Technological advancement attracts high number of customers in
Vietnam and is able to meet the demand of large number of customers in cost efficient manner.
Legal Factor
NIKE under legal factor has to comply with the rules and regulations of all the countries in
which it is operating. In Vietnam, company is required to comply with investment laws,
enterprise laws and other regional and global agreements. Complying with legal regulations in
Vietnam is challenge due to poor quality human resource under public services and high
corruption. While in USA it has to comply with various laws and regulations but that could be
met by following set procedure without issues over online sources (Bhargav and et.al.,2019).
Complying with rules and regulations in USA is not major challenge for Nike.
Environmental Factor
In Vietnam people are highly vigilant about the activities and operations of companies that
cause harm or damage to the environment. It has faced issues due to the environment
exploitation caused from the factories that required company to resolve the environmental issue
on immediate basis (PANDEY, 2017). Likewise environmental authorities in USA are highly
strict towards the companies that do not follow the environmental regulations associated with the
business conducted by them. NIKE undertakes various CSR projects every year for protection
and prevention of the environment.
Organisation culture importance for Nike
The Nike company is one of the most active and strongly developed brand with larger
products and services ranging from sportwear , smart accessories and has actively formed large
space within global business avenues for developing new goals and expanded scope among
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various countries where company has been actively indulging in new metrics formulation for
new innovation business procedures and for gaining stronger creativity within new working
horizons. There is also wide demand for factoring innovation and higher diversity among
actions which will yield onto new competitive growth factors, keenly leveraging higher
structured ideas and for communicating vision within new reflective productive situations
which will develop higher synergy of actions and also technically yield higher work goals. The
company is following clan culture where all employees are working with stronger vision and
working steps onto where there is innovation, higher diversity actions and also programmed
culture worked on which will yield onto major creativity and larger goals. Nike also focuses to
reduce ethical business issue by analysing where its management is lacking for bringing on new
actions delivery and for gaping wider culture factors which will enable to yield onto higher
productive expansion within various horizons (Popescu,2019)
The culture of Nike being focused onto collaborative working parameter also focuses to
bring on diverse functional paradigm of new factored growth, new keen energy for composed
working parameter which pools in resources effectively within long run, This will positively
reduce working operation structure within Nike for enhancing its position among industry for
new larger goals and effective market structure to pool onto larger effective long term
innovation which shall also actively function for gaining stronger working efficacy developed
within working operations. Nike company shall also actively focus onto including brainstorming
of new ideas and also for developing wider creative actions which will enhance stronger actions ,
inculcate new ideas and also bring on divers ideas where various actions are taken for bringing
on new reflective synergy of larger ideas. There has been also new work goals formulated
among various determinants for gaining stronger focused approach and higher growth factors for
bringing on wider factors of creativity, new actions of competitive growth and to encompass new
larger creative development and higher focused leadership which will reduce major
drawbacks and competitive demerits which are impacting company goodwill metrics (Hanson,
2019) There has been also various changes analysed and functionally developed for
communicating change and large diversity of actions among rapid platforms which will enable to
deliver new forms of creativity within wide platforms onto where there is emergence for new
working goals formulated analysed. Nike will be able to yield onto working operations and for
restoring wisdom among wider working operations, technically gaining stringent effective
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demands analysed which will further bring on more effective working platforms and also to
yield onto new goals for enhanced working motivation which pools on resources for larger
working avenues within more technical development with new resources growth productively
and largely resourcing diversity among actions.
Analysis of the ethical issues
The ethical issues are encountered in the situation when the person or the business
organization choose the alternative which can be evaluated as the ethical or unethical. It is not a
moral issue but an ethical issue and needs a lot of thinking and the planning in order to figure out
a solution. Business ethics has progressively getting one of the most argumentative issues in the
present business scenario. Because of the globalization of business sectors and production
measures, an expanding number of MNC have to handle ethical issues in the various areas and
the countries they are working in (Garanti, 2019). An organization's reputation is reliant on its
moral and ethical practices which, thus, assists with characterizing a plan of action that can
prosper after some time even in affliction. In the present business condition, nonetheless, every
organization is on a wild race to secure a more prominent degree of benefit by utilizing shortcut
methods. The same thing has happened to Nike company which with the objective of earning
higher profits. Thus, there are various ethical issues which are being faced by Nike.
The major ethical issue being faced by Nike in Vietnam is in respect to the poor
working conditions in its factory where workers were being employed at the lower wages for
the long working hours. Initially company denied such issues and kept on working in the same
manner in the deprived good working environment along with the exploitation of the lower cost
labours. So, in order to overcome such issue and criticism, the company issued a report with
regard to the factories in which the employees are employed for manufacturing the products in
the horrible conditions (Khan and Yu, 2019). The objective behind self-publishing the report was
to present eth positive image in the market but then it led to lower branding image but it
increased the transparency of the company in the mind of the consumers.
Subsequent to changes set up, Nike has actually failed to forestall the physical and mental
maltreatment to its staff in the work environment. Undesirably, administrators and significant
partners failed to keep these issues from happening and supported in the dishonest treatment of
laborers around the world; subsequently, the association did little deliberately to fix this (Irias,
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2019). The company Nike put most of the fault to the suppliers and manufacturing plant owners
and to help eliminate the utilization of sweatshops, the organization presented the "Just Don’t Do
It campaign". Nike's key arrangement, accordingly, presently centres around the ethical
treatment of representatives around the world. In accordance with the legal factor affecting the
company in Vietnam it can be said that Nike is required to comply with the all the rules and
regulations effectively which is very complex in nature. Another ethical issue being faced by the
Nike is chid labour. Nike has broken the all the legal laws in respect to age of employment.
Sometimes, children as youth as 4 or 5 years of age were discovered working in helpless
conditions for significant stretches of time.
Being a manager at that time, I would have immediately taken up the actions. For that,
first I would have undertaken a critical analysis of the factories with the purpose of determining
the actually working conditions in place and whether the basic amenities are being provided to
the workers or not. Also, would work on verifying whether right amount of wages is being
provided or not. Based upon the analysis, actions would have been taken step by step taking into
consideration the organizational culture of Nike (Ovelar& del Rosario, 2017). Timely, effective
and harsh measures would have been taken which would have resulted into instant result in the
form of converting the negative image into the positive image. Improving the goodwill of the
company (Kim and et.al, 2020). Putting on the continuous strategy to make sure that everything
is working effectively as per the legal requirements and ethically as well. Putting emphasis on
the organizational culture and following the same in this context as well would have resulted into
the better and innovative ways to tackle with the situation and improve it further.
CONCLUSIONS AND RECOMMENDATIONS
It can be concluded from the above that the Nike could have performed even better if
proper strategies and legal and ethical standards were followed at that time. The major external
factor having impact over the company was economic factors in the positive part as the economy
of Vietnam was progressively expanding which would lead to increase in the investment by the
investors to the country. The rapid growth of the country would have led to the effectively
achieving the sales target of the company. Along with that the lower labour rate is an added
advantage that was enjoyed by the company in respect to manufacturing of its products. Another
external factor is the legal factor which might be having a negative impact over the Nike
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business operations, it requires complying with all the legal laws and regulations which are very
strict and complex.
In accordance with the ethical issues being faced by the organization, it can be
recommended that company should make a strict policy and team which continuously works on
ensuring that all the manufacturing and legal requirements have been met by the company. Also,
it should ensure that it meets with the basic requirements of the employees which will lead to
ensuring that employees are feeling safe in the workplace and are having any problem. The
organizational culture which is being followed should be promoted which will help in bringing
creativity and innovation in the workplace and a sense of trust among the workers of the factory
and also brings transparency. Nike should make policy in respect to who should be employed so
that the situation of child labour can be avoided. Therefore, by following the above stated
recommendations, Nike can avoid such issues in its future business operations and work in an
effective manner.
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