Business Law Report: Nike's Offshoring and Onshoring: Legal Analysis

This business law report examines Nike's offshoring and onshoring strategies, focusing on the legal and ethical implications of outsourcing. It explores the concepts of offshoring, onshoring, and nearshoring, highlighting their impact on business operations and profitability. The report delves into key legal areas, including occupational health and safety, anti-discrimination, and equal opportunity, with reference to Australian law and relevant case studies. It analyzes Nike's approach to these legal frameworks in both its Australian and Indian operations, emphasizing the importance of compliance with employment and contract laws. The report provides comparisons between onshoring and offshoring, discussing the advantages and disadvantages of each approach, and offers recommendations for Nike to ensure legal and ethical practices in its global operations. It stresses the need for responsible business conduct, including adherence to workplace health and safety regulations and anti-discrimination policies to maintain a positive brand image and employee motivation.

Business Law Report
Offshoring and On-shoring

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
CONTENT.......................................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Offshoring and on-shoring are the process which are trending in the present marketplaces
of various business. As these forms of outsourcing largely provide lower price availability to the
organisation operation. These on shore and offshore markets are beneficial because of lower cost
employment and low cost working place. These will have provided with lowered cost in
production and hence contribute positively in the profitability of firm largely (Clark and Monk,
2013).
Nike is offshoring and on-shoring their work process in order to increase profit margin
over their products by using low cost services from the external firms. Nike is offshoring some
part of their work from the market of India while working dominantly in Australian market. Nike
also developed various contracts with the companies of Austria market as well as in order to take
advantage from low cost on shore markets of nation. In this report, various aspects of offshore
and on shore is discussed complying with various contractual and employment laws in
outscoring the business processes.
CONTENT
Outsourcing is able to achieved through different shoring approaches to be work done
from others. This introduces three techniques i.e. On-shoring, Offshoring and Nearshoring.
Outsourcing can be defined as the process or contractual agreement formed between tow
companies that some of part of company operations and work is done by another external
business firm. Like for an example; Nike is outsourcing their manufacturing part from other
small business firms in Indian market (Fratocchi and et. al., 2013). The key difference in various
outsourcing form arises from the selection of location to outsource some part of work. On-
shoring is the process of relocating the business work to a different location which is cost
efficient for company within the borders of parent nation. While Nearshoring is the form of
outsourcing in which the work is done by an external company located in nearby countries which
is having similar economical and legal constraints. Offshoring is the processes which involves
relation of business process in another country which having cheaper rates and helps in working
cost efficiently. This may involves opening subsidiary in another country work done by other
coy located in different nation.
1

Occupational health and safety: This is also referred as workplace health and safety.
This particular topic of discussion leads to introduction of various legislation y government of
Australia which maintains healthy and safe environment in workplace. Workplace Health and
safety act introduced in 2010 and Workplace Health and safety regulation act (2010) both bounds
employee and owner of business firm to maintain and replace the associated risk working
premises of organisation. The employer should maintain healthy working environment. These
legislation includes assessment and migration of various risk that relates to the health, welfare of
people who are part of work point (Fratocchi and et. al., 2016). This legislation includes the
protection of customer, visitors, employees, worker, contractors, some supplier and volunteers
who regularly or sometimes visits to the workplace and ill environment may leads to unhealthy
life of person. The owner is complied with the legislation to maintain safety in working
environment in relation with various machinery safety etc. and responsible to maintain and
control the various risk related with health and safety of linked people.
The employment law defines the various provision which helps in maintaining and health
and safety measures in working conditions of firm. The companies are liable to pay for loses if
business firm is not following the various legislation defined in the Health and safety act of 2010
in Australia. The business in the Australia are trending the offshoring and on-shoring of work ion
large scale. These activities of business organisation should be complied with the WHS law in
working environment. The outsourcing companies also take care of the employment protection
and providing them a healthy working environment by following all safety measures. The
Contact law also protects the workers and labours of external company to claim for loses in
workplace if any because of not maintaining good working environment in organisation
premises.
Case law: R v. Town of Meaford Fire Department- This is the case of two fire-fighters
who claimed against the non-maintenance of safety measures in working environment of the
Meaford fire department while they are executing their duty on the site of fire accident and
suffers allot because if smoke inhalation due to non-functioning of a firefighting apparatus
(Norm Keith, 2012. Occupational Health and Safety: Five Cases You Need to Be Aware of).
Comparison attributes Onshore Offshore
Occupational Health and In the on shore functioning of While off shore outsourcing of
2

Comparison attributes Onshore Offshore
Safety an business firm it is easy to
maintain health and safety
provisions as compared to the
other forms of outsourcing. As
the on shore location are near
to the parent company unit and
have to follow same nation
legislation which helps in
keeping closer oversight by
Nike over its onshore
organisations.
some work from the external
companies in other country.
This will largely influence the
functionality of firm as this
will leads to legal
complication as both the Nike
and offshore company have to
take care of legislation of both
India and Australia while
working. This will be an
disa6davtheg of offshore over
the onshore form. While the
offshore forms of outsourcing
are more profitable in case of
providing low cost work as
compared to parent
marketplace.
The various areas available to the Nike organisation in order to act beneficial in both the
market of Australia well as the market of India. The organisation should act responsibly towards
the country law as well as the foreign legislations in order to work in legal premises and reduce
risk of various legal communication linked with offshoring and on shoring. The organisation can
develop various policies to regulate the working of lower small business in order to direct them
to managing health and safety measures in working environment of firm (Halemba and
Babińska, 2016). This will help in building good brand image of Nike in both offshore and
onshore markets. The Nike can also provide financial helps to the other offshoring companies in
order to work in compliance with all the provisions of health and safety act as well the
employment act in working markets.
Anti-discrimination and equal opportunity: This is the law introduced by the
government of Australia in order to provide equal opportunity of growth in the commercial
3

environment to every person who is working with any firm or seeking for employment (Joubioux
and Vanpoucke, 2016). This is law which provides various legislations and provision in order to
reduce discrimination on the basis of race, colour, gender or another disability in businesses. As
per the views of ACT Human Rights Commission in Australia no individual should be
discriminated on the grounds of various demographic features in commercial environment. Anti-
discrimination board in New South Wales also defines number of provisions in order to protect
the rights of humans while working in any business firm. As per this particular law the individual
should not be discriminated on the basis of race, colour, gender, sexual preference, age, physical
or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion,
political opinion, national extraction, social origin and should be provided with equal opportunity
of growth and use of any of the resources in the organisation (Moradlou and Backhouse, 2016).
The employment law also comprises the various legislation related with the equal
opportunity and anti-discrimination. Employment law is the initiative of government in
protecting the right of employee and labours asking for the profitability of an organisation. This
particular legislation all defined various provision related with the anti-discrimination act and the
equal opportunity law. In the case of offshoring or on shoring the business work with another
external company the relation developing business firm should make an efficient contract with
defining all the related norms to this particular legislation of anti-discrimination activities.
Company like Nike should defined the legislation related with equal opportunity and anti-
discrimination to employees who are working for the firm goals in offshoring and on shoring
firms of outsourcing. The employees working for Nike should not be discriminated in both the
markets of India and Australia in order to develop a good working brand image in commercial
environment and providing better employment to the people who are working cost effectively for
firm profit.
Case law: Laalaa v Director General, Department of Education and Training (EOD)
[2009] - In this particular case law the laalaa claimed that he is discriminated on the basis of her
race in working environment as she brings to Muslim origin. The court dismissed statement the
claim against the director general (Laalaa v Director General, Department of Education and
Training (EOD) [2009] NSWADTAP 56 (29 September 2009).
4

Comparison attributes Onshore Offshore
Anti-discrimination and equal
opportunity act
This having advantage over the
onshore policies of Nike as this
will provide an close
examination of working of the
small business and keep eye on
the anti-discriminatory norms
and helps in providing equal
opportunity to grow and use
the resources of firm equally to
every employee in workplace.
While the offshore companies
are not complying with the
laws of anti-discrimination
equal opportunities in their
functional operation and this
effect the motivational level of
employees and negatively
effects the efficiency and
quality of work as well. The
Nike have to define various
provision related with the anti-
discrimination act both
Australia laws as well as
legislation followed in India
market to work legally and
ethically in working
environment.
The Nike organisation should follow anti-discrimination act and equal opportunity act in
working of the firm as this will enhance the motivation level of employees and work efficiency
as well. Nike should follow up the various provision in relation to the equal opportunity act
while outsourcing their operations work and providing work to external companies in markets of
Australia as well as market of India (Sheridan, 2013). The firm should follow up the legislation
of not to discriminate the people on the basis of their religion, race, colour, disability or gender
as this will demotivate the employees and negatively affect the functionality of business
organisation to large extent. Nike should follow up efficient formation of contract while defining
the Employment Act and anti-discrimination provision in agreement of outsourcing business
works by offshoring and on-shoring from sin order to provide equal opportunity of development
to every linked individual to the business firm.
5

The On Shoring location for outpouring the business work and part of its operations will
be Australia. As on shoring is the firm of outsourcing the work within the boundaries of nation of
parent company. Nike is working in Australia and also making a contractual relationship to work
done by others within the premises of Australia itself (Pradhan, 2016). This would be a
beneficial platform for the Nike to on shore the business operation as this will provide an easy
implementation of process in working environment. The on shore form of outsourcing work will
provide more implementation speed as the location is nearby to the parent operations and also
provides higher security to the process as the company can develop a closer oversight over the
process and work done by the external company (Thomson, 2013). This is also beneficial as on
shore does not complicate the functionality of firm within in legal constraints as the Nile have to
focus on only one country legislation that is laws defined in Australia to maintain health and
safety in working environment as well as provide anti discriminatory workplace to employee and
providing equal opportunity to grow in market.
CONCLUSION
From the above discuss over the subject matter of offshore and onshore this can be ended
with the conclusion of that various companies these forms of outsourcing the work from others
in order to get work done in lower cost and can make higher profit in market. The various small
companies are engaged in working for large organisation at lower cost by using the low cost
workers and cheaper locations to establish working unit. Nike is using both onshore market of
Australia and offshore market of India in order to work with lower cost make higher profit. The
companies are complying with various employment law like anti-discrimination act,
occupational health and safety act of 2010 and the equal opportunity act to the employees of
offshore and onshore working in order to get good quality work done by small business for the
larger ones.
6

REFERENCES
Books and Journal
Clark, G. L and Monk, A. H., 2013. The scope of financial institutions: in-sourcing, outsourcing
and off-shoring. Journal of Economic Geography. 13(2). pp.279-298.
Fratocchi, L and et. al., 2013. Manufacturing back-reshoring-an exploratory approach for
hypotheses development.
Fratocchi, L and et. al., 2016. Motivations of manufacturing reshoring: an interpretative
framework. International Journal of Physical Distribution & Logistics Management.
46(2). pp.98-127.
Halemba, M and Babińska, D., 2016. Captive offshoring services for SMEs in Poland: The role
of mutual trust and cultural aspects. Przedsiębiorczość Międzynarodowa. 2(2). pp.213-
232.
Joubioux, C and Vanpoucke, E., 2016. Towards right-shoring: a framework for off-and re-
shoring decision making. Operations Management Research. 9(3-4). pp.117-132.
Moradlou, H and Backhouse, C. J., 2016. A review of manufacturing re-shoring in the context of
customer-focused postponement strategies. Proceedings of the Institution of Mechanical
Engineers, Part B: Journal of Engineering Manufacture. 230(9). pp.1561-1571.
Pradhan, R., 2016. The regime of Amalgamation of law and technology" Boon or Bane".
Sheridan, A., 2013. Shoring up the future? Management Today. (Apr 2013). p.26.
Thomson, R., 2013. National scientific capacity and R&D offshoring. Research Policy. 42(2).
pp.517-528.
Online
Laalaa v Director General, Department of Education and Training (EOD) [2009] NSWADTAP
56 (29 September 2009). 2009. [Online]. Available through:
<http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWADTAP/2009/56.html?
stem=0&synonyms=0&query=title(Laalaa%20and%20Director%20)>. [Accessed on 2nd
October 2017].
Norm Keith. 2012. Occupational Health And Safety: Five Cases You Need To Be Aware Of.
[Online]. Available through:
<http://www.mondaq.com/canada/x/212476/employment+litigation+tribunals/
Five+Cases+You+Need+To+Be+Aware+Of>. [Accessed on 2nd October 2017].
7