Companies in this world of capitalism are geared towards more. They want more profit, more shareholder value, and more market share, among others needs. The realizations of these objectives have been attained through the successful initiation, development and management of brands in most instances. “Indeed, the effective development and management of brands has become a major priority for all organizations of all sizes in the different industries and markets” (McNamara, 2008). “The reasons for brand development are certainly clear; strong brands are positively correlated with customer loyalty and profits” (Rain, Lane, & Steiner, 1991). However, the efficient management of brands can present challenges, especially in the case where managers are unable to accurately evaluate and assess their brands particular strengths and weaknesses objectively. Nike Company is not left out in this quest of profit, image and presence of strong brands world wide. This paper takes a critical and comprehensive analysis of productivity and public image and in addition, the paper strives to answer the question: How does productivity conflict with public image? • How must social and ethical issues be considered in their many stakeholder relationships?
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Productivity and public image
Nike company is world leading sport equipment manufacturer which was established in 1964.The company is well known but its catchy slogan just do it .The success of the company has been attributed to its wide expansion into sport and aggressive marketing of its product under its own brand name through affiliate companies world wide. Over the years the company has build its name and public image through a number of strategies such as; contributing to local and international sport teams and clubs, distributors organize events under the banner of Nike. Good public image is quite important for the success of a company. According to (McCalman, and Paton, 2008) “the long-term sustainability of any business requires a positive image and strong bond between business and society and there is no secret or hidden formula responsible for the success of corporation”. To attain and maintain good public image the company has invested more on corporate social responsibility CSR.Carroll & Buchholtz, (2009) defines CSR as “the obligation of decision makers to take actions which protect and improves the welfare of society as a whole a long with their own interests” In addition, it runs well researched and catchy commercial on televisions, print media, and internet. This marketing and advertising coupled with its involvement in sports at all levels has created a strong bond between the company and the general public.
The conflict between Productivity and public image
Productivity in a company is one of pivotal role of managers in a company. The process involves focusing on the company production process and methodologies. This is normally achieved with minimal cost possible. However, the development of good public image requires an extra expense which put the two concepts on conflicting views. Production tries to minimize cost and maximize profit while public image development is an expense which requires an extra cost from the company.
In the quest to balance the aspect of productivity and public image, Nike company has invested heavily on both production and CSR a cross the world. In this regard, the company continues to enjoy a considerable good public image which is quite important for the success of any business enterprise. Moreover, Nike spends a lot of resources to produce expensive advertisement and TV commercial which are not only geared towards gaining high profits but also enticing the people to its products and brands.
Productivity, Social and Ethical Issues in Business
Social and Ethical Issues in Stakeholder Relationships
There are a number of social and ethical issues that arise in the corporate world and the trend keeps growing amid efforts by relevant stakeholders to reverse the trends. Violators of social and ethical matters, also known as sweatshops, are characterized by: unhealthy working conditions, massive exploitation of employees, and the use of child labor among other unethical issues. According to Caroll and Buchholtz, (2008), “sweatshops have grown in number in the past few years as global competition has heated up and corporations have gone to the reaches of the world to lower their cost and increase their productivity.” A number of Multi National Corporations (MNCs) have been involved in the illegal acts characterized by long working hours and dismal pay. Nike Corporation came in the limelight in its alleged involvement in acts of sweatshops. Despite the company’s popular brand name and advertising subcontract it has with world celebrities; Tiger Woods and Michael Jordan, the firm has grossly violated social ethics in especially in its overseas market.
In the case of Nike Corporation, the blame is mainly in the overseas countries. There is great wage disparities between what the company pays her employees in the United States compared to what other employees earn; for instance, in Indonesia. The possible reason for such an act of behavior could be availability of cheat labor in other countries. However, it is a great violation of employment legislations to have unjustified wage disparity in this age. Furthermore, the act is against the company’s high profile and mission and vision statements that advocate for just treatment.
Unethical business practices and social misconduct among MNCs has faced criticism from number organizations like: human rights activists, students’ organizations, and trade unions among other bodies that advocate for fairness and equal treatment to all workers. In the contrary, the firms representatives argue that, “their wage rates are embarrassing by developed-world standards, those rates frequently equal or exceed local legal minimum wages, or average wages,” (Caroll and Buchholtz, 2008). This claim is not valid because the fact is that Nike Corporation is a big company which pays her employees better packages elsewhere. The effects of such acts are felt by other firms that are competing for the same market share. Cheap labor, longer working hours and such like activities boost financial positions of these corporations which make them continue to leading and dominating a given industry.
In a bid to reverse these trends, there are global initiatives that have been suggested. International Labor Organization and other international bodies have structured legal framework to advocate for the plight of employees. One such initiative is the Social Accountability International, SA8000 that was launched in US back in 1997. The standards set in SA8000 have stringent measures to curb against acts of discrimination and human rights violation. For example, child labor clause states that, “No worker under the age of 15; minimum lowered to 14 for countries operating under ILO Convention 138 developing-country exception; remediation of any child found to be working,” (Caroll and Buchholtz, 2008).
Apart from the initiatives taken by international organizations, corporations should develop their own ethical values and social practices especially in the modern times where consumers are becoming more and more sensitive to ethical business practices. It is move in the positive direction for Nike Corporation in the anti-sweatshops campaign. Nike Corporation, Adidas-Salomon, have developed a legal framework which guides her international trade acts like; business outsourcing in the global sphere. Also, according to Caroll and Buchholtz, (2008) “In the spirit of transparency, Gap, Inc released a 40-page report in 2004 that offered an unusual look at its factory conditions abroad.” Such initiatives are bound to be emulated with other firms and further competitions to outdo one another in the fight against social and ethical vices will ultimately address the issues of sweatshops. In order for firms to boost their stakeholder relationship, effective stakeholder management is a good avenue to address the complexity of contemporary issues surrounding firms’ ethical practices, (Weiss, 200, pp. 40-41).