Global Corporations and Supply Chain Management
We end this book with two important corporate cases on supply chain management: Nike and Walmart. Both cases illustrate the struggles of large companies in their work to be profitable, global, and sensitive to poverty and environmental issues in the commu
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Global Corporations and Supply Chain Management
Introduction We end this book with two important cases on supply chain management. In the 1990s Nike faced a great deal of criticism that some of its manufacturing units, all franchises not owned by Nike, were basically sweatshops, mistreating workers, paying low wages, and not providing decent working environments even by local standards. Nike listened to those criticisms, and ever since has been engaged in the process of changing these conditions. The case in this collection illustrates these efforts in its Vietnamese franchises. Walmart, the world’s largest retailer, is working on its Chinese suppliers, trying to encourage environmentally sustainable processes and products while at the same time squeezing the lowest price from its supply chain. Whether and how these efforts will be successful is its challenge. Both cases illustrate the struggles of large companies in their work to be profitable, global, and sensitive to poverty and environmental issues in the communities in which they operate.
P.J. Albert et al. (eds.), Global Poverty Alleviation: A Case Book, The International Society of Business, Economics, and Ethics Book Series 3, DOI 10.1007/978-94-007-7479-7_8, © Springer Science+Business Media Dordrecht 2014
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Global Corporations and Supply Chain Management
Nike, Inc.: Corporate Social Responsibility and Workplace Standard Initiatives in Vietnam1 Corporate Overview Nike was founded in 1964 by Philip H. Knight as “BRS (Blue Ribbon Sports)”; in 1972 the name was changed to “Nike.” Phil Knight remains Nike’s owner, chairman, and CEO today. Nike, based in Beaverton, Oregon, has more than 22,000 and over 300 contracted suppliers in about 52 countries throughout the world, employing more than 550,000 workers on any given day creating sports and fitness footwear, apparel, equipment, and accessories for worldwide distribution (over 400 of these suppliers are located in Asia). Approximately 175 million pairs of shoes are manufactured each year for Nike, contributing in part to Nike’s annual revenue for 2001, which totaled almost $10 billion.2 Nike’s Code of Conduct, first sent out to manufacturers in 1992 and the second code to be developed in the entire industry binds all Nike contract manufacturers and requires that all “manufacturing partners must post this Code in all major workspaces, translated into the language of the worker, and must endeavor to train workers on their rights and obligations as defined by this Code and applicable labor laws.”3 In its code, Nike sets a standard for its partnerships by seeking contractors who are committed to best practices and continuous improvement in the following areas: – Employing management practices that respect the rights of all employees, including the right to free association and collective bargaining – Minimizing the impact on the Environment – Providing a safe and healthy workplace – Promoting the health and well-being of all employees Specifically, Nike’s code binds its partners to core standards of
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