Nike is the world's leading sports and fitness company, producing a wide range of sports related apparel and equipment. Headquartered in Beaverton, Oregon, Nike operates on six continents with more than 500 factories worldwide and offices located in 45 countries outside the United States. Most of the factories are located in Asia, including China, Taiwan, India, Turkey, Thailand, Vietnam, Pakistan, Philippines, Malaysia, and Korea.
Over the years, Nike has received sharp criticism for its poor labor practices in third world countries, along with other environmental and human rights exploitations. These abuses have made Nike a symbol of sweatshop labor around the world. Groups such as NikeWatch, Global Exchange, and Corp Watch are part of a global campaign to persuade Nike and other sports brands to respect workers’ rights.
The poor labor conditions in some overseas production plants forced several unsuccessful boycotts against Nike, led by many universities, anti-globalization and anti-sweatshop groups such as the United Students Against Sweatshops. Despite the negative publicity, Nike annual revenues have increased from $ 6.4 billion in 1996 to $15 billion in 2006.
In 2000, Nike founder Philip Knight canceled a $30 million gift to the University of Oregon after the school joined the Workers Rights Consortium, taking a stand on international labor and human rights.
Relationship with Beaverton
Nike is headquartered in the city of Beaverton, Oregon but is technically within unincorporated Washington County, creating conflict between Nike and local government. Remaining outside the city limits of Beaverton, shelters Nike from thousands in annual city taxes.
From Nike’s perspective, it is the only Fortune 500 company headquartered in Oregon, and believes it should not be annexed by Beaverton without its consent because of its large payroll. Nike prefers to work with the county government since annexation would cost the company $700,000 annually in city taxes for services it already receives from the county.
However, Beaverton believes Nike’s position is counter to having its business and zoning laws apply equally to all businesses. The situation worsened when Beaverton attempted to forcibly annex the property where Nike was located. This led to a lawsuit by Nike, and lobbying by the company resulted in Oregon Senate Bill 887 in 2005, which specifically bared Beaverton from forcibly annexing the land Nike occupies for 35 years.
Corporate Diplomacy Efforts
Nike has made considerable efforts to improve contract worker conditions overseas since the first reports of sweatshop conditions arose in the mid 90’s. It has instituted factory monitoring by students and by PricewaterhouseCoopers, the international auditing and consulting firm.
Nike has also increased the minimum age requirements for footwear workers to 18 years, and increased wages for Indonesian footwear workers by more than 70 percent. It has established community-based micro-loan programs and on-site continuing education for factory workers, and improved factory air quality consistent with OSHA guidelines.
Nike is supportive of the U.S. Department of Labor's Fair Labor Association (FLA), a coalition of human rights groups, universities, and corporations created by the Clinton administration to address the problem of sweatshop labor. The FLA adopts less stringent standards, allowing companies to contract their own FLA-approved monitoring entity.
Within the last few years, Nike has increased its public diplomacy efforts and contributed millions to local and global causes to further improve its global image.
A majority of Nike’s corporate diplomacy and corporate philanthropy is conducted through the Nike Foundation, which is a non-profit organization based in Beaverton, Oregon. . The Foundation is dedicated to giving the world’s neediest girls the opportunities to lead full, active lives and contributes to fighting poverty through investments in adolescent girls.
Nike focuses on programs and advocacy efforts that are directly linked to two of the United Nation’s Millennium Development Goals—poverty alleviation and gender equality.
A portion of Nike’s annual giving target of three percent of the preceding year’s pre-tax income is allocated to the Foundation to support its mission.
In 2007, Nike partnered with the UN’s refugee agency, donating $1 million dollars to its ninemillion.org campaign, which is a global campaign designed to raise awareness and resources to provide refugee youth access to education and sports programming. Nike has also facilitated additional fund-raising efforts with organizations such as Manchester United, and devoted retail space at Niketowns worldwide to support the campaign.
Let Me Play
Nike is vocal about its commitment to its “Let Me Play” global community investment strategy. Let Me Play focuses community investments on using sport as a tool for youth inclusion. In the last two years, Nike invested $100 million worldwide in community-based sport initiatives. The company will invest an additional $315 million through 2011 to give youth greater access to sports.
Nike earned top marks on Climate Counts first annual company scorecard, which scores 56 major corporations across eight sectors – from apparel to electronics to fast food – on their commitment to reversing climate change.
Companies were scored on a scale from one to 100, based on 22 criteria that fall within four benchmarks: whether they measure their carbon footprint; what efforts they have made to reduce their own climate impact; whether they support or oppose global-warming legislation; and what they disclose to the public about their work to address climate change.
Nike scored higher than big names like Apple, eBay.com and Levi Strauss. At the bottom of the list were Amazon.com, Wendy’s, Burger King, Jones Apparel, CBS and Darden Restaurants (which owns Red Lobster and Olive Garden).
NikeGO PE is a physical education program that provides elementary schools the ability to build effective physical education programs. It is designed to develop students’ overall fitness, motor, and social skills alongside strategies that incorporate literacy, math, science, art and nutrition into school PE lessons.
NBA star, LeBron James, is the spokesperson for Nike's NikeGO program, which was launched in his hometown of Akron, Ohio, on September 8, 2003. Since then, the program has been implemented in more than 400 public schools, reaching more than 75, 000 students.