Nasty Nike

In 2011, Nikeone of the worlds leading suppliers of athletic shoes and apparel
was again all over the media for the wrong reasons: Nike faces allegations of worker abuse
in Indonesia, Nike staff in Indonesia subjected to 'serious' physical and verbal abuse,
Nike workers 'kicked, slapped and verbally abused' at factories making Converse. Reports
of the companys objectionable labour practices were mostly centred on factories in
Indonesia, where employees were reportedly kicked, slapped, and psychologically abused.
One worker reported being kicked by a supervisor after making a mistake cutting rubber.
Another was fired for taking sick leave, despite producing a medical certificate. Workers
failing to meet shoe production targets were forced to stand under the scorching sun for hours
before returning to work in tears. According to Hannah Jones, a Nike executive overseeing
company efforts to improve labour conditions, internal investigations revealed that workers
experienced serious and egregious physical and verbal abuse.
It was a horrible job, one worker said, Our bosses called us pigs, dogs, and
monkeys. Were powerless, said another, Our only choice is to stay and suffer, or speak
out and be fired.
References to the worker abuse are still showing up in Google search results for Nike.
Making matters worse, only a decade earlier Nike came under heavy criticism for its use of
sweatshops and child labour. Nike senior management are eager to turn the companys image
around. In their view, the reports have badly tarnished the companys image and are still
hurting sales. The company has responded by increasing monitoring efforts and publishing
detailed reports acknowledging the problems in the South East Asian factories.
Problems in factories appear to be reducing, but research indicates that consumers still
associate the Nike brand with sweatshops and slave labour. A changing global market also
has Nike concernedin 2014 Nikes largest market was in the US, and its smallest, but most

rapidly growing, was in Asia. Nike is concerned that given the issues in their Asian factories
the brand may not reach its potential level of market share. Nikes senior management are
seeking a more substantive response to the problem. What is more, they want to make sure
such activities never occur again.
Material for this case was adapted from: Nike workers 'kicked, slapped and verbally abused at
factories making Converse (2011). Daily Mail Australia; Nisen, M. (2013). Why the Bangladesh
factory collapse would never have happened to Nike. Business Insider Australia; Trefis Team (2014).
Nike Earnings Preview. Forbes.