Business Ethics Essay Example | Topics and Well Written Essays - 2000 words - 9

Business Ethics - Essay Example Strict regulation of the labour industry in the USA and other developed countries means companies will have to incur increased cost of production. Therefore, developing countries in regions such as Asia has provided the necessary conditions for businesses to increase their production capacity while reducing cost of production. This has also provided global corporations with an avenue where they enjoy markets in developed countries but avoid the stringent rules and regulations in home countries. While corporations have succeeded in the cost of labour, there has been significant media spotlight on the operations of factories contracted to provide various services with evidence indicating widespread irregularities in labour practices. This report will focus on sweatshop scandal involving Nike in discussion of impropriety in overseas factories while also examining the situation from different stakeholders’ point of view. The ethical problem in this situation is also highlighted based on the argument that Nike concentrated on making profits while neglecting what was right for the workers in the factories. Suggestions are also presented on why attempts to remedy the situation were not effective while also noting how Nike should have reacted to the scandal. The sweatshop scandal involving Nike involves perceived wrongdoings in the organization’s labour practices for a period between 1991 and 2005. The scandal went public tarnishing Nike’s image build on offering high quality products in the sportswear and apparel industry. As an organization that aims to be the best in the industry, Nike’s strategy involves outsourcing various functions and manufacturing capabilities in order to reduce cost and focus on effective marketing strategy for organizational products (Vogel, 2006). Therefore, their outsourcing strategy led to the sweatshop scandal as a number of contractors in