International Business Case Study 2

...

- Is it possible, as Killgallon claims, that the Ohio Art Company had no knowledge of labor problems at Kin Ki? Do you think company executives had any knowledge of the working conditions?

Yes, it is possible that William Killgalon, Ohio Art Company CEO doesn’t know about the labor condition as he is living in different city and might not have complete detail about the labor as he is only concern with executives and profits.

- What steps can executives at the Ohio Art Company take to make sure they do not find the company profiled in The New York Times again as an enterprise that benefit from sweatshop labor?

Executives at the Ohio Art Company can make a labor safety contract with the Kim Ki and threaten them to ends their venture in case of violation of this contract. They can make a team which monitors the labor activities going in China and if something goes wrong they directly try to fix it.

Nike: The Sweatshop Debate

- Should Nike be held responsible for working conditions in foreign factories that it does not own, but where subcontractors make products for Nike?

Nike may not own any factory under its name and let subcontractor to make products for them, still it has to follow the ethics and shouldn’t let anyone violates human rights. Nike is partially responsible for the working conditions in the foreign factory as it has to set a contract with the subcontractors to not violate human rights before starting business with them and if they do so they should cancel their license of producing Nike’s product.

- What labor standards regarding safety, working conditions, overtime, and the like, should Nike hold foreign factories to: those prevailing in that country, or those prevailing in the United States?

Ethically Nike should provide facilities to their labor as provided in United States. But if that isn’t possible then they should provide a little more than the minimum wage rate and provide a human friendly environment for the labor to work in. They shouldn’t violate the International Labor Rights and should improve the condition of the workers in supplying countries.

- An income of $2.28 a day, the base pay of Nike factory workers in Indonesia, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given this, is it correct to criticize Nike for the low pay rates of its subcontractors in lndonesia?

No, this criticism is not correct. Nike might have contracted with these subcontractors in order to decrease their cost of goods and to provide employment to people in Indonesia who might not otherwise have them. As they are paying more base pay to the workers so they do not deserve such criticism.

- Could Nike have handled the negative publicity over sweatshops better? What might it have done differently, not just from a public relations perspective, but also from a policy perspective?

Yes, Nike could’ve handled the negative publicity better by addressing the criticism as whole and not only the age part of it. They could’ve talked about better working condition, health facility, minimum wages and friendly environment for the workers. Their main focus was on the child labor and they forgot about other problem faced even by elder workers. Nike could’ve hired an agency to look after its workers matter and help them to solve it in order to get their lost reputation back.

- Do you think Nike needs to make any changes to its current policy? If so, What? Should Nike make changes even if they hinder the ability of the company to compete in the marketplace?

Nike clearly needs to make the changes in their current policy. They can hire an international agency to help them in correcting the problem or they can admit the problem and try to solve the issues of the workers in the sweatshops.

As Nike cannot lose its competitors and needs to compete in the market as well so it should adopt a middle way by giving basic human rights to their workers and keeping its competition alive.

- Is the WRC right to argue that the FLA is a tool of industry?

WRC and FLA is two opposite organizations. FLA audits the companies and business while WRC is run by the aid of labor unions and it refuses to deal with companies. So it not well stated that WRC right to argue that the FLA is a tool of industry.

- If sweatshops are a global problem, what might be a global solution to this problem?

Sweatshops are a global problem where a company seeks low cost of manufacturing product. The solution is to provides the basic facilities to labor and fulfill Universal Worker Rights which includes minimum age and wage limit, improved quality of life and better working environment.