The major issues were child labour, slave labour and workers who toiled in unsafe and inhumane work environments. Indonesian workers revealed that they were being paid as low as 19 cents an hour. Women workers could only leave the company premises even on Sundays without permission from the management.

 

To save face, Nike had involved auditing organizations like Ernst and young to study the working conditions. The firm was paid to publish a good report and this was soon found out by the activists who questioned the objectivity of these audits.

Also, Nike involved a group of its employees whose sole focus was to help make things better for those who were making the Nike products. This was increasing the feeling among the activists that Nike is undertaking these fake measures to save its face.

Age of workers

Age of the workers employed in the manufacturing units was an alarming problem. Although Indonesia had worker protection legislation in place, widespread corruption had made the laws essentially useless. Nike contractors were hiring under age workers and at the same time providing them salaries with which their daily needs could also not be fulfilled.

Leaked excerpts from a internal Ernst and Young report suggested that there were serious health and safety issues in Nike factories.  Majority of workers suffered from respiratory ailments due to poor ventilation and exposure to chemicals.

Wages

Workers in this part of the world were paid very low. The wages were too little to compensate for the efforts and the final product that was produced.

Nike sought to diffuse the wage issue by simply ignoring and argued that this labour situation was beyond their control. They continued arguing that the stark wage difference was due to the painfully low standard of living of people in these countries.

Key Issues

Corporate culture

Corporate culture is used to control, coordinate, and integrate of company subsidiaries. However differences in national cultures exist contributing to differences in the views on the management. Differences between national cultures are deep rooted values of the respective cultures, and these cultural values can shape how people expect companies to be run, and how relationships between leaders and followers should be resulting to differences between the employer and the employee on expectations.

Problems arise in corporations because agents (top management) are not willing to bear responsibility

for their decisions unless they own a substantial amount of stock in the corporation.

Like most organizations, Nike was interested only in the bottom line and the profits generated. There was no regard paid to the environment, the working conditions, the wages paid, the general well being of the employees etc. When questioned they shirked the working conditions to be the responsibility of the contractors.

Problems of Ethics

Despite the American law of fair labour practices of 1938, which prohibits child labour, limits the working hours and establishes safe working conditions, Nike chose to give a blind eye.  Also to make matters worse it threatened the contractors to move business elsewhere if they were unable to keep wages down. They also ignored the widespread bribery to public officials. Also they indulged in paying audit firms for a better audit.

Nike had become the symbol of corporate greed and explotation.