Thanks to our friends with the ideas to make the slide done. There are a lot of things we can learn from the case.

1. Globalization involving us all
Source:
http://www.strongtowns.org/journal/2016/6/29/glob
alizations-challenge-to-cities

2. Globalization involving us all
Source:
http://www.strongtowns.org/journal/2016/6/29/glob
alizations-challenge-to-cities
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3. Questions?
Benefits?
Drawbacks?
Performance
Corporate
citizenship

4. The promise and
perils of globalization:
the case of NIKE
Group 1:
Jen Vu Huong – 15044079
Puko Ha Anh –
Danny -
Duy Anh -
28 Sept 2016

5. Contents
1. Introduction about Nike
2. Nike in the globalisation context
3. The promise
4. The perils
5. Lessons learned and discussion

6. About Nike
Sales of Nike (2001)
Footwear
Apparel
Equipment
(Largest company)

7. About Nike (Cont)
(Data in 2015: https://www.statista.com/)

8. Nike and globalisation context
4th phase
3rd phase
2nd phase
1st
phase
1948-1970s 1980s-presents

9. Nike and the 3rd phase of Globalisation
-1960s
• Market drivers
• Falling barriers to trade/investment
• Rise of Japanese Multinational
enterprise
• Technological innovation
• Convergence in consumer lifestyle
& preference (1985: USA spent $5
billion on shoes)
• Competitors drivers (Adidas)
Globalisation
drivers
• Changed the business model
• Outsourcing to lower-cost Japanese
producers
• Sales increased to almost 2M USDResults

10. Nike and the 3rd phase of Globalisation
-1970s
• Cost drivers
• Costs/prices increased in
Japan
• Tighter labour market/shift
in currency, etc
Globalization
drivers
• Cultivated potential suppliers
in Korea, Thailand, China and
Taiwan

11. Nike and the 4th phase of Globalisation
-1980s
• Government drivers
• Korean govern focused
on footwear industry
Globalization
drivers
• Closed its US factories
• Outsourced almost its
production to Asia
Results
82%
18%
Footwear production
Korea &
Taiwan
Others
Nike factories
locations

12. Nike and the 4th phase of Globalisation
1990s – currently
• Cost drivers
• Korea and Taiwan
developed
Globalization
drivers
• Outsourced to
Indonesia, China and Vietnam
• Entered to other industries
Results
• More than 700 factories
• Employed over 500,000 workers
in 51 countries
(data from the year: 2002)

13. Nike and new industries
• Markets drivers
• The integration of
world financial markets
• Customers preferences
and lifestyles
• Government drivers
Globalization
drivers
• How to deal with
suppliers

14. Nike and the promise of globalisation

15. Nike and the perils of globalisation
Poor health
and working
condition
Child
labour
Low
wages

16. Nike and The perils of globalisation
Poor health
and working
condition
Child
labour
Low
wages
1. Low wages in Indonesia:
Paid lower than minimum wage
Ex: less than 1USD/day
Refuse to take responsibility
Early 1990s:
25,000 workers working
for Nike in Indonesia

17. Nike and The perils of globalisation
1. Low wages in Indonesia
2. Child labour in Pakistan
Poor health
and working
condition
Child
labour
Low
wages
70% of the world’s
high-quality soccer balls
Were produced in Sialkot.
Pakistan
(Data: the year 2001)

18. Nike and the perils of globalisation
Poor health
and working
condition
Child
labour
Low
wages
The wave of criticism against Nike
increased
with a “critical event” when Life
magazine published
photo of 12 year-old boy
stitching a Nike soccer ball
1. Low wages in Indonesia
2. Child labour in Pakistan

19. Nike and the perils of globalisation
1. Low wages in Indonesia
2. Child Labor in Pakistan
3. Health and Safety Problems in
Vietnam
Poor health
and working
condition
Child
labour
Low
wages
1997: employed 9000 workers
A chemical solvent
(named Tounlene exceed
6 to 177 times acceptable
standards)

20. Nike and the perils of globalisation
1. Low wages in Indonesia
2. Child Labor in Pakistan
3. Health and Safety Problems in
Vietnam
Poor health
and working
condition
Child
labour
Low
wages
Poor working conditions caused
health & safety problem
(especially skin and heart diseases)
Boycott, protest

21. Nike’s response to the perils
Poor health
and working
condition
Child
labour
Low
wages

22. New staff and training
Increased monitoring of
its suppliers
Cooperated with
international and non-profit
organizations
Nike’s response to the perils

23. New staff and
training
Nike’s response to the perils
-Creating new teams to frequently (weekly, monthly, etc)
to monitor factories
Example: 85 labor & environmental specialist
1000 production specialists
- Building training programs for employees
- Evaluating and rewarding managers

24. Increased
monitoring of its
suppliers
Nike’s first response to the perils
- Internal and external inspectors
-Not only focusing on price, quality
but labor health/environmental perspectives
- Using incentives and punishments

25. Cooperated with
international and
non-profit
organizations
Nike’s response to the perils
ATLANTA AGREEMENT
- Seek to improve working conditions in developing countries
- Promote corporate citizenship
- Focus on human rights, labour rights and environmental sustainability
- Develop a common set of standards for monitoring around the world

26. The results and the debates
Eliminate
chemicals released
in footwear
production
Improving
conditions
Wages
increased
Performance
Corporate
citizenship

27. Lessons learned and discussion

28. Thank you^^

29. Reference
• The Promise and Perils of Globalization: The Case of Nike
Richard M. Locke, MIT Working Paper IPC-02-007, July 2002
• 1978-97: HBS Case #9-299-084 "Nike, Inc.: Entering the
Millennium," March 31, 1999 and 1998-2001: Company
financial information
• National Sporting Goods Association, 2002; www.sbrnet.com
• http://www.nike.com/
• The Japanese Model of Political Economy,” in The Political
Economy of Japan: Volume 1, The Domestic
Transformation, Kozo Yamamura and Yasukichi
Yasuba, eds., Stanford University Press, 1987
• http://www.strongtowns.org/journal/2016/6/29/globalizations
-challenge-to-cities
• https://www.statista.com