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Child Labor In Developing Countries

Ethical Analysis Of Nike Activities in Southeast Asia

Introduction to Child Labor in Developing Countries

Child labor is regarded as a serious social problem in which children are engaged in employment practices and work processes (Rugman and Verbeke, 2007). Apparently, children should not be included in employment management; still due to lack of financial resources, families were open for child labour. Most of the children work for their families and also to maintian their livelihood. Thus, in such respect focus has been laid on Nike’s practices regarding child labour. Thus, in this context, the present research study has been emphasizing on Nike which operates business as a athletic footwear organization and which delievers several products and accessories to the consumers.

Along with different sports products, Nike is engaged in rendering other acessories as well. The organization is greatly focused on brand management which also ensures to enhance customer satisfaction rate. In this respect, focus has been laid on organizational practices of Nike with regards to child labour in developing countries.

Hnece, discussion has also been included regarding labour practices of Nike in South East Asia. Therefore, in this respect reearcher has highlighted all the ethical practices of Nike through using semiotic square (Srivastava, 2011). However, many countries do not prioritize the child development and instead allows its children to get involved in child labor. Many millions of laborers across the world are children where many are working as hidden workers in homes or the underground economy (Srivastava, 2011). The international labor organization prohibits child labor simply because it is a violation of human rights. Child labor is one of the factors contributing to the failure of children to complete education and thus affecting their future negatively.

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Labor Practices Of Nike In Southeast Asia

In developing countries, many families are poor, and the issue of family planning is a big challenge. It is easier to find a family with around ten children all under the age of 18years and that both parents are not employed in these countries.Resolving the issue of child labor in such situations is therefore not an easy task (Shah, 1998).

This is because the children are in such cases are working to get basic commodities and forcing the companies that employ these children to terminate the employment may lead to the children seeking other employments with lower paid work or even get involved in child prostitution in some cases (Shah, 1998). However, this does not mean that practicing child labor should be encouraged in such areas, but instead, other ways to help the children is encouraged.

A good example of child labor issues is Pakistan. In 1996, a life magazine published an article about child labor, and it had had a photo of a 12-year-old kind stitching a ball which was a product of Nike. This kid would spend most of the day stitching the pieces together only to be paid 60cents at the end of the day. This article led to activists complaining about the issue of child labor, and Nike later accepted that some of the soccer balls that Nike bought from Pakistan had been made by a contractor who was using child labor. Although the issue of Nike using subcontractors who are using child labor came into public in 1996, it may have started earlier because Nike has always used the third world countries to produce its commodities and to leave when the living standards of the country rise and make the manufacturing more expensive.

A good example is Japan where Nike used to produce its commodities and later left when Japan’s living standards went high. The case of the 12year old boy stitching the soccer ball was just one of the many cases which happen, and it shows that child labor is existent in many developing countries. However, this does not mean that the governments’ involved has allowed child labor but the problem is that enforcement is weak. For instance, Pakistan has laws concerning child labor, but in some places within the country, some children work for 10hours a day, six days a week simply because the law is not enforced by the government (Schanberg, 2006).

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Semiotic Square

Semiotic Square is also called as Greimas square which is a tool that is used for structural analysis. This also identifies relationship between semiotic signs through considering opposite sides of the concepts. Applying the model in Nike, it can be said that the semiotic square is formed by an binary relationship among two contrary signs. It basically focuses on the study of signs and symbols which are the major elements of communicative behaviour. At the same time, it also includes identification of the system of communication such as language, clothing and gestures. Another dimension is that it depicts a general theory of signs and symbolism. This is usually divided into the branches of pragmatics, semantics and syntactics.

There are three different aspects that lies in this model and this can also be applied in Nike in terms of showing the relationship between business aspects. Thus, on the basis of above diagram, it can be said that Nike has to implement ethical aspects in to business practices. However, the practice of child labour increases ethical implications on Nike and as a result it affects the business prospects. The diagram depicts that child labour impacts Nike business operations and at the same time it also increases legal implications of the business. Therefore, with the elementary structure, it is evident that the model shows relationship between contrary, contradictory and implication. In this context, it can be said that business marketing is mainly focusing on the business interaction between organizational actors.

According to the Semiotic Square, Nike has to ensure that all the business practices are ethically and legally managed as that has a direct impact on business performance and productivity aspects. In addition to the same, it can also aid Nike to avoid all such aspects that can affect the business practices. However, the model shall not be applied in the situation if Nike already follows all ethical dimensions.

For instance- Nike can protect the business practices and performance through acting ethically and at the same time it does not require implementation of Semiotic Square in diverse business aspects. Therefore, this context it is clear that Nike needs to ensure that all legal and ethical dimensions are being considered. In addition to the Semiotic Square, Nike is also required to emphasize on ethical theories so as to apply different principles which aids business entities to judge the effectiveness of business practices. Two major theories which are applicable in this case are discussed as follows:

Deontology

According to this theory, ethical principles of the business can be ascertained through observing how people adhere to their obligations and duties at the time when they are engaged in decision making process. The theory contains several positive attributes; however it also has various confined elements. However, as per the ethical principles, it is crucial for the business entity to oblige all the terms and conditions so keep all the ethical standards (Srivastava, 2011).

Utilitarianism

This theory is based on one’s ability for predicting the consequences of a specific action. Choice is typically made regarding all the aspects that provides the most benefits to the business entity. However for such perspective, it is crucial for the business entity to focus on justice and equity so that prominent outcomes can be derived accordingly. Focus is required to be laid on good practices so that legal issues and constraints can be avoided accordingly (Schanberg, 2006). Hence, organizational people of Nike must emphasize on legal, ethical and accurate practices in all domains (New York Times. 1997).

Following these cases, many consumers of Nike’s products and activist groups protested against the issue of Nike and child labor. However, just like many other companies would do, Nike’s response was defensive, and they claimed that it is their subcontractors who were getting involved in child labor and not Nike itself. Nike said that it was not aware of the extent of the child labor and that it is these subcontractors/suppliers who should be responsible for such acts (Rugman and Verbeke, 2007). It is obvious that Nike’s code of conduct cannot promote child labor. In its code of conduct, it clearly explains that it does not support child labor. With this, it cannot be seen as a company that supports child labor, and this avoids future repercussions that may arise from child labor practice (Woo, 2017).

However, the issue of child labor is controversial, and it is a major challenge for multinational companies like Nike. This is due to its utilization of global supply chains which largely depend on outsourcing their products. It is tough to monitor all the operations of a product and the legality of the process involved. Labor laws also vary across different countries and for this, the legal working age for children is different for different countries. Companies should thus be aware of these differences and abide by them.

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As seen earlier, many children involved in child labor comes as a result of poor backgrounds whereby their situation forces them to work. If some of these children do not work, then it means that no food on the table (Rugman and Verbeke, 2007). For this reason, some individuals including Nike’s stakeholders claim that in the case of poor backgrounds, child labor is essential to the survival of the family. On the other side, some stakeholders are against it as it tarnishes the company’s reputation.

NGOs and activists groups also put pressure on the issue, and this presents a dilemma for many businesses like Nike. However, for the company to maintain its international reputation, it has to do what is right. It has to enforce its code of conduct by all means. In some places there some regulations that employees should not talk to their coworkers (Wilsey and Lichtig, no date).

These unethical practices was a big blow for Nike having in mind that one of the big assets that Nike has is its name, then tarnishing the name would bring a major backlash. Despite the presence of some unethical practices within the companies involved with Nike, they were able to implement some recommendations from experts to deal with the issues.

This means that they took actions before their international reputation was completely eroded. Some of the recommendations that Nike implemented were: start paying workers the legal minimum wages or higher than the minimum, eliminate any forced or excessive overtime, eliminate regulations that prohibit workers from talking to their coworkers, stop deducting additional criminal fines among other recommendations (Kahle, Boush and Phelps, 2000).

After many of the recommendations had been implemented, many issues pertaining child labor and other unethical issues were resolved and further surveys to check whether the problem was still prevailing were conducted. The later reports indicated that the workplaces had greatly improved and that the workers are more comfortable than before. However, there were still some little ethical issues and just like before, there were some recommendations to solve the remaining issues (Kahle, Boush, and Phelps, 2000).

Some of the recommendations were that the company should continue to implement global standards for international labor practices. They should also be more aggressive in enforcing the code of conduct. Labor representatives should represent the worker's interests, and it should be the duty of Nike to promote the development of these representatives. The factories that manufacture Nike products should come up with better grievance systems within the factories to solve issues in a better manner. They were also recommended that they should enhance their relationships with human rights community within the countries where their commodities are produced. External monitoring to ensure that the code of conduct is implemented was also recommended (Kahle, Boush, and Phelps, 2000).

Conclusion

The use of Nike in this report is just a representation of many other companies that have unethical practices in conducting their businesses. Child labor is also practiced illegally in many parts of the world in developing countries. Many multinational corporations have put in place measures to ensure that good code of conduct is implemented to avoid human rights violation. However, the problem of child labor is still persistent in some areas, and it can be attributed to poor living standards.

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Bibliography

  • Kahle, L.R., Boush, D.M. and Phelps, M. (2000) Good Morning, Vietnam: An Ethical Analysis of Nike Activities in Southeast Asia. Available at: https://www.researchgate.net/publication/276027322_Good_Morning_Vietnam_An_Ethical_Analysis_of_Nike_Activities_in_Southeast_Asia .
  • NIKE and child labor (no date) Available at: http://www1.american.edu/ted/nike.htm.
  • Rugman, A.M. and Verbeke, A. (2007) REGIONAL AND GLOBAL STRATEGIES OF MULTINATIONAL ENTERPRISES. Available at: https://kelley.iu.edu/riharbau/repec/iuk/wpaper/bepp2004-19-rugman-verbeke.pdf.
  • Shah, A. (1998) Child labor — global issues. Available at: http://www.globalissues.org/article/62/child-labor.
  • Srivastava, K. (2011) 'Child labour issues and challenges'.
  • Wilsey, M. and Lichtig, S. (no date) The Nike controversy. Available at: https://web.stanford.edu/class/e297c/trade_environment/wheeling/hnike.html.
  • Woo, J. (2017) ‘Government & business: Nike’, .
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