Why did Nike fail to address corporate social responsibility early on? Nike was a discoverer in overseas manufacture as the most common way of reducing prices for their goods. To keep competitive prices and production costs low, athletic footwear manufacturing has moved to areas with low labor costs, such as China, Indonesia, and Vietnam. The conditions of work in these factories were far imperfect: abuse, poor conditions, and widespread harassment have been issues for Nike. It was increasingly difficult for manufacturers to control wages and work conditions in factories in conditions when Asian factories were tended to subcontract the work.
Evaluate Nike’s response to societal and consumer concerns about its contract manufacturing. Nike believes that transparency should work as a basic motivation for contract factories and consumer concerns. Nike tried to facilitate for contract factories to comply with their code of conduct and has exercised the programs, that used to improve assess of factory compliance with the code of conduct. It gave factories impulses to better work conditions, and manufacturers rewarded those which have shown improvement. The outcome of its positive changes was obvious and Nike received considerable improvement of its reputation and corporate image in the past few years. However, the company is being rewarded for its efforts toward improvement thus far.
What are the challenges facing Nike in the future? Nike plans to follow a quick growth strategy in emerging economies and announced its plans to increase sales from $3 to $3,5 billion by 2015. At the same time, it is also taking steps to feature itself as a socially responsible company and enlarge its visibility. Nike plans to develop more innovative and sustainable products in the future and admits that it has to move forward the corporate responsibility, continuing to better its audit tools. Nike will face many challenges in the way of implementation of all these plans, but the strategy works and worth a try.