Data Analysis: Nike CSR

The Nike Corporation had a tumultuous period in the 1990s due to the numerous accusations targeting the company’s business model, abuse of employees, low payment and lack of corporate social responsibility activities (Riddle, 2013). Nike took up corporate social responsibility engagements targeting innovation based on four pillars of materials to use, enhanced processing, better choices and the bringing of choices to scale (Nike, Incl., 2011).

The vision and mission statements of Nike contain a reflection of the company’s commitment to CSR to help enhance its business sustainability. The Nike, Inc. FY10/11 Sustainable Business Performance Summary notes that Nike’s vision statement states that, “Our vision is to build a sustainable business and create value for Nike and our stakeholders by decoupling profitable growth from constrained resources”.

Through the company’s vision statement, it is important recognize its commitment to CSR as it aspires for a sustainable business and enhanced welfare for its stakeholders. According to Riddle (2013), Nike’s commitment to CSR in the modern competitive market is evident in its vision and mission statements and the desire to achieve balance between people, profits and planet. Nike faced criticisms of its treatment to the environment especially in China where it was accused of environmental pollution through the release of poisonous effluents to rivers and other forms of pollution resulting from the overall manufacturing process.

The publicity created by Nike for its commitment to CSR in its vision statement is a convincing indication of the its intent to realize a better working environment for all associated stakeholders including the planet itself. Riddle (2013) notes that Nike adopted a policy to recycle its products in an effort to help reduce the level of environment pollution caused by its products around the world. The commitment to this process was never existent in the 1990s when it was accused of concern for only its profits and not the environment or its employees.

Through Nike’s vision, it is evident that the company embraces innovation as a tool for corporate social responsibility to help enhance its sustainability in the complex business market. Riddle (2013) notes that the corporation innovates to bring about enterprise-level sustainability and to make innovation the centre of its business model. The continued increase in the level of innovation at Nike is an indicator of the company’s resolve to enhance its business sustainability by bringing on board new sustainable products. Jackson and Sawayda (2014) argue that Nike has greatly evolved in its commitment to CSR since the company’s criticisms in the 1990s. According to the scholars, the company has embraced various CSR activities such as environmental sustainability.

Environmental Sustainability

Nike’s commitment to CSR through environmental sustainability is demonstrated in its efforts to enhance product recycling as a way of reducing environmental pollution through worn out products. Jackson and Sawayda (2014) observe that in the year 1995 the company’s Reuse-A-Shoe program began collecting shoes across its retail stores to help enhance its efforts to boost environmental sustainability through recycling. The initiative started-off as a CSR technique to show the company’s concern for the environmental dangers its products posed the inhabitants of planet earth. The program gained pace as the world grew more concerned of the CSR activities the companies whose products they consumed engaged in. To help enhance the effectiveness of the Reuse-A-Shoe program in the United States, the company partnered with the National Recycling Coalition in the year 2002 and was able to effectively collected and recycle millions of worn-out Nike footwear (Jackson & Sawayda, 2014).

The Reuse-A-Shoe program gained fame and helped the company exhibit its commitment to CSR by contributing greatly to a safer operational environment in the United States and beyond. Due to the success of the Reuse-A-Shoe program, the Nike management opted to expand the scope of product collection for recycling to other regions around the world and that led to the creation of shoe collection points in Europe and Australia (Jackson & Sawayda, 2014). By the year 2014, the company had successfully collected more than twenty-eight million pairs of worn-out athletic shoes since the year 1990 (Jackson & Sawayda, 2014). The collection of such a large number of sport-shoes for recycling is an indication of the company’s commitment to the realization of a more sustainable operational environment and a better planet earth for future generations.

The creation of a closed business loop at Nike is another element of great concern for environmental sustainability. The Considered Design philosophy is the one used by Nike to help create a closed business loop through which the company monitors its level of wastes at all manufacturing stages (Jackson & Sawayda, 2014). The researchers describe a closed loop business philosophy as one that allows for recycling of all wastes at all production stages in a company. The adoption of a closed loop business philosophy ingrained in the Nike business administration model helps the company enhance its ability to live to its vision and mission statements targeting maximization of CSR.

Jackson and Sawayda (2014) further note that the use of the Considered Design philosophy is not only a common rhetoric at the company but a big reality illustrated by the company’s ability to enlist it in its company ethos. The company uses the most sustainable technology to help ensure production of best products for best athletes. The establishment of guidelines that ought to be met across all the company’s production lines across the world further enhances the realization of Considered Design at the company. Jackson and Sawayda (2014) observe that the company has set the 2020 target as the year to realize total adherence to its set Considered Design guidelines that will help minimize wastes and thus preserve and conserve the environment.

Factory Transparency

Nike considers operational and management transparency as an integral function of its efforts to realize business sustainability across its different factories around the world. The company faced accusations of low remuneration for its staffs in the 1990s despite the huge profits and market dominance it enjoyed at the time, prompting the need to adopt better employee welfare management programs such as the provision of sustainable wages. Jackson and Sawayda (2014) argue that through the establishment of the Management Audit Verification (MAV), the company is able to ensure adherence to its code of leadership. The tool ensures harmonization of wages, development and observation of work hours, concern over employee grievances in addition to the stipulation of the guidelines for freedom of association to help enhance the overall employee welfare.

Nike’s commitment to transparently enhancing the overall welfare of all employees’ helps the company stay put to its resolve to ensure business sustainability via CSR. The company cares for the environment as from a CSR perspective is further boosted by the adoption of the Environment, Health and Safety (EHS) audit tool that helps the company adhere to its Considered Design framework.  Nike’s adoption of the Safety, Health, Attitude of Management, People and Environment (SHAPE) tool and its subsequent replacement in the year 2007 is a clear revelation of its commitment to environmental and employee welfare sustainability efforts (Jackson & Sawayda, 2014). The company replaced the shape audit tool with a factory self-evaluation tool to help ensure increased adherence to its code of leadership.

The Nike International Corporation brags high accountability and transparency standards due to its ability to disclose its supply chain in addition to monitoring various aspects of its suppliers to help ensure adherence to its code of leadership. The modern operational dynamics at Nike have their anchor on CSR as a model for business sustainability. The company’s ability to take note of the overall adherence to its code of conduct by all its suppliers comes to the fore with the use of a Balanced Scorecard technique. Jackson and Sawayda (2014) opine that the use of the Balanced Scorecard is real at Nike as the company takes consideration of environmental care for all its suppliers and factories around the world. Additionally the technique helps the corporation monitor labor and health issues across all its factories in a bid to help ensure maximum welfare for all its employees around the world.

Nike has a reputation of a leading CSR observe around the world due to the transformation the company underwent after the criticisms of employee and environmental abuse it suffered in the 1990s. The company’s commitment to environmental sustainability as a corporate social responsibility initiative is outlined it its adoption of the Reuse-A-Shoe initiative that has helped it collect and recycle more than twenty-eight million shoes since 1990 (Jackson & Sawayda, 2014). The commitment to environmental sustainability is further exhibited by the company’s resolve to use a Balanced Scorecard as a method of evaluating the labor, healthcare and environmental sustainability efforts put in all its factories to help enhance it business model.

Jackson and Sawayda (2014) note that Nike is highly concerned about its labor and environmental sustainability efforts in its business model as it considers CSR the heart of business success and sustainability in the modern world. This commitment is evidenced by the company’s establishment of a CSR committee to help deliberate on issues regarding the welfare of the employees, customers and environment. The empowerment of the CSR committee at Nike, giving it the powers to analyze policies and draw recommendations to the corporation’s board of management is an indicator of the level of commitment to CSR at Nike. The creation and empowerment of the CSR committee at Nike portrays the relentless efforts and resolve the company has in its efforts to ensure a sustainable CSR oriented organizational and operational environment.

Jackson and Sawayda (2014) observe that the Nike’s CSR vice president directly reports to the company’s CEO while the corporate social responsibility committee comprises at least two board members. This implies that the CSR committee and its work form an integral base for the organization’s operation and activities, hence, critical to the success of the company. Additionally, the management at Nike is noted to be making efforts to ensure the organization’s CSR initiatives are adhered to at all levels (Jackson & Sawayda, 2014).

Sustainability Report: FY 2011

            Nike stays highly committed to the realization of sustainable economic growth innovation. Valjakka (2013) notes that the Financial Year 2011 sustainability report of the Nike Corporation indicates great commitment to the realization economic growth through innovation and adherence to set CSR guidelines. Nike’s CSR strategy as noted in the Financial Year 2011 sustainability report categorizes the company’s CSR initiatives into various stakeholder variables that help reiterate the company’s commitment to sustainable growth. The breakdown of the steps undertaken by the company as per the 2011 sustainability report provides sufficient evidence of sustainable strategies the company is employing to help realize its CSR targets. The following breakdown of the sustainability reports brings to the fore the strategies employed by the company to help achieve all the CSR targets:

Customer

In the 2011 financial sustainability report, Valjakka (2013) observes that Nike aspires to be more ethical in its dealing with its customers as a CSR strategy to help enhance its brand and public image. The report indicates that Nike begins and ends with the consumer in addition to aspiring to meet the continued increase in sustainability demands of the client. The company notes that the consumer expectations have been growing with time and there is urgent need to both meet the increasing demand as well as the sustainability of the continued demand increase to help enhance the company’s economic growth. To help achieve this goal, the sustainability report notes that the company was to use an online platform dubbed “Nike Better World” to help exhibit innovative solutions to the increase in customer demand and enhance the sustainability of the increase (Valjakka, 2013). The online innovative platform was expected to respond to environmental issues and social issues affecting customers, hence, an ethical consideration to customer welfare.

The company realized that consumers were more responsive to the quality of products in the market and as a result, opted to produce excellent products suiting customer tastes and demands. The company’s initiative to create products designed to meet customer expectations and increased demand is in line with its resolve to be more ethical in its customer dealings in addition to boosting its economic position.  The realization of increased economic performance in this case was not a primary goal but rather a secondary product of the CSR initiative of enhancing ethical behavior in dealing with customer demands and expectations.

To help realize the ethical CSR initiative through this process, Valjakka (2013) notes that the 2011 sustainability report proposes the need for the company to ensure increased transparency. Higher levels of transparency at the organization were considered integral to the realization of better care and concern for customer welfare. The creation of strategies to address the needs of customers in line with the company’s customer welfare CSR initiative was important in helping it realizing sustainability through the innovative CSR programs. The company understood the need to improve customer welfare as an ethical consideration to help change the public perception held about the company in the 1990s. Nike appreciates the efforts of all stakeholders and considers it ethically important to meet the exact customer demands in addition to ensuring high product quality despite the limited resources.

 

 

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