Corporate Governance and Social Responsibility Essay

Corporate Governance and Social Responsibility - Essay Example Then, a discussion of the controversies that affected Nike will follow in the context of corporate governance and CSR. The preceding section will list the corporate governance and CSR practices within the organization including the impact of such measures for Nike today. 2.0 Company Overview Nike is the leading sports footwear and apparel manufacturer throughout the world. It has more than 30 years of experience in developing high performance and innovative shoes. In recent market reports, Nike holds at least 30 percent market share, a comfortable lead from its closest rival, the German brand Adidas. (Van Riper 2008) Nike as a brand is the strongest among its competitors. This has been achieved through years of careful brand promotions that have exposed Nike to the widest possible population and earned it as one of the American icons next to Coca-cola, IBM, Microsoft, Walt Disney, among others. Nike in its overall organizational strategy – from product development to sales and promotions – is unique in comparison with all the rest of the major players in the footwear and related industries. If one examines its strategy, the company focuses much on brand-building recruiting the best athletes in every sport to endorse its brands and reinforce the image it has carefully cultivated throughout the years. Nike’s history, however, is not written with success stories exclusively. The fact is that it is punctuated with several controversies involving unethical practices. The following cases are some examples: Nike was widely criticized back in the 1990s after a series of news reports aired in CBS recounted the unfair conditions and practices of the company’s manufacturing facilities in Vietnam and Indonesia. The report cited the payment of below minimum wage to its employees; charges of employee physical abuse; and, the forced running of laps by employees who wore nonregulation shoes. (Jackson, Sawyer and Jenkins, p. 17) The child labor contr oversy in Pakistan and other third world countries. Nike was sued for false advertising in a California court after Marc Kasky accused the company of issuing false and misleading statements, prompting a protracted and yet unresolved debate about whether Nike’s campaign of press releases, advertisements, and other promotional measures to defend its business practices constitute free speech or commercial information. (L’Etang & Peiczka, p. 56) The manner by which Nike sought to quell these controversies underscored how they value their reputation and how unethical practices could severely impact their market performance. Crucial to the measures taken by the organization to deal with the above crises was the adoption of corporate social responsibility practices. Writing about this development in 2001 for The Independent, Steve Boggan (2001) reported, â€Å"Nike attempted to present itself to its shareholders in its first "corporate responsibility report" as a touchy-feel y entity established by "skinny runners" and employing young executives who worried about the environment and the level of wages it paid.† 3.0 Corporate social responsibility The old adage stating that the only business of business organizations is business is thought to be outdated and no longer applicable today. In the current global scenario, explained Fernando (2009), competition is more cutthroat, requiring corporations â€Å"to pause and ponder upon the impact of their business on the global community in general and their key stakeholders in particular†