Free Case Study About Global Strategy - Nike Case Study
As the leader of the sport apparel industry, Nike has always been an example of business practice and a quality and innovator trend – setter. In the 21st century economy, the company is facing new challenges for reaching a sustainable future in which to continue fostering its social and financial performances. The focus on fair labor condition for its contractors’ workers, the reduced water consumption or the zero discharge of pollutant chemicals globally are Nike’s main focuses for achieving a sustainable future for its business and the society wherein it unfolds its operations.
The current case study focuses on the dilemma of Hannah Jones, the vice president of sustainable business and innovation and Eric Sprunk, the vice President of merchandising and product who have to develop a plan for reaching the Zero Road, while facing internal and external pressures.
The paper also details about the internal and external factors that make the Zero Road a difficult to achieve and even unsustainable target.
Nonetheless, Nike’s case study outlines the contemporary challenges that business committed to sustainability and corporate social responsibility (CSR) programs face, when aiming to align them with the organizational financial goals.
Confronted by nongovernmental organizations, with Greenpeace leading the sustainability criticism, and by its own sustainability concerns that might affect the future prosperity of the business, Nike developed the Sustainable Business and Innovation unit for reaching tough sustainable targets. With an older focus for reducing the environmental impact of its manufacturing processes on the environment, decreasing the water consumption and the water and environmental pollution, the organization developed a thorough planning for including the sustainable development within the organizational goals. Moreover, in the light of global apparel realities, centered on the exploitation of the labor force in underdeveloped countries perpetuated by contractors, Nike has been challenged to take a stand and responsibly manage and supervise its contractors’ operations, pressured by various support groups. Its corporate responsibility plans include not only a detailed attention on reducing the exploitation of the worker, providing fair working conditions, aligned with the manufacturing countries’ economies. It incorporates an elaborated concern for the future of Nike’s operations, defining specific targets for the “zero discharge of hazardous chemicals globally”, according to its commitment to the Greenpeace challenge (Paine, Hsieh & Adamsons 14).
In reaching this goal, Nike assigned Hannah Jones, the vice president of sustainable business and innovation and Eric Sprunk, the vice President of merchandising and product, for aligning their units’ operations to attain the envisioned sustainability objectives along with the overall organizational performance goals. In their effort to propose their road to zero toxins, Jones and Sprunk understand that they face a deeper dilemma of trading-off between organizational resources in parallel with extending their corporate responsibility to its internal and external stakeholders. Customers and employees alike would have to pay for Nike’s investments in zero discharge of pollutant substances and innovations in chemistry and other research and development areas would have to be aligned with the organization’s corporate governance. This situation seems not solely problematic to Jones and Sprunk who have different organizational interest and must reach an agreement, but also idealistic, as it has to align business performance goals with organizational corporate responsibility, business ethics and sustainable work, within a given budget. This is the situation Jones and Sprunk are confronted with, which pose a dilemma for both of them in outlining the targets for reaching the zero toxin elimination goals, while taking into consideration the above – mentioned organizational-focused aspects.
For understanding the gravity of the issue, a more detailed consideration on the factors that Jones and Sprunk need to consider in reaching their goal of zero discharge of hazardous chemicals globally is required. Primarily, although SB & I unit is an integrated component of Nike’s operations, its targets for reaching the intended sustainability for the corporate responsibility purposes seem to contradict the social performances of the organization. Creating innovations meant to reduce the pollutant substances caused by Nike’s operations implies considerable investments, which are unsupportive for the company’s productivity, in a highly competitive business. For maintaining its social performances and pursuing its efforts for reaching the zero toxin discharge, the organization would have to consider working along its supply chain, which includes the end consumer, who would have to pay the investments required for the sustainable path. As Sprunk observes, the consumers might not be sensitive to the toxin discharge matter and they might not want to pay extra for solving this issue (Paine, Hsieh & Adamsons 14). Similarly, considering the business and utilitarian ethics, this approach might even be unethical, as it does not take into consideration the desires of Nike’s direct stakeholders – its clients.
Other departments of the organization might also have to suffer from the company’s commitment to its zero pollutant substances discharge globally program, such as Marketing or Research and Development, which would be an unsustainable measure, contradicting Nike’s objective of reaching sustainability. Sustainability refers not only to environmental support, but also to the business development in a clean and healthy environment, with all the incorporated concerns: “water, waste, toxics, climate change and energy, labor, community investment, product design, materials, manufacturing, and innovation” (Paine, Hsieh & Adamsons 13). In this context, a focus on environment sustainability for achieving zero toxin discharge is incomplete and contradictory for Nike’s sustainability plans.
As the leader of the sport apparel market, Nike sets quality and sustainability standards, working with its suppliers for reaching the envisioned targets. The goal that Jones and Sprunk are challenged to achieve include a consideration of the changes in their collaboration with their suppliers and the adjustments that they will have to endure for reaching the Road to Zero.
Nike’s case is an excellent example that outlines the general challenges of sustainable and corporate responsibility programs that seem to contradict the corporate financial responsibility. Pressured by various social actors, groups and communities, organizations across the world are developing corporate social responsibility programs, meant to position them as reliable partners in the social problems with which the world confronts. However, there are grey areas in terms of ethics and corporate responsibility involvement, which define the lack of compliance between the corporate social responsibility goals and the financial responsibility objectives.
The dilemma that Jones and Sprunk face within Nike for reaching zero toxin discharge is the type of problem that sharpens the pressure with which organizations committed to corporate responsibility programs face. The sustainability and CSR programs are nevertheless aimed at reducing operational costs, contributing to the organizational financial goals. For instance, in Nike’s case, its focus on reducing the water consumption in dying its products and the partnership with the Dyecoo organization for eliminating water in the dying process is a sustainable solution for both the environment and the business performances (Paine, Hsieh & Adamsons 11). Moreover, CSR and sustainability programs are also generating increased community and social support, which indirectly contributes to organizational financial performances. Nevertheless, when faced with high investments for reaching sustainability and corporate social responsibility goals, organizations tend to compromise either their focus on CSR and sustainability or on their financial performances.
Paine, Lynn, S., Hsieg, Nien-He & Adamsons, Lara. Governance and Sustainability and Nike. Harvard: Harvard Business School. 2013. Print.