Nike Company as a Member of Global Compact Local Network

Nike Company as a Member of Global Compact Local Network

Nike Company as a Member of Global Compact Local Network
Business Practices in Compliance to Global Compact

The United Nations Global Compact initiative seeks to encourage firms globally to adopt
sustainable and socially responsible policies as well as reporting their implementation. It is a
principle-based framework for organizations through the ten principles in the fields of anti-
corruption, environment, human rights, and labor 1 . Nike is a firm compliance of the global

compact especially in terms of initiatives and issues concerning workers, environmental
sustainability, partnerships with the Fair Labor Association, commitment to increasing physical
activity aiming youths, and contract factories.
There are a number of strategies and practices that would work in improving compliance
with principles of the global compact. One of the most effective practices is for the companies to
commit in improving working conditions for their workers in their factories as well as in their
contract factories 2 . This can be achieved by having compliance staff tasked with the
responsibility of monitoring workplace conditions through a series of audits conducted. In
addition, the companies can supplement overall contract factory compensation through
sponsoring after hour’s education, mobile health clinics, health education, and management and
life skills training.
Nike is one of the founding members of the Global Alliance for Workers and
Communities (GA), an initiative that strives to respond to the concerns and needs of factory
workers in the global manufacturing chains. The main goal of the GA is to improve the lives and
future of workers in the global production through assessing of their needs and those of the
community, developing and implementing programs that address these needs, as well as
reporting publically about these activities 3 . This way the company is able to give a voice to the
workers allowing them articulate their own needs and interests. More importantly, it is

1 Williams, Oliver F. “THE UN GLOBAL COMPACT: THE CHALLENGE AND THE
PROMISE.” Business Ethics Quarterly 14, no. 4 (October 2004): 755-774. 
2 Bigge, david m. “Bring on the Bluewash: A Social Constructivist Argument Against Using Nike v.
Kasky to Attack the UN Global Compact.” International Legal Perspectives 14, (April 1, 2004):
6. LexisNexis Academic: Law Reviews
3 Berliner, Daniel, and Aseem Prakash. “The United Nations Global Compact: An Institutionalist
Perspective.” Journal Of Business Ethics 122, no. 2 (June 26, 2014): 217-223.

imperative that companies establish a code of conduct that encompasses labor standards that are
related to the nine principles of global compact. The code of conduct should then be
implemented throughout the factories linked to the company and audited on a regular basis.
Concerning the principle on environment, businesses should support approaches to
environment challenges, undertake initiatives to enhance greater environmental responsibility,
and encourage the establishment of environmentally friendly technologies. Corporate social
responsibility initiatives should be a core part of companies’ business strategy. However, a
company’s social responsibility program is likely to succeed if there is a company-wide support
and action to sustain it. This calls for comprehensive involvement of all the stakeholders and
other players. For instance, the assessment, development, and training should engage the
different independent organizations. In a case where unions exist they should also be engaged as
part of the program.

Positive and Negative Lessons

Companies that practice better working conditions and relations with workers and
responsible environmental programs have numerous advantages over those that do not. For
instance, they can realize improved relationships with stakeholders, partners, and communities.
Consequently, they realize better communication between workers and managers. CSR programs
acts as a forum for dialogue and learning for businesses enabling firms to network with other
similar enterprises 4 . It is a platform for fostering of civic participation and social commitment.

4 Williams, Oliver. “The United Nations Global Compact: What Did It Promise?.” Journal Of Business
Ethics122, no. 2 (June 26, 2014): 241-251.

The initiatives can be viewed as realizations that solutions to the most fundamental challenges
facing businesses and societies can only be addressed through extraordinary collaborations. The
main focus of businesses should, therefore, be on supporting the alignment of the various
initiatives and programs as well as in facilitating cooperation among all the actors to integrate the
diverse efforts and skills.
In complying with the principles of global compact, firms should seek to share their
business culture and cognition of social responsibility with other stakeholders and those around
them. They can achieve this by consistently improving on their corporate structure, social
responsibility, and operations.

Business Practice Recommendations

To comply to global compact principle on labor standards and conditions in contract
factories, companies should detail monitoring process and criteria to assess its factory’s
compliance on a wide array of issues. The company should lay down a strategic relationship with
manufacturers that are focused on a more integrated supply chain 5 . The strong relationship that
the company has developed with suppliers and factories would then enable it to have influence
over processes.

5 Hoessle, Ulrike. “The contribution of the UN global compact towards the compliance of international
regimes: a comparative study of businesses from the USA, Mozambique, United Arab Emirates and
Germany.” The Journal Of Corporate Citizenship no. 53 (2014): 27. 

By and large, the design of these initiatives should be based on the fundamental respect
for workers being accorded better working conditions and a voice in ways they are invested in
and treated. The initiatives should be focused on according workers an active role in determining
investments that are made in their work and living places 6 . As such, the initiative allows the
company and its partners including government agencies, unions, NGOs, and factory managers
to take positive, proactive action in addressing the needs of the workers such as improved health,
workplace conditions, and education. Transparency of the program is paramount in all aspects as
well as allowing public discussions which can then be used to inform decisions.

Benefits, Challenges, and Risks for Stakeholders

The company implementing the initiatives is likely to attract and retain more qualified
personnel as a result of the improved working conditions and reputation of the company. Most
employees are motivated to work for companies that respect worker’s rights and standards.
Companies that practice better working conditions and CSR are held at high regard by partners
including investors, partners, suppliers, employees, and customers 7 .

6 Rasche, Andreas, and Sandra Waddock. “Global Sustainability Governance and the UN Global
Compact: A Rejoinder to Critics.” Journal Of Business Ethics 122, no. 2 (June 26, 2014): 209-216. 
7 Baumann-Pauly, Dorothée, and Andreas Scherer. 2013. “The Organizational Implementation of
Corporate Citizenship: An Assessment Tool and its Application at UN Global Compact
Participants.” Journal Of Business Ethics 117, no. 1: 1-17. 

Despite the numerous benefits in these initiatives, stakeholders are likely to experience
some challenges and issues in implementation. For instance, there are always demands for
greater corporate disclosure from other parties and stakeholders such as customers, communities,
and investors 8 . Again, the company is likely to garner greater customer interest seeking the
status of the activities of the company especially concerning CSR. The stakeholders are also
likely to face pressure from the competitive markets in terms of cost and responsibility. The main
risk in practicing these initiatives lies in increasing the cost of production for the company which
is a main concern for the stakeholders. Improved standards for suppliers mean meeting more
costs and impacting on revenues. Equally, CSR is an extra cost for investors and partners 9 .

Bibliography

Baumann-Pauly, Dorothée, and Andreas Scherer. 2013. “The Organizational Implementation of
Corporate Citizenship: An Assessment Tool and its Application at UN Global Compact
Participants.” Journal Of Business Ethics 117, no. 1: 1-17. 
Berliner, Daniel, and Aseem Prakash. “From norms to programs: The United Nations Global
Compact and global governance.” Regulation & Governance 6, no. 2 (June 2012): 149-
166. 

8 Berliner, Daniel, and Aseem Prakash. “From norms to programs: The United Nations Global Compact
and global governance.” Regulation & Governance 6, no. 2 (June 2012): 149-166. 
9 Rasche, Andreas, and Sandra Waddock, 2014

Berliner, Daniel, and Aseem Prakash. “The United Nations Global Compact: An Institutionalist
Perspective.” Journal Of Business Ethics 122, no. 2 (June 26, 2014): 217-223.
Bigge, david m. “Bring on the Bluewash: A Social Constructivist Argument Against Using Nike
v. Kasky to Attack the UN Global Compact.” International Legal Perspectives 14, (April
1, 2004): 6. LexisNexis Academic: Law Reviews
Hoessle, Ulrike. “The contribution of the UN global compact towards the compliance of
international regimes: a comparative study of businesses from the USA, Mozambique,
United Arab Emirates and Germany.” The Journal Of Corporate Citizenship no. 53
(2014): 27. 
Rasche, Andreas, and Dirk Ulrich Gilbert. “Institutionalizing global governance: the role of the
United Nations Global Compact.” Business Ethics: A European Review 21, no. 1
(January 2012): 100-114.
Rasche, Andreas, and Sandra Waddock. “Global Sustainability Governance and the UN Global
Compact: A Rejoinder to Critics.” Journal Of Business Ethics 122, no. 2 (June 26, 2014):
209-216. 
Williams, Oliver F. “THE UN GLOBAL COMPACT: THE CHALLENGE AND THE
PROMISE.” Business Ethics Quarterly 14, no. 4 (October 2004): 755-774. 
Williams, Oliver. “The United Nations Global Compact: What Did It Promise?.” Journal Of
Business Ethics122, no. 2 (June 26, 2014): 241-251.