Globalisation of Nike

Introduction:Globalisation is defined in the dictionary as “The growth to a global or widespread scale”. However, under a more economic definition, the term “Globalisation” describes the increased mobility of goods, services, labour, technology and capital throughout the world.

The advantages and disadvantages of globalisation have been debated and studied heavily in recent years. Some economists of globalisation say that it helps developing nations “catch up” to industrialized nations much faster through increased employment and technological advances. Critics of globalisation say that it weakens national sovereignty and allows rich nations to ship domestic jobs overseas where labour is much cheaper. Here are some examples of both advantages and disadvantages of globalisation.

This essay makes an attempt to study globalisation in general and the impact of globalisation on the sporting apparel giant Nike. The paper is divided in following subtopics:I.Overview of GlobalisationII.Advantages of GlobalisationIII.Disadvantages of GlobalisationIV.Effect of Globalisation.

V.Globalisation at NikeVI.Reasons for Globalisation at NikeVII.ConclusionsVIII.RecommendationsIX.Bibliography.

Advantages of Globalisation include:1.Increased free trade between nations2.Increased liquidity of capital allowing investors in developed nations to invest in developing nations3.Corporations have greater flexibility to operate across borders4.Global mass media ties the world together5.Increased flow of communications allows vital information to be shared between individuals and corporations around the world6.Greater ease and speed of transportation for goods and people. Reduction of cultural barriers increases the global village effect8.Spread of democratic ideals to developed nations9.Greater interdependence of nation-states10.Reduction of likelihood of war between developed nations11.Increases in environmental protection in developed nationsDisadvantages of Globalisation include:a.Increased flow of skilled and non-skilled jobs from developed to developing nations as corporations seek out the cheapest laborb.Increased likelihood of economic disruptions in one nation effecting all nationsc.

Corporate influence of nation-states far exceeds that of civil society organizations and average individualsd.Threat that control of world media by a handful of corporations will limit cultural expressione.Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritagef.Greater risk of diseases being transported unintentionally between nationsg.Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperityh.International bodies like the World Trade Organization infringe on national and individual sovereigntyi.Increase in the chances of civil war within developing countries and open war between developing countries as they vie for resourcesj.

Decreases in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countriesEffect globalisation of companiesEconomic impact- This includes the amount and types of jobs available and filled, the profits the company receive each financial year, the increase of international trade, the increase of competition and how effectively the company is bettering its competition, and finally the efficiency of the company in term of employees roles and shrinkage of goods.

Environmental impact: This includes the company’s environmental contract and the effectiveness of sticking to this outline, including how products are made, how employees trained to deal with issues involving flora and fauna, and the degree of harm the business causes natural species.

Human rights- this includes treatment of workers and their rights and responsibilities within the company. It also include pay rates, special features i.e. superannuation, leave etc. The company should have a policy that covers the laws of each country and human rights laws throughout the world. This policy needs to be abided by and all personal involved should have a clear understanding of all concepts.

Individual culture- this is the major issue surrounding globalisation, as it is what consumers see daily. The continuing amalgamation of cultures is even more noticeable in today’s society. When evaluating whether the company ‘Americanised’ the product, used differing designs in separate countries to cater for individual needs, and used countries unique cultural assumption.

Globalisation at Nike:The Nike Sporting Company is a massive, multi-billion dollar corporation. The Nike Company has factories and outlets all over the world, starting with a new generation of sport shoes, Nike have increasingly to change. Since the mid 1990’s to present date; Nike has begun the production of other products such as watches, clothing, bags, golfing gear and even parting with other companies (Phillips) to produce new Nike electronic products. Nike has expanded incredibly over the past 10 years including acquiring All Star Converse, one of their biggest past rival companies.

Nike has been a leader of sports wear and designs for four decades, sponsoring athletes like American record-holder Steve Prefontaine, who becomes the first major track athlete to wear Nike shoes. The corporation was founded by Phil Knight and Bill Bowerman in 1971 and has expanded rapidly ever since, with revenue of $13.7 billion. However, Nike was caught up in a law case in 1998 where they were sued for the use of Sweat shops with underage / under wage employees, Phil Knight formally commits Nike to strict standards for manufacturing facilities used by Nike, including: minimum age; air quality; mandatory education programs; expansion of micro loan program; factory monitoring; and enhanced transparency of Nike’s corporate social responsibility practices.

The Nike Corporation has outlets and factories all over the globe, with its world headquarters in unincorporated Washington County, just west of Portland. Some of the locations of Nike factories are China, Malaysia, Indonesia and Taiwan.

Reasons for Nike’s globalisation:Since 1993, The Nike Corporation commenced sponsoring R&B stars with their products that began a national culture of wear and distributed millions of their products nationwide. Consumers follow the clothes their favourite celebrities wear, and which Nike was very successful in doing.. Today Nike is also considered being a typical wear for the “superior” athletes, attracting many desiring sports companies to buy their products. The now worldwide company has become very successful in many fields of sport including, basketball, golf, soccer and the Olympic games series. The reason Nike is more successful than other sport companies (i.e. Addidas, Puma, Reebok) is because they have created an image for the sporting world, not just a brand.

Effect of globalisation on Nike:Economic impact- Nike will be able to offer lots of jobs for people; however their history of underage workers and minimum wage policy will definitely have an effect on the Australia economy. Nike appears to be doing better than their competition, earning yearly revenue of $13.7 billion dollars simply because of their lies against the minimum wage policy and the use of sweatshops. Nike is a great example of economic impact on the Globalisation that Australia will adopt because it will greatly increase our export rates to other countries and lowing foreign debts.

Environmental impact- Nike will not have much effect to the environment because most of their products are made in under-conditioned factories. Also, the company will unlikely to harm any nature species.

Human Rights- Nike will definitely have an impact on globalisation. Sarah Peart, spokesperson of the “Anti-Nike” campaign launched against Nike in 2004 said,” Many people are not even aware that sweatshops exist in Australia, let alone Nike’s slave factories in Third World countries where they pay workers as little as $3 a day. Public exposure of Nike’s practices is one of our main aims.” The majority of these outworkers in developed countries are from non-English speaking backgrounds, forced to work out of their homes and often paid as little as $2 per hour. Workers are often unaware of their rights, conditions or even who their employer is. Nike has a very poor reputation on the fact that their products are made from “sweatshops” from third-world countries, which have resulted they being the target of many protest action because of its disgusting treatment of workers.

Individual culture- Nike often abuse the policy of sweatshops they own in third-world countries, “Often, they have nothing more than a load of material dumped on their door step, or they collect it, and they are told to have it done by a certain day”, said Curr, member of the Anti-Nike campaign. “That day can be changed or hurried up in the form of speed-ups where outworkers have to stay up all night to finish the job, because instead of picking it up on Friday they want to pick it up on Wednesday and if you don’t have it ready then you won’t get paid.” This is vital to the fact that globalisation is allowing them to abuse the rights of individual culture and human rights. Nike is a leader of a global system of exploitation, they are industry leaders and their mode of manufacture has been to keep moving to countries where workers have the least rights, which is important to the globalisation policy we are currently adopting, Nike will “destroy” the economy easily with their outrageous actions.

Reference:

1.http://www.greenleft.org.au/back/2001/455/455p3.htm2.http://www.darkseptemberrain.com/ideas/disadvantages.htm3.http://en.wikipedia.org/wiki/Nike4.http://www.answers.com/main/ntquery?method=4&dsid=2222&dekey=General+Agreement+on+Tariffs+and+Trade&gwp=8&curtab=2222_15.http://www.answers.com/main/ntquery;jsessionid=1bs06ckh5k19g?tname=globalization&sbid=lc04a&method=66.http://www.answers.com/main/ntquery?method=4&dsid=2222&dekey=Strategic+management&gwp=8&curtab=2222_17.IMF staff (January 2002) Globalization: Threat or Opportunity?http://www.imf.org/external/np/exr/ib/2000/041200.htm8.Egoryan, R. ‘Globalization and Terrorism’ http://www.iatp.irex.am/grants/globalization/eng/main.htm9.Asian Development Bank: Drivers of Change: Globalization, Technology, and Competition http://www.asiandevbank.org/Documents/Books/ADO/2003/part3_3-1.asp10.The Danish Minister of the Environment: EU can solve environmental problems http://www.eu2002.dk/news/news_read.asp?iInformationID=24292