HR Sustainability Initiatives: Nike
The issue of human resource sustainability is critical to the success of any business (Ehnert, Harry and Zink, 2013 p18), in this case Nike. This paper will critically look at the HR sustainability initiatives of Nike and evaluate the authenticity of such initiatives. To rest the case and conclude that the initiatives are surely functional, the contribution of such initiatives to enhance the positive social and human outcomes for Nike will be evaluated. Businesses tend to learn from each other. As such, the applicability of similar initiatives to different businesses will be placed under the lens.
Nike, in the past two decades faced an insurmountable task with its workers globally and in response, the company implemented different initiatives aimed at making the HR aspect of the company sustainable. First, the company helped found the Fair Labor Association (FLA). Second, the company developed multiple indexes that were useful in rating sustainability practices in both its facilities and those contracted independently. Third, the company in 2009, engineered and executed a far reaching company reorganization. All these aspects delivered the results they were designed for, or provided a learning platform for the company to better its HR practices.
The Fair Labor Association champions for the rights of workers in different sectors of the manufacturing industry. It is a body that was formed to focus on the needs of worker. It is a force that was engineered with the intention of ending ‘sweat shops’. It was supposed to give workers with no alternative means of raising their voices a voice. In a brochure by Fair Labor Association (2008, p1), the NGO demonstrates its workplace code of conduct which touches on issues of forced labor, child labor, harassment, conditions in the workplace, and wages among other issues. Willing companies subscribe to become members in the organization and pledge to follow its code (Fair Labor Association, 2011, p17) and are continuously subjected to independent audits which inform the organization and its stakeholders of areas needing improvement.
The development of multiple indexes critical in the rating sustainability practices in Nikes factories and in those of its affiliates is a key in improving sustainability of HR. The indexes provided metrics that are used to measure the impact of labor and other elements. The indexes are critical in ensuring HR sustainability due to their informative component which works by pointing out the position of a factory and how well labor and other aspects in the factory respect the wellbeing of its workers. Soares (2016) explained that the multiple indexes are critical in closing the CSR gap; the gap has demonstrated sufficient capability to drag companies such as Nike into murky waters.
A company reorganization that was planned and implemented in 2009 by Nike was surgically implemented to ensure that HR sustainability is not just a department in the company, but a way the company works. On this, Kujawińska, Vogt and Wachowiak (2015, p195) explained that reorganization of a company is critical in the adoption of sustainable production practices which include caring about employees.
The formation of the Fair Labor Association by Nike and other associates was done out of the need to have independent evaluation of workplaces and their conformation to different codes which safeguard the wellbeing of workers. To demonstrate its authenticity, Nike has been following the recommendations of FLA to enforce its relationships with independent contractors. Further, other notable companies in the global space such as Apple (FLA, 2012), have joined the forum to demonstrate that FLA is up to task to help companies rise to the occasion. The FLA has tentacles in majority of places where labor is an integral part of the production process.
Multiple indexes developed by Nike are critical in informing Nike as well as its associates their position as far as sustainability of HR policies among other policies is considered. Nike, ensures that it uses the indexes to evaluate its relationship with an independent contractor. The indexes are critical in informing the direction the relationship between Nike and the contractors is supposed to take. It is a means of finding problems within the supply chain with an aim of rectifying for the betterment of the workers in such contracted factories. As explained by Radhakrishnan (2015, p24), indexes provide a learning tool for both all manner of companies (both small and large) and it is crucial in identifying challenges, opportunities, and for capturing ongoing improvement.
The reorganization of Nike in 2009 was authentic in all ways possible. The reorganization was critically thought out, was deliberate, took time to be implemented, and incorporated best practice. Savitz and Weber (2013, p 6) explain that having corporate social responsibility move up the corporate ladder, significant reorganization is critical. On this, Savitz and Weber (2013, p 6) explain how restructuring was effected in GE after Jack Welch left the company to indicate how strong the methodology is in advancing the human resource sustainability narrative. Nike, were it not for authenticity in the reorganization, would not have incurred the expenses and inconvenience that come with reorganizing. Further, Carroll, Brown, and Buchholtz (2017 ch 2) explain that such restructuring is also CSR activity which ensures that the company is playing good citizenship.
The founding of the Fair Labor Association has enhanced positive social and human outcomes for Nike’s HR. FLA has been a champion of good practices with an emphasis to the environment as well as to the human workforce in the company. FLA enforces a code of conduct in Nike as well as to the independent contractors affiliated to Nike. Through its independent audits, FLA has been able to point out areas that need improvement in the said enterprises. Nike, on the other end, follows the advice or recommendations given by FLA to ensure that there is an application of the code for business to thrive. FLA provides a means for the market to regulate itself through making affiliates conform to some standards by having internal and external monitors as recorded by Marx (2008, p 255). Sourcing from non-compliant factories is recommended for termination of the concerned factory demonstrates no will to change in accordance to FLA recommendations. FLA is premised on the fact that people are subjects and have their unique needs and wants which should be fulfilled according to Ehnert, Harry and Zink (2013 p18). This gives the human resource involved companies’ positive human outcomes. The environment as well as other social courses are poised for positive developments as a result.
Multiple indexes provide mechanisms for evaluation of small but critical aspects that can easily be forgotten. It is a checklist that factories are required to go through every now and then and see how well they conform to standards either internally or with external help. Epstein, Buhovac, and Yuthas (2010, p353) explain that the indexing system has gained momentum in the company and has been incorporated even in the design process where environmental aspects are considered. As a result, companies are able to come to a realization of what they have not done and what they need to do to conform to set standards. As such, the indexes give impetus to factories, whether independent or otherwise, an opportunity to modulate their operations for the betterment of sustainability. In the process, due concern is given to the human resource since it is a critical aspect of operations.
Reorganization had a bucketful of positives in enhancing positive social and human resource outcomes for Nike. After reorganization, Nike was able to develop high end systems which ensured that sustainability and human resources were incorporated into the business and accountability was ingrained into the working methodology of the business. Buhovac and Yuthas (2010, p353) observe that the CSR staff were incorporated into the business units. This was a win for the organization as it encouraged rapid communication and operationalization of initiatives in the entire organization. As such, CSR adopted a top-down approach.
Different businesses have different modus operandi, as such, similar sustainability initiatives are likely to deliver different outcomes. Take a company that is majorly reliant on technology and not labor, for instance, Toyota or General Electric. These companies employ highly skilled labor which is well informed and often with options. As such, such companies, which are not labor intensive, might not derive as much outcomes from human sustainability point of view. Such companies rarely find themselves outsourcing labor from low wage countries and as such, they rarely face a backlash over human resource issues. It is for such reasons that such companies are not members of the Fair Labor Association.
Sustainability initiatives are critical in ensuring that a business operates in a responsible way both to the society and to the employees. Achieving this feat, as it has been demonstrated by Nike, requires the formulation of deliberate strategies that are cognizant of the desired end outcomes. Laasch and Conaway (2014, Ch 11) opine that such sustainability efforts are a demonstration of responsible management. Through the formation of the FLA, multiple indexes, and corporate reorganization Nike demonstrated the willingness to not only change its public perception, but also to change the fortunes of its employees and contractors as well as its environmental footprint. All the three actions have all the hallmarks of authenticity and have demonstrated tangible and positive outcomes.
Carroll, A.B., Brown, J. & Buchholtz, A.K. 2017, Business & Society: Ethics, Sustainability & Stakeholder Management, 10th Edn, Cengage Learning, US.
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Epstein, M.J., Buhovac, A.R. and Yuthas, K., 2010. Why Nike kicks butt in sustainability. Organizational Dynamics, 39(4), p.353.
Fair Labor Association, 2008. Fair Labor Association: Protecting Workers’ Rights Worldwide. Globalization & the Workplace. Retrieved https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?referer=https://scholar.google.com/&httpsredir=1&article=1434&context=globaldocs
Fair Labor Association, 2011. 2011 Annual Report-Fair Labor Association. Retrieved https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=2726&context=globaldocs
Fair Labor Association, 2012. Apple Joins Fair Labor Association.
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Laasch, O. & Conaway, R.N. 2014, Principles of Responsible Management: Global Sustainability, Responsibility, and Ethics, 1st Edn, Cengage Learning, US.
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Soares, E.T.P., 2016. Closing the ‘CSR gap’through a successful CSR strategy: insights from Nike Inc (Doctoral dissertation).
Savitz, A. and Weber, K., 2013. Talent, transformation, and the triple bottom line: How companies can leverage human resources to achieve sustainable growth. John Wiley & Sons.
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