This essay evaluates the performance of a leading global sports corporation, Strike.com, in relation to the impact of its practices such as profit maximization at the expense of ethics and social responsibility. The aim of each firm is to generate profits so as to ensure quick growth but this should be regulated by common practices on professional corporate responsibility such as humane working conditions and reasonable pay. This, if not adhered to, may lead to the firm’s collapse in the long-run such as the case in view of the rest global financial meltdown. First, the essay reflects on the highly successful period of 1996-2001 and the reasons as to why. Further, the firm’s performance after the effects brought about by the investigative report is analyzed. Finally, the appropriate steps that should be taken so as to improve Strike.com’s image to the clients in a more ethically correct environment are analyzed.
In the 1996-2001 period, Strike.com’s success can be attributed to a variety of factors: Minimal labor costs, availability of a large international market and a highly successful advertising, marketing and promotions strategy. The Vietnamese employees were highly exploited by working for long hours, at times working for 15 hours a day with minimal wages which forced them below the United Nations-recognized poverty status of living less than a dollar a day. Although it served to generate more output per employee, it was highly unethical and exploitative. The large corporations such as Marks and Spencer, Wal-Mart, Doshco, Tesco and Sainsbury offered a huge, readily available and well-paying market to Strike.com’s products though these benefits were not passed on to the employees. An 8 figure advertising, marketing and promotions strategy had also been put into place. Sports personalities who are highly renowned were featured wearing the company’s sportswear which largely drove sales by fuelling demand. It was a highly successful advertising strategy that ensured that the company made huge profits.
In 2006, a group of investigative reporters from the BBC Panorama program, working with activists from Dignity International, a charitable organization working on behalf of human rights and workplace issues, produced a well researched and highly critical report and prime-time TV program on the way Strike.com was operating. The report showed that casual workers were physically assaulted on the job and were paid an average of 20 cents an hour. Supervisors were paid a low of $42 a month and regular workers were paid even worse. On March 14, 1997, BBC Panorama reported that 56 young women were forcefully ordered to run around one Strike.com factory. This resulted in them fainting and consequent shock. As a result, Dignity International decided to look at the plight of workers. The report indicated that Strike.com acted in contravention of various labor laws such as the company failed to meet basic minimum wages, provided poor working conditions and health and safety measures were ignored. It further reported that sexual harassment and child labor were prevalent in the Vietnamese factories. Srike.com was found to contradict information given to its Anerican clients about its labor practices. This had led to a misconception that Strike.com had maintained as good an image as it had in the U.S. The company had repeatedly said that it did not tolerate employee mistreatment in its Code of Conduct yet findings indicated otherwise. The report showed that Strike.com went further to discourage workers in joining labor organizations by calling in the military and firing dissident workers whenever means of negations such as strikes and boycotts were deployed. Many workers also complained of being forced to work overtime. Set quotas for each employee which was set even higher once attained forced workers into overtime. The report also exposed a trend whereby workers were employed on training wages for 120 days and were later fired to save on fringe benefits accrued by permanent employees. It was found to be highly irregular that Strike.com’s annual payroll in six of its factories was less than what a single superstar earned on athletic endorsements. Consumer abstinence on Strike.com’s products in order to reverse this critical condition has already started.
To improve this condition and make Strike.com a leading Global Corporate Citizen, the new CEO should first ensure all factories meet the set standards by U.S. Occupational Safety and Health Administration's (OSHA) in indoor air quality. Claims on employee exposure to toxic fumes should be solved by this. Advance notice on testing and considerable changes in order to minimize toxic emissions should be taken into place. Strike.com should be open to public and rights groups’ inspection and unannounced monitoring checks by industry hygienists. Secondly, child labor should be stopped by raising the minimum age in footwear factories to 18 and 16 in apparel factories. Thirdly, non-governmental institutions should be incorporated in its monitoring and evaluation programs with regular reports on the progress being reported to the public. An expanded employee education program with high school equivalent courses should be availed to workers. This is since wages offered are very low hence most workers cannot afford to give up their overtime income for education.
Strike.com should enlarge its micro-enterprise loan program to benefit more Vietnamese. This will ensure that its employees at least live a dignified life. It should commit to a living wage and fund charitable courses such as this. Finally, the company should fund university research programs spearheaded by independent academics on social responsibility with access to its factories as training sites.
It is therefore imperative that Strike.com improves its image through: protection of employees opposed to factory policy, enhancing regular, independent and transparent monitor programs, paying decent wages that meet UN standards, ensuring reasonable working hours and well-paid overtime and maintaining proper safety and health standards. This benefits shall not only accrue to the firm but shall also be reflected as achievements by various NGO’s monitoring the process such as Dignity International.(Still Waiting for Nike to do it, 2007) (Glenn, 2004) (Levy, 1997)
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