Nike Corporate Governance and Social Responsibility Issues

Nike Corporate Governance and Social Responsibility Issues

Introduction

Nike, is a global giant in footwear, apparel, accessories, equipment and services,
development, marketing and sales. Typically, the pioneer footwear products for athletes are the
pillar brand of the company products alongside a huge percentage of its products meant for
leisure or casual purpose. Essentially, Nike as a company specially focuses on promotion of
NIKE Brand and the brand associated with Jordan product offering in key segments. The major
categories that the company bases its distribution of products comprise action sports, running,
men and women training, and football. Nike also undertakes extensive marketing of its products
to kids. Nike also carries out marketing of its products to other outdoor activities, baseball,
wrestling, cricket, tennis and volleyball. Equally, Nike sells a considerable number of
performance equipment such as eyewear, golf clubs, bags, eyewear, socks, gloves, and protective
equipment. Due to the extensive market for Nike’s products, the organization has spread its reach
to the globe capturing the North American territory, Greater China area, both Central, Western
and Eastern Europe, and across emerging markets (Bhuiyan et al., p.2). Therefore, the paper will
capture the company overview, history, sustainability and governance issues, CSR and corporate
governance issues at Nike Company.

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Part One: Background

History of Nike

Phillip Knight as the proprietor with the partnership with his coach Bill Bowerman
founded the Nike Company in January 1964. Initially, the company operated under the name of
Blue Ribbon Sports which functioned as the main distributor of Onitsuka Tiger shoes
manufactured in Japan. Indeed, in reference to Otis Davis, one of the athletes who was coached
by Bowerman at the University of Oregon, he postulates that the shoes he used to win two gold
medals in the Olympics which took place in 1960 were made by Bowerman. He states, “Bill
Bowerman made the first pair of shoes for me. People don’t believe me. In fact, I didn’t like the
way they felt on my feet (Childs et al., p.84). There was no support and they were too tight. I saw
Bowerman make them for the waffle iron and they were mine.”
When the company began operation in 1964, Blue Ribbon Sports managed to sell an
estimated 1300 shoes at $8,000. However, within a span of a year, the company acquired its first
employee and its sales had more than doubled at $20,000. In the following year, the Blue Ribbon
sports, has stationed its first retail store within the California territory within the 3107, Pico
Boulevard in Santa Monica. At the time, due to elevated sales level in the year, the company
expanded its operations to the East Coast Massachusetts (Childs et al., p.88). Again, within the
next four years the contractual relationship which Blue Ribbon Company and the Japanese based
Onitsuka Tiger had reached terminated. At that point, the company thus opted to produce its core
brand of footwear designed by Carolyn Davidson. Davidson Swoosh brand would be adopted by
Nike in June 18, 1971 and patented on January 22, 1974.

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Eventually, in 1976 Nike hired John Brown and Partners to create the brand Nike given
their professional acumen in advertising. The meaning of “brand ad” for Nike would loosely
translate into “there is no finish line”. Due to the increased demands of Nike’s products, by 1980,
it attained over an estimated 50% proportion of the market share of the United States athletic
shoe market (Kim, p.2). Nike offered the initial public offering in the December of 1980.

The Vision

Typically, the vision statement of Nike Company states, “To bring inspiration and
innovation to every athlete in the world.” Thus, in summary its vision is centered on ensuring
that there is inspiration and innovation to each athlete in the world. Again, the key attributes of
vision statement of Nike is premised on creating inspiration. As such, Nike has leveraged its
marketing strategies by generating sufficient demand for its products confirmed by progressive
increases in annual sales (Alexander, p.269). Inspiration is at the core of Nike business model
which is reinforced with the extensive billions of dollars yearly to spur demand of its products.
Additionally, another significant element of innovation is pegged on innovation.
Innovation is a key element which ensures that the company consistently stays abreast with
consumer needs and preferences. Nike has also positioned itself as an innovative company