3. Is it ethical for Nike to pay endorsers millions while its factory employees receive a few dollars a day?
4. Is Nike’s responsibility to monitor its subcontracted factories a legal, economic, social, or philanthropic responsibility? What was it 10 years ago? What will it be 10 years from now? 5. What could Nike have done, if anything, to prevent the damage to its corporate reputation? What steps should Nike take in the future? Is it “good business” for Nike to acknowledge its past errors and become more socially responsible?
6. What are the goals of the Jonah Peretti decided to customize his Nike shoes and visited the Nike iD website. The company allows customers to personalize their Nikes with the colors of their choice and their own personal 16-character message. Peretti chose the word “sweatshop” for his Nikes. After receiving his order, Nike informed Peretti via e-mail that the term “sweatshop” represents “inappropriate slang” and is not considered viable for print on a Nike shoe. Thus, his order was summarily rejected. Peretti e-mailed Nike, arguing that the term “sweatshop” is present in Webster’s dictionary and could not possibly be considered inappropriate slang. Nike responded by quoting the company’s rules, which state that the company can refuse to print anything on its shoes that it does not deem appropriate. Peretti replied that he was changing his previous order and would instead like to order a pair of shoes with a “color snapshot of the 10-year-old Vietnamese girl who makes my shoes.” He never received a response.
1 THE PR NIGHTMARE BEGINS Before Nike could blink an eye, the situation turned into a public relations nightmare. Peretti forwarded the e-mail exchange to a few friends, who forwarded it to a few friends, and so forth. Within six weeks of his initial order, the story appeared in the Wall Street Journal, USA Today, and the Village Voice. Peretti himself appeared on the Today Show, and he estimates that 2 million people have seen the e-mail. At the height of the incident, Peretti was receiving 500 e-mails a day from people who had read the e-mail from as far away as Asia, Australia, Europe, and South America.2,3 Nike refused to admit any wrongdoing in the incident and stated that they reserve the right to refuse any order for whatever reason.
Beth Gourney, a spokesperson for Nike, had the following to say regarding the incident: Clearly, he [Peretti] was attempting to stir up trouble; he has admitted it. He’s not an activist. Mr. Peretti does not understand our labor policy. If he did, he would know that we do not hire children; our minimum age for hiring is 18 . . . and we don’t apologize for not putting the word “sweatshop” because our policy clearly states: “We reserve the right to cancel any order up to 24 hours after it has been submitted.”4 Nike, Inc., is no stranger to sweatshop allegations.