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Business is part of society and engages in ongoing exchanges with its external environment. Together, business and society form an interactive social system in which the actions of each profoundly influence the other (Lawrence & Weber, 2017, p. 22)”. It is important to know that factors in the external environment of an organization can effect the success of a business. There are also ways that primary stakeholders affect the business’s performance, and that corporate social responsibility is controversial. In the following, I will discuss how all of this applies to the company Nike.
“Nike Inc. is a well-known company that produces branded sports shoes and quality sportswear that has been admired by everybody for their brand (Nyak, 2017, p. 59)”. According to Nike’s mission statement, “expanding human potential by doing everything that possible is that force that drives them.” The two key factors in Nike’s external environment that can affect its success is the economic and Nike’s brand growth in developing companies.
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The economic factor can be driven by the economy, which is the economy is not doing well then that can affect how well Nike’s products are selling. The growth in developing countries factor can affect Nike if this growth is too rapid. Rapid growth can affect the overall labor cost of Nike’s supply chain which then impacts the production facility of the business.
“The term stakeholder refers to persons and groups that affect, or are affected by, an organization’s decisions, policies, and operations (Lawrence & Weber, 2017, p. 8)”.
The five ways that Nike’s primary stakeholders can influence financial performance is through the customers, Suppliers, employees, shareholders, and retailers. If customers are not satisfied with the company can exercise economic power by refusing to buy from Nike.
Employees also exercise economic power by participating in strikes to protest unfair working conditions. Retailers can affect economic power by refusing to sell Nike’s merchandise in their establishments. If retailers excise this power, this can affect financial performance because it will make it harder for Nike to cater to the need of consumers who only shop in the store. Nike’s shareholder has both legal and informational power. The key information that shareholders have can help to benefit the financial need of the company. The legal power gives a way for Nike’s shareholders in turn file suit for any damages such as possible defective products caused by the firm. The economic performance of Nike’s can be affected if their suppliers do not fill orders to comply with the supply and demand of both Nike’s consumers and retailers.
Nike’s corporate social responsibility comes from the purpose statement. Nike’s purpose moves us statement states that “Our purpose is to use the power of sport to move the world forward. We believe in a fair, sustainable future-one where everyone thrives on a healthy planet and level playing field”. The controversial corporate social responsibility concern associated with Nike was excising their political power by using Colin Kaepernick in a commercial. This was controversial because Kaepernick is an NFL athlete protested publicly during the National anthem by taking a knee to compact police brutality. “The brand is engaging with a hugely complex issue. It is an issue that touches on American history as well as American values. It is not about institutional racism, freedom of speech, civil liberties. It is about all of that and more (Ethical Corporation, n.d.).” This stance that Nike took caused some people to boycott their products. Some consumers even chose to make public videos of them burning there Nike brand products in retaliation.
Companies like Nike depend on consumers as their main stakeholder’s. Consumers are whom the products and/or services offered by a company are geared towards. If consumers lose interest in Nike’s brand, then this would greatly impact the success of this company. Companies must be mindful of both the internal and external environmental factors that can affect the success of the company.
Social Performance of Organization. (2022, Dec 09). Retrieved from https://studymoose.com/social-performance-of-organization-essay
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