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Nike and the Sweatshop Debate: A Public Relations Crisis Seeking Resolution in the Principles of Image Repair Theory

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Abstract

Nike has been the subject of numerous business and public relations case studies regarding how it handled its sweatshop public relations crisis of the 1990s. This case study expands upon the extensive scholarly and public research and discourse to examine William L. Benoit's Image Repair Theory as it relates to Nike's sweatshop public relations crisis of the '90s. The goal of this study is to answer the question whether or not Image Repair Theory was a complete or incomplete solution to the sweatshop debate Nike encountered not only in the latter part of the '90s, but up through the last couple of years. Among the questions this study hopes to answer are: 1. What was the nature of the initial allegations against Nike regarding the manufacturing of its athletic footwear products in overseas factories? 2. How did Nike answer these allegations within the context of Image Repair Theory? 3. What "corrective action" did Nike take to respond to public outcry over manufacturing of their products in third world countries, as it relates to Image Repair Theory? (Benoit, 2008) 4. How did Nike use Corporate Social Responsibility to bolster its image during its public relations crisis? 5. How did Nike's response to the sweatshop crisis and resulting damage to its image and reputation result in policy changes at Nike that would impact the apparel industry as a whole? An ambitious study spanning a period over approximately 22 years, this Nike case study sets the stage for further discussion on a global scale for how the public perceives the importance of where apparel products are manufactured. In short, does the public really care if Nike's products are manufactured under unsafe and unhealthy conditions in subcontractor factories around the world? The conclusion of this case study addresses that question with regard to Nike today, and opens the door for further public relations research on the apparel industry as a whole.
Image Repair and Nike Sweatshop Debate
Nike and the Sweatshop Debate:
A Public Relations Crisis Seeking Resolution
in the Principles of Image Repair Theory
Rosanne Hart
JMC-6800 PR Theory and Practice
Kent State University
February 26, 2015
Revised October 16, 2016
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Image Repair and Nike Sweatshop Debate
Nike and the Sweatshop Debate:
A Public Relations Crisis Seeking Resolution
in the Principles of Image Repair Theory
Introduction
Nike has been the subject of numerous business and public relations case studies
regarding how it handled its sweatshop public relations crisis of the 1990s. This case study
expands upon the extensive scholarly and public research and discourse to examine William L.
Benoit's Image Repair Theory as it relates to Nike's sweatshop public relations crisis of the '90s.
The goal of this study is to answer the question whether or not Image Repair Theory was a
complete or incomplete solution to the sweatshop debate Nike encountered not only in the latter
part of the '90s, but up through the last couple of years.
Among the questions this study hopes to answer are:
1. What was the nature of the initial allegations against Nike regarding the manufacturing of
its athletic footwear products in overseas factories?
2. How did Nike answer these allegations within the context of Image Repair Theory?
3. What "corrective action" did Nike take to respond to public outcry over manufacturing of
their products in third world countries, as it relates to Image Repair Theory? (Benoit,
2008)
4. How did Nike use Corporate Social Responsibility to bolster its image during its public
relations crisis?
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Image Repair and Nike Sweatshop Debate
5. How did Nike's response to the sweatshop crisis and resulting damage to its image and
reputation result in policy changes at Nike that would impact the apparel industry as a
whole?
An ambitious study spanning a period over approximately 22 years, this Nike case study
sets the stage for further discussion on a global scale for how the public perceives the
importance of where apparel products are manufactured. In short, does the public really care
if Nike's products are manufactured under unsafe and unhealthy conditions in subcontractor
factories around the world? The conclusion of this case study addresses that question with
regard to Nike today, and opens the door for further public relations research on the apparel
industry as a whole.
Overview
Nike was originally founded as Blue Ribbon Sports by Philip Knight, a University of
Oregon runner and his coach, Bill Bowerman in Beaverton, Ore. in 1964. At the suggestion
of their first sales manager, Jeff Johnson, the company changed its name to Nike in 1972
after the Greek goddess of victory, Nike (Reference for Business, 1999).
Today, Nike is an international powerhouse brand with corporate revenues for 2016 of
$32.4 billion. Additional background on Nike states:
Founded as an importer of Japanese shoes, NIKE, Inc. (Nike) has grown to be the world's
largest marketer of athletic footwear, holding a global market share of approximately 37
percent (of all athletic footwear produced). In the United States, Nike products are sold
through about 22,000 retail accounts; worldwide, the company's products are sold in
more than 160 countries. Both domestically and overseas Nike operates retail stores,
including Nike Towns (company-owned retail stores) and Nike factory outlets. Nearly all
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Image Repair and Nike Sweatshop Debate
of the items are manufactured by independent contractors, primarily located overseas,
with Nike involved in the design, development, and marketing. (Reference For
Business, 1999)
According to the official Nike website, the company currently is "working with 709
contract factories employing nearly 1 million workers in 44 countries" (Nike FAQs). As of its
fiscal 2012-2013 "Sustainable Business Performance Summary," Nike's global contractors
produce more than 500,000 different products (Nike, FY12/13, p. 67).
Since the initial public outcry in the late 1990s blasting apparel manufacturers for their
use of sweatshops, the public uproar around Nike has abated, but the sweatshop debate has not
been extinguished (Sherman. & Perlman, 2010). The April 2013 Rana Plaza disaster in
Bangladesh, in which over 1,100 garment workers died and more than 2,000 were injured in the
collapse of the factory building, has fanned the flames of sweatshop debates among human rights
advocates.
"The tragedy...has forced Western apparel sellers to re-examine their worldwide search
for cheap labor, which has turned Bangladesh into an exporter of $20 billion of clothing a year"
(Banjo, 2014a). Nike's very beginnings had its foundation in low cost labor overseas when the
company started out importing athletic shoes from Japan, then a low-cost producer of footwear.
Nike, while admirable in its efforts to champion and implement positive changes within
its own company regarding overseas manufacturing practices, still suffers from the historical
references used by traditional and online media in their coverage of "sweatshop" conditions that
continue to exist in apparel manufacturing facilities, particularly those in Third World Southeast
Asia. Chasing low-cost labor sources is inherent to the apparel industry, as my interviews with
two global apparel industry product specialists reveals in this study.
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Image Repair and Nike Sweatshop Debate
That said, the topic calls for deeper research and investigation as it relates to the fashion
industry, but for purposes of this class, my case study will limit itself to how Nike handled
allegations of condoning sweatshop conditions in the manufacture of its products, specifically its
footwear.
Nike is no stranger to public relations crises, having weathered the downfall of its
celebrity spokesmen, i.e. Lance Armstrong's devastating lies about using performance enhancing
drugs, and Tiger Woods' marital infidelities. A top Fortune 100 company, Nike has the financial
and human resources to address and manage arguably any crisis that erupts, as evidenced by its
most recent company financial report showing a budget of $3.01 billion for "demand creation,"
an umbrella term for marketing, advertising, public relations (Nike Proxy, 2014).
It could be argued that Nike's education in the handling of a public relations crisis today
was honed by its experience with the 1990s sweatshop uproar, which ultimately led to Nike's
improved image and reputation as a leader in establishing standards of conduct for
manufacturing footwear and apparel overseas.
Literature Review
From 1992-1998, one of America's most well-known brands would face a public relations
crisis over manufacturing in sweatshops overseas that would seriously taint its image throughout
a seven-year period. It all started with an activists expose' of Nike's Indonesian contractors in
1992 that finally exploded into a public uproar in 1996 when it was discovered that television
host Kathy Lee Gifford's clothing line for Walmart was made in sweatshops (Nisen, 2013). The
sweatshop furor would continue to haunt this athletic footwear and apparel juggernaut over the
next 20 years.
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Image Repair and Nike Sweatshop Debate
When it comes to the world of athletic shoes, Nike rules "holding a global market share
of approximately 37 percent" of all athletic footwear sold (Reference for Business, 1999).
At approximately the same point in time in the early '90s, when Nike was embroiled in the
sweatshop controversy, public relations theorist William L. Benoit developed the theory of
image repair which addresses crisis situations on the scale of Nike's (Benoit, 2008).
Benoit's theory recognizes that before the strategies of image repair can be deployed in a
case like Nike's, for example, two factors must be considered: first "an offensive act has
occurred," and second, "the accused is responsible for that act" (Benoit, 2008, p.246). In the case
of Nike, reports surfaced in the media in the early to mid-90s about "labor conditions" in Nike's
contractors' factories in Asia that described oppressive conditions such as "human rights abuses,
violence to laborers, and hideous working conditions," in "sweatshops" of "wretched origins"
(DeTiene & Lewis, 2005, p. 361).
Research on Nike reveals that not only had an "offensive act" occurred but also that Nike
bore responsibility for where and how its athletic footwear was manufactured overseas (Brand &
Brand, 2001).
Benoit points out that "Images are threatened when another person obtains information
that creates an unfavorable impression or organization" (Benoit, 2008, 247). From the first
report by labor rights activist Jeff Ballinger in 1991, followed by the June 1996 editorial by Bob
Herbert in The New York Times, to the official response in 1998 by Nike CEO Philip Knight at
the National Press Club, Nike's image was under siege (Nisen, 2013). But it didn't end then, as
illustrated in my study that follows.
Application of Image Repair Theory
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Image Repair and Nike Sweatshop Debate
The process of Nike's image repair within the context of Benoit's five categories of image
repair theory forms the foundation of this case study.
Within the theory's categories: denial, evasion of responsibility, reducing offensiveness
of event, corrective action, and mortification (Benoit, 2008, p. 248) lie the applications to the
early stages of Nike's public relations crisis.
Denying allegations and shrugging off any responsibility summarizes Nike's public
relations position initially. Schwartz analyzes Nike's early strategy for dealing with the
allegations of sweatshop manufacturing and "how its image was its competitive advantage. It
was not about making shoes; it was about making the coolest, most fashionable shoes"
(Schwartz, 2000, p. 8). Randy Shaw's book, Reclaiming America: Nike, Clean Air, and
America's New Activism," published in 1999, provides a comprehensive look at Nike's rise to
international iconic brand status amidst the sweatshop crisis triggered by labor and human rights
activists.
According to Shaw, driven by its creative "Just Do It" campaigns," total control of
sneakers worn by the country's top college basketball teams," and "millions of
Americans...paying up to $150 for a pair of sneakers" that reportedly cost $5 to make, Nike
appeared to have a bullet-proof reputation against the oncoming "anti-Nike campaign" (Shaw,
1999). Media pressure, activist groups, and an ensuing public uproar exerted pressure on the
iconic billion-dollar brand to get serious (Sherman & Perlman, 2010).
In 2001, Dr. Tim Connor, an activist for worker's rights with Oxfam Australia, wrote an
extensive report published by The Global Exchange, "an international human rights
organization." Dr. Connor's report extensively profiled Nike's progress in its labor issues since
Knight's 1998 speech to the National Press Club. Here Knight used this venue shrewdly to reach
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Image Repair and Nike Sweatshop Debate
influential media like The New York Times to reveal the specific and remedial actions the
company would take regarding improving conditions in the factories that manufactured its
products (Connor, 2001).
Background on Nike's Global Labor Issues
A review of the issues surrounding conditions within Nike's off-shore manufacturing
facilities provides an important perspective with regard to whether or not image repair theory is
sufficient to resolve a crisis of the magnitude Nike experienced in the '90s, and continues to
manage today. Locke (2002) and Schwartz (2000) delve into the inevitable pitfalls of globally
manufacturing Nike products. Journalists Banjo and Krashinsky illuminate current issues Nike as
well as others in the apparel industry continue to face on the issue of sweat shops (Banjo,2014;
Krashinsky, 2013). The debate continues as illustrated by activist online sites such as Oxfam.org,
which dedicates specific coverage in its NikeWatch newsletter to Nike's manufacturing practices
overseas (Oxfam Australia, 2012).
To Oxfam's credit in 2009, they invited Nike to comment in response to a letter Dr.
Connor wrote in the NikeWatch newsletter. Nike's Hannah Jones, vice president of Corporate
Responsibility, and Maria Eitel, president of the Nike Foundation, responded to Oxfam's
criticisms with a letter expounding on Nike's position on "the challenges of improving conditions
in the global contract supply chain" and its philanthropic program in support of girls through its
Nike Foundation (Oxfam Australia, 2012b).
Implications for the future
The steps Nike took to specifically address the sweatshop attacks of the 1990s
encouraged others like Liz Claiborne, the Gap and Reebok to join Nike in hiring "respected
human rights groups to monitor a handful of their factories" in efforts to improve working
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Image Repair and Nike Sweatshop Debate
conditions (Greenhouse, 2000, para 17). More recently, Nike was used as an example of how the
Canadian company, Loblaw (Joe Fresh brand sportswear) should respond in the wake of the
2013 collapse of a Bangladesh factory where Joe Fresh was being manufactured. The tragedy in
Bangladesh resulted in the loss of more than 1,000 lives, the worst disaster in the history of the
garment industry, and brought the sweatshop issue once again into the public's consciousness
(Krashinsky, 2013).
Image theory a partial solution to Nike's crisis
It is my position that the application of Benoit's image repair theory represented only a
partial solution to handling Nike's sweatshop crisis. Corporate Social Responsibility (CSR)
measures supported by Heath's premise of Corporate Responsibility (CR) within the context of
his Fully Functioning Society Theory (Heath, 2006) offer additional support to Image Repair
Theory to address the complexity of Nike's sweatshop public relations crises. Despite the public
relations challenges as a result of Nike publicizing its "corrective actions," the company's image
remained strong through development of corporate social responsibility programs (Haigh &
Brubaker, 2010) and (Epstein & Buhovac, 2010 ) and a powerful advertising, public relations
and marketing-- "Demand Creation" --budget over $3 billion, according to Nike's 2014 Proxy
Statement. Further, an analysis of Nike's stock price, shows the company has been on an almost
unstoppable trajectory of growth.
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Image Repair and Nike Sweatshop Debate
Figure 1. NIKE Inc., 1991-2015, Stock chart, courtesy Fidelity.com
Concluding Remarks
Benoit's image repair theory represents a blue-print for how public relations practitioners
can develop a strategic communications solution to many crisis situations. However, what makes
this study important is its relevance to sweatshop issues that continue to emerge within the
apparel industry as a result of its reliance on cheap manufacturing sources in countries like
Bangladesh, Vietnam, South Korea, Thailand, Indonesia, and South America in order to feed
consumer demand today for inexpensive fast fashion companies like Forever 21, H&M and Zara.
In Nike's case, where the backdrop for this crisis is the global stage, Benoit's image repair
theory represents an insufficient solution, and calls for the application of additional strategies
found within CR as well as CSR.
The more recent research from scholarly publications, traditional consumer and business
media accessed online, and activist online sites support my view that the issue of sweatshops as
it relates to Nike's public relations crises of the '90s and early 2000s is complex and not sufficient
by itself to devastate the image of a powerhouse brand like Nike.
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Image Repair and Nike Sweatshop Debate
Like apparel and footwear brands today, Nike confronted the inherent pitfalls of
outsourcing its manufacturing to Third World countries (Locke, 2002) where labor costs are
shockingly low, factory conditions are often unsafe, and government corruption exists.
While it was the exposure of human rights violations within those factories and their
unsafe working conditions that led to Nike's tarnished reputation in the '90s, my research
concludes that Nike's image and brand remained relatively unscathed as recent research shows in
online discussions of Nike's image today (Nisen, 2013) and the obvious growth of the brand in
terms of revenues and Nike's stock price. (Yahoo Finance)
On a micro level, the Nike sweat shop study sets the stage for further discussions in the
future for how the public perceives the importance of where apparel products are manufactured.
A case could be made that the global manufacture of apparel products in sweatshops represents a
public relations crisis of global proportions for the apparel industry in general. But if Nike and
the findings in this study are any indication, one wonders, "Do consumers really care?"
Data Collection Methods
Recognizing that Nike has been the topic of extensive research and case studies not only
in the area of public relations crisis management, but also ethical practices within its supply
chain management, my objective was to locate the most relevant research as it related to Nike
and its sweatshop public relations crisis. Data collection was divided into two areas of research:
1. Information on sweatshops and Nike, in particular
2. Scholarly articles on Image Repair Theory, CR and CSR
Relying on online library resources available through Kent State University, a search of
all scholarly journal articles in which "Nike" was referenced was conducted through
NexusLexus, as well as Google Scholar. Journal articles covering legal, management, public
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Image Repair and Nike Sweatshop Debate
relations, supply chain and corporate communications were organized into a chronological
sequence of events relating to Nike's public relations crisis of the early to late '90s. Additional
research was conducted to determine what recent studies had been undertaken in the last 10 years
regarding Nike and labor issues. This led to several scholarly articles written on topics related to
Nike's corporate social responsibility programs, such as sustainability.
An extensive internet search of traditional and online media was undertaken regarding the
history of events that led to Nike's full-blown public relations crisis concerning labor practices in
their contractors' factories in Southeast Asia. Sources ranged from activist and human rights
online sites, such as Oxfam.org and The Global Exchange, to online articles in The New York
Times, Wall Street Journal, Fortune Magazine, to books, such as Randy Shaw's book,
Reclaiming America: Nike, Clean Air, and the New National Activism whose first chapter is
devoted to the "anti-Nike campaign."
Public Relations Society of America (PRSA), a professional organization for public
relations practitioners, consultants, and educators, was consulted regarding its library of case
studies referencing Nike, however these were limited and less comprehensive than the above
sources.
Additional research on the topic of public perceptions regarding "global outsourcing" and
"corporate social responsibility" led to CNBC/Burson-Marsteller's Corporate Perception
Indicator research to determine whether or not consumers really care where or how their clothing
is manufactured (CNBC/Burson-Marsteller, 2014).
Original Research
For insight into actual conditions in overseas factories making apparel and footwear for
the United States, two apparel industry colleagues were consulted with extensive experience in
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Image Repair and Nike Sweatshop Debate
technical production of apparel and quality control of apparel products made overseas for their
companies. Marilyn Stewart, retired vice president of technical production for J.C. Penney, was
responsible for communicating apparel specifications for production in J.C. Penney factories in
China, Hong Kong, Korea, Taiwan, Thailand, Vietnam, India, Bangladesh, Nicaragua, and
Guatemala. Ms. Stewart visited many of these factories as part of her 25-year career at Penney
which made her information valuable to my research.
Mary Ellen Cassman was interviewed regarding her experiences as manager of quality
control for Target Corporation from 1988-1996, during the height of the sweatshop
controversies. Her extensive experience in China, Hong Kong, India, Korea, and Taiwan
communicating with Target's overseas agents, provided an invaluable framework for
understanding the complexities of implementation and ramifications of Nike's corrective actions
taken to resolve its public relations crisis related to sweatshops.
Dr. Tim Connor, currently teaching at Newcastle Law School in Australia, and
referenced in my case study, was contacted regarding his activities with Oxfam Australia and his
current research on sweatshops.
Theory
For the theoretical underpinnings of my study in which Image Repair Theory's strategies
were foundational to my case for Image Repair Theory as a partial solution to Nike's public
relations crisis, I reviewed numerous scholarly journals. The research led to further findings on
Nike's resolution of its PR crisis in the scholarly studies of CR, a premise of Heath's Fully
Functioning Society Theory (FST), and a complement to CSR.
Finally, the Nike website was particularly informative regarding its current
manufacturing practices, codes of conduct for suppliers, and extensive CSR programs and
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Image Repair and Nike Sweatshop Debate
philanthropy under The Nike Foundation. Nike financial data, regarding the price of their stock
from 1992- 2015, was available from YahooFinance.com and Fidelity.com, and both sites
provided a chart showing Nike's meteoric rise of its share price in that period.
Report of Research Findings
A Historical and Global Perspective
There was a time in the early 20th century, and as late as the 1970s, when the majority of
apparel and footwear sold in the United States was manufactured in this country, employing
thousands of Americans, many European immigrants during the early 20th century.
Manufacturing at that time was concentrated primarily in New York.
That is no longer the case today, due to the increased labor costs for apparel
manufactured in America, and the availability of "cheap labor" overseas. Nike represents an
example of the industry's shift from domestic to off-shore apparel and footwear manufacturing.
According to Shaw, Nike had moved "most of its shoe production to South Korea, whose
workers earned nowhere near the U.S. rubber-shoe industry average of $6 per hour" (Shaw,
1999).
Margaret A.Emmelhainz writes in The Journal of Supply Chain Management: A Global
Review of Purchasing and Supply, "While nearly all industries have seen an increase in
international sourcing, the apparel industry has been particularly aggressive in sourcing items
overseas" as a way to "lower costs" and to remain price-competitive globally (Emmelhainz,
1999, p. 53).
According to the American Footwear and Apparel Association, 97.5 percent of apparel
and 98.5 percent of footwear sold in the United States in 2012 were made overseas, with the
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Image Repair and Nike Sweatshop Debate
United States being the world's largest importer of apparel "from over 150 countries, many of
which can be properly regarded as underdeveloped" (Emmelhainz, 1999, p. 53).
Nike, a juggernaut American brand, was established in 1964 as Blue Ribbon Sports
(BLS) to offer specialty running shoes that would undercut its competition in price. Founders
Philip Knight and Bill Bowerman discovered they could import and sell "high-tech sports shoes"
from Japan for less cost than those produced in the United States and Germany. When BLS
reached $2 million in the early part of the '70s, the company "began to design and subcontract its
own line of shoes" under the Nike brand (Locke, 2002, p. 4).
As Japan's labor costs increased, Nike sought other sources of low-cost production in
areas like Korea, Thailand, China, Taiwan, Indonesia, China and Vietnam, where most of their
products are now manufactured by factories Nike doesn't actually own (Locke, 2002, p. 5).
Today, more than 500,000 Nike products are produced in "709 factories which employ
nearly 1 million workers across 44 countries" (Nike, 2015). With revenues over $32 billion,
Nike is the undisputed leader in athletic footwear, with the largest market share of all sports
footwear sold in the world ( Reference for Business, 1999).
Locke writes that "the same factors that permitted Nike to grow at an impressive rate over
the last several decades -- taking advantage of global sourcing opportunities to produce lower
cost products and investing these savings into innovative designs and marketing campaigns"
have led to its "series of public relations nightmares" and the allegations of condoning sweatshop
conditions in their contractors' factories (Locke, 2002, p. 9).
Understanding the complexity of manufacturing overseas and monitoring factories spread
across the globe is important to gaining a perspective on how Nike dealt with its lengthy public
relations crisis stemming from the sweatshop attacks and resulting "anti-Nike campaign."
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Image Repair and Nike Sweatshop Debate
Marilyn Stewart, former manager of technical design for J.C. Penney, explains that
companies who manufacture apparel products in underdeveloped countries do not have control
over what the government in that country mandates, or how a government may subsidize the
factories. She also pointed out the importance of trust in the factories' relationships with its
American-owned companies, because engaging a company employee for oversight in every
factory is impossible because of the number and locations of these factories across Southeast
Asia, China, and Central America. In the interests of keeping labor costs as low as possible, she
pointed out, "A manufacturer may farm it (the production) out and not tell the company" (R.
Hart, personal communication, February 16, 2015).
Higher labor costs in Taiwan and Korea, she explained, led to companies seeking lower
costs in third world countries.
Mary Ellen Cassman described her experiences as manager of quality control for Target
Corp., which required travel to hundreds of factories throughout Southeast Asia, China, India
and Hong Kong.
"We relied on our (factory) agents to be sure our standards were being kept," she said. In
1988, she added, "there was no discussion of standards."
She describes conditions in factories at that time as having poor ventilation and "terrible
lighting, conditions that changed in the '90s as a result of the sweatshop publicity around Nike.
"It was the topic of conversation," she said, noting that she and her colleagues were
concerned how the negative publicity would affect their ability to find low-cost sources of
production. "The bottom line," she commented, is "we were all chasing cheap needle," apparel
industry lingo for the lowest cost sewers (R. Hart, personal communication, February 20, 2015).
Allegations Against Nike
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Image Repair and Nike Sweatshop Debate
The 1990s was a time when the entire apparel industry became the target of scrutiny and
public outrage over revelations of "sweatshop conditions" discovered in factories not only
overseas, but also domestically. Nike, a powerful and influential global brand, was among
numerous apparel companies singled out for attack, leading to the formation in 1996 of the
Apparel Industry Partnership established under President Clinton which included Nike, Reebok
and L.L. Bean (Emmelhainz, 1999, p. 52).
In his article for the online publication, Business Insider, writer Max Nisen recaps the
series of events which led to Nike's public relations crisis, beginning with a 1991 report
published by labor activist Jeff Ballinger "documenting low wages and working conditions in
Indonesia" (Nisen, 2013, para 5). Ballinger followed with an article in 1992 in Harper's about
an Indonesian factory "worker making 14 cents an hour, less than Indonesia's minimum wage"
(Shaw, 1999). The following year, in 1993 CBS interviewed Ballinger for a report on Nike's
Indonesian suppliers, which led to heightened awareness of the sweatshop issue, as well as
Nike's role in the issue (Nisen, 2013, para 5). America's minimum wage at the time was $4.25 an
hour.
Although Nike had responded to Ballinger's earlier allegations by instituting a factory
code of conduct, public sentiment had not risen to levels that would threaten Nike's image or
sales until Kathy Lee Gifford's name was attached to child labor conditions in contractor
factories overseas in 1996. Although Gifford did not manufacture apparel, her name was on the
clothing line sold at Walmart, and she was deemed guilty by association. A "teary apology" on
her part was followed by Gifford making sweatshop labor a national issue (Nisen, 2013, para 5)
and thus, throwing Nike into the spotlight.
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Image Repair and Nike Sweatshop Debate
The New York Times published a column by Bob Herbert in June, 1996 that "alleged that
Nike built its wealth and products with the 'slave' labor of young Asian women" (DeTienne, &
Lewis, 2005, p. 361). Herbert continued to attack "Nike's labor practices" in seven more
columns, criticizing Nike's advertising campaigns, and even chastising Nike's iconic spokesman
Michael Jordan as " 'an uncaring multimillionaire celebrity' making $20 million a year from a
company that worked young Asian women like slaves" (Shaw, 1999). Herbert's columns fueled
activists who recounted "human rights abuses, violence to laborers, and hideous working
conditions within Nike's Asian facilities" (DeTienne & Lewis, 2005, p. 361). Consumers
protested, small boycotts were staged, and "over 40 demonstrations" were reported at Niketowns
across the country (DeTienne & Lewis, p. 361).
The negative publicity reached a crescendo in 1997 at a time when college students
across the country mobilized to protest Nike as a supplier of college-affiliated athletic uniforms
under a student-formed anti-sweatshop movement entitled "United Students Against
Sweatshops" (Sherman & Perlman, 2010, pg. 328).
Although Nike was a powerful presence in the world of sports apparel and sports
marketing, armed with a "massive advertising budget to counter whatever negative publicity
activists could generate about its labor practices" Shaw, 1999), the company finally realized its
"image was stained, and it was pressured to respond" (DeTienne & Lewis, 2005, p.361 ).
Nike's Response: Image Repair Theory Applications
In the strictest sense of the definition of Image Repair Theory, Nike's image was under
attack. According to W.L. Benoit and his colleagues, Image Repair Theory relies on two key
components: "1) an offensive act has occurred, and 2) the accused is responsible for that act"
(Benoit, 2008, p. 26). In Nike's case, the offensive act concerned the "sweatshop" labor
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Image Repair and Nike Sweatshop Debate
conditions that existed in factories that produced Nike products. While Nike didn't own the
factories, as they originally stated in response to the allegations, the company could still be
blamed because it "permitted the act to occur" and its audience of consumers, media, and
stakeholders were holding the firm responsible, and thereby Nike's image was "threatened"
(Benoit, 2008, p. 249).
Image Theory also holds that "images are threatened when another person obtains
information that creates an unfavorable impression about another person or organization"
(Benoit, 2008, p. 249). Ballinger and Herbert played key roles in obtaining information about
the conditions in Nike's contractors' factories, which ultimately led to damaging Nike's highly
marketed image.
Initially Nike responded to Ballinger with Image Theory's denial tactics. "Oh, they're not
ours," Nike was quoted as saying. "We just buy the shoes from them. Go talk to our vendors"
(Schwartz, 2000, p. 8).
A New York Times article in March 1996 reported that a 22- year-old Indonesian factory
worker was fired and locked in the Nike-contracted factory for seven days for trying to organize
workers to demand an increase in their $2 daily wage. Nike's spokeswoman, Donna Gibbs,
replied first with "evasion of responsibility" (Benoit, 2008, p. 248) tactics by saying she was not
aware of the situation, and then later with strategies of denial, by responding, "Our information is
that workers were not held for a week" (Shaw, 1999).
She later countered with another Image Repair move, "attack the accuser" (Benoit, p.
248) by disparaging the reporter's credibility and charging the article was 'highly distorted or an
outright lie" (Shaw,1999).
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Image Repair and Nike Sweatshop Debate
These strategies were insufficient to stem the growing tide of criticism and negative
publicity Nike continued to encounter. According to DeTienne and Lewis, Nike "mobilized a PR
task force to aggressively confront this wave of attacks on its polished company image"
(DeTienne & Lewis, 2005, p. 361).
Employing Image Repair Theory to deny allegations of sweatshop conditions in factories
and unfair wages, and taking the apparently ineffective corrective action of instituting a Nike
factory code of conduct, Nike needed to address its PR crisis with a more comprehensive
strategy. That game plan would later be challenged, and require the application of additional
public relations approaches.
Corrective Actions
"One of the most effective image repair strategies is corrective action, in which the
company promises to correct the problem" (Benoit, 2008, p. 251). While Nike couldn't
guarantee it could "prevent the recurrence of an offensive act" in global factories that were
beyond its control, it could take steps that would work toward improvements, and it could refuse
to hire contractors who did not uphold its standards, as it does now (Nike, Code of Conduct,
2010).
In 1997, Nike took the first of many corrective measures to shore up its image by
commissioning social responsibility audits and surveys of its factories, resulting in a report
prepared by Andrew Young that contained "surveys of 20 factories in six Asian countries"
(DeTienne & Lewis, 2005, p. 364). The report concluded that the factories "met all applicable
health, safety and labor standards" and noted that the average wages paid were double local
minimum wage rates. It added that Nike provided subsidies for meals and medical treatment
(DeTienne & Lewis, p. 364.
20
Image Repair and Nike Sweatshop Debate
A separate audit was conducted by Ernst & Young of a Vietnamese facility, however the
results "returned horrific results" (DeTienne & Lewis, p. 364), citing lack of drinking water and
workers being exposed to "toxic chemical concentrations 177 times the allowable safety limits"
DeTienne & Lewis, p. 364). The audit was leaked to Nike critics in 1997 by a "disgruntled
employee" who passed it along to the New York Times, touching off a lawsuit brought by Marc
Kasky in April 1998. The lawsuit claimed that because Nike was publicizing its improved labor
practices and its code of conduct, Nike was guilty of "false advertising" (DeTienne & Lewis,
2005).
Leveraging its corrective actions as a vehicle for publicity, Nike highlighted its progress
with factory audits as well as other corrective actions, including listing on its website factory
names and addresses in Vietnam and Taiwan in response to demands by United Students Against
Sweatshops protesting on college campuses against Nike. To address student concerns, Nike
management made campus visits to answer student concerns.
To counter negative media publicity, "Nike issued numerous press releases, opinion
articles and even full page advertisements in major newspapers, all of which indicated that Nike
factories were operating decently and paying a living wage" (DeTienne & Lewis, 2005, p. 363).
Whether due to the lawsuit filed by Kasky or the company's disturbing 70 percent decline
in quarterly profits reported in March of 1998, Knight decided to appear before The National
Press Club in Washington on May 12, 1998 to personally present actions Nike was taking to
address "key complaints" of its global manufacturing policies (Sellnow & Brand, 2001, p. 278).
Among the tenets of Image Repair Theory is "identifying the relevant audiences" (Benoit,
2008, p. 252), and for Nike one of those important audiences was major newspaper media.
21
Image Repair and Nike Sweatshop Debate
In Nike's case, it was a strategic move to appear before The National Press Club which
would reach the nation's most influential newspapers. Knight's speech received immediate and
overall positive coverage in The New York Times, USA Today, St. Louis Dispatch, Dallas
Morning News and Los Angeles Times.
The content of his speech reflects a clear articulation of corrective actions that Nike was
taking to repair its image and "served to launch a new era for Nike during which the corporation
would attempt to rebuild consumer confidence" (Sellnow & Brand, p. 264).
Those six corrective actions included mandating that Nike shoe factories meet OSHA
standards; raising the minimum age for workers to 18 for footwear and 16 for apparel; involving
NGOs for factory monitoring and making their reports public; expanding education programs for
Nike footwear makers; increasing micro-loan programs for families in Vietnam, Indonesia,
Pakistan, and Thailand; and funding university research and open forums on responsible business
practices (Connor, 2001).
Nike launched a public relations campaign around the actions and intent of the six-point
program in Knight's Press Club speech designed to promote its "good corporate conduct"
(DeTienne & Lewis, 2005, p.360).
When Image Repair Theory Backfires
As part of Benoit's prescribed "image restoration rhetoric" described as a "form of
persuasive discourse" (Benoit, 2008), it was important for Nike to publicize its plans to improve
labor conditions and issues within its contracted factories.
"A firm commitment to correct the problem can be an effective component of image
repair discourse" (Benoit, 2008, p. 254). However, Benoit (2008) also cautions that "there is a
risk that this strategy will fail -- and possibly make things worse--if a company's actions do not
22
Image Repair and Nike Sweatshop Debate
redeem its promises" (p. 255). In the case of Nike, it could be argued that this is exactly what
happened when Kasky filed its lawsuit against Nike in April 1998 and pursued a decision against
Nike for the next five years.
The Kasky case claimed that Nike was guilty of "fraudulent advertising" by promoting
through press releases how the company was making positive changes in its contracted factories,
as the 32-page report by Andrew Young had indicated. Kasky referenced the damaging Ernst &
Young report that appeared in The New York Times to support his "false advertising" charges.
The case was ultimately settled after the U.S. Supreme Court voted to dismiss the case and return
it to the original California court. Nike agreed to settle the case with a "charity settlement" for
"$1.5 million over three years to the Fair Labor Association" (DeTienne & Lewis, 2005, p. 370),
a non-profit group that Nike created with other partner companies to monitor overseas factories.
At issue in the Kasky case was Nike's strategic use of publicity to promote policies and
programs that fall within the realm of corporate social responsibility (CSR). As Haigh and
Brubaker point out, CSR and image restoration (repair) strategy can work effectively together in
a crisis situation, and in Nike's case the strategy was instrumental in getting its image on track.
"One way an organization can protect against backlash of crises is through practicing
CSR practices," according to Haigh and Brubaker (2010, p. 455). Nike's CSR practices related
to the code of conduct it established, the specific activities detailed in Knight's 1998 Press Club
Speech, the Andrew Young report, as well as its leadership role in creating the Fair Labor
Association which addressed labor and human rights issues.
Haigh and Brubaker (2010) cite additional research that "found press coverage discussing
CSR activities bolstered individuals' perceptions of an organization's reputation, image and
credibility" (p. 456.). Their research also revealed that negative information about a company is
23
Image Repair and Nike Sweatshop Debate
less likely to be believed by stakeholders "in times of crisis if they are aware of CSR activities"
(Haigh & Brubaker, 2010, p. 456), which was the strategy of Nike's PR team in countering the
negative publicity from reports of poor labor conditions in their contractor's factories.
Nike developed its first CSR program in 1998 at the height of the anti-sweatshop
movement and concurrently with Knight's game-changing speech to the National Press Club. "As
Nike made an explicit commitment to CSR, its approach to labor issues also changed" (Kytle &
Ruggie, 2005, p. 14).
The company is a founding member of the Global Alliance for Workers and
Communities, which addresses workplace issues, the Fair Labor Association, and involved in the
UN Global Compact. These organizations are all aimed at improving standards for workers in
developing countries (Locke, 2002, p. 18).
Further evidence of the importance of CSR to Nike's image-building process comes from
Wolfgang Frank, a director at PDA, the largest NGO in Thailand which Nike supports with a
variety of programs in Thailand including funding and micro-loans to 11,500 Indonesian
entrepreneurs. In his report on "Successful Partnership for CSR Activities in Thailand," Frank
states, "Nike ranks as one of the five most generous corporate donors providing $29.2 million in
2002" (Frank, 2012). He reaffirms the importance of Nike's focus on CSR to "counteract a
negative image" that resulted from the late '90s (Frank, para 3).
Nike's robust CSR initiatives are detailed in depth on its Nike.biz website and illustrate
the strides the company has made over the last decade. The Nike Foundation in particular
supports The Girl Effect to "create opportunities for girls" which is especially relevant because
"80 percent of the 800,000 workers making Nike products are women-- most aged 17 to 24"
(Oxfam, 2012b).
24
Image Repair and Nike Sweatshop Debate
Heath's Premise of CR and "Being Good"
Robert L. Heath's Fully Functioning Society Theory posits that society becomes "more
fully functioning" when management demonstrates "characteristics that foster legitimacy" in a
number of ways, one being "working to meet or exceed the requirements of relationship
management, including being a good citizen" (Heath, 2006, p. 100). The theory, Heath (2006)
says, presumes that people seek information to make the best decisions in the face of a reality
"fraught with chaos, entropy, and turbulence" (p. 100), which describes Nike's public image
during the chaotic period of public protests and controversy around Nike's connection to
sweatshops.
At the core of Heath's theory is Greek philosopher Quintilian's "principle of the good
person communicating well as a foundation for fostering enlightened choices through dialogue in
the public sphere" (Heath, 2006, p. 96).
Heath provides eight different premises as pillars of his Fully Functioning Society Theory
(FST), within which lies a key to the resolution of Nike's sweatshop attacks of the late '90s and
early 2000s, and possibilities for addressing future challenges from activist groups as well as
media. That key is Heath's premise of corporate responsibility (CR) or "Being Good."
Heath says that "Sound principles of CR when they are effectively implemented
constitute the essence of each organization's legitimacy by meeting or exceeding the normative
expectations of stakeholders and stake seekers" (Heath, 2006, p. 103).
CR is a function of management choices that lead an organization to be good, and
therefore legitimate. Legitimacy derives its power from reputation, which threatened, leads to a
weakened public perception of an organization's legitimacy.
25
Image Repair and Nike Sweatshop Debate
While Nike's enormous financial resources provided ammunition to counter the barrage
of negative publicity, a notorious lawsuit, student protests, and a drop in share price, it wasn't
until the company addressed corporate social responsibility within the context of Heath's premise
of "being good" that the tide against Nike began to turn.
"Instrumental CR results from positive engagement to make society better through
policy positions (Nike's Code of Conduct), products/services that add value to people's lives, and
other activities that clearly favor the public interest over (or at least equal to) personal (partisan)
interest" (Heath, 2006, p. 103). The application of Heath's CR premise within the context of
actual CSR initiatives established by Nike at the height of its crisis provides a foundation for
building a crisis management strategy that integrates principles of Benoit's Image Repair Theory.
In Nike's responses to criticism from Oxfam, we see its adversarial posture of earlier
years replaced with a more accommodating approach that emphasizes Nike's good works, in
keeping with FST's premise of "being good."
A letter from Nike's Hannah Jones, vice president of corporate responsibility and Maria
Eitel, president of Nike Foundation, responds to a letter from Oxfam Australia's Labor Rights
Advocacy Coordinator, Dr. Tim Connor, challenging Nike's progress toward low wage issues
within its overseas supply chain offers. Jones' and Eitel's letter illustrates Nike's improved and
CSR-driven PR tact.
The March 11, 2009 responses from Nike included these statements:
"...a complex issue like wages should not be confounded with Nike's sincere interest and
investment in helping empower people around the world. ... While we continue to address
core issues in our supply chain, we also believe that we can and should contribute to
reducing poverty because it aligns with our mission to unleash human potential.
26
Image Repair and Nike Sweatshop Debate
Similarly, the Nike Foundation, founded by Nike, Inc., as an autonomous philanthropic
platform shares this mission and does so specifically by advocating for girls, a severely
underserved population" (Oxfam Australia, 2012a).
Jones and Eitel were referring to the Nike Foundation's support of The Girl Effect it
founded in partnership with the NoVo Foundation and the United Nations Foundation and
Coalition for Adolescent Girls. (Nike Foundation)
Analysis of Research Findings
Image Repair Theory's Incomplete Solution
The research conducted on Nike and sweatshops reaffirms my premise that Benoit's
Image Repair Theory was an incomplete solution to the company's public relations crisis of the
'90s and the early years of 2000, based on the backlash that occurred as a result of the Kasky
lawsuit. Nike's PR efforts were strengthened by its focus on CSR, initiatives that represent
aspects of Heath's Fully Functioning Society Theories.
Further, the questions posed at the beginning of the study are answered through research
conducted for this case study. In an analysis of the situation over a 20-year period, the following
can be concluded:
1) Allegations of sweatshop conditions in Nike's sub-contractor factories were leveled
against the company by media, consumers, student activist groups, and human and labor rights
activists over the period from 1992 through 2005. Despite Nike's iconic brand status, its image
was tarnished by the public's perception that its products were made under sweatshop conditions,
likened to "slave labor." The public uproar seriously tainted the brand, the company's reputation
and its legitimacy as the world's leading athletic footwear company.
27
Image Repair and Nike Sweatshop Debate
2) Nike's early public relations strategy for managing the sweatshop crisis reflected
tactics described within Image Repair Theory. "An offensive act" had occurred (Benoit, 2008),
and as we see later on, Nike was in fact responsible.
Nike at first denied the allegations of manufacturing their footwear and apparel products
in sweatshop factories, stating the company didn't own the factories, and therefore, had no
responsibility for how products were made.
From "denial," Nike's PR responses reflected "evasion of responsibility" (Benoit, 2008)
by claiming lack of awareness of the conditions in the factories, a "defeasibility" tactic within
Image Repair's strategies.
The same Nike PR spokeswoman, responding to a damaging New York Times story about
a mistreated Indonesian worker, countered the charges by attacking the reporter's credibility, a
move within Image Repair's "reducing offensiveness of event" (Benoit, 2008) strategy.
3) After considerable pressure exerted by Nike's external publics and stakeholders, the
company developed a public relations strategy supported by Image Repair Theory with
"corrective actions" (Benoit, 2008) that Nike would take to address its contractor issues.
CEO Philip Knight's speech to The Press Club represented a turning point in Nike's
public relations crisis management. Corrective actions were announced, changes implemented, a
code of conduct enforced, and CSR programs initiated. It is within this latter area where Image
Repair Theory was not only insufficient to solve Nike's PR crisis, but also resulted in causing
more problems, leading to a high-profile lawsuit that brought Nike's CSR motivations into
question.
28
Image Repair and Nike Sweatshop Debate
4) Image Repair Theory, while instructive in many crisis PR situations, offers no
guarantees for solving a public relations crisis, particularly one of the magnitude and global
scope as Nike's.
With its considerable financial resources, Nike engaged a skilled public relations team to
craft a comprehensive public relations strategy focused on Nike's Corporate Responsibility, a
tenet of Heath's Fully Functioning Society Theory, that is reflected in an organization's CSR
programming. Nike's CSR initiatives spanned a broad spectrum, from its leadership and
involvement in labor and human rights organizations like the Global Alliance for Workers and
Communities, to Nike-funded The Girl Effect, to the micro-loan programs for families in
Indonesia.
Nike's public relations crisis worsened with its earlier one-off strategies to deflect and
deny, however, as the public outcry increased and stockholders complained, the company took
responsibility for its subcontractor's factory policies and conditions and relied on public relations
strategies grounded in solid, proven theories to promote the company's remedial initiatives.
5) The changes Nike made within its global supply chain motivated other apparel
companies to address sweatshop allegations and conditions in their subcontractor factories. Phil
Knight, in his speech to The National Press Club, wisely framed Nike's company-wide actions
within a context that they would be good for the entire apparel industry.
Today, Nike provides extensive information on its website regarding its manufacturing
policies and practices, location of overseas factories, outreach to Third World laborers, current
statistics on its global employment, all of which are included within the company's annual CSR
and Sustainability reports to its stakeholders, which are available to the public and media on its
website.
29
Image Repair and Nike Sweatshop Debate
The Future: Bangladesh and Nike's Positive Role
Nike has remained out of the spotlight for the most part since 2005 with a public relations
strategy that no longer relies on denying every allegation, Nisen (2013) writes. "Nike has mostly
managed to put the most difficult chapter in its history behind it, and other companies who
outsource could stand to learn a few things from Nike's turnaround" (Nisen, 2013, para 8).
However, Nike's name emerged again after the Rana Plaza tragedy in Bangladesh.
Nike worked with few factories in Bangladesh recognizing the safety hazards prevailing
in many of them. Nike's Hannah Jones was instrumental, in fact, in cancelling a major contract
with an important factory after a personal visit in 2012 revealed "a checklist of code of conduct
violations, including excess fabric that could catch fire, and barred windows," Shelly Banjo
wrote in an article for the Wall Street Journal a year after the disaster (Banjo, 2014a, para 40).
Concurrently, Banjo interviewed new Nike CEO Mark Parker for the Journal's blog regarding
what lessons Nike learned from its labor issues of the past 20 years.
"We've learned a lot from our past," Parker said, adding that one of the lessons is
"Ignorance is not bliss. You have to understand the systemic issues and work with factory
partners to solve them" (Banjo, 2014b, para 3).
With regard to Bangladesh, Parker reported Nike has "limited" its involvement there
(Banjo, 2014, para 11). "We've taken a very responsible position. Is it a perfect situation?"
Parker asks. "No. There are always opportunities to improve, not just in Bangladesh, but around
the world" (Banjo, 2014b, para 13).
The steps Nike took to specifically address the sweatshop attacks of the 1990s
encouraged others like Liz Claiborne, the Gap and Reebok to join Nike in hiring "respected
human rights groups to monitor a handful of their factories" (Greenhouse, 2000, para 17) in
30
Image Repair and Nike Sweatshop Debate
efforts to improve working conditions. Gap Inc. "pledged to resolve" problems within its
factories by hiring more thorough inspections, and in 2005, Gap cancelled contracts with 136
factories because of "low pay and hideous working conditions" (Frith, 2005, para 22). American
Apparel followed suit and made a "no-sweatshop commitment to U.S.-based labor"
(Krashinsky, 2013, para16).
More recently, Nike was used as an example of how the Canadian company, Loblaw (Joe
Fresh brand sportswear) should respond in the wake of the 2013 Rana Plaza factory disaster
where Joe Fresh apparel was being manufactured ( Krashinsky, 2013).
"Nearly two decades on, the public relations response has evolved, and companies like
Loblaw have learned lessons from big names such as Nike," Susan Krashinsky (2013) wrote in
The Globe and Mail (para 7).
Nike's leadership role in fighting labor and human rights abuses within subcontractor
factories over the last 20 years clearly has had a positive impact on the apparel industry by
influencing other apparel companies to make changes, as this case study shows.
However, as long as apparel manufacturers continue to chase "cheap needle," and
consumers clamor for low-cost clothing and footwear, the issue of potential labor and human
rights abuses within global contractor apparel and footwear factories will continue.
Big brands like Nike have the capability to use their powerful image and tremendous
financial resources to be good citizens in the context of Heath's theory of a fully functioning
society and to serve as role models for positive change.
For Nike, the company's clout as an iconic brand and billion-dollar enterprise contributed
to its ability to sustain only minor financial damage, with a dip in stock price during the height of
the crisis. From that point, the company experienced tremendous growth, as the financial chart
31
Image Repair and Nike Sweatshop Debate
below illustrates (NIKE Inc., 1991-2015, Stock chart, courtesy Fidelity.com).
For apparel industry public relations practitioners and communications managers, the
implications of Nike's case are profound. How Nike addressed its sweatshop crisis serves as not
only a warning for corporate communications managers regarding their company's apparel
manufacturing practices, but also emphasizes the importance of a comprehensive, multi-pronged
crisis communications strategy grounded in proven public relations theories.
Limitations and Recommendations for Future Research
Research Limitations
32
Image Repair and Nike Sweatshop Debate
Although extensive research existed on the topics of Nike's image crisis, sweatshop
apparel and footwear manufacturing practices, as well as image repair theories, Heath's FST and
CSR, there were a number of limitations:
1) There were few opportunities, with the exception of Stewart and Cassman, to obtain a
first-hand perspective of the problems surrounding the sweatshop issue. Interviews with Nike as
well as others in the apparel industry would have provided more precise information regarding
how the companies' public relations' departments responded to the negative publicity.
2) An important limitation exists with regard to the public's general understanding of the
apparel industry, as the distinction between company-owned and contracted factories is crucial to
understanding how a company can control labor practices in the global manufacturing of its
apparel and footwear. Nike attempted to make that distinction.
Furthermore, issues of corruption, governmental wage and labor policies unlike those in
the United States, and the highly mobile nature of global workers seeking the best employment
opportunities, impact the extent to which a company can exert influence and controls.
Recommendations for Future Research
Research in educational materials and textbooks, scholarly articles and professional
public relations and communications industry periodicals is limited with regard to addressing
public relations issues relative to the apparel industry. The fact that this industry represents more
than $750 billion in global revenues, and that the majority of apparel and footwear products are
produced overseas, many in Third World countries, calls for further research within the field of
public relations that goes beyond the current emphasis on publicity and social media to include
theory, ethics, and CSR.
33
Image Repair and Nike Sweatshop Debate
Finally, do consumers really care where or how their products are made? The landmark
CNBC/Burson-Marsteller "Corporate perception indicator: A global survey from main street to
the executive suite" in which 25,012 individuals were surveyed from June 28-August 15, 2014
suggests the possibility consumers do care (CNBC/Burson-Marsteller, 2014).
Participants were asked, "If a corporation outsources its manufacturing to another global
market, does that tend to make you more or less favorable toward it?" Results from those in the
"general population" revealed 8% said "much more favorable," 23% replied "somewhat more
favorable," 33% somewhat less favorable," and "19% much less favorable" (CNBC/Burson-
Marsteller, 2014, Q. 47). Interestingly, slightly more than 50% of the general population
indicated a less favorable attitude toward companies that outsource, leading one to presume,
where products are manufactured does matter to consumers.
The complete study and results, available online, lend further credence to the viability for
additional research in the area of public relations and crisis communications for the global
apparel industry.
34
Image Repair and Nike Sweatshop Debate
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