Excerpt
from WSJ article: (Please read this excerpt and provide your response to the
questions listed)

Hannah
Jones, Nike Inc.’s head of sustainable business, had been lecturing colleagues
for years about the dangers of manufacturing in Bangladesh. Yes, the country
featured some of the cheapest factories in the world, she argued, but the
athletic-gear maker could ill afford another public pasting over its labor
practices.

Her
counterparts in the production division, charged with squeezing costs,
countered that they should all visit the place together and then decide. So one
day last year, five of them slogged up a dirty staircase to the top floors of
an eight-story building here that housed one of Nike’s suppliers, Lyric
Industries.

Rolls of
fabric were strewn across the production floor and some windows were bolted
shut, Ms. Jones recalls, clear-cut hazards in the event of a fire. The building
was filled with other businesses, and there was no telling how safe those were.
After spending the morning speaking with Lyric managers, workers and people in
the neighborhood, they flew home and decided to cut ties with the company.

The
decision came not long before another garment-manufacturing hub known as Rana
Plaza collapsed, killing 1,100 people in a suburb of Dhaka, in the worst industrial
disaster in Bangladesh’s history. The tragedy, which happened a year ago this
month, has forced Western apparel sellers to re-examine their world-wide search
for cheap labor, which has turned Bangladesh into an exporter of $20 billion of
clothing a year. “Our competitors were moving fast into Bangladesh and the
pressure was getting bigger and bigger,” says Nike Chief Operating Officer
Eric Sprunk. “We needed a strong point of view to say, ‘Are we going to
increase our source base there or not?’ “

Nike’s
internal conflict over Bangladesh shows that its effort to clean up its act in
the developing world, which began about 20 years ago, remains a work in
progress. As the U.S. apparel industry sends more production to low-cost
nations, Nike’s experience offers a lesson in the difficulty of managing the
twin priorities of controlling costs and maintaining acceptable working
conditions.

One
faction inside Nike, led by Mr. Sprunk and other manufacturing executives, had
argued the company could put the necessary safety controls in place to produce
in Bangladesh and better match rivals’ cost and margin advantages. But a team
led by Ms. Jones, chief sustainability officer, had insisted the company
couldn’t guarantee working conditions there would be safe.

The decision
to cut ties to Lyric Industries, with which Nike had worked for more than a
decade, and to another factory reduced Nike’s footprint in Bangladesh to four
facilities. In effect, it conceded that problems outsourcing production to the
country couldn’t be easily fixed.

Over the
years, Nike’s use of overseas manufacturers has periodically sullied its image,
and its campaign to eliminate such problems hasn’t been easy. It has plowed
money into helping factories and sacrificed sales at key moments when standards
were breached. It has largely eliminated problems such as factory-worker deaths
and the use of certain hazardous chemicals.

But
problems persist.

Questions
you need to address:

1. 
Ever
since the campaign against its labor practices in the 1990s, Nike embarked on a
long process of “compliance”. However, shareholders and stakeholders are
looking beyond mere compliance.

Today,
sustainability is of utmost importance to companies and its stakeholders.  

What
are some of the things that Nike can/should do to address the issue of
sustainability? Your response should address (a) the core idea of
sustainability; (b) the three P’s of sustainability; and (c) the three R’s of
sustainability.

2. 
How
should Nike integrate sustainability into the depths of its company? Your
response should address supply chain activities ranging from design to
manufacturing to all other operations of its supply chain. 

3. 
How
should Nike go ahead with its practice of outsourcing manufacturing to
countries with low-cost labor? Should this be discontinued or should it be
continued with some changes? Provide ample justification. 

Provide a two-page (double spaced;
font size 11) written response to the questions listed above.

You may refer to the text book or
any other online resources for additional information required for your
write-up.

You may want to look up some
information about Nike and allegations of worker exploitation during the 1990s.