NIKE AND CRISIS REPUTATION MANAGEMENT 1

Nike and Crisis Reputation Management
Public Relations: Crisis Management
ARTICLE : NIKE FIGHTS FULL-COURT PRESS ON LABOR ISSUE

MURIEL CARVALHO STUDENT NUMBER : 12876057 DUE DATE : 07/07/2010

A. Crisis Timeline
In 1991: Nike’s contractors were accused of manufacturing Nike products in sweatshop conditions, using child labour, paying less than the minimum wage, enforcing overtime, subjecting employees to verbal abuse and sexual harassment and running factories like prison camps1. Nike initially responded to public criticisms by claiming no control over the conditions inside the factories making its shoes and clothing. Nike argued that as the company does not own any of the factories producing its products, Nike could not influence working conditions or pay. As Coombs suggested in his Situational Crisis Communication Theory, Nike’s first image restoration theory was denial. This means the organisation was shiffting the blame for the incident to another entity responsible for harmful act, in this case it was the factories. Also, Nike’s attempted to evade responsibility by defeasibility as the company said they lacked control over critical elements of the situation (Coombs)2. 1991-1997: Nike continued to defend its wage levels with commissioned studies and rhetoric3. “CEO Phil Knight claimed that working conditions in Asian factories had improved drastically since Nike had begun business 25 years before. He said if a shoe factory worker had gone to sleep just 10 years earlier and woken up in the late 1990s they would have thought that they had 'died and gone to heaven”4.

1998: Nike poured its marketing expertise into its own corporate reputation and sought to portray a caring company that was concerned about working conditions in its contractors' factories

1

Company history : Nike Inc. Retrieved at