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 notinfluence 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 theylacked 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 1990sthey 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 http://www.fundinguniverse.com/company‐histories/NIKE‐Inc‐Company‐History.html Corporate Communication: an internal journal. Accessed at
Putting the Boot In. Retrieved at http://herinst.org/sbeder/PR/nike.html Corporate Evasions of Responsibility Regarding Global Sweatshops http://www.marshall.edu/etd/masters/williams‐heidi‐2003‐
B. Stakeholders impact and outcomes
1991: The UK's Thames TV, The Economist and Knight Ridder reported on conditions in Nike factories in Indonesia5 1993: US television network CBC reported that workers suffered physical and sexual abuse on top of their low wages and an exhausting quota system. The New York Times, The International Herald Tribune and The Economist alsoreported on Nike's Asian factories6 1994: Further bad press included investigative reports in The Rolling Stone, The Boston Globe, The Los Angeles Times, The Chicago Tribune and a book by Donald Katz called Just Do It7
1997: Nike was the target of several protests outside store openings and by students against their universities' links with the company. Anti-Nike rallies were held in 50 US cities and11 other countries8 1998: The damage to Nike's reputation was beginning to be felt in the account books. Share prices were dropping and sales were weak9
C. Action and responses
To responds to these allegations and negative publicity Nike has mounted a PR counteroffensive so as to portray a caring company that was concerned about working conditions in its contractors' factories10.
the Boot In. Retrieved at http://www.uow.edu.au/~sharonb/nike.html
Putting the Boot In. Retrieved at http://www.uow.edu.au/~sharonb/nike.html Putting the Boot In. Retrieved at http://www.uow.edu.au/~sharonb/nike.html Putting the Boot In. Retrieved at http://www.uow.edu.au/~sharonb/nike.html Putting the Boot In....
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