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International Business Policy
Global labour markets: exploitation or development?
What would you say about child labor?
You are Phil Knight, CEO of Nike, and a journalist is coming to your office. You know
you will be asked questions about child labor.
What are you going to say?
First Question to P. Knight
Labor standards of workers producing Nike products are on average much lower than those of US
factories.
Such standards would not be considered acceptable in the US.
Does this raise an ethical issue to you?
Second Question
You have factories producing Nike shoes in Indonesia, a brutal military dictatorship
based on corruption.
Don’t you mind supporting such a regime?
and being supported by it?
Third Question
Why Nike soccer balls are
often stitched by
children, in particular in
Pakistan?
Fourth Question
You say that in your Indonesian factories, the
minimum age is 14.
Does this bother you?
Back to yourself
Are you sure you can formulate the extent to which employing children is a dilemma?
Are you sure you can formulate the extent to which exploiting workers is a dilemma?
Can you avoid the temptation of justification?
A Business Ethical Dilemma
More Profit
Less profit
Employing children
Not employing children
Would any multinational company intentionally let children work in its factories if it was more costly?
This is how you can distinguish a justification from a reason to act
Another Formulation
Lower wages
Higher wages
Exploiting workers
Empowering workers
Human resources engender costs that must be minimized in order to maximize profit
Common Justifications
There is no real problem I act within the law If I don’t employ them, they are worse off There are better in my factories than in others’ It is a historical necessity It is the path to development It is beyond my control I have no choice (because of competition)
These are no reasons to act, but excuses that prevent ethical action.
What could you say about child labor?
You are Paul Pressler, CEO of Gap. You are determined to abolish any form of child labor
in your company and to improve workers’ condition.
What are you going to say?
First Question to P. Pressler
You know there are persistent violations of wage, health and safety standards in your factories in most regions
where you do business. They go from improper protective equipment to physical
abuse and psychological coercion. There are even instances of child labor.
Do you admit it?
Second Question
You have taken steps to tackle the issue but you know these steps are insufficient.
Do you admit it publicly?
Third Question
Some activists don’t believe your commitment is genuine.
Do you invite them to say precisely this in your own annual report?
Fourth Question
You know the only solution to diminish exploitation of workers is to empower them individually and collectively (e.g. through
unions and global standards).
Do you promote the formation of unions knowing that this will necessarily result in
paying higher wages?
Transparency and Credibility
Actions with
corrections
Lack of ethics in actual behavior
Ethical issues faced by the company
To build credibility, you should not communicate only to the extent you have taken corrective actions
Some Conclusions
Beware of the temptation of denial and justification! It does
not help to act and hardly help to feel better.
To know if an ethical argument is a reason to act or merely a
justification, look at whether you would sacrifice some
interest for it!
The many things you don’t want to be known are already
known. If they are spelled out, they give you an opportunity
to show your improvement.