Nike, Nietzschean Superman and the Sweat Life for Superwomen  

David M. Boje

January 1, 2001

This paper for will be presented to the  International Relations Research Association. January 5-7, 2000. IRRA sessions are in Fairmont Hotel in New Orleans. Session S19 "The Anti-Sweatshop Movement and Corporate Codes of Conduct" session is Friday January 5th. 10:15 a.m. - 12:15p.m.

Abstract

In this essay I look behind the mask of "free" global trade presented by Nike Corporate Leadership. Behind this mask, I see the Nietzschean Superman, with a will to power that is not talked about in contemporary leadership theory. Contemporary leader theory does not mention "sweatshops," is too politely bureaucratic, preferring transactional and routinized transformational leaderly study to that of the less moral Supermen and Machiavellian Princes. The contribution of this essay is to present a look at leadership that is not polite, humble, or quite so moral and pure.  I develop a three dimensional model of leadership across nine types of networks. The first dimension I call "X" the transactional to transformational moral ground of traditional leadership study. The second dimension I call "Y" extending from the will to serve to the Nietzschean will to Power. And the third dimension "Z" extends from the narrative homogeneity to narrative heterogeneity.  As a case example, I look at the nine networks of involvement of the Nike Corporation in (1) supply chains, (2) distribution webs, (3) postmodern cultural icons (Woods, Jordan, and stars like Gibson & Hunt), (4) transgovernment relations (among 1st & 3rd world governments), (5) education, (6) Nike is the leader of a pack of competitors, (7) investors and consumers (who purchase stocks and products), (8) workers (in Beaverton, Oregon, expatriates, and 3rd World mostly young females, and (9) the postmodern network of resistors to the leadership of Nike in the global stage of postmodern capitalism. 

OUTLINE
Abstract
Introduction
Part I - Towards a Network Theory of Leadership
X Dimension
Y Dimension
Figure One - X and Y Dimensions
Phil Knight's Leader Styles
Z Dimension
Figure Two - X, Y, and Z Dimensions
Part II - Extending the 3D model to the 9 Types of Nike Network Relationships
1. Supply Chains
Shell Game
2. Distribution Webs
3. Postmodern Cultural Icons
4. Transgovernment Network
5. Education
6. Apparel Industry Competitors
7. Investors & Customers
8. Workers 
9. Resistance Network
Part III - One Answer - How Nike Might Transform from Sweatshops to French Taylorism?
Four Study Questions
  1. How has Nike enacted its espoused Code of Conduct over time?  
  2. Does Nike pay a living wage?
  3. Does Nike subcontract with "sweatshops"?
  4. What is the relationship between Fair Labor Association (FLA) and Workers Rights Consortium (WRC)? 
What did Karl Marx, Frederick Taylor, and Adam Smith have in common?
The Proposed Action Research Experiment
Conclusions
References
About David Boje

Introduction

    I did my dissertation on the centrality of organizations and leaders in various interorganizational networks, such as communication, resource, and reputation (Boje, 1979a).Along with David Whetten, we posited that leadership takes place in an interorganizational field of strategies and environmental constraints (Boje, 1979b,1999a; Boje & Whetten, 1989; Boje, White & Wolfe, 1994).  

    Since then, I have looked at how change and transformation takes place in transorganizational networks (Boje & Wolfe, 1980). The field of transorganizational development theory and praxis was first appraised in a seminal article by Culbert, Elden, McWhinney, Schmidt, & Bob Tannenbaum (1972). For a more recent review, see the Transorganizational Development Web Site). 

    The purpose of this paper is to extend the field of leadership from its current focus on leaders and worker transactions and organizational transformations to the interorganizational field of network study. The field of leadership has not strayed from from the trait study of great leaders, the dyadic behavioral relations between leaders and followers, and the recent interest in differentiating between transactional and transformational (even charismatic) leaders. The purpose of this essay is to explore the kinds of leadership enacted in Nike-Beaverton, its subcontractors, and distribution chain. I will suggest that Phil Knight is part Machiavellian Prince, part Nietzschean superman and part Weberian charismatic hero as well as Bureaucratic executive. In the second part of the essay, I will look at ways Nike Corporation could transform its supply chain of feudalistic sweatshops into what Dominique Besson (2000) calls, "French Taylorism." 

    I would like to make several related contributions to leadership. First, to focus on nine types of global networks in which leadership takes place. Using the Nike Corporation as a case example, these range from  (1) supply chains of Third World factories, (2) distribution webs of outlets (from NikeTown to Footlocker), (3) postmodern cultural icons (Woods, Jordan, and stars like Gibson & Hunt), (4) transgovernment relations (among 1st & 3rd world governments applying more or less legal codes), (5) education (programs to change student perceptions of Nike), (6) Nike is the leader of a pack of competitors, (7) investors and consumers (who purchase stocks and products), (8) workers (in Beaverton, Oregon, expatriates, and 3rd World mostly young females, and (9) the postmodern network of resistors to the leadership of Nike in the global stage of postmodern capitalism. Second, I wish to look here to elaborate an expanded and more integrative theory of moral and amoral reasoning (e.g. Kohlberg). Kohlberg (1964, 1966, 1969, 1976, 1981 & 1984) studied differences in children's reasoning about moral dilemmas. He hypothesized that moral difficulties motivated their development through a fixed sequence of increasingly flexible kinds of moral reasoning. See Boje (2000b) for a review of the relation of what I term "narrative moral development" to leadership theory. I propose to look at three dimensions of leadership in the athletic apparel industry that includes networks of designers, marketers, subcontractors, workers, celebrities, distributors, customers, investors, intellectuals, journals, governments, and protestors. My basis thesis is one can not properly understand the depth and scope of Nike leadership unless we understand its relations to the nine types of networks listed above. In my multi-dimensional view, there are three critical dimensions to Nike's transorganizational leadership. For simplicity, I will label them X, Y, and Z.

X - Transactional to transformational leadership, as studied by Burns (1978) and Bass (1985).

Y - From the Will to Server to the Nietzschean Will to Power. The Will to Power is specifically excluded from transaction and transformational leader theory by both Burns and Bass. I therefore treat it as a second dimension of leadership (See Boje, 2000b) for an overview..

Z - From monophonic (single voice) narrative to (polyphonic) narrative. I am interested in the Tamara (Boje, 1995) of storytelling behaviors of transorganizational leadership (Boje, 1999a). 

PART I - Towards a Network Theory of Leadership

In Part I, I will review a three-dimensional model of network leadership. In Part II, I follow this up with specific recommendations to Nike Corporation.

    X - Dimension - As an overview, James MacGregor Burns (1978) based his classic study of leadership on Kohlberg's levels of moral thinking to differentiate between transactional and transformational leadership (Dimension X). Burns looked at modal thinking (the means over ends reasoning) in the early stages of development and held these leaders to be "transactional."  Transactional leadership "requires a shrewd eye for opportunity, a good hand at bargaining, persuading, reciprocating" (Burns, 1978:169). A "transformational leader," on the other hand, "recognizes and exploits an existing need or demand of a potential follower... (and) looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower" (p. 4). 

    Y - Dimension - The Y Dimension extends from Will to Serve (WTS) to Will to Power (WTP). Nietzsche's notebooks (1967) on Will to Power (WTP) were written from1883 to 1888. The transaction/ transformational leadership theorists reject the WTP bas being too immoral, merely a brutish self-indulgent or tyrannical power wielding that is immoral. But, a more careful reading of Nietzsche reveals quite a different approach to both leadership and the study of morals.  The WTP for Nietzsche has something to do with the will to initiate and implement a goal as well as the more macro construct of Darwin's theory of natural section, the power to transform the inherited advantages from generation to generation (WTP #362). And WTP is also a Will to Truth (TSZ, pp. 28, 113). For Nietzsche the world revolves around the inventor of new social and cultural values (TSZ, p. 52). Nike is a Superman leader, extending its power from cultural transformation through celebrity and star power to the factories and sweatshops of the Third World nations. The WTP is a will to overcome the small people, "they are the superman's greatest danger" (TSZ, p. 287). And the superleader is not satisfied with the happiness of the greatest number of workers or consumers (TSZ, p. 287). The Super leaders sees the abyss with the eyes of an eagle and grasps the abyss of poverty and misery with the talons of an eagle (TSZ, p. 288). 

    Resituating the Transaction/Transformation Model of Leadership -   Figure One crosses the X and Y dimensions of transaction to transformation with WTS to WTP. The horizontal X dimension of transactional to transformational made famous in the work of James MacGregor Burns (1978) and Bernard M. Bass (1985); and the vertical Y dimension I am adding, extends from the will to serve others to the will to power of Friedrich Nietzsche (writing in the 1870s). Burns and Bass restrict leadership to the bureaucratic transactional and heroic/ charismatic approaches (cells 1 and 3) to a will to serve others. I would like to resituate leadership by including the work of Machiavelli and Nietzsche (cells 2 and 4). Burns, more than Bass, disqualifies leaders who wield power, including those with a strong "will to power" as well as tyrants and dictators who use power in what Burns and Bass see as amoral. In short, the contemporary transaction/ transformation duality restricts leadership moral uses of power, to the will to serve others.  Bass sees the transactional leader as either opinion leader, group leader, party, legislative, or executive leader.  In each case, the transaction leader "requires a shrewd eye for opportunity, a good hand at bargaining, persuading, reciprocating" (p. 169). The transactional leader approaches followers with an eye to exchanging one thing for another: jobs for votes, or subsidies for campaign contributions. 

 

WILL TO SERVE OTHERS

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1. BUREAUCRATIC TRANSACTION LEADER  

 

Bureaucrat pretending to be heroic; Hero who is tamed by bureaucracy

3. HEROIC/ CHARISMATIC LEADER  

 

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Bureaucrat pretending to be the prince; Prince who has become engulfed by bureaucratic counter measures

EXECUTIVE LEADER W/ 4 CHOICES?

Heroic leader who leaves the group to find self; Superman who becomes puppet of group

2. PRINCE LEADER  

 

Prince who gains power but does not know how to handle it; Superman who becomes prince; Superwoman who resists Prince

4. SUPERMAN/ SUPERWOMAN LEADER  

 

WILL TO POWER

Figure One: The X & Y Leader Dimensions

    Burns' transformational leader can be an intellectual, reform, revolutionary, or (charismatic) hero. The transformational leader "recognizes and exploits an existing need or demand of a potential follower... (and) looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower" (Burns, 1978: 4).  Few, if any, leadership theorists have noted the transactional aspects of Weber's (1947) model of the three leaderly authorities. Yet, what Weber theorized is quite consistent (though not identical) with the transactional theory of Burns (1978) and Bass (1985).  All do recognize Weber's charismatic leaderly authority, but never seem to read the part about the routinization of charisma, or see how bureaucratic transaction and heroic charisma interact with the third category of authority, the traditional feudalistic enactment of the Sultan and Chief. Burns and Bass seem to accept a linear progress model of leaderly power and authority that suggests that transaction and transformation are beyond the feudalistic form.  Yet, for Machiavelli's strategic advice to Prince, the types of power Burns finds amoral, and therefore outside his definition of leadership, is still, I think, very much in evidence today.  And so is the Superman, the will to power of Nietzsche.  Figure One, therefore is an effort to resituate the discussion of transactional and transformational leadership by adding a second, vertical dimension. To me the Princely leader is concerned about the means of power, and will sacrifice ends over means.  However, the Superman or Superwoman leader is more transformational than transactional  (For more on this topic please see Transformational Leadership, Charismatic Leadership, and the Theatrics of Leadership study guides). 

Phil Knight's Leader Styles 

As an illustration, we can look just at Phil Knight's leadership style in terms of the dimensions and categories of Figure One. 

  1. Bureaucrat - Phil Knight as executive director manages the transaction game, the rate setting of production and wage prices negotiated in contracts with some 700 subcontractors.  In these transactions, the subcontracting factory owners (who are mostly Korean and Thai) are left little bargaining room to extend more than poverty wages to their workers. 

  2. Prince - Phil Knight shrewdly manages the ad machine to enact a spectacle public image of himself and Nike corporate behavior. 

  3. Hero - Within Nike, Phil Knight is a charismatic heroic figure, with the tattoo of the swoosh on his leg, something the distributor sales force, knows as EKINs emulates. But it is not Phil's charisma that sells shoes or the spectacle image of Nike to consumers and investors. In the postmodern era, the public worships heroes of consumption, not production. So Tiger Woods is the current spotlight hero of Nike, have supplanted the retired Michael Jordan. Jennings (196) observed the transition from production to consumption heroes. 

  4. Superman - I do not think we can capture and define Phil Knight's leadership qualities and behaviors in the typical duality of transaction and transformational categories (See Figure One). Instead, I see Knight as exercising a will to power that is prerequisite to what Nietzsche calls the Superman leader.  Nietzsche's Will to Power (hereafter WTP) notebooks were written between 1883 and 1888 (see Nietzsche, 1967). WTP had a mechanistic (WTP 618) and Organic one (WTP).  The mechanistic WTP includes the idea of "every specify body strives to becomes master over all space and to extend its force (-its will to power:) and to thrust back all that resists its extension" (WTP  #636).  In its organic form, Nietzsche describes it a s a will to life. The more mechanistic form is an expression of the calculability of the world in formulas of motion, cause, and effect, attraction and repulsion, as well as the separation of deed from doer (WTP #624-627, 631). Mechanistic WTP is more transactional, where as the organic one is more about transformation. In either case, WTP is "an insatiable desire to manifest power" and "the exercise of power, as a creative drive" and one that "can manifest itself only against resistances" (WTP, 619, 656).  It is this sense of the will to power that I read in the texts and behavior of Phillip Knight. Knight is forming, shaping and reshaping his power domain in athletic apparel and in his narrating of his power domain. One could argue that Knight's WTP is mechanistic, about amassing quantities of money and market share by the mechanistic chaining of more and more Asian subcontract factories to distribution chains worldwide. Knight executes his strategies in an orchestrated campaign where the "means" are subordinated to a "will."  "Willing" for Nietzsche (WTP #668) is not "desiring," striving," "demanding": "it is distinguished from these by the affect of commanding." It is a primitive form of affect, "encroachment of one power upon another power" (WTP #668, 689). The resistance that for Phil Knight and Nike must be continually overcome is the herds of journalists, intellectuals, and activists who trade web information and concoct sensational exposé stories about Nike sovereignty. The danger of investor and consumer boycott and rebellion is kept at bay the will to power, the will to sustain the life of the Nike global empire. The Superman (or Superwoman) is "lid by a faultless and severe instinct into doing nothing that disagrees with him, just as he eats nothing he does not enjoy:" (WTP # 906). And this will to power is for Nietzsche an exceptional quality of the Superman leader that I see in Philip Knight, superior in will, knowledge riches, and influence to the Korean and Thai Princes and to the Sweaty workers, at least for now (WTP #804, 866, 960).  Knight exercises his will, despite postmodern coalitions of resistance (wet artists, intrusive journalists, campus protest, WTO protest, and NikeTown protest, and shareholder meeting protests). 

Philip Knight is the Superman, who has ordered Nike to terminate promotion contracts with Brown, Michigan, and his own alma mater, the University of Oregon, withdrawing a pledge of $30 million for a sports stadium.

Located at www.dogeatdogfilms.com  -Michael Moore's World Wide Web site transcripts from his interview with Knight. Moore made the video out-takes available after he saw a misleading posting of selected clips on the Nike website earlier this week. The new footage shows the CEO justifying the use of 14-year-old labor in his
overseas factories.  

But our purpose is not to assess Phil Knight, it is to look at the nine types of network relationships in which Knight's leadership is engaged. To do this requires we look to a third (Y) dimension of network leadership, the narrative voice.

 

Z Narrative Dimension -  From Monophonic (single voiced) to polyphonic (many voices).    

   Figure Two adds a third dimension to what was displayed in Figure One. This is the Y dimension of monophonic to polyphonic narrative. The (blue) boxes in the lower potion of the figure on the monophonic narrative types, whereas, the upper (orange) ones represents the polyphonic ones.  

Figure Two: Leader in Three Dimensions

In bureaucratic leadership, for example, there is mostly monologue; other voices are there on the stage but forbidden to speak, or they can only be whispered, their words unhearable, drowned out by the one official narrator who is authorized to take center-stage and speak and speak some more. As Kirkeby (2000: 232) argues it is the right of power to narrate events, to declare them romantic, tragic, comedic, or ironic, and then of course make them all  into a romantic narratives that fits the bureaucratic pension for monophonic (single voiced) influence. For any other voice to speak would be an act of bureaucratic espionage; certainly for the secretary to speak would be unthinkable rebellion. Barry and Elmes (1997) look at monophonic and polyphonic aspects of leadership strategy.  See Boje (2000c) for more on the multiple voices of leadership. 

The combination of the three dimensions (X, Y, & Z) provides eight types of leadership. The first four are more monophonic than the last four (on Z narrative dimension). 

  1. Bureaucratic (X = Transactional; Y = Will to Serve; Z = Monophonic)

  2. Heroic (X = Transformational; Y = Will to Serve; Z = Monophonic)

  3. Prince (X = Transactional; Y = Will to Power; Z = Monophonic)

  4. Super (X = Transformational; Y = Will to Power; Z = Monophonic)

  5. Government (X = Transactional; Y = Will to Serve; Z = Polyphonic)

  6. Intellectual/ Reform (X = Transformational; Y = Will to Serve; Z = Polyphonic)

  7. Opinion (X = Transactional; Y = Will to Power; Z = Polyphonic)

  8. Revolutionary (X = Transformational; Y = Will to Power; Z = Polyphonic)

Nike's cover story is getting fiddled with more and more holes, with each revelatory story. This, in my opinion, is forcing Nike leadership to move from denial that sweatshops exist, to camouflage tactics where factories raided by activists and journalists are cleaned up, moved, or shut down (as in #2).  However, here the risk takes on new intrigue. Nike is flirting with the idea of implementing OSHA safety and health standards, ISO 9000, and even ISO 14000 standards. Yet, Nike has its heels dug in and will not be paying living wages, even though it pays Tiger Woods $100 million in endorsement contracts.
In 1998, even Nike chief executive Phil Knight conceded that "the Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse." (Standing up to the swoosh 
The Village Voice; New York; Oct 10, 2000; Andrew Hsiao; Vol. 45 Issue: 40, Page: 41-43).
"There may appear to be little common ground linking concerns about China trade policy, student activism, university athletics, and sweatshop labor. But the Nike sportswear contracts have provided the glue that has cemented them, like sneakers, firmly together" 
What does it mean when Time Magazine gives Nike its worst innovation award> In "The best & worst of 2000" list of  Time Magazine, Dec 18, 2000, Volume: 156, Issue: 25, p.78, Voted Nike among the worst innovators of 2000,  "THE NIKE ID Here's a nifty thing to Just Do: Nike allows Web surfers to customize this sneaker online, selecting style, colors and lace types, even stamping the shoes with a personal ID code. Any bets on how long until you can pick your own sweatshop worker online? "
Protesters are everywhere, "marching down Fifth Avenue to the Rockefeller
Christmas tree to protest Nike, Gap, Kohl's and Disney; or, up in Cambridge, walking through the Harvard administration building singing carols like "Away in a Sweatshop." - Santa and Sweatshops  Wall Street Journal; New York, N.Y.; Dec 22, 2000, A14. 
"The well-known campaign against Nike, for example, has forced the company to promise significant changes in its employment practices, though few have yet been realized. When a recent cross-country "Nike Truth Tour" organized by students protested the firing of a worker at a Nike subcontractor in Honduras, the employer was forced to rehire her" (Globalization from below  The Nation; New York; Dec 4, 2000; Jeremy Brecher; Tim Costello; Brendan Smith; Volume: 271Issue: 18: 19-22).
"Take Nikomas Gemilang, a sprawling, 50-building minicity near Jakarta that employs 22,500 workers making shoes for Nike and Adidas. It is owned by Taiwan's Pou Chen Corp., the world's largest shoe manufacturer. At Nike's
urging, Nikomas set a higher wage scale for senior workers and ousted managers who had yelled abuses at workers. The factory also improved safety and food in company dorms, which house 13,000 workers... And workers' pay, even if it's better than average for that country, is still pitiful considering the nearly 40% gross profit margins Nike and Reebok earn"  (A World of Sweatshops - Business Week; New York; November 6, 2000; Sub Title:  Progress is slow in the drive for better conditions Edition: 
Industrial/technology edition Issue:  3706 Page: 52).
Furthermore, the anti-sweatshop movement is far more widespread than the scholars seem to realize. Religious congregations throughout the United States are involved.. Labor unions are organizing exploited apparel workers of other countries, and of the United States. All across the country, a process of educating and mobilizing consumers in response to abuses by employers in the apparel industry is going on. .The scholars should stop pretending to be neutral and objective in a situation where people-especially women and young girls-are being exploited and are suffering so that excessive profits may continue to be generated by Nike and the corporations that indulge in similar practices.  THE REV. PAUL SURLIS Associate Professor Emeritus of Moral Theology and Social Ethics (Letters to the editor  - The Chronicle of Higher Education; Washington; Oct 27, 2000; Volume:  47 Issue: 9, Page:  B4)

 

PART II - Extending the 3 Leader Dimensions to Nike's Nine Types of Network Relationships

The next part of the essay looks at the nine types of network leadership that Nike participates in. 

(1) Supply chains of Third World factories - Nike Corporation, its 700 subcontractors and a 1,000 outlets form a global production and distribution supply chain. Nike is a $9 billion supply and distribution chain subcontracting and marketing 200 million pairs of sports shoes a year. "Reebok, Nike, Liz Claiborne, and Mattel--have finally begun enforcing their
codes in the past year or two" (Bernstein, 2000: 86). 

In terms of the dimensions of Figure Two, Nike's leadership in the 700 subcontractor supply chain of factories is (X = Transactional; Y = Will to Power; & Z = Monophonic). In terms of Will to Power, Nike has disclosed the locations of forty-one of its factories in eleven countries around the world, the rest are secret. In 1997 alone,  Nike spent $978 million on marketing and advertising its corporate image and logo. The leaders of this supply chain act as if they really believe that feudal sweatshops are more productive, efficient, and profitable than modern management systems. The 700 subcontractors in the supply chain are not all created equal. That is Thai and Korean conglomerates own many of the 700 factories, and to minimize the power of Nike on their actions, they also subcontract to Reebok, Adidas, Fila, Puma, and numerous other apparel marketers. 

There are many feudal lords and princes in the Nike empire.  These roles are played by the Korean and Thai factory owners who subcontract to Nike Corporation, in endless rounds of bargaining. The Machiavellian Princes have their own strategies and tactics fore resisting Nike's corporate power (Carty, 1999). 

The Subcontractor Sweatshop Shell Game

I remember seeing my first Shell Game on the streets of Manhattan. Several (usually two to four) actors collaborate with the shell game to take the tourist's money. Once you know this, it is actually rather easy to spot the accomplices. 

Take three shells and label them "Global Alliance," "Fair Labor Association" and "Price Waterhouse Coopers." Shells are a neat concept as they hide the "sweatshop" -- like the pea, something desired by labor organizers, student activists, and academic rebels..

In the Nike Supply Chain Shell Game, subcontractors will move a sweatshop from location to location. Nike will bring in its accomplices, the FLA, GA or PWC to verify that there is no sweatshop.  If a journalist or activist finds child labor, force overtime, unsafe conditions, Nike will demand that the subcontractor clean it up.  Meanwhile Nike and its subcontractors open up new factory locations.  Meanwhile Nike has a number of empty shells. That is, factory locations that rival the best factory conditions anywhere. But, the Shell Game is for the monitors to figure out if all 700 factory locations are up to such high standards. 

The global supply chain is ridiculed in exposé stories of spotting the sweatshop under the shell. The subcontractor invisibly moves the "ball" here, here, or there. "Catch me if you can?"  This is facilitated by threatening workers who talk to monitors in suits or anyone who looks like a journalist or activist.  The contracts are worth big bucks. 

Networks of activists and academic intellectuals are traveling to Asia to spot the Shell Game. They interview and observe Nike subcontract factories, and returning to the 1st world with stories of sweaty practices. Nike's strategy has been to (1) deny that sweatshops exist, (2) except when one is found to be unequivocally real, where upon Nike (a) cancels its contract if it is a weakling, (b) moves the factory production to an undisclosed new location, or (c) reengineers its practices if it is of moderate power, or (c) ignores it, while stating publicly that reform takes time, and Nike will hang in there until libratory change for the workforce happens. Meanwhile Nike Corporate in speeches and websites claims that its strategic game is transparent (Transparency 101), for all the world to see.  Yet, Nike only will disclose the where about of about 40 of its 700 factory locations, claiming the strategic secrecy is necessary to sustain its competitive advantage. Meanwhile, activists and journalists and a few academics hunt the Asian world for factory locations like treasure hunters search for sunken ships. The credibility of the shell game is augmented by flashy consulting studies and a few well rehearsed factory tours by celebrities such as Andrew Young, MBA students (Tuck Business School), and a few sympathetic academics.

May 12, 1998 Phil Knight announced revolutionarily labor initiatives after release of the Ernst and Young Report
Nike axes 'sweatshop' after BBC investigation  Marketing; London; Oct 19, 2000; Tania Mason; Page: 5 "Nike has pledged to pull out of the factory it uses in Cambodia and the Gap has suspended orders there, following Sunday's BBC Panorama program, which uncovered the use of child labor by both companies... June Textiles Co in Phnom Penh, which produces clothes for both brands. Hidden cameras smuggled inside showed children who appeared to be younger than 15 years old working on the shop floor, while other employees admitted working seven-day weeks. "
2nd Source - ASIAWEEK: SIGNS OF THE TIMES Asiaweek; Hong Kong; Oct 9, 2000; "Nike pulled out of the June Textiles sweatshop factory in Cambodia after discovering it used child labor. Undercover investigators filmed children sewing shirts for just a few cents a day."
Anita Roddick argues that instead of pulling out Nike should stay and face its responsibilities -  "Somehow, we have to persuade these retailers and the media on the rare occasions when they publicise the issue - that the right response is to take responsibility. That means sticking with the factory to sort out the abuses, sending the child-workers to school and paying them while they're there. If everybody washes their hands of the whole problem, we won't get anywhere" (Diary, New Statesman; London; Oct 16, 2000; Anita Roddick; Volume:  13 Issue:  627,  Page:  8)

 

(2) Distribution webs of outlets (from NikeTown to Footlocker) - There have been very few studies of the distribution contracting of Nike (Carty, 1999). Most of the attention is on the supply chain of Asian factories. The Nike storytelling machine (Boje 1991, 1995) is a narrative web spanning the 1st World thirst for heroic sports worship  and the 3rd world supply chain of sweat labor, as well as the global distribution transaction economy of distributors (NikeTown, Footlocker, and university campus apparel stores).

Nike produces and distributes its official Nike story of sports endorsements, postindustrial supply chain management, and global distribution using postmodern culture manipulation. This link between postmodern culture and postindustrial supply chain has been brilliantly treated by Victoria Carty (1999).

 

(3) Postmodern cultural icons (Woods, Jordan, and stars like Gibson & Hunt) - Whereas we once worshiped the heroes of production, we now celebrate heroes of consumption. This is part of the postmodern condition, the marketing of products using endorsement sports and movie stars. 

Over-branding - The over-branding of sports celebrities and Swooshes onto every conceivable body and life space surface has reached saturation level. The Swoosh is everywhere.

What Nike wants is power, not the empowerment of women, as suggested in the recent Paramount film.

 

Paramount Pictures presents "What Women Want," a film by Nancy Myers, starring
Mel Gibson, Helen Hunt, Marisa Tomei, Lauren Holly, Delta Burke, and Alan Alda, in
which a Chicago advertising executive gets a whole new outlook on life when a fluke accident gives him the ability to read women's minds. Stop by a NikeTown in the cities listed below between now and December 14th, to receive a pair of complimentary advance screening tickets, while supplies last. You can also enter to win a "What Women Want" prize pack which includes a "What Women Want" t-shirt, pair of Nike Air Kukinis and a Nike watch.

Cities: Boston, New York City, Atlanta, Miami, Chicago, Denver, Los Angeles, San Francisco, Portland, Seattle (Source Nike). 
WOMEN'S GROUPS URGE NIKE TO PUT ITS MONEY WHERE ITS MOUTH IS:

LOW WAGES FOR WOMEN WORKERS IN SOUTHEAST ASIAN SWEATSHOPS DEPLORED

October 28, 1997

Washington DC -- The Feminist Majority joined the National Organization for Women and other women's organizations in deploring Nike's use of overseas sweatshops which exploit women workers, paying them as little as 20 cents per hour or $1.60 a day in Vietnam - hardly enough to eat on, let alone pay rent, clothing, health care and more. Nike women's empowerment ads aimed at the US market are in sharp contrast to the treatment of women workers in these sweatshops. Eighty to ninety percent of the workers in these sweatshops of Vietnam, Indonesia, and China are women...

"The message in Nike's women's empowerment ads are strong," said Feminist Majority President, Eleanor Smeal, "but there's a disconnect between that message and the way Nike pays and treats its workers, especially its women workers. Sweatshops, which all of us thought were a thing of the past, are back again. And just like the feminists at the turn of the century fought sweatshops, it's incumbent on us to do the same." (Ann Kaplan, Feminist Criticism and TV)

Just 10% of Nike's annual $978 million a year advertising budget would lift Nike's subcontracted workers' wages to a livable level.

"Women want employment, but employment with dignity." By Lynda Yanz, Maquila Solidarity Network, July 1999.

 

(4) Transgovernment relations (among 1st & 3rd world governments applying more or less legal codes) - Will World Governments Regulate Nike's Global Sweatshop Supply Chain? One of the central issues is what is the role of government in sweatshop monitoring? For now, governments in the 1st and 3rd World let Nike hire its own monitors. However with increased numbers of reports of factory abuses, it is likely that there will be more government intervention into this area. In a proposal to Nike Corporation, Boje et al (2000) have outlined the risks of escalation of governments mandating Nike and subcontractor reforms. 

TABLE ONE: SIX LEVELS OF GOVERNMENT INVOLVEMENT ON GLOBAL ENTERPRISE MONITORING

Level 1 - The government takes no formal role in apparel monitoring forums, legislation or research. Monitoring is left to the voluntary action of the global enterprise, its subcontractors, labor unions, workers, and non-governmental organizations.

Level 2 - The government encourages corporations to establish codes of conduct as it did in the case of the Apparel Partnership following public outcry over the apparel industry practices in Indonesia in 1991, Kathy Lee and sweatshops in 1996, and the rise in campus protests over apparel monitoring in the last five years.

Level 3 - The government facilitates forums and research into the myriad of codes between such entities as Apparel Partnership, universities, Fair Labor Association, Workers Rights Consortium, Collegiate Apparel, SA8000, and other organizations with codes. These codes vary according to corporate or non-corporate control and the inclusion or exclusion of areas such as living wage, right of workers to associate, enforcement of local national laws. This would mean establishing research grants for university research into such issues as the viability and effectiveness of codes of conduct, what is a sweatshop, how to measure living wages, and the relationship between the university and organizations such as Fair Labor Association, Workers Rights Consortium, and Collegiate Apparel who offer alternative and different monitoring standards and programs.

Level 4 - The government monitors everything from barbershops, beauticians, and chiropractors. The government could begin to monitor the claims and practices of consulting firms and non-governmental organizations such as Global Alliance, Price Waterhouse Coopers, Fair Labor Association, Workers Rights Consortium, etc. who either offer apparel factory monitoring or certify and recommend those who do or procedures for monitoring the apparel industry. This is done through the establishment of an agency for apparel monitoring of worker rights and environmental accountability.

Level 5 -The government enacts laws that oversee the certification and re-certification of monitoring programs to meet minimum standards for workers rights and environmental accountability.

Level 6 - Transgovernment trade agreements that include ecological, wage, health and safety standards for global enterprises and subcontract factories.

Public protest around the world, on college campuses, in factories, and in the streets of various nations has been a main reason that government has become involved in how global enterprises have begun to behave with more conscience and ethics. A corporate sense of ethics and social accountability that is independent of government action has been a second rationale.  

(5) Education (programs to change student perceptions of Nike) - One of the overlooked authors of management communication discourse are multinational corporations (MNCs) such as Monsanto, Disney, McDonalds, Wal-Mart and others whose annual reports, press releases, advertising, and sponsored research and consultant reports becomes the stuff on which others' discourses rests. Corporate writing is embedded in a web of media, accounting, consultant, and ad writing that seeps into academic writing (student, doctoral, and professorial) that influences how groups, such as unions, state, women, minorities, and populist movements get characterized. 

St John's University students' first-hand inspections conditions of some subcontract factories (Nike, 2000b). Nike's $750 million dollar advertising budget for writing and the sponsored apologist writing has spawned reactionary and resistance writing (Bissell et al, 2000), but that is not what makes its way into the Business College classroom. Consider what Nike (2000a) posts in its corporate web site:

Knight succeeded of his own accord, of course. But luckily for Lehigh, some of his seminal business insight for the company that became Nike has gone into a class that Professor Karen Collins had designed for incoming freshman in Lehigh's College of Business and Economics at the Bethlehem, Penn. school.

For the third year, Collins will use Nike as the model for a class of some 260 freshmen taking her Introduction to Business course. With full cooperation and support from Nike, students get a firsthand look at how the global athletic company does business, including marketing, finance and global responsibility issues. Students then ultimately design business plans for fictitious companies based on what they learn…

In the first year of her program, Collins used a large American automaker as the model, but student interest was low. She polled the class about which company they'd rather learn about, and the nearly unanimous vote was for Nike. "They buy the product, they know the ads," she says. "It was a natural fit."…

At the end of the semester, when the business plans are done, an independent judging group from Anderson Consulting reviews the plans and selects a winner. Members of the top three teams are each awarded a share of Nike stock and are honored at a daylong event in New York City. Nike awards a $2,000 prize for the best plan.

Nike provides course materials, access to Nike executives, and financial incentives that make student or faculty-critique of Nike at St. John's problematic. For example, such a course could include examples of how Nike is a writer of ghettoized race, questionable labor practices (Bissell et. al, 2000), and gender portrayals (Cole, 1996, 1997; Cole & Hribar, 1995), and for its economic development and ecology rhetoric (Boje, 1998d, 1998g, 1999b) and global postmodern consumerism culture (Carty, 1999).

Students of organization as well as journalists, investors, consumers, and activists read and write about Nike's and critics' writing. But, the writing opportunities are corporately financed, staged, and otherwise controlled. For example, Nike (2000b, c, d) sponsored 16 students from St. John's University to study code of conduct compliance auditing practices of Price Waterhouse Coopers and visit "some" Nike factories. The reports are posted to Nike's (2000b) corporate web site along with a transcript of a conference call (Nike, 2000c) and Nike's (e.g. 1998, 2000d) response to issues raised. Critics are skeptical of Nike-arranged factory tours to only 32 of over 600 locations. The question is, do off-the-tour factories operate in ways that violate Nike's code of conduct and are just not being reported in the FLA, Global Alliance, and Price Waterhouse Coopers studies (Bissell et al, 2000). 

(6) Nike is the Leader of a pack of competitors - Nike and Reebok once traded market shares, but not anymore.  Nike generated about $9 billion in sales in 2000, making it the market leader. What is interesting about these competitors, is the way the follow the market leader. Where Nike goes, so do its competitors, even co-locating in the same factory. 

(7) Investors and consumers (who purchase stocks and products) - Protests at annual shareholder meetings have become so newsworthy and regular that Nike has moved its annual meetings away from Beaverton Oregon.  Yet, the protests continue.  However, shareholder vote down initiatives voiced by protesters.  And consumers continue to purchase products even when they are made aware of sweatshop conditions. Yet, the consumer boycott is growing. " What Nike is learning, presumably, is that a growing percentage of shoppers take account of a company's conduct and reputation when deciding whether to buy its products. While this is good news for a few businesses, many others are finding themselves targets for and often embarrassing public criticism" - Marketing; London; Oct 26, 2000 by Tania Mason, Page: 27). 

(8) Workers (in Beaverton, Oregon, expatriates, and 3rd World mostly young females - Nike has several types of workers. First, the workers in Beaverton, Oregon who work on a campus like facility, receive top benefits, and time off for recreation and sports.  Then there are roughly a thousand expatriates who travel the globe to insure that subcontractors adhere to product quality and labor standards.  These are the Nike employees celebrated in Annual Reports (Landrum, 2000).  But, then there are the 600,000 factory subcontract workers (mostly women between 16 and 22) who do the cutting, gluing and sewing.  What do Nike factory workers look like?

Source BBC. - Nike & Gap - Cambodia

Vietnam Nike - Dara O'Rourke Photo

 

Nike Vietnam - Oregonian Photo

Despite the militaristic and subservient photos, there is worker resistance. There is no power without resistance , and female (and some male) workers are providing the resistance to Nike corporate power and subcontractor practices.   "The workers shall live one day as the bourgeois do now - but above them, distinguished by their freedom from wants, the higher caste: that is to say poorer and simpler, but in possession of power" (WTP, 764). Cheap women's labor is the attractor to the tranational corporate investment that is integral to globalization. 

The purpose, in my view, of the Nike storytelling organization is to keep the supply web as secretive as possible, while parading a few flagship locations as indicative of all 700 factory locations. There are facts about subcontractor factory life, that do not make it into the press releases about Tiger Woods. "According to one of the local papers, there are at least 50,000 fingers cut off in industrial accidents every year in China" (Source). The storytelling machine has an easier task since supply chains are already complex and hard to decipher: 

For example, if factory A cannot complete an order of 10,000, they might give 4,000 to factory B, where the conditions are worse. We find that it is very hard to track the locations of the factories because the subcontracting system is so complicated. That's why we try to press multinational corporations to disclose information about all of their suppliers.  

Out of the birth of tragic sweatshop conditions of exploitation and terror, is born the will to resist corporate power by the women tending the cutting, gluing, and sewing machines.  The women of Nike are becoming steeled as a higher form of being, with a will to achieve their own aristocracy and empire.  Nietzsche, like Marx, say them as the future of great social movements and revolutions. Including the voice of the workers, while essential, must also be done with great care. In the past there have been workers who have been fired and otherwise disciplined for participating in studies and media reporting on Nike factories 

    For example, Ms. Nguyen Thi Lap, a worker for the Nike subcontractor, Sam Yang in Cu Chi, HCMC Vietnam  started working for Nike in October 1995. In March 1996, she was promoted to section leader of Sewing Line No: 15.  She was interviewed by ESPN in February 1998.  Two months later she was demoted and punished by the company.  After having gone through a series of punishments, she realized that she cannot take it any more and she eventually quit working for Sam Yang in May 1998. (See the case of Miss Lap Nguyen). Here are excerpts from the interview:

 

When I became sick, I went to the clinic.  The doctor said that I have fever of 37 degree C..  On the  Sunday the 29th while working overtime, I was working very hard and being sick at the same time, so I got a really bad headache.  So I put my hands on my head.  The manager then hit me in the arm.  After the manager hits me, I could not work so I went to the nurse to take the rest of day off.  I took another day off the Monday.  When I came back on Tuesday,  the personnel manager Tran said that section leader cannot take sick day, and demoted me to become a sewer.  But the plant manager did not let me sew.  Some day they made me cut threads, some day they made me do pressing (?) and continued to move me around from one job to another.  

So I filed a complaint with the union and asked the union resolve the conflict.  During the time while waiting for the union’s action, they make me do very menial work.  Let me tell you, I was a section leader overseeing 50 workers.  Why do they have to punish me this way?  Why don’t they recognize my past contribution to the company?  There were times they make me mop the floor on the second floor.  Because I was a section leader, I am too ashamed to carry a bucket of water and so I asked a friend to take the bucket up for me.

While I was mopping the floor, I was crying.

Lap starts to cry.

Do you think the treatment was related to the interview (translator note: with ESPN)?

When the union asked me to do the interview,… right before I did the interview, the manager told me that since I’m an employee of this company I should said nice thing about the company, that the company is currently facing problems.  After the interview, the manager (Bak) called me up and asked me what I told the reporter.  I told her that I only talked about wages.   She asked me if I told the reporter whether the company still beats workers. As soon as she questioned me, she asked me to leave.  

After the interview, I was asked to lead another sewing line in a different plant.  But the people the company staffed the line were not experienced sewers and they were trainees.  I told the manager that without experienced sewers, it’s going to be hard to get the quota done.  The manager told me that it would take time for people to gain experience.  I told the manager that it would be hard for me to complete my quota with only trainees.  The manager assured me that she understood the situation. 

Do you still wants to work at that place?  Did they force you to quit?

I just want my job as a sewer.  I don’t want them to punish me by making do menial works, switching me to different jobs.  My hand were getting swollen from repairing the shoes and their punishment.  So I asked the union to resolve the problem. 

Lap is crying

For complete interview, See the case of Miss Lap Nguyen)/

Nike no longer employs child labor, after the Life Magazine exposé of children making Nike and Reebok soccer balls (See Pakistan). Yet, from time to time, Nike subcontractors do employ child labor. The recurrent use of child labor, while the exception, is a public relations nightmare for Nike. A recent BBC Panorama exposé report filmed Nike and GAP child labor in a Cambodian sweatshop (See BBC, Panorama web site -  "Gap and Nike: No Sweat?" October 15, 2000  By Paul Kenyon  Full Text version. Video Version; BBC Panorama - Global Exchange Excerpts   Another video transcript excerpts and please see Nike's Response to the BBC Program).

(9) Postmodern network of resistors to the leadership of Nike in the global stage of postmodern capitalism - Knowingly or not, many of us wear garments made in sweatshops. Nike is resisted by a growing movement to make consumers aware of sweatshop practices of global corporations such as GAP, Wal-Mart, Reebok, Adidas, Nike and others. Nike is the lightning rod for a postmodern network of resistors to its leadership. For example, Nike was a key protest target in the WTO protest of Seattle last year. And "Nike's sales plummeted after it was singled out as a sweatshop culprit" (Source http://www.wslc.org/reports/latest.htm ).  

    Campus Protest - On college campuses Nike and other apparel manufacturers are attacked regularly in speeches, street theater and sit-ins reminiscent of the 1970s Vietnam war rallies.  Nike's corporate strategy is to enroll universities in their Fair Labor Association (FLA), while campus radicals hold non-violent protests until the administration and faculty vote in the Workers Rights Consortium (WRC). The race is on and enrollments are in the two associations are running neck and neck. You probably heard the news story that Phil Knight canceled his endowment to the University of Oregon. 

"Nike's founder and chairman, Philip H. Knight, said in April that he would give no more money to Oregon, his alma mater, because it was joining the Worker Rights Consortium, an anti-sweatshop group backed mainly by students and labor groups. He criticized, among other things, the group's approach to monitoring apparel factories (The Chronicle of Higher Education, May 5, 2000)." ("Oregon withholds dues to worker-rights group" The Chronicle of Higher Education; Washington; Nov 10, 2000; Volume:  47 Issue:  11:A40).
the USDA has "locked campuses nationwide with protests against sweatshop conditions in the collegiate apparel industry, occupying buildings on more than a dozen campuses. The protests forced more than fifty universities and colleges to capitulate to students' demands and join the Worker Rights Consortium (WRC)

 

Workers Rights Consortium (WRC) and James Keady, a student turned activist,  spend their free time promoting a new Nike image,  with young girls spending 12 to 14 hours a day in 100-degree heat, six days a week, on an Nike assembly line in Asia gluing sports shoes while they breathe toxic toluene fumes and earn about a dollar  a day. And Nike's CEO Phil Knight has been playing Nietzschean Superman, and as the Chronicle of Higher Education put it "unleashed a full-court press against the Worker Rights Consortium late last month, and athletics departments across the country may find themselves wilting under the pressure" (Suggs, 2000).  For more on spectacle, see Guy Debord's work. Beneath the coliseum, the spectacle gladiator sports heroes, is the dirty "sweat" work of feudalistic capitalism, invisible to the postmodern spectacle late capitalism. 

  The irony is that feudalistic sweatshop factory work so prevalent at the dawn of the industrial revolution is once again the motor of the postmodern knowledge and service revolution.  The global economy has evolved from production to consumption capitalism, but feudalistic sweatshops is apparently here to stay.  The kinds of leadership in the Nike supply chain, running from Beaverton to the subcontractor factories in Asia, to the showrooms of Footlocker, NikeTown, and the campus apparel store must somehow convince that savvy postmodern consumer, that the age of feudalistic sweatshops is not reality.  This is no small feat of leadership given the hundreds of web activists, university intellectuals, and skeptical journalists who find Nike's claims that sweatshops do not exist hard to swallow.    

What follows is an interview with Alice Kwan, a researcher with the Hong Kong Christian Industrial Committee (HKCIC), where she monitors labor conditions in South China, with a particular focus on the garment and footwear industries. The Hong Kong Christian Industrial Committee has been working for the rights of workers since 1967. 

Kwan: In Nike's Code of Conduct, they say they respect the right to organize. In the past few years,
Nike has told us that they would like to keep their promise and respect the right to organize in China. But they also say, "It is very sensitive. It is not allowed and we don't want to do anything to violate the law, we can't do anything. We are sorry." So they wash their hands and shift responsibility to the Chinese government. 

Nike is very clever. We heard that they also told their Taiwanese partner, Yue Yuen, "No matter, help them to organize." But this is manipulated by the factory management. Mostly, the trade union is
composed of the management only and workers have no say in it. 

Besides, all of the unions have to affiliate with the All China Federation of Trade Unions (ACFTU).
ACFTU is the only union allowed in China. It is controlled by the Communist Party and the government, so the workers have no right to independent organizing. 

Most of the Nike workers who we have asked whether or not they have a trade union in their factory
don't know. When we ask those that say there is a union what the union does, they say they organize
picnics, karaoke singing contests, a monthly birthday party, but they never try to help solve labor disputes or stand with the workers. 

Source - Chinese rights, U.S. wrongs: Interviews with Wei Jingsheng and Alice Kwan  Multinational Monitor; Washington; May 2000; Anonymous;  Volume:  21 Issue:  5 Page: 19-23

What happens when activists become the heroes? 

"NIKE IS PAYING A STARVATION WAGE IN INDONESIA;" SAYS JIM KEADY. "I KNOW-I STARVED ON IT." http://WWW.NIKEWAGES.ORG/ 

This is what a term paper can do -"Keady's professor suggested that the young jock explore the connection between moral theology and sports, and Keady settled on the issue of Nike's labor practices. "I didn't know that this. would lead to any sort of activism," he says. "I was just looking for a good paper topic." 
Keady learned about Nike's now notorious history of child labor lin 1996, eight-year-olds were found making Nike soccer balls in Pakistan
wretched working conditions (in 1997, overworked Vietnamese women were found to have been exposed to toxic chemicals at 177 times legal levels) (See 1997 Leak of Ernst and Young Nike audit Report - Greenhouse).
miserable pay (for years, Nike contractors even fought for exemptions from Indonesia's paltry minimum wages) appalled him.
After the term paper, it so happened "St. John's was then negotiating with Nike over a multimillion dollar sponsorship deal, and for Keady, what had been an intellectual issue suddenly became all too practical. "As a coach, I would've had to wear the equipment shoes, socks, T-- shirts, sweats, everything." Keady decided he couldn't " 
He was given the choice resign or wear the Swoosh. ""I was told f would have to wear Nike clothes and drop the issue or resign."  Keady decided to go to Indonesia and see if he could live on the Nike wages?
"His head was throbbing from a headache, and he felt so faint from hunger that the 6-4 former soccer pro was having trouble "lifting a water bottle to my mouth without it shaking violently." The absurdity of it is that Keady's sufferings were self imposed: the result of his having volunteered to live for a month on the typical wages-about $1.20 a day-of an Indonesian factory worker sewing shoes for Nike. " - SOURCE - "Standing up to the swoosh" - The Village Voice; New York; Oct 10, 2000; Andrew Hsiao; Volume: 45 Issue:  40 Page: 41-43

  In sum,  the Nike supply and distribution network is a spectacle museum of sports heroes doing celebratory work that shields consumers and the press from the feudalistic sweatshop world of 700 Korean and Thai subcontractors, lords and tyrants over some 600,000 Asians (mostly young women between 16 and 22 years of age).

    

PART III - ONE POSSIBLE ANSWER 

How Might Nike Transform its Supply Chain of Feudalistic Sweatshops into French Taylorism?

    One answer to Nike's moral leadership dilemmas would be to conduct action research experiments that would convince executives and factory owners and managers that feudalistic sweatshop practices are less profitable and less efficient than more modern and even postmodern ones. 45 academic scholars have organized into four study groups and made a proposal to put the question of sweatshops versus modern factory methods to an empirical test (Boje et al, 2000). 

    The purpose of the action research is to develop interdisciplinary work and dialogue that will address a set of action research questions that is of growing concern to academics, the general public, and the Nike Corporation. Basic research while important is not sufficient. Specifically we propose to work with a sample of factories (the size and location will be determined with Nike and stakeholder input).  The result we anticipate is to be able to contrast different forms of pay-systems and work design and working conditions. The implementation will be according to action research methods. That is, an effort that involves workers, managers, and other stakeholders, including the study groups we list below in the design of the experiments we are proposing. We propose to embark upon action research initiative that brings various stakeholders (researchers, workers, corporate executives, managers, subcontractor mangers, governmental and non-governmental organizations) together to implement change. There has been a good deal of consulting (i.e. Global Alliance, Fair Labor Association, and Price Waterhouse Coopers) and non-governmental organization (NGO) report and media writing, but limited academic empirical study (See Appendix B). The issue is to rethink labor and environmental monitoring practices, within a larger context that compels a reframing of the institutions and ethics of development and globalization. Our purpose can be summarized to promote dialogue that leads to basic, applied, participatory, as well as action research efforts that lead to change. We have four research subgroups organized as follows

1. How has Nike enacted its espoused Code of Conduct over time? This study group will focus on monitoring studies by PWC, FLA, and Global Alliance, as well as studies that support and question their methods and findings.

MIT professor, Dara O'Rourke, said in a report to be issued today that inspectors from the firm, PricewaterhouseCoopers, had a pro- management bias, did not uncover the use of carcinogenic chemicals and failed to recognize that some employees were forced to work 80-hour weeks (Greenhouse, NY Times, September 28, 2000). 
To download entire Dara O'Rourke report using ADOBE see http://web.mit.edu/dorourke/www/PDF/pwc.pdf 
"Based on recent visits to Asia, companies such as Reebok, Nike, Liz Claiborne, and Mattel have finally begun enforcing their codes... Widespread gains in the workplace are unlikely until workers can organize unions, or a system emerges to
punish violators of international codes. Even under the programs set up by Nike and Mattel, they are free to sell their goods in the U.S. if it turns out they were made under abusive conditions. But their experiments do suggest that not every factory has to be a sweatshop to make the global economy work" (A World of Sweatshops  Business Week; New York; November 6, 2000; Aaron Bernstein, with Michael Shari in Jakarta, and Elisabeth Malkin in Guatemala City; 
 Edition:  Industrial/technology edition Issue:  3706,Page: 84-86).

2. Does Nike pay a living wage? This study group will sample subcontract factory workers, review factory payroll records, and collect data that will measure and validate various living wage formula. In addition we are proposing action research experiments that would implement and test various wage-payment schemes in a sample of factories across nations.

WSJ says "multinationals such as Nike will tell you the living wage is unworkable" (WSJ October 6, 2000, A22). 

See Cruel Treatment Working for Nike in Indonesia  Urban Community Mission Survey Report, December 1999 Source: Press For Change

Nike which pays 58 cents per day to its laborers in Indonesia (The Ecologist; Nov 2000; Volume: 30 Issue: 8, Page: 12).

Ballinger, Jeff  16 September, 2000 Nike: American dream on RI sweat from Jakarta news. 

The Olympic Living Wage Project - The Olympic Living Wage Project, sponsored by Press for Change, and done in collaboration with the Nicaraguan Solidarity Committee, NikeWatch, and Call to Action USA, is an international human rights project focusing on the lives of sweatshop workers in Nike’s Indonesian shoe factories. The Project sets out what it takes to live on Indonesian wages at a Nike factory See http://www.nikewages.org/addressing.html 

3. Does Nike subcontract with "sweatshops"? What are the reassurances that Nike and other U.S. companies such as GAP, Toys `R' Us, Wal-Mart, and Payless can give to  American consumers that their goods aren't produced under sweatshop conditions? nike says a "sweatshop" can not be defined. Yet, “The name, sweatshop, goes back to the late 1800s, and refers to the technique of "sweating" as much profit as possible out of each worker. Once a thriving tradition at the turn of the century, sweatshops saw their numbers dwindle in the face of relentless encroachment by labor organization and social legislation. By the post-war years they were pushed to the brink of extinction. But with the new arrangements made possible by the global economy -- highly mobile transnational capital, computer-coordinated production schedules, and free trade policies” (Sweat Gear web site).  Apparel manufacture too often equates to sweatshop work that is based on modes of production and piece-wages that appears feudal in contrast to the kinds of factories that are recently attaining ISO9000, ISO14000, and SA8000 certification.   This study group will look at definitions of sweatshops and measure said variables in a sample of subcontract factories. In addition, they will propose and conduct action research experiments that test what we described in our review as forms of French Taylorism. This way a sample of existing subcontract firms can be compared with the experimental options. 

Nike claims "cultural relativism," -  China and other developing countries are at a stage the U.S. was at 100 years ago and therefore, Nike is not to blame.

LINKS ON THIS ISSUE:

There is a September, 2000 critique of the Global Alliance methodology and findings available http://www.cleanclothes.org/companies/nike00-09-15.htm   The new study was conducted by Junya Yimprasert of the Thai Labour Campaign and looks into the situation at Luen Thai and w GA fails to report is how workplace conditions have been defined. For the purposes of the Global Alliance study, "workplace conditions" does not include several major topics of concern to Thai garment and footwear workers, such as issues relating to wages, hours of work, freedom of association and collective bargaining. Though Nike describes the Global Alliance as part of Nike's overall monitoring program this initiative is clearly not investigating issues of basic workers rights." According to the main report at http://www.cleanclothes.org/companies/nike00-09-15-1.htm  "In the Global Alliance study selected workers were asked to answer multiple choice questions. In this way, their priorities were suggested for them."  Finally, after interviewing Luen Thai workers, the Thai Labour Campaign found that "...they felt that the questionnaires were guiding them and tried to encourage them to conduct activities at the community level. The workers questioned why they, the workers, have to do community development while their working conditions were not improved." Please consult the report for additional issues related to methodology.

There is a new survey of wages in Indonesia conducted between 10 September and 18 October 1999.  The Urban Community Mission in Jakarta worked with Workers to survey 3,500 workers from 11 different Nike contract factories. The survey results allege that sweatshop and abusive management practices are widespread Review the survey in preparation for your response. (Press here for survey results). 

Sweatshops exist in the U.S. too - A "Garment Enforcement Report" (AprilJune 1999) from the U.S. Labor Department reported that 205 sweatshop investigations resulted in the discovery of 109 violations." The Department of Labor estimates that there are over 700 sweatshops in the U.S. 
"Free-market advocates correctly point out that low wages are appropriate to untrained, unskilled workers and that many of the sweatshop conditions are no more than what naturally occur in the lowest-paid strata of employment" (Sweatshops: Look for the INS label  Ideas on Liberty; Irvington-on-Hudson; Jul 2000; Wendy McElroy; Volume:  50 Issue:  7  Page:  29-32) 
Others look at the appropriateness of child labor. "Nike spokesman Todd
McKean says in BBC interview, "unfortunately we've found on occasion in
different places isolated instances (of child labor) which I would say this is isolated." 
"We know of no case where a nation developed a modern manufacturing sector without first going through a `sweatshop' phase," according to David L. Lindauer in Nichols, Martha, "Third World Families at Work: Child Labor or Child Care?" Harvard Business Review, January-February, 1993, p. 1223. 
"If child labor is a necessary evil of industrialization, then a nation should be judged on how quickly it passes through this phase." The political economy of child labor and its impacts on international business  Business Economics; Washington; Jul 2000; S L Bachman;  Volume:  35 Issue:  3  Page:  30-41.

4. What is the relationship between Fair Labor Association (FLA) and Workers Rights Consortium (WRC)?  The schools have made agreements, over the past two years or so, with either the White House-backed Fair Labor Association (FLA) or the student-backed Worker Rights Consortium (WRC), the two organizations competing for anti-sweatshop commitments from colleges and universities. This study group will focus on the monitoring efforts of FLA and WRC by sampling colleges and universities with and without FLA and/or WRC agreements.

The USAS student movement comes of age - The Nation; New York; Oct 16, 2000; Liza Featherstone;  Volume: 271 Issue:  11, Page:  23-26.
Roberts, Dexter & Bernstein, Aaron "A Life of Fines and beatings," Business Week, October 2, 2000 pp. 123-128 article that looks at a 3-month Business Week investigation of the auditing practices of PWC for Wal-Mart (Kathie Lee Gifford handbags), Timberland, New Balance, and Nike. The implication is that "auditing systems can miss serious problems -- and that self-policing allows companies to avoid painful public relations about them." And therefore a study of self-monitoring, PWC, FLA and other monitoring systems is needed.  "While no company suggests that its auditing systems are perfect, most say they catch major abuses and either force suppliers to fix them or yank production." (Summary of the Business Week Article). This is a Dickensian tale. Wal-Mart Director of Corporate Compliance Denise Fenton says its auditors, PricewaterhouseCoopers LLP (PWC) and Cal Safety Compliance Corp., had inspected Chun Si five times in 1999 and found that the factory didn't pay the legal overtime rate and had required excessive work hours.  The Business Week study found PWC audits missed most of the more serious abuses:
Chun Si management confiscated all ID papers of its workers, an illegal practice that left a worker a "virtual captive" of the factory. 
Guards regularly punched and hit workers for various offenses. 
The factory did not pay for overtime work. 
Workers were paid so little, and so often fined for infractions, such as taking too long in the toilet, that at the end of a month they often owed the company money. 
In the compound, workers were punched and hit for by guards for talking back to managers or just for walking too fast. 
And they fined them up to $1 for infractions such as taking too long in the bathroom
The Audit Studies are being faked (Consider this Wal-Mart Audit by Price Waterhouse Coopers):
Chun Si then took drastic steps, apparently in an effort to pass the final audit upon which its contract
depended. In early November, management gave a facelift to the two attached five-story factory buildings, painting walls, cleaning workshops, even putting high-quality toilet paper in the dank bathrooms, according to Liu and Pang Yinguang (also not his real name), another worker employed there at the time whom BUSINESS WEEK interviewed in mid-September.

Management then split the factory into two groups. The first, with about 200 workers, was assigned to work on the fixed-up second floor, while the remaining 700 or so worked on the fourth floor, leaving the other floors largely vacant. Managers announced that those on the fourth floor were no longer working for Chun Si but for a new factory they called Yecheng. Workers signed new labor contracts with Yecheng, whose name went up outside the fourth floor.

The reality soon became clear. Workers on the fourth floor, including Liu and Pang, were still laboring under the old egregious conditions--illegally low pay, 14-hour days, exorbitant fees for meals--and still making the same Kathie Lee handbags.

``It felt like being in prison,'' says Pang, 22. But those on the second floor now received the local minimum wage of $55 a month and no longer had to do mandatory overtime. A new sign went up in the cafeteria used by workers on all floors explaining that the factory was a Wal-Mart supplier and should live up to certain labor standards. Liu says there was even a phone number workers could call with problems: 1-800-WM-ETHIC. ``When we saw the Wal-Mart statement, we felt very excited and happy because we thought that now there was a possibility to improve our conditions,'' says Liu.

LAST STRAW. Instead, they got worse. On Nov. 28, a second notice went up stating that starting on Dec. 10, all workers would be required to pay cash for dinner rather than just have money subtracted from their paychecks as before, say Liu and Pang. With up to 80% of workers already skipping breakfast to save money, the upper-floor employees were aghast, says Liu.
``If we had left the factory then, we wouldn't have had even enough money for a bus ticket home,'' he says. ``But if we stayed, we knew we wouldn't have enough money to eat.'' 

National Labor Committee report, "Made in China,"
Human Rights for Workers - November 2000 issue covers sweatshops in China

Also See Breakdown of cost of pair of Nike Sneakers

And Breakdown of cost of a cap is Retail price = $19.95
University makes $1.50 or more
Worker makes 8¢

It is the task of each subgroup to decide upon the most valid, reliable and credible methodologies to address their respective research question and our overall objectives. Each sub-group will review research proposals and participants for selection to do various tasks, such as participate in action research experiments. Finally, some members (but not all) will want to be selected to actually travel to collect field data. Each study team will make a specific set of recommendations on methodology and to improve the situation for Nike and its works. Interviews and field studies would best be conducted by multi-lingual researchers in order to minimize translation difficulties.

From FEUDALISTIC SWEATSHOPS TO FRENCH TAYLORISM - 

What did Karl Marx (1867), Adam Smith (1776), and Frederick Taylor (1911) have in common? 

ANSWER - They agreed that there are organizational alternatives to sweatshops that yield more productivity, profit, and net workers higher wages.  

What about the influence of wage rates? Smith (1976) in the  Wealth of Nations, saw the choice about paying each worker a "living wage" was clear, economic and moral:

A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation (Smith, 1776, CHAPTER VIII Of the Wages of Labor). 

Adam Smith did not favor sweatshops. Adam Smith, among others, contended that interests of self-centered interests of merchants and manufacturers ran counter to the general welfare of society.  Smith advocated local accountability, moral reasoning, and a limit to bigness of business. Smith did favor the landowners over the merchants and manufacturers.

The proprietor of land is necessarily a citizen of the particular country in which his estate lies.  The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country (WN, 2: 848).

Smith argued for the primacy of agrarian capitalism over industrial capitalism.

What was revolutionary about Taylor's scientific management, was the observation that rest and refreshment are necessary to quality and sustained work. Any profit gained by overwork and snatching time for mealtimes and rest breaks and from paying the least possible bare subsistence wage and over-work in unhealthy and unpleasant situations was meager compared to the output of the high productivity enterprise. In short, both Taylor and Marx held out solutions to sweatshops' "slow sacrifice of humanity" (Marx, 1867: 244).

For Marx, piece-wage was a special form of time-wage. "In time-wages the labor is measured by its immediate duration, in piece-wages by the quantity of products in which the labor has embodied itself during a given time" (1867: 553). And piece-wages, from his point of view, afforded the "source of reductions of wages and capitalistic cheating" of workers (p. 553). That is, with piece-wages, the incentive is for the capitalist to parasitically "sub-let" labor by using the services of middlemen (subcontractors). "In England this system is characteristically called the "Sweating system."

On the one hand piece-wage allows the capitalist to make a contract for so much per piece with the head laborer--in manufactures with the chief of some group, in mines with the extract of the coal, in the factory with the actual machine-worker--at a price for which the head laborer himself undertakes the enlisting and payment of his assistant workpeople (p. 554).

To Marx, it is in the personal interest of the subcontractor using piece-wage systems to "strain his labor-power as intensely as possible" by lengthening the working-day. And this is exactly what we have witnessed in apparel manufacture: without the external control of government or the global enterprise's policies and codes, subcontractors use piece-wage and extend the working day, as well as the number of days worked each month. In Marx's day, the "Children's Employment Commission: and other agencies intervened to change working and employment practices.

Piece-wage is the main pay system in today's apparel subcontract factory. Marx hypothesized that piece-wage is paid such that it becomes the average wage, thereby negating any incentive for independence, self-control, or liberty. "Piece-work has, therefore, a tendency, while raising the individual wages above the average, to lower this average itself" for the workforce. In practice, the quotas in the apparel industry are adjusted to keep the piece-wage to a bare minimum and working conditions such as rest periods and subcontractors avoid training in more efficient production methods, unless external controls are enforced. The assumption of the subcontractor is that since the alternative to work is starvation or more rigorous demands of agriculture, those workers have ample incentive to produce. This is defined here, as feudalistic sweatshop practice. We would like to conduct research that would implement and test experiments in alternative pay schemes.

For example, going back to Taylor (1911), his innovation in pay schemes was to introduce the idea of differential piece-rate systems. In his series of experiments he demonstrated that workers when performing a carefully calibrated and planned task, would increase their effort when wages increased by 60 per cent (p. 74). In short, raising quotas and extending the working day, were found to be less productive alternatives than ensuring "prosperity for the employee, coupled with prosperity for the employer" the key to his compensation philosophy.

For Taylor, the solution to feudalistic sweatshop factories was to convince employee and employer, that through scientific experimentation, work conditions and work processes could be redesigned so that workers toiled few hours, with more rest breaks, and at higher pay, while the firm enjoyed the fruits of sharp increases in production. It is our proposal to test Taylor's option in the apparel industry. That is to move from what is called "extreme Taylorism" managing work processes with central control and high division of labor, to what Taylor had originally described, a system of work which is productive for employers and prosperous for employees.

Taylor (1911: 14-18) argued that it is possible to have prosperity for both owners and workers and the diminution of poverty and the alleviation of human suffering. We believe this is an attainable objective for the Nike corporation, its subcontractors, and global workforce. Taylor concludes, "the writer has great sympathy with those who are over-worked, but on the whole a greater sympathy for those who are under paid" (p. 18). This is the gist of our attempt to prove that living wage payment and healthy working conditions combined with scientific work processes makes economic sense.

French Taylorism - Defined - In a special edition of Journal of Organizational Change Management, Dominique Besson and Slimane Haddadj (2000) review post-Taylor approaches. Different countries throughout the world including Asia and Europe have implemented Taylorism quite differently. We hypothesize the implementation in apparel factories in Southeast Asia is the reverse to the Taylorian philosophy itself, and even a return to the feudalistic factory conditions and piece-wage compensation schemes of the 1800s. By contrast, French Taylorists implemented what Besson (2000) describes a more postmodern approach. It is more accurately "critical postmodern." On the one hand, it is an approach with strong links to Braverman's (1976) Labor and Monopoly Capital project and Marx's (1867) critique of sweatshops and piece-wages. On the other hand, the postmodernists see a drift between what Taylorism was in Taylor's day, and what it is now, in France (and elsewhere). Instead of taking an anti-Taylorism approach, Besson (2000) argues that the post-war configurations of Taylorism in France have not adopted the deskilling system that Braverman points out. But are French workers more "empowered" compared to Asian workers?  French workers are not disempowered from their knowledge and know-how (Besson, 2000: 425). At the same time, French Taylorism achieved high increases in productivity and efficiency in "an informal kind of postmodern administration" (p. 426). First, instead of implementing flexible work rules, the French prefer to keep those rules more rigid, in order to give employees confidence in the work design. The French adjusted rigid Taylor principles to allow for continuous improvements in work designs and such postmodern notions as "work autonomy spaces" (p. 434). Second, the wage contract is considered an essential way in which workers negotiate with management in order to adjust work conditions, skill levels, wages, and the authority system. In this way workers in French Taylorism have a way to invoke resistance as well as ongoing-negotiation, as part of the work organization. This is not a totalizing consensus seeking strategy; it is one where parties know what side of the bargaining table they sit on. Third, instead of management total control over the system of work, employees can avoid such productive despotism by co-control over work processes. Multi-skilling, for example, is seen as a way to enhance worker's negotiating position. Fourth, Taylorism, in its French manifestation, is part of a plurality of perspectives. Management and worker, as well as customer and supplier have voice in the postmodern version. "There existed, and there still exists today, a coded social dialog between workers, union officials, organizers and the hierarchical management" (p. 434). Fifth, the French variation of Taylorism is based on a conflict-engagement approach in which employers and employees actively consider social power and diversity and the dangers of hegemony. Sixth, my own observations of French Taylorism is that working conditions, including good food, rest breaks, and those long French vacations make quite a difference.

Could Taylorism in France be assimilated into the Asian subcontract apparel system? It is a question that merits scientific study. Our proposed experiment stands as alternative to increased levels of governmental regulation of industry working conditions. French Taylorism is a mid range solution between trade unionism and feudalistic sweatshops. It is an improvement over classical Taylorism, that allows piece-wage systems to be modified in ways that increase productivity and worker wage levels, while affording workers avenues of resistance to totalizing systems of control.

Our proposal to the Nike Corporation and its subcontractors is to experiment and scientifically compare alternative work design, work conditions, and wage-incentive schemes. It represents a step forward in establishing stakeholder dialogue and getting beyond expose research projects, or naïve consulting reports, that do not detail methodology nor go beyond the report to actually implement meaningful change. Why not try French Taylorization as a possible improvement over "extreme" forms of Taylorization now in use in the apparel industry in third world nations?

The Experiment  In short, we hypothesize that the modern scientifically managed subcontract factory will dramatically out-produce and out-pay the feudal sweatshop. We seek permission to run this experiment. Taylor (1911: 92-96, 136-143) hypothesized that better working conditions including shorter hours (from 12 to 8.5 hours), rest periods four times a day, paid days off each month for "girls" (his term), and rigorous scientific work procedures would lead to both higher factory output and higher wage levels and therefore to more harmonious relations between employer and employees. Taylor also included "the consumers, who buy the product" of employer and employees "and who ultimately pay both the wages of the workmen and the profits of the employers" (p. 136). This described the global subcontracting production and distribution network of Nike Corporation. Taylor was able to convince sweatshop owners and their subcontractors that this hypothesis had scientific validity. We believe that by turning from consultant and monitor reporting to scientific study (quantitative and qualitative) and to action research experimentation, that we can convince subcontract factory owners and managers, that sweatshops are not as profitable as the modern firm.

Conclusions

Phil Knight exercises a strength of will to power and conviction, and  begrudging negotiation with activists that can only be described as "enlightened despotism." It is a WTP to keep from falling into the disordered chaos of the democratic impulse or the humanitarian impulse to pay living wages to 600,000 workers. It is the WTP of the Robber Barons at the dawn of the industrial age, renewed in this postmodern global economy. 

The Nike corporation camouflages its sweatshops in spectacles of sports gladiators, whose symbolic Swoosh is purchased in heroic worship by admiring consumers.  Beneath the Coliseum where this spectacle plays on its global stage in TV and every ad imaginable, there are the beating hearts of 600,000 sweatshop workers (mostly young women).  

What I have proposed is a way for Nike to sustain its global economic power, but enjoy the fruits of modern factory practices. We would like Nike to let us academics into the factory gates to conduct some action research experiments. We believe that Nike can deep six the sweatshop practices in favor of some French Taylorist ones. We believe that paying a living wage will result in higher profits to both Nike and its subcontractors.  The sports gladiators can continue to sell Swoosh apparel, and workers can move up a notch on the food chain. 

References

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For a listing of Academic Work on Nike Corporation, please consult Academics Studying Nike Web Site. Also see NikeWorkers Web Site  for good list of links

David M. Boje is a professor of management in the Management Department at New Mexico State University. He has published numerous articles in Management Communication Quarterly, Administrative Science Quarterly, Academy of Management Journal, and other top management journals. David is chair-elect of the Research Methods Division of the Academy of Management and serves on the Board of Governors of the International Academy of Business Disciplines. He is editor of the Journal of Organizational Change Management. More recently, he is founding editor of Tamara: The Journal of Critical Postmodern Organization Science. He serves on the editorial board of Academy of Management Review, Management Digest, Organization, Journal of Management Inquiry, M@n@gement, Organization Studies, EJ-ROT, Emergence: A Journal of Complexity Issues in Organizations and Management Communication Quarterly . Recent books include Managing in the Postmodern World (1993, 2000) with Bob Dennehy; and Postmodern Management and Organizational Theory (1996), with Robert Gephart and Tojo Thatchenkery, Narrative Research Methods for Communication Studies (Sage, 2000), and Spectacles and Festivals: Ahimsa approaches to production and consumption (Hampton Press, CA, 2001 use ID=Guest and Pass=Guest). His vita is available on the web (press here). David Boje's past academic work on Nike Corporation is listed next. Boje has also taught accountants and managers in the Maquiladora to implement ISO14000 and SA8000 standards of health, safety and ecology.

 

 

David M. Boje, Ph.D.
Department of Management, MSC 3DJ
New Mexico State University
P.O. Box 30001/Las Cruces, NM 88003-8001
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Nike Research Proposal
http//business.nmsu.edu/~dboje/nike/call_for_nike_research.html