Nike and the Decision to go Green
Corporate and Social Responsibility
Title of Your Essay
Nike, sulfur hexafluoride, or SF6 the environment and how Nike handled the problem of SF6. First we must look at the market and nonmarket stakeholders who were involved in this situation and the key parts that they played. “Market stakeholders, a term that includes employees, stockholders/shareholders, customers, suppliers, retail wholesalers or dealers, and possibly creditors” (Hammond & Christensen, 2016, Section 2.1, para. 4). Nonmarket stakeholders have no direct financial relationship with the company but can have social, environmental, and possibly marketing relationships with the company. The media, general public, environmental groups and even the government can be part of the Nonmarket stakeholders.
The relevant market stakeholders in this situation would be Nike’s employees, customers, and stockholders/shareholders. Nike’s employees were asked to design a new product with technology that didn’t exist yet that didn’t sacrifice any of the quality of their product. It took Nike nearly 14 years and tens of millions of dollars to finally figure out the technology that is used in their shoes today (Holmes, Stanley 2006, p106-108). The customers had to worry that the new technology might make the shoes they liked so much heavier or not as comfortable, which in turn would make it harder for them to perform as athletes. The customers had grown accustomed to finding the shoes they wanted for sale and readily available. The stockholders/shareholders had already invested in the shoes Nike making with SF6 being used to provide the cushion. They expected to see a return on that investment and now were being told there might be some problems with continuing to sell the shoes due to the potential impact on the environment.
The relevant nonmarket stakeholders involved with Nike were the environmental groups that were bringing attention to the fact Nike was using SF6 in their shoes. Several groups that started with a German environmental magazine were spreading awareness about SF6 and the potential to harm the environment. These groups are very relevant because they could have really hurt not only Nike sales but also their reputation at a time Nike was already under attack for its contract factories overseas.
The solution that Nike chose was to try and work with the environmental groups and have good open, clear communication so they could work on the same goals together. By not ignoring the problem Nike was able to avoid having tons of negative media directed at them and their shoes. It showed the environmental groups that Nike cared about the environment and were willing to invest time, money, energy and effort into making a product just as good but without harming the environment. Nike was also open with the market stakeholders and explained to them the investment in new and better technology would pay off in the long run both financially and socially. Good communication between both market and nonmarket stakeholders can be tricky but if common ground can be found between the two, you will end up with a better product, one that is safer for the environment, and good company publicity just like what happened at Nike.
Hammond, S. C., & Christensen, L. J (2016). Corporate & Social Responsibility: Road map for a Sustainable Future. Retrieved from https://content.ashford.edu/books/Hammond.2506.16.1
Holmes, S. (2006). Nike Goes For The Green. BusinessWeek, Issue 4002, p106-108. Retrieved from http://www.bloomberg.com/bw/stories/2006-09-24/nike-goes-for-the-green.