1. How does the concept of due diligence play a role in this case? What should Nike have done at the time people were developing ideas for a new product?

2. Why did the Muslim community take offense with the name "Air Bakin"? What values and beliefs that are part of the general Muslim worldview were underlying this offense?

3. Why did CAIR take offense at the shoe, in general?

4. How can you use the Triangle of Meaning model (Chapter 5) to explain the viewpoints from both sides?

5. What do you think Nike, Inc., will do to ensure that a similar issue won't occur again in the future? (They have made other cultural blunders before.)

6. What impact, if any, do you think this experience had on Nike, as a company, to individual Nike employees, to Nike's customer base?

Abstract

In 1997, Nike released a new line of athletic shoes sporting a logo that upset the Muslim community because its design closely resembled the Arabic word for God. This case examines cultural gaps between the world's leader of athletic footwear, and an organization that represents the third-largest faith in the United States. What should Nike have done prior to the release, and what can it do to repair the damage?

Introduction

In June 1997, Roy Agostino, the spokesperson for Nike, Inc., sat in his Beaverton, Oregon office preparing himself for a difficult press conference that would be held that afternoon. Earlier in the year, the sports footwear and apparel company had released a line of Nike Air athletic shoes with four separate patterns: Air Bakin', Air BBQ, Air Grill, and Air Melt (The New York Times, 1997). The entire line of shoes was adorned with a logo that angered the Muslim community because it too closely resembled the Arabic word for God. (See Appendix 6.1.)

This perception was troubling to Agostino. He knew Nike had intended the logo to resemble flames, hence the association to the names of the shoe line: BBQ, Grill, etc. Additionally, months before the shoe line even went into production, Nike noticed that there might be a small resemblance to the word "Allah," and to mitigate the risk of offense, the company designed a new logo that separated the "A" and the "ir" in the word "Air" (The Washington Post, 1997). Agostino grumbled to himself, thinking of how ineffective and inadequate this change had been.

In addition to how he was feeling at the time, Agostino recognized that Nike, Inc. wasn't a newcomer to controversy and marketing blunders. In 1995, Nike was reprimanded for a billboard placed near the University of Southern California campus depicting a basketball player with the headline, "They called him Allah" (Associated Press, 1997a). This was also offensive to the Muslim community. In response to complaints from the Council on American-Islamic Relations (CAIR), Nike removed the billboard (Associated Press, 1997b).

Now, only two years later, Nike once again found itself involved in a conflict with CAIR. Frustrated, Agostino realized that a quick and decisive response was of the utmost importance for continued positive relations with the American-Islamic community.

Nike, Inc.: Company Information

Nike, Inc. (Nike) was incorporated in 1968 by Bill Bowerman and Phil Knight. It took Nike 12 years to grow from a start-up athletic footwear company to a listed public company. Thanks to a series of negotiations, innovative products, and excellent marketing campaigns, Nike has now grown to become the world leader of athletic footwear and apparel (United States Securities and Exchange Commission, n.d.a, p. 24).

Nike entered into international markets about ten years after its founding. In fiscal year 1997, the company's non-U.S. sales accounted for 38 percent of its total revenues, compared with 36 percent in fiscal 1996 and 37 percent in fiscal 1995. As of May 31, 1997, Nike had sales distributors, licensees, subsidiaries, and branch offices in about 110 countries in the world. It had 31,000 retail accounts outside the United States.

In the United States, Nike had 19,700 retail accounts (including department stores, footwear stores, sporting goods stores, skating, tennis, and golf shops, and others) along with 26 distribution centers in 1997.

Since 1990, Nike's total sales figures have continued to grow, resulting in a compound annual growth rate of 22 percent. The company's revenue reached $9.19 billion, and its net income reached $796 million in fiscal year 1997. At the time, both numbers were the highest in the company's history (United States Securities and Exchange Commission, n.d.b, p. 21).

In fiscal year 2003, Nike's non-U.S. sales exceeded its U.S. sales for the first time (United States Securities and Exchange Commission, n.d.b). In 2014, its non-U.S. sales accounted for 54 percent of the company's total revenues. Nike's products include eight categories: running, basketball, football (soccer), men's training, women's training, action sports, sportswear, and golf. Its sales network has expanded to almost all countries worldwide. There are now 322 independent retail stores in the United States and 536 retail stores outside of the United States.

Nike's total sales have continued to grow since 2009, resulting in a compound annual growth rate of 11 percent. In 2014, the company's revenue reached $27.8 billion, and its net income reached $2.7 billion, both numbers being the highest in the company's history (United States Securities and Exchange Commission, n.d.c).

Nike is in a highly competitive industry. Its target consumers are people who participate in various sports and fitness activities. These consumers like fashionable athletic styles and change their tastes frequently. Nike has to stay current with new trends and designs and, therefore, develop new products on a timely basis. Meanwhile, Nike has many competitors in the industry, including Adidas and Reebok. Fortunately, Nike has earned a good reputation for both quality and design. As an industry leader, it's critical that Nike maintain this reputation and brand image (United States Securities and Exchange Commission, n.d.).

Islam: A Brief Overview

Islam is one of three Abrahamic religions, along with Judaism and Christianity, which trace their roots to the agreement God made with Abraham in the Hebrew Bible. Islam is a monotheistic religion that originated in the Middle East and includes a core tenet belief that Muhammad was the last messenger of God. It's now the second-largest religion globally after Christianity, with over 1 billion followers, and it continues to grow rapidly (Religion Facts, n.d.).

Muslims believe the Qur'an is a sacred text because it's the verbatim word of Allah (God). They believe it was revealed to the Prophet Muhammad in the seventh century and passed on to the world along with the Hadith (the Prophet's teachings and practices) to guide all followers. In Arabic, the definition of the word Islam is "submission." Hence, Muslims believe that the sole purpose of their existence on earth is to submit to and worship Allah now, in anticipation of paradise in the afterlife. They believe that Islam is a complete and untainted religion, and that its teachings and laws can be applied universally.

The faith is based on the Five Pillars of Islam: Testimony (Shahada), Prayer (Salat), Almsgiving (Zakat), Fasting (Sawm), and Pilgrimage (Hajj), which function as obligatory acts of worship for all believers. Muslims relate nearly every aspect of life to religion and thus first seek the guidance of the Qur'an for all worldly affairs. If the Qur'an's interpretations are unclear, then they seek guidance from the Hadith. Through both, they derive "Sharia Law" and believe that the answers they find are inclusive and can be extended through the ages.

Furthermore, as dictated by the Five Pillars, after declaring their faith, Muslims must pray five times a day facing the Prophet Muhammad's burial site (Ka'ba) in Mecca. They're encouraged to do this in their main house of worship, which is known as a mosque, because this strengthens community bonds. The main day of worship is Friday, when all businesses must close for noon prayer and believers gather for a weekly sermon given by an Imam.

Muslims must also fast from dusk to dawn every day for the entire month of Ramadan. Ramadan is the ninth month of the Hijri Calendar, a lunar calendar used by Muslims, which represents the emigration (the Hejira) of the Prophet Muhammad from Mecca to Medina and marks the beginning of Islam. (Dates vary in the Gregorian, or Western, calendar. For example, it started on June 18 in 2015, on June 7 in 2016, and on May 27 in 2017.) Moreover, Muslims must make a pilgrimage to Mecca once in their lifetime and give alms to the poor yearly.

Islam has many commonalities with Judaism and Christianity; however, there are some notable differences. Muslims believe in the virgin birth of Jesus and consider him a prophet of God whose message has been corrupted with the passage of time. They believe that Jesus didn't die, but rather ascended into heaven following his crucifixion. They don't believe in the resurrection of Jesus but do believe in his second coming.

Muslim Americans

Muslim Americans are considered a minority in the United States, projected to make up just over 1 percent of the population by 2020 (Appendix 6.2) (Pew Research Center, 2011); however, they represent the third-largest faith in the United States, following Christianity and Judaism. Muslim Americans come from a myriad of backgrounds and cultures.

A study conducted by Gallup Polls in 2008, titled Muslim American: A National Portrait, states that Muslim Americans are the most racially diverse religious group in the United States, predominantly composed of African Americans, who account for 35 percent of the total Muslim population (Gallup, n.d.). The roots of this dominance can be attributed to the age of slavery in

Colonial and post-Colonial America as the slave trade sent many Muslims from Africa to the Western frontier. This was followed by an influx of Muslim immigrants into America during the post-Civil War era, initially into blue-collar jobs in New York City and then eventually further west.

Over the past century, some of the most notable migration occurred during the Cold War era as the United States attempted to strengthen its position against the Soviet Union. Although the terror attacks on September 11th caused a slowdown in migration to the United States from the Muslim world, the more recent "Arab Spring" and associated political turmoil is causing many to seek refuge in the West again. United States and American-Islamic Community

Conflicting Viewpoints

Considering the fundamental nature of the Islamic faith, the Muslim American culture may differ significantly with that of the general population. These distinctions are most apparent when studying how religion relates to aspects of life, such as family, community, gender equality, and political views. It's also worth noting that many aspects of Muslim culture stem from Islam being an inclusive religion.

Muslims are for the most part collectivist in nature. As mentioned before, Muslims incorporate religion into every aspect of their daily lives and are required to pray five times a day which entails a certain amount of discipline and dedication. This contrasts with the prevailing norm in the United States, where some aspects of worship, such as prayer and confession, may be seen as more of a personal endeavor, separated from most daily affairs.

Muslims pray on rugs and they place great emphasis on cleanliness in the place of worship. It's considered disrespectful to step on prayer mats without clean feet. It's also common for Muslims to extend this tradition into their homes by removing all footwear at the front door before entering.

With this is mind, culturally speaking, Muslims believe that displaying the soles of the feet to others is a sign of disrespect. They teach their children not to sit with one leg crossed over the other (thus exposing the bottom of one foot) in social gatherings.

These beliefs about the feet became very public to the Western world in 2008 when a Muslim man threw a shoe at former President George W. Bush while he was giving a speech in Iraq. Throwing a shoe at someone is considered a great insult in the Islamic world. Faegheh Shirazi, a professor of Middle Eastern studies at the University of Texas, gives an interesting explanation as to why the act of throwing a shoe is negatively perceived through different cultural lenses:

Perhaps it has to do with the hierarchy of the body position, that is, the relationship between the head and the feet, the head being at the top and not touching the ground and the dirt ... the head carries a more prestigious status in comparison to the feet, which in older times mostly remained bare.

(Duke, 2013)

Additionally, Muslims, like believers in Judaism, are forbidden to eat pork. This is derived from the Qur'an and is attributed to the filthy nature of the animal itself. Adversely, Muslims eat "halal" meat, which is meat that is slaughtered in an Islamic way and blessed with the name of Allah. Alcohol consumption is also forbidden.

Another commonly publicized cultural difference involves Muslim women wearing the burka. The West was built on the notion of freedom, and the concept of the burka is difficult for many Westerners to understand. For Muslim women, modest clothing is the norm, and wearing a hijab or full burka is a mark of devotion and commitment to the faith. In some countries, such as Saudi Arabia, wearing the hijab is obligatory, while in the United States it's a personal choice. There have been ongoing clashes and misunderstandings surrounding the burka, to the extent that some countries, such as France, have banned it.

Negotiations between Nike and CAIR

The controversial line of Nike Air athletic shoes went on sale in the United States in March 1997. Before any of the shoes had moved into retail stores, a shipment was sent to a Muslim distributor, who noticed the ill-fated design. The distributor notified Nike that the logo may be controversial. Nike claimed their original intent was that the word "Air" be written in flames in the logo and there had been no intended malice. Heeding the warning, Nike decided to alter the design to appease the Muslim community and attempted to resolve the situation before it escalated.

Despite Nike's attempt to mitigate the risk, the design was still seen as too closely resembling the Arabic word "Allah." Unfortunately, Nike clearly didn't alter the design enough to sufficiently differentiate it from the Arabic reference. As a result, CAIR started receiving complaints from Muslim communities soon after the Nike Air shoe lines were moved into retail stores (Harrington, 1997). As an important representative of the Muslim community, CAIR had a responsibility to address Nike's cultural insensitivity. And, according to CAIR spokesman Ibrahim Hooper, the council responded to the complaints by asking their members "to act in a peaceful way by sending Nike letters, faxes, e-mail and telephone calls" (Harrington, 1997). The spokesman continued that, "a boycott on Nike would have been the next step. But quite frankly, we would never have liked to do that unless there was no other choice" (Harrington, 1997).

So, at this point, members of the American-Islamic community proceeded to send correspondence to Nike, expressing their outrage over the use of the word "Allah" on a shoe. First, the word "Allah" is not allowed to be used on a product and using it on a shoe is a further offense because the foot is seen as unclean (Morrison, 2012). Furthermore, the community was angered because Muslims don't eat pork, and one of the shoes referenced pork (bacon) with the name "Air Bakin'" and its play on words.

Nike responded to the initial complaints and community outrage with a statement from Nike spokeswoman Vizhier Corpuz. In the statement, she claimed that the company had no intention of offending anyone with the shoes and she expressed contrition that the shoes ended up in retail stores. Furthermore, Nike reiterated that they had actually changed the design so "Air" would not be mistaken for any other word (Associated Press, 1997a).

Nike also went a step further by recalling 38,000 pairs of the shoes and diverting a similar number away from "Saudi Arabia, Kuwait, Malaysia, Indonesia and Turkey to 'less-sensitive' markets" (Harrington, 1997). At this point, Agostino believed Nike had done their part and made the appropriate accommodations to renew goodwill between themselves and the Muslim community.

However, CAIR retaliated against Nike's responses to the issue by claiming that the shoes in question had still been seen at stores throughout the United States, and pressed Nike to initiate an investigation. The CAIR executive director accused Nike of having "people at the company who [wanted] to insult Muslims" (Abu-Nasr, 1997). The council was further incensed because Nike had given no assurances that the incident would not happen again. With this latest wave of negotiations, Agostino realized that Nike must go back to the drawing board and come up with a more effective response to CAIR.

The Decision

As Agostino sat in his office making last-minute press release preparations, he thought about the various distinct solutions that Nike management had formulated and that he could announce. Nike had come up with several good ideas for making additional reparations, but Agostino and the company had not yet decided on a decisive approach to mend relations. Among the possible solutions, recalling all the Nike Air shoe lines was a sure win with CAIR, but also the riskiest for the company. This solution would hopefully mend fences between Nike and the Muslim community; however, it offered negative financial implications for the company.

The cost of recalling shoes would definitely not sit well with key decision-makers at the company or most stockholders. Instead, Nike just promised to stop producing and distributing the line, leaving thousands of pairs in circulation.

Another possible approach was a public acceptance of guilta genuine apology and an offer to donate funds toward the betterment of the affected Muslim community as a show of good faith for the future. "Image is everything in this industry," Agostino thought to himself. If Nike's image is tarnished by this conflict, then it will set a dangerous precedent for the future of the company. Instead, Nike and its stakeholders wanted to set a positive example in the industry, and let consumers know that valid complaints are taken seriously. This press release was critical and making the right decision for the company had long-lasting implications. Agostino left his office with a feeling of indecision and hoped that he would be making the right choice.

Questions