The US sportswear maker, Nike no longer owns production facilities in the USA, but has instead outsourced the function to subcontractors in the far east. This is because production costs there are much lower than in the USA. For example, a worker in the far east will be paid $2 while $35 will be paid to a worker in the USA for doing the same Job.

Nike has come under criticism for taking advantage of these low wages by relocating their factories. They have also been criticized for the unhealthy work environment in the Asian factories.

However, the host nations welcome this investment, despite the low wages paid, as they see it as a way of alleviating the high unemployment levels in the respective countries.

Discussion points

1. Is the criticism of Nike fair, considering that the host countries are in dire need of creating jobs?
2. What do you think Nike's executives might have done differently to prevent the sensitive charges of labor in overseas factories?
3. Do firms need to consider the so-called corporate social responsibilities in making investment decisions?