Why did Nike fail to address corporate social responsibility earlier?
Phil Knight and his University of Oregon track coach Bill Bowerman founded Blue Ribbon Sports, later renamed Nike, in 1964. The idea, born as a result of a paper written by Knight during his Stanford MBA program, was to import athletic shoes from Japan into the U.S. market otherwise dominated by German competitors Puma and Adidas. The company initially operated as a distributor for a Japanese athletic shoe company, Onitsuka Tiger, but also developed its own brand of athletic footwear to promote in the American market. The company’s relationship with Onitsuka Tiger ended in 1971, and the Nike brand was created in 1972 (“Nike” after the Greek goddess of victory). The company was renamed Nike in 1978, and has grown to be the largest worldwide seller of athletic goods, with approximately 19,000 retail accounts in the United States and about 160 countries around the world.
Nike’s main popularity came from celebrity athlete sponsors. As the popularity of the Nike product grew, so did its product demands and the need to produce more apparel to meet the demands of customers. In contrast to its meteoric rise in the 1980s after going public, the late 1990s began a period composed of combating allegations about labor and human rights violations in Third World countries in which manufacturing had been subcontracted. Nike’s response to this issue has been considered by critics to be more of a damage-control stunt than a sincere attempt at labor reform.