Examples of MNC and Industry Case Studies The information provided herein serves as a guide and you may further develop your case studies by researching and including 2-3 PSPs and other relevant information. Nike: A multinational company and its impact on LEDCs Founded on January 25, 1964, USA Nike is a global sportswear company headquartered in Oregon in the United States. T Net income of approximately US billion in 2022 making it the most valuable brand among sports businesses As of 2022, it employed 79 100 people worldwide with an additional 500 000 people working for companies to which Nike subcontracts most of its manufacturing in Eastern Asia. Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia. Nike is hesitant to disclose information about the contract companies it works with. Benefits for LEDCs: • Nike factories create new jobs in countries like China, Vietnam, Thailand and Indonesia, allowing poorer people to earn a wage. The standard of living for many people improves, increasing the ability to access food and quality housing. • Nike has invested in and promoted the development of transport infrastructure in the areas near the factories. Better roads make it easier for the population to get around, and this has a positive ripple effect on other economic activity. Disadvantages • Poor health and safety standards area major threat to people employed in the factories. • Short-term contracts and payment below the national living wage also have a devastating impact on the local community. For example, in one Cambodian factory that produced apparel for Nike, several women collapsed after working 10 hour days, six days a week, and they reported feeling hungry and exhausted. • Natural resources such as oil are being overexploited, as they are required for manufacturing. This has a negative impact on the local environment. • Factories are often footloose. This means Nike could relocate to another less developed area if the local conditions or government policies are deemed unfavourable – with a devastating impact on employment and the local economy. Water pollution In July 2011, environmental group Greenpeace published a report regarding water pollution impacting the Yangtze River emitted from a major textile factory operated by Nike supplier Youngor Group. Following the report, Nike, as well as Adidas, Puma, and a number of other brands included in the report announced an agreement to stop discharging hazardous chemicals by 2020. In 2016 Nike started to use water free dyeing materials so that they can help reduce their water use in their Southeast Asian factories
Child labor allegations During the s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used. Ina BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike. The documentary focused on six girls, who all worked seven days a week, often 16 hours a day. Strike in China factory In April 2014, one of the biggest strikes in mainland China took place at the Yue Yuen Industrial Holdings Dongguan shoe factory, producing amongst others for Nike. Yue Yuen did underpay an employee by 250 yuan (40.82 US Dollars) per month. The average salary at Yue Yuen is 3000 yuan per month. The factory employs 70,000 people. This practice was in place for nearly 20 years.