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Globalization: Looking at Nike

Adrianna Jordan Grand Canyon University SOC-100 Everyday Sociology Dr. Cruz 05/23/2021

2 Globalization: Looking at Nike Nike, originally known as Blue Ribbon Sports in 1964-1978 was founded by Bill Bowerman. It is a nationally recognized American sportswear company, headquartered in Beaverton, Oregon. Bill Bowerman formerly a track-and-field coach at the University of Oregon, worked with one of his student’s Phil Knight, together they opened their first retail outlet in 1966. In 1978 Blue Ribbon Sports was renamed to Nike to recognize the “swoosh” logo (Tikkanen).

From the late 1980s Nike, continued to expand business and branch out to athletic sports apparel. Nike purchased companies ranging from shoe companies to sport-equipment companies. Some companies that NIKE has purchased throughout the years are: Cole Haan (1988; sold in 2012) and Converse, Inc. (2003), a sports-equipment producer Canstar Sports, Inc. (1994; later called Bauer and sold in 2008), and the athletic apparel and equipment company Umbro (2008; sold in 2012). In 1996 this created Nike ACG (“all-conditions gear”), which expanded to extreme sports such as snowboarding and mountain biking. With technology on the rise in the 21st century Nike began selling sports-technology accessories, extending to portable heart-rate sensors and high-altitude wrist compasses (Tikkanen). Nike is known for using celebrities for endorsements and sponsorships. In 2012, Bloomberg Business Week noted that Nike spent 13.5 percent of the total revenue (Woods, 2018). NIKE net worth as of May 19, 2021 is $210.07B (NIKE). In the 1990s the company’s image temporarily suffered from exposures about poor working conditions in its overseas factories (Tikkanen).

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How does global stratification impact local culture? Globalization is the distribution of merchandise, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interrelationship of countries around the world cultivated through free trade (Fernando, 2021). Globalization is about the world becoming progressively united. Countries today are more connected than ever before, due to factors such as air travel, containerized sea shipping, international trade agreements and legal treaties, and the Internet. In the world of business, globalization is associated with trends such as outsourcing, free trade, and international supply chains (Fernando, 2021). The competitive edge Nike has over most companies is the low overhead cost to manufacture goods. Nike does not own or operate its own factories, instead it solicits the services of independent manufactures. Companies expand over fourteen different countries around the globe. Majority of the independent companies reside in Vietnam, China, and Indonesia. Although no single manufacture contains more the 5 percent of Nike’s total production. Nike also depends profoundly upon independent contractors to source the supplies for shoes in the countries they are produced from. Enabling Nike to consolidate its costs by limiting the number of vendors with whom it must exchange contracts with. To start with laws and wages of society generally differ in various countries. In other countries like China, Philippines, and Indonesia individuals are willing to work at an inexpensive cost. (Hu&Chen2016). Second, big companies can pay lower prices and labor cost and benefit from a bigger profit (Hu&Chen2016). On the other hand, Nike can create job opportunities for thousands of individuals in poorer economies. Outsourcing can create a relationship with struggling economies, bringing business flow, and create recognition with a major label throughout

4 the world. Since the reform and opening in 1976, China's market has attracted many international companies, and the discourse depicting the transformation of China's citizenry from comrades to consumers also has demonstrated that the strong motivation for competition has led Chinese consumers to quest for Western brands in the market (Hu&Chen2016). The success of these companies is not only because of the quality of their products, but also because of the involvement of cultural factors in the business practice in China. In other words, the cultural factors of selling a brand are associated with the change of Chinese consumers' behaviors. The effectiveness of outsourcing was served in my eyes although in an unethical way. The advantages of outsourcing are profit, and profit alone. Nike created poor working conditions, low working wages and thousands of jobs lost in America just to save a buck. To pay an individual less then fair wage with poor conditions is an ethical and moral outcry.

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References

Tikkanen, A. (n.d.). Nike, Inc. Encyclopedia Britannica. https://www.britannica.com/topic/NikeInc. Woods, L. (2018, December 3). Why Nike Uses Endorsements & Sponsorships. Bizfluent. https://bizfluent.com/13636879/why-nike-uses-endorsements-sponsorships. NIKE Net Worth 2006-2021: NKE. Macrotrends. (n.d.). https://www.macrotrends.net/stocks/charts/NKE/nike/net-worth. Hu, Y., & Chen, G.-M. (2016). The impact of cultural cringe on consumer behavior in China. China Media Research, 12(4), 75+. https://link.gale.com/apps/doc/A469850006/AONE? Henslin, J. M. (2017). Essentials of sociology: A down-to-earth approach (12th ed.). Boston, MA: Pearson. ISBN-13: 9780134205588. Retrieved from: http://www.gcumedia.com/digital-resources/pearson/2016/essentials-ofsociology_ebook_12e.php

Fernando, J. (2021, May 19). Globalization. Investopedia. https://www.investopedia.com/terms/g/globalization.asp....