Topic: Analysis The Case: Nike Faces New Workers Abuse Claims In Indonesia
Case Study: Nike Faces New Worker Abuse Claims In Indonesia
Human Resource Management is a phrase that is used by many practioners and academics to refer to the managment of human labor within an organization. It most certainly is used differently and more so understood differently within different circumstances by these different groups.Thus, making it difficult to have an exact definitive explanation. However, what is clear, is that it involves ‘the effective use of human resources in an organization through management of people-related activities’ (Harvard). This encompasses the selection, training, assessment and rewarding of employees. Its also involves the overseeing of the organizations’ leadership and culture ensuring that it is compliant with the employment and labor laws. Alan Price in his bok describes it as a ‘ a philosophy of people management based on the belief that human resources are uniquely important in sustained business sucess. (Price, Human Resource Management 4th edition.)
The case of Nike facing new worker abuse claims is nothing new to the sports gear giant that has face such accusations in the past. Despite their numerous efforts to come out from under the series of negative press, it still seems that they are not quit out of the woods yet. However, the claims raised by their worker in Indonesia is just a part of the problems faced by big companies that also outsource their work. It can be used to illustrate the problems faced by such big companies in the area of human resource management.
Some of the issues that can be directly derived from the case report in Indonesia include ;
1) Abuse of Workers, that includes both physical and verbal abuse.
2) Unjust work dismissal.
3) Contractor Outsourcing
The above are just but a number of the numerous challenges faced by human resource professionals everyday. For the purpose of this essay we shall focuse on the issues raised in the case study.
A). Abue Of Workers.
This can be used to describe the treatment of workers by their superiors in terms of verbal and physical interactions. Improper treatment of workers can be described as harassement and it is part of the challenges faced by Human Resource personnel. Harassment, accordin to ths Federal Communication Commission encyclopedia, constitutes the unwelcomed verbal or physical conduct based on race,color religion,sex,origin,age disability,sexual orientation or retailation (‘legally protected characteristics’). (FCC; Workplace Harassment is a Form of Discrimination.)
As cited in the case file, the claims of worker abuse against Nike’s oversees plant are not unfounded. According to the workers at the plant in Sukabumi,Indonesia, their supervisors throw shoes at them, slap them in the face and call them dogs and pigs. This claims are confirmed by Nike who admit to the accusations, sayin their is little they could do(case,p1). Another case of abuse was in the PT Amara factory where workers said that one of the supervisors forced six female workers to stand in the sun for hours after the failed to meet the goal of completing 60 pairs of shoes(case, p1). For exmple, in Muslim communities it is very offensive to be called a dog or pig.
The above instances by any standard can be refered to as abusive treatment of workers and steps should be taken to deal with them correctly. One of the steps that needs to be dealt with is accountability of the actions take against those victimized namely the workers of the said plant. Another step is to that should be enforced is harsh penalties should be imposed on those who carryout such acts on their employees.
B) Unfair Work Dismissal
Unfair work dismissal or more correctly wrongful termination is when an employee of an organization is barred from working at the given company on grounds that are not sufficient enough to call for such a termination. Or when one is fired (terminated from their employment) due to reasons that are not relevant to ones ability to conduct their official duties and the termination breaches one or more terms of an employment contract.
Wrongful termination can occur for a number of reasons . One of them is when an organization / employer fires an employee who risks putting the company at risk by exposing truths about the organization that would best serve the organization by remaining hidden. This was the case of some unfortunate ex-employees of Nike’s Pou Chen plant who were fired after filing complaints about their work conditions. This clearly is unfair grounds for termination and thus can be described as wrongful termination.
Wrongful work termination is a major challenge to Human Resource Management not only because of the adverse effect it has on employee morale but also on the ability of the organisation to progress effectively. It is an issue that should be dealt with because it takes away from the proper functioning of the HR department and its ability to receive proper feedback on issues relevant and critical to the company which is crippled because of such a senario.
One of the solutions that can be applied to deal with this scenario is putting in place proper organization policies that should also be well enforced. For example polices that require a superior or head of any division to give clear and justified reasons of work termination for any employee that they fire. Also they should put in place calls for termination or harsh penalties on supervisors who act unjustly to their subordinates in a bid to have them terminated. This helps to deter them from acting like so.
C). Contractor Outsoucring
In recent times major organizations have evovled from having just having a few plants within their home country to have subsidiaries all over the world. This has given rise to a pheonmena called Global Human Resource Management more commonly Global HRM.(Management Study Guide). Globalization has brought many positive developments, but with it has come a major challenge of dealing with multicultural and diverse workforce. This has given rise to a phenomena that is quickly taking precedence among many major corporations and multi-nationals; this is management outsourcing. It is here that contractors step in and do the jobs that were primarily supposed to be done by their own staff.
The issue with outsourcing work is that the conditions or terms of agreement between the vendor and the contractors, bar the parent company from having much control over the daily runnings of the contrator plants as was in the case with Nike. Who had outsoucred the manufacturing of their converse sneaker products to Taiwanesee operated plants – the Pou Chen Group factory in Sukabumi and PT Amara Footwear factory among others. The issues raised range from ‘illegally long work hours to denying access to Nike inspectors’ (case, p2). Other include paying less than the minimum wage and verbal harassments (case,p2). This situation is farther aggreviated by the fact that the contrators holding the license with Nike have farther subcontracted the work to other contractors.
The issue of managing contractors is one that has not conpletely been solved especially in regards to liabilities and accountabilites and it has been regarded as a ‘grey area’ by some. The situation of outsourcing one’s work presents certain benefits since the responsibilities a vendor owes to his contractors is reduced tremedously reduce as compare to an employee. For example ‘the organization need not provide health benefits and pension benefits to the contractors and hence this reduces their operating costs significantly’(Management Study Guide; Management of contractors.) Thus, we can appreciate the fact that outsourcing is gaining so much traction these days.
Clearly one of the issues which comes with contracting is the extent of control that the parent company has over its contractors. This comes out really clearly in the Nike case where some of its official were denied access to do an audit or are unable to will enough influence so as to make the change and conform to the standards of conduct. (Nike case, p.2)
One of the key solutions that can be applied to this problem is to ensure that there are proper working contracts that clearly stipulate the responsibilities and requirements of each individual entity. Ensuring that there is little room for ambugity and it allows for the parent company to have a measure of control over certain affairs especially in terms of their code of conduct. Thus it is important as an organization, tocritical consider the terms and conditons of an agreement before getting into a contractual relationship with a contractor to ensure any future disputes over responsibility and accountability and more so issues to do with code of conduct are resolced squarely using the contract. (Management Study Guide; Management of contractors).
Aristotle once said ‘the whole is more than the sum of its part’. The understanding and apppreciation of this profound piece wisdom is the origin of the core responsibilities that the field of Human Resource Management offers in todays business world. Human Resource department is responsible for searching for talent, harnessing it and making it to cumilatively work in conjuction with others in order to achieve the goals of a given organization. We can thus appreciate the significant role Human Resource Management plays in the daily runnings of an organization and look to improving and resolving the challenges it faces.
References
1. MANAGEMENT STUDY GUIDE
Pave Your Way To Success
Human Resource Management: Global Human Resource Management- Meaning and Objectives.
www.managementstudyguide.com/managing-workforce-diversity.htm
2. HRM Guide Human Resource Management
Defining Human Resource Management
Based on Human Resource Management, 4th Edition by Alan Price
www.hrmguide.co.uk/introduction_to_hrm/defining-hrm.htm
3. Federal Communication Commission
FCC Encyclopedia
Workplace Harassment is a Form Of Discrimination
www.fcc.gov/encyclopedia/understanding-workplace-harassment-fcc-staff
4. MANAGEMENT STUDY GUIDE
Pave Your Way To Success
Human Resource Management:Management Of Contractors
www.managementstudyguide.com/management-of-contractors.htm
5. Harvard
MGMT E-4240 Human Resource Management
m.extension.harvard.edu/courses/human-resource-management
6. Andrew Crane
Academy Of Management
Modern Slavery As A Management Practice: Exploring the Conditions and Capabilities for Human Exploitation.
amr.aom.org/content/38/1/49.abstract
