Nike Inc. maintains corporate social responsibility (CSR) and environmental, social, and governance (ESG) programs to address the interests of its major stakeholder groups. According to Archie Carroll, stakeholders are individuals or groups that have a stake in what the business does. The company influences them, and they influence the company in return. Stakeholders’ interests and actions affect the company’s brand image and sales performance in the context of the competition described in the Five Forces analysis of Nike. The company addresses these stakeholders’ interests through multiple corporate social responsibility programs relevant to the sporting goods business. However, charitable programs are the main arm of Nike’s corporate social responsibility strategy.
Stakeholders’ interests are satisfied through Nike’s CSR and ESG programs. The corresponding CSR/ESG policy and strategy are based on Nike’s consideration for communities and customers, whose interests influence the company’s design and production of its athletic footwear, equipment, and apparel. Considering that these stakeholder groups represent the sporting goods market, corporate citizenship goals relate to the effectiveness of the brand and other competitive advantages described in the SWOT analysis of Nike. For example, a sustainable or green brand image can increase the company’s effectiveness in attracting environment-focused customers.
Nike’s Stakeholders, CSR & ESG Initiatives
As a global business, Nike Inc. has a wide variety of stakeholders influencing the sales of its sports shoes and other products. However, the company’s corporate social responsibility programs target only the major stakeholder groups. Nike has the following stakeholders, arranged according to the company’s prioritization:
- Customers (top priority)
- Communities
- Employees
- Governments
- Interest Groups
Customers. Nike’s corporate social responsibility strategy gives top priority to customers as a stakeholder group. Customers are significant because they affect sales revenues in the footwear, apparel, and equipment market. In the case of Nike Inc., these stakeholders’ interests include high-quality products and reasonable prices. The company addresses these interests through R&D investments for products with high quality and advanced technology. CSR and ESG objectives for customers are considered in goals for product development and differentiation established through Nike’s generic competitive strategy and intensive growth strategies.
Many of the corporate citizenship efforts for this stakeholder group are communicated through Nike’s marketing mix (4Ps). For example, the public relations component of promotion activities highlights the company’s CSR and ESG programs, sustainability status, and business ethics, to maintain a positive brand image. The corporate social responsibility strategies of competitors, like Adidas and Puma, affect how customers respond as they compare the corporate citizenship statuses of firms in the sporting goods market. Considering high profitability and growing sales revenues, Nike’s corporate social responsibility programs satisfy the interests of customers as a top-priority stakeholder group.
Communities. This stakeholder group influences Nike’s corporate social responsibility standing and brand strength. Customers tend to buy more of a product that has a positive impact on communities. The interests of these stakeholders include support for the development of communities. Nike Inc. addresses these interests through charitable programs and grants, which serve as the company’s primary means of supporting community development initiatives. For example, the company has community development programs in developing countries, focusing on supporting the empowerment of girls. The company also has a variety of “Community Impact” corporate social responsibility programs, such as the Active Schools & Youth Sports program, which donates funds and sports shoes, apparel, and equipment to promote physical activity among students. These Community Impact programs align with Nike’s mission statement and vision statement, in terms of considering everyone an athlete. The sportswear company allocates a percentage of its pre-tax income to support these community development initiatives.
Employees. Nike Inc. recognizes the significance of employees as a stakeholder group that influences organizational effectiveness. For instance, employees’ performance directly translates to business performance. The interests of these stakeholders include fair compensation, career development opportunities, and a sense of purpose. Nike addresses these interests through corporate social responsibility policies and programs that focus on internal leadership development, talent management through coaching and mentoring, and team building. Also, Nike’s company culture (organizational culture) promotes an inclusive work environment that boosts employees’ morale and facilitates the satisfaction of their concerns regarding corporate social responsibility and business ethics in the workplace. These ESG and CSR efforts maximize human resource support for Nike’s ability to produce more popular and advanced athletic footwear, apparel, and equipment.
Governments. As part of its corporate social responsibility strategy, Nike Inc. identifies governments as a stakeholder group. These stakeholders are important because they affect how Nike operates, in terms of its permits, limits, and legal actions. Governments are interested in legal and regulatory compliance, as well as business contributions to tax revenues and community development. Understandably, the community development interest is addressed through Nike’s corporate social responsibility programs for community development. In addressing the other interests of this stakeholder group of governments, Nike Inc. maintains policies and standards to ensure compliance in all its business areas. Thus, the firm’s corporate social responsibility strategy satisfies the interests of governments as stakeholders.
Interest Groups. Nike’s corporate social responsibility policies also address the concerns of some interest groups. These stakeholders affect Nike in terms of potential government intervention and in terms of consumer perception regarding the company and its sporting goods. The interests of these stakeholders are varied, including fair labor practices, business sustainability, and environmental conservation. These interests reflect sociocultural and ecological trends, such as the ones identified in the PESTLE/PESTEL analysis of Nike. These trends show that communities tend to favor sustainable businesses and companies that have satisfactory corporate citizenship programs. Nike Inc. addresses these interests through charitable giving, sponsorships, and funding for some social programs. The company also has corporate social responsibility policies for improving labor management and environmental impact. These considerations indicate that Nike Inc. satisfies the concerns of interest groups.
Nike’s CSR & ESG Performance in Addressing Stakeholders’ Interests
Nike’s prioritization of customers reflects the importance of this stakeholder group. The satisfaction of customers directly affects revenues. The company’s corporate social responsibility strategy is also satisfactory in terms of giving second priority to communities, considering the variety of policies and programs to support these stakeholders. While it is understandable that employees determine organizational performance, Nike’s corporate social responsibility support for communities is congruent to its support for customers as a top-priority stakeholder group. Communities determine customers’ buying behaviors. Overall, Nike Inc. is effective in ensuring that its corporate social responsibility programs support the sporting goods business aims of optimizing sales revenues while contributing to societal improvement.
References
- Fatima, T., & Elbanna, S. (2023). Corporate social responsibility (CSR) implementation: A review and a research agenda towards an integrative framework. Journal of Business Ethics, 183(1), 105-121.
- Nike, Inc. – Form 10-K.
- Nike, Inc. – Impact – Moving Forward.
- Nike, Inc. – Benefits – We Take Care of Our Team.
- Nike, Inc. – Giving Back to Our Communities.
- Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15(5), 3892.
- U.S. Department of Commerce – International Trade Administration – Consumer Goods Industry.
- U.S. Department of Commerce – International Trade Administration – Textiles Industry.