Nike Inc. maintains corporate social responsibility (CSR) programs to address the interests of its major stakeholder groups. According to Archie Carroll, stakeholders are individuals or groups that have a significant stake in what the business does. The company influences them, and they influence the company in return. The brand image and sales performance of Nike sports shoes, apparel, and equipment are significantly subject to the effects of stakeholders’ interests and corresponding actions. Nike addresses these stakeholders’ interests through a number of corporate social responsibility programs. However, the Nike Foundation is the main arm of the company’s corporate social responsibility strategy.
Nike Inc. stakeholders’ interests are satisfied through the company’s corporate social responsibility (CSR) programs. The corresponding CSR policy and strategy are based on Nike’s consideration for communities and customers, whose interests significantly influence the company’s design and production of its athletic footwear, equipment and apparel.
Nike’s Stakeholder Groups & CSR Initiatives
As a global business, Nike Inc. has a wide variety of stakeholders with significant influence on the sales of the firm’s sports shoes and other products. However, the company’s corporate social responsibility programs target only a number of major stakeholder groups. Nike has the following stakeholders, arranged according to the firm’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 the company’s revenues from the sports shoes, 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 significant R&D investments. For example, Nike continues to provide products with high quality and advanced technology. Considering high profitability and growing sales revenues, Nike’s corporate social responsibility effectively satisfies the interests of customers as a top-priority stakeholder group.
Communities. The stakeholder group of communities has a significant influence on Nike’s corporate social responsibility standing. Consumers 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 the Nike Foundation, which serves as the company’s primary means of supporting community development initiatives. For example, in 2005, the Nike Foundation started its community development programs in developing countries, with focus 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 and vision statements in considering everyone an athlete. Nike allocates 1.5% 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. These CSR efforts are expected to maximize 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 in certain markets for its sports shoes, equipment and apparel. 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, Nike Inc. maintains a number of policies and standards to ensure compliance in all of 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 interests of some interest groups. These stakeholders have significant effect on Nike in terms of potential government intervention and in terms of consumer perception regarding the company and its sports shoes, apparel and equipment. The interests of these stakeholders are varied, including fair labor practices, business sustainability, and environmental conservation. Nike Inc. addresses these interests through the Nike Foundation’s initiatives, as well as sponsorships of a variety of related 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 as stakeholders.
Nike Inc.’s CSR 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 also determine consumers’ buying behaviors. Overall, Nike Inc. is effective in ensuring that its corporate social responsibility programs support the business aim of optimizing revenues from the sale of sports shoes, apparel and equipment worldwide.
References
- About Nike – Community Impact.
- About Nike – Unleash Human Potential.
- Carroll, A. (1991). The pyramid of corporate social responsibility. Business Horizons, July/August, 39-48.
- Ditlev-Simonsen, C. D., & Wenstop, F. (2013). How stakeholders view stakeholders as CSR motivators. Social Responsibility Journal, 9(1), 137-147.
- Miles, M. P., Munilla, L. S., & Darroch, J. (2006). The role of strategic conversations with stakeholders in the formation of corporate social responsibility strategy. Journal of Business Ethics, 69(2), 195-205.
- Nike, Inc. Form 10-K, 2015.
- Pater, A., & Van Lierop, K. (2006). Sense and sensitivity: the roles of organisation and stakeholders in managing corporate social responsibility. Business Ethics: A European Review, 15(4), 339-351.
- Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the academy of Marketing Science, 39(1), 117-135.
- United Nations Foundation – Nike Foundation.
- Werther Jr., W. B., & Chandler, D. (2010). Strategic corporate social responsibility: Stakeholders in a global environment. Sage Publications.