Business Ethics-Nike
Ethical business operations tend to run from the basic level of decision-making by the leadership to the complex implementation of operations and establishment of a robust business relationship. In this context, a business such as Nike should pursue to achieve ethical decision-making and a sense to nurture appropriate business relationships. Thus, in this case, Nike’s supply chain team is not ethical when they actively bully the suppliers during annual price negotiations and pose competitive threats to their business partners. Essentially, posing this threat will push the manufacturers to reduce their prices to maintain their business operations with minimal profit margins. According to Kim et al. (2022), when giant firms use their power to oppress their manufacturers and suppliers, this is known as supply chain bullying. This is evidenced by Nike’s covert intention to threaten the manufacturers during price negotiations, pushing prices down in favor of Nike.
Forward integration could be an absolute solution for the company when aiming to increase profitability. However, evaluating the company’s trajectory is crucial when setting out to pursue forward integration (Rothaermel, 2017). Nike’s manufacturers are located globally, with most locations ungoverned by US labor and safety laws. This makes it possible to get cheap labor, thus less production cost. Pursuing forward integration would reduce the profit margins realized due to increased labor costs. In my opinion, during price negotiations, Nike would advocate for lower prices from the manufacturers rather than intending to maintain ethical negotiations with the counterparties. In the long run, Nike violates the core norm of negotiations that calls for fairness and ethicality. According to Lewicki & Robinson 1998, competitive negotiations tend to violate the established negotiation rules, including truthfulness and earnestness.
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References
Kim, S., Chae, S., Wagner, S. M., & Miller, J. W. (2022). Buyer abusive behavior and supplier welfare: An empirical study of truck owner–operators. Journal of Supply Chain Management. https://doi.org/10.1111/jscm.12285
Lewicki, R. J., & Robinson, R. J. (1998). Ethical and unethical bargaining tactics: An empirical study. Journal of Business Ethics, 17(6), 665-682.
Rothaermel, F. T. (2017). Strategic management: Concepts (3rd ed.). McGraw-Hill Education.
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Question 
Nike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate to manufacture the shoes it designs. Therefore, the firm has a credible threat over its current manufacturers.
Business Ethics-Nike
If Nike has no intention of actually entering the manufacturing arena, is its supply chain management team being ethical with the current manufacturers if the team mentions this credible threat numerous times in annual pricing negotiations? Why or why not? What aspects of Nike’s agreement with its manufacturing partners do you believe they emphasize in negotiations?
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