The Nike Reebok Debate

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					                                 The Nike Reebok Debate

On Nov. 28 we will have an in-class “town meeting” on global sourcing. There has been
a great deal of controversy over how U.S. firms should acquire manufactured products
from abroad. Some people say that the contracting practices of U.S. firms violate human
rights. Others say they are appropriate and tend to improve the lives of the employees in
the supplier firms and of people generally in the supplier countries.

The controversy has been particularly intense in the athletic footwear industry. The
“International Sourcing in Athletic Footwear” case in your course packet summarizes
this. Our town-meeting debate will address this issue.

Two small groups of students will play the roles of Nike and Addidas/Reebok executives
respectively. (Addidas recently purchased Reebok.) The students in the audience will
play the roles of Nike or Reebok/Addidas employees, stockholders, U.S. labor leaders (or
ordinary union members), human rights activists, Asian workers flown to the U.S. by
human rights activists, economic development officials of Asian countries, and ordinary
concerned citizens. As the case in your packet shows, Nike has been more focused on
simple business relationships with its suppliers in Asia, while Reebok has attempted to
focus more on human rights. But the situation is more complex than that; many people
argue Reebok’s approach does not protect workers better than Nike’s.

The question under discussion is: “Are Nike and Reebok’s processes of sourcing their
footwear appropriate?” The format of the debate is as follows:

Opening statements – One or more executives from each side summarize why each
thinks their approach is appropriate. (If the executives choose, they can also tell why they
believe their competitors’ policies are inappropriate.) Since Nike’s policies have been
most controversial, I propose to let Nike’s executives go first. Each side to speak 6
minutes.

Rebuttal statements – Each side has 2 or 3 minutes to rebut or comment on any
statements made.

Open discussion – The students playing many different roles ask questions to the
executives of both sides. 28-30 minutes.

Final summation – Each side summarizes its arguments. 5 minutes each.
Preparation –

The case is fairly old, but the data in it is still very relevant. For additional data, I
recommend you start with the most recent annual reports of each firm. They can be
obtained …

For Nike – www.nike.com
About Nike/Jobs > Investors > Fiscal Year 2005 annual report

For Reebok – www.reebok.com
North America > USA > About Reebok > Investor Relations > Reebok Financial
Information > download 2004 Annual Report [pdf]
You can also review the Adidas annual report at http://www.adidas-
group.com/en/investor/events/2006/2006-03-02.asp

Reebok and Adidas annual reports require Adobe Acrobat Reader, a free program
available from www.adobe.com/reader.

You are welcome to gather data from other sources, but if you wish to use statistical data
from other sources you must show it to the professor before the debate so he can guide
discussion if the data is challenged. (If you grossly misuse data, either from the case, the
annual reports, or other sources, the professor may challenge you.)