I need to pick an organization that has created a financial management strategy to manage a contemporary financial management issue such as global outsourcing. I would like to go with NIKE as the company however I am flexible with the company.
Describe your selected contemporary issue.
Describe the financial strategy that your selected company has created to manage your issue.
Assess the impact of corporate governance and ethical issues on the company's strategy.
Evaluate the financial situation of the companies prior to any action .
Assess the financial situation after the action was taken.
Did the company successfully manage the selected issue? why or why not?
The response addresses the queries posted in 2160 words with references.
//Before writing about the issues faced by the company, we have to first understand about the business and its scope. So, firstly we will write about the company under the heading of the introduction, for example: //
Introduction about the company
I have selected NIKE to describe the contemporary financial issues. It was established in 1964 and is located in Beaverton. It is a consumer products company, which deals in the designing, manufacturing, and marketing of sports footwear, accessory products, apparel, and equipment worldwide. The company designs athletic, daily, and leisure footwear for men, women, and children. The company pays the high amount on the publicity of the products. The competitive advantage of the NIKE Inc is its distribution channels. The company sells its products to retail customers, through its 254 retail stores in the United States & 232 retail stores worldwide and through a mix of independent distributors and licensees (Yahoo Finance).
//Above we have discussed about Nike Inc. which is a part of clothing industry and suffering from some financial issues. Now we will talk about the various contemporary financial issues. These issues will help you to evaluate the financial situation of the company. //
Outsourcing is a normal business activity as when a company demands to seek new resources like labors, raw materials, etc. To maintain competitive advantage and its image in the market, outsourcing will not have any negative effects on the economy. The reason for outsourcing was to save cost of manufacturing, so that company can earn large amount of profit. The contemporary issue of global outsourcing is that company wants to earn a profit in the global market with low capital investment and low cost of product manufacturing. The terrific way to minimize the cost of goods sold (cost of manufacturing the product) is to decrease the labor costs of a product by hiring low -wage rate workers. Since the standard of living of the workers residing in the developed country is high, the company will try to take advantage of the lots of poor workers in developing countries. Nike designs its products in the U.S. and manufactures its products in the countries like India, South Korea, China, etc. where cost of labor is too low, so that the company will easily achieve its target of profit maximization (Christensen).
Adding jobs and money into developing countries can be a positive movement, but it will create fear of loosing job in the mind of overseas workers, which will be the obstacle or issue in the near future (Christensen).
Another terrible method adopted by the NIKE contractures to capture large market share and gaining profits is that the company paid 20% less than the basic needs I.e. About $2.25 a day. This means that company is avoiding the basic requirements of their workers and the workers are hardly making enough money to fulfill their basic needs. Nike's labor costs constitute just 5% of Nike's total product costs. The working condition of the factory is not also good and the workers face this crisis, which is continuously ignored by the NIKE's management team (Nike on Global Economics, 2004).
//Every organization makes some strategies to resolve the various issues and problems. I am giving you some strategies as per my knowledge so that the company can utilize this to cope up with the issues and maintain its position in the industry. //
Financial strategy to cope with the issue
Determining a complete and successful sourcing strategy is not easy for any organization. The key obstacles that the ...
This response addresses the queries posed in 1904 Words,APA References