CIS498 Strayer University E Commerce Start Up Gantt Chart Paper This assignment consists of two (2) sections: a project introduction and a Gantt chart or p

CIS498 Strayer University E Commerce Start Up Gantt Chart Paper This assignment consists of two (2) sections: a project introduction and a Gantt chart or project plan. You must submit both sections as separate files for the completion of this assignment. Label each file name according to the section of the assignment for which it is written. Additionally, you may create and / or assume all necessary assumptions needed for the completion of this assignment.

You have been made the Chief Information Officer and Chief Technology Officer (CIO / CTO) of an innovative e-Commerce start-up company that a venture capital group has funded. The CEO has given you sixty (60) days to deliver an information technology project plan in anticipation of the company locating to a new facility. Since this is a start-up company, there is currently no building or technology infrastructure to support the business. All information technology (hardware and software) must be implemented in either a hosted solution, on-site solution or a hybrid model. The CEO is expecting you to integrate different technologies from different partners and incorporate industry best practices in connection with the development of technological systems. The new facility is a two-story stand-alone building. The company currently consists of ten (10) employees with revenues of $5 million but is expected to grow to thirty (30) employees with revenue of $30 million over the next two (2) years.

Section 1: Project Introduction

1.Write a two to four (2-4) page project introduction that includes the following:

a.Background information of the company.

b.The type of business in which the company is involved.

c.A description of the information systems that the company should have to support the business. The description should include the following:

i.databases

ii.systems analysis

iii.security

iv.networking

v.computer infrastructure

vi.human computer interaction

vii.Web design

d.The use of at least two (2) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.

Your assignment must follow these formatting requirements:

This course requires use of Strayer Writing Standards (SWS). The format is different than other Strayer University courses. Please take a moment to review the SWS documentation for details.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Section 2: Gantt Chart / Project Plan

Use Microsoft Project or an open source alternative, such as Open Project, to:

2.Create a Gantt chart or project plan (summary and detailed) template. The Gantt chart or project plan should:

a.Record all tasks, subtasks, resources, and time related to the project.

b.Outline the planning, analysis, design, and implementation phases.

c.Develop in accordance with the systems development life cycle (SDLC).

The specific course learning outcomes associated with this assignment are:

Describe the various integrative functions and processes within the information systems area, including databases, systems analysis, security, networking, computer infrastructure, human computer interaction, and Web design.
Demonstrate the ability to evaluate organizational issues with integrative technological solutions.
Use technology and information resources to research issues in information technology.
Write clearly and concisely about strategic issues and practices in the information technology domain using proper writing mechanics and technical style conventions. The Promise and Perils of Globalization:
The Case of Nike
Richard M. Locke
MIT-IPC-02-007
July 2002
The Promise and Perils of Globalization:
The Case of Nike
Richard M. Locke
MIT Working Paper IPC-02-007
July 2002
Through a case study of Nike, Inc. – a company that has come to symbolize both the benefits and the risks
inherent in globalization – this paper examines the various difficulties and complexities the companies face as
they seek to balance both company performance and good corporate citizenship in today’s global economy.
The views expressed herein are the author’s responsibility and do not necessarily reflect
those of the MIT Industrial Performance Center or the Massachusetts Institute of
Technology.
INDUSTRIAL PERFORMANCE CENTER
Massachusetts Institute of Technology
Cambridge, MA 02139
The Promise and Perils of Globalization:
The Case of Nike1
Richard M. Locke
Alvin J. Siteman Professor of Entrepreneurship
and Political Science
MIT
MIT IPC Working Paper 02-008
z
The views expressed herein are the author’s responsibility and do not necessary reflect
those of the MIT Industrial Performance Center or the Massachusetts Institute of
Technology.
1
This case was prepared for the Sloan School of Management’s 50th Anniversary celebration and should be
read in conjunction with “A Note on Corporate Citizenship.” This case was prepared with the active
involvement and research assistance of the following Sloan MBA students: Vanessa Chammah, Brian
Curtis, Elizabeth Fosnight, Archana Kalegaonkar, and Adnan Qadir. I would also like to thank Miguel
Alexander, Maria Eitel , Dusty Kidd, Joeph Tomasselli, and Dara O’Rourke for their helpful comments and
assistance during this project.
1
1. Introduction
How should global corporations behave in the new international world order? What
constitutes good corporate citizenship in a world where the stakeholders are diverse and
dispersed around the globe and where no clear or consensual rules and standards exist?
These questions shape the behavior of most multinational corporations (MNCs) today.
Although multinationals are eager to pursue the opportunities of increased global
integration, they are increasingly aware of the reactions which their strategies induce –
both at home and abroad. Thus, they tread warily, lacking clear and agreed-upon
definitions of good corporate citizenship.
Through a case study of Nike, Inc. – a company that has come to symbolize both the
benefits and the risks inherent in globalization – this paper examines the various
difficulties and complexities companies face as they seek to balance both company
performance and good corporate citizenship in today’s global world.
1. The Athletic Footwear Industry
The athletic footwear industry experienced an explosive growth in the last two
decades. In 1985, consumers in the United States alone spent $5 billion and purchased
250 million pair of shoes.2 In 2001, they spent over $13 billion and bought over 335
million pair of shoes.3 Although the industry is highly segmented – by different sports,
models and price – the branded shoe segment is dominated by a few large companies
(e.g., Nike, Reebok, Adidas). In fact, the top 10 footwear companies control over 70% of
2
Miguel Korzeniewicz, “Commodity Chans and Marketing Strategies: Nike and the Global Athletic
Footwear Industry,” in Gary Gereffi and Miguel Korzeniewicz, eds., Commodity Chains and Global
Capitalism, (Greenwood Press, 1994): 248.
2
the global athletic footwear market. (See Table 1). Since displacing Adidas in the early
1980s and Reebok in the early 1990s, Nike has become the largest and most important
athletic shoe company in the world. (See Figure 1).
Table 1: Market Share
Athletic Footwear Market
Share
Nike
Reebok
Adidas
Fila
Converse
New Balance
ASICS
Puma
Keds/Prokeds
Airwalk
Top 10
Others
Totals
1991
22.5
18.8
13.6
0.9
3.4
1.8
4.7
4.6
3.0
0.0
73.3
26.7
100.0
1992
1993
25.4
20.0
10.0
2.1
3.5
1.8
5.4
3.8
3.9
0.0
75.9
24.1
100.0
24.4
18.9
9.3
2.7
4.0
2.1
5.2
4.3
3.9
0.4
75.2
24.8
100.0
1994
22.7
18.3
10.3
3.0
4.2
2.2
4.7
3.1
3.0
1.1
72.6
27.4
100.0
1995
27.1
17.4
9.9
4.1
3.3
2.5
4.2
2.4
2.4
1.2
74.5
25.5
100.0
1996
32.1
14.7
10.2
6.0
2.7
2.9
3.5
2.4
1.9
1.4
77.8
22.2
100.0
1997
35.3
14.5
10.3
5.7
3.2
3.1
3.0
2.1
1.5
1.1
79.8
20.2
100.0
1998
0.0
0.0
1999
30.4
11.2
15.5
3.9
2.2
3.8
2.5
2.1
0.0
0.0
71.6
28.4
100.0
Sources: HBS Case #9-299-084 “Nike, Inc.: Entering the Millennium, March 31,1999 and Footwear News, December 27, 1999.
Figure 1: Global Athletic Footwear Market Share – Top 6
40
35
30
Nike
Reebok
Adidas
Fila
Converse
New Balance
25
20
15
10
5
0
1991
1992
1993
1994
1995
1996
1997
Sources: HBS Case #9-299-084 “Nike, Inc.: Entering the Millennium, March 31,1999 and Footwear News, December 27, 1999.
3
National Sporting Goods Association, 2002; www.sbrnet.com
3
2. The Promise of Globalization: Nike, Inc.
Founded in 1964 through an investment of $500 each by Phil Knight and Bill
Bowerman, the company (then called Blue Ribbon Sports–BLS) has evolved from being
an importer and distributor of Japanese specialty running shoes to becoming the world
leader in the design, distribution and marketing of athletic footwear.
Our business model in 1964 is essentially the same as our model today:
We grow by investing our money in design, development, marketing and
sales and then contract with other companies to manufacture our products.4
According to company legend, Nike’s business model was developed by Knight
while attending Stanford Business School in the early 1960s. Knight realized that while
lower-cost, high-quality Japanese producers were beginning to take over the US
consumer appliance and electronic markets, most leading footwear companies (e.g.,
Adidas) were still manufacturing their own shoes in higher-cost countries like the United
States and Germany. By outsourcing shoe production to lower-cost Japanese producers,
Knight believed that Blue Ribbon Sports could undersell its competitors and break into
this market. As a result, Blue Ribbon Sports began to import high-tech sports shoes from
Onitsuka Tiger of Japan. As sales increased to almost $2 million in the early 1970s, BLS
parted ways with Onitsuka and began to design and subcontract its own line of shoes.
The Nike brand was launched in 1972, and the company officially changed its name to
Nike, Inc. in 1978.
Nike developed a strong working relationship with two Japanese shoe manufacturers,
Nippon Rubber and Nihon-Koyo, but as costs/prices increased in Japan over the course of
the 1970s (due to a combination of a tighter labor market, the impact of the first Oil
4
As reported on Nike’s web site, nikebiz.com
4
Crisis on Japan’s economy, and a shift in the dollar/yen exchange rate as a result of the
so-called “Nixon shock”),5 Nike began to search for alternative, lower-cost producers.
During these same years, Nike opened up its own shoe factories in Maine and New
Hampshire, hoping to develop a reliable and high-quality source to supply its growing
domestic market. At the same time, the company also began to cultivate potential
suppliers in Korea, Thailand, China and Taiwan. By the early 1980s, as costs continued
to increase in both Japan and the United States, and as the Korean government created a
number of incentives to develop Korea’s footwear industry,6 Nike closed its US factories
and sourced almost all of its production from Asia. In 1982, 86% of Nike’s athletic
footwear came from Korea and Taiwan.7
Over time, as Korea and Taiwan also began to develop, costs began to rise in these
countries as well. As a result, Nike began to urge its suppliers to re-locate their operations
to other, lower-cost countries. The company worked with its lead suppliers to open up
manufacturing plants in Indonesia, China and Vietnam. By guaranteeing a significant
number of orders and by placing Nike employees at these new factories to help monitor
product quality and production processes, Nike was able to help its lead vendors establish
an extensive network of footwear factories throughout Southeast Asia.8
Today, Nike’s products are manufactured in more than 700 factories, employing over
500,000 workers in 51 countries. (See Table 2). Nike has only 22,658 direct employees,
5
For more on these years, see Yasusuke Murukami, “The Japanese Model of Political Economy,” in The
Political Economy of Japan:Volume 1, The Domestic Transformation, Kozo Yamamura and Yasukichi
Yasuba, eds., (Stanford University Press, 1987).
6
These and other government incentive programs are nicely described in Alice H. Amsden, Asia’s Next
Giant, (Oxford University Press, 1989).
7
International Sourcing in Athletic Footwear: Nike and Reebok, HBS Case # 9-394-189: pp 2-5.
8
For more on the evolution of Nike’s strategy, see Nike (A), HBS Case # 9-385-025; International
Sourcing in Athletic Footwear: Nike and Reebok, HBS Case # 9-394-189; and J.B. Strasser and Laurie
5
the vast majority working in the United States.9 Over the years, Nike has broadened its
product range. Whereas in 1980, Nike sold 175 different styles10 of shoes, it offered 772
different styles in its Spring 1990 collection and almost 1200 different styles in its Spring
2000 collection.11 Nike has also moved into other sectors (apparel and sports equipment)
and expanded its sales beyond the United States into Europe, Latin America and Asia.
(See Appendix A.) Last year, the company made about US$9.5 billion in revenues, of
which 59% came from footwear sales and 29% from apparel.
Table 2 – Regional & Product Distribution of Suppliers
Country
Albania
Belarus
Argentina
Australia
Bangladesh
Brazil
Bulgaria
Cambodia
Canada
Chile
China
Dominican Rep
Ecuador
Egypt
El Salvador
Germany
Greece
Guatemala
Holland
Honduras
Hungary
India
Indonesia
# of Factories
Apparel
Equipment
1
1
4
11
4
9
4
2
21
1
74
5
1
3
8
2
19
2
3
5
1
23
30
1
1
3
9
3
3
4
2
20
1
35
4
1
3
8
2
19
2
3
5
1
19
16
0
0
0
2
1
1
0
0
1
0
22
1
0
0
0
0
0
0
0
0
0
1
3
Footwear
0
0
1
0
0
5
0
0
0
0
17
0
0
0
0
0
0
0
0
0
0
3
11
# workers
200
70
436
400
14,120
5,488
881
2,021
2,300
100
175,960
3,995
353
600
4,044
30
5,300
816
81
2,438
1,650
16,071
104,514
Becklund, Swoosh: The Unauthorized Story of Nike and the Men Who Played There, (Harper Business
1991).
9
Nike, Corporate Responsibility Report, FY 2001: p. 1
10
This includes different color combinations of shoes.
11
These figures come from various Nike catalogues. We would like to thank Jody McFarland for helping
us obtain these data.
6
Israel
Italy
Japan
Korea
Laos
Lithuania
Macau
Macedonia
Malaysia
Micronesia
Mexico
Morocco
new Zealand
Pakistan
Peru
Phillippines
Portugal
Romania
Singapore
South Africa
Sri Lanka
Taiwan
Thailand
Turkey
UK
USA
Vietnam
Zimbabwe
Total
3
12
6
49
2
1
3
1
42
2
41
2
1
3
4
22
23
3
2
2
16
35
62
16
5
131
12
1
1
8
2
31
2
1
3
1
41
2
39
2
1
2
4
18
23
3
2
2
16
24
42
15
5
117
7
0
736
2
2
4
10
0
0
0
0
1
0
0
0
0
1
0
4
0
0
0
0
0
7
11
1
0
14
0
0
579
89
0
2
0
8
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
4
9
0
0
0
5
1
2,157
5,000
1,500
4,000
2,452
45
500
215
8,044
672
12,258
1,274
50
9,880
5,286
9,400
1,872
2,900
300
660
10,286
15,600
47,962
7,944
814
13,369
43,414
7,000
68
556,722
Source: Nike, Corporate Responsibility Report, FY 2001.
Important differences exist among the sectors in which Nike competes. Although
still primarily known as a footwear company, only 6812 out of its 736 suppliers are
producing shoes. Most of these suppliers are located in Asia. (See Appendix B). In
contrast, Nike apparel products are manufactured in 579 factories distributed throughout
the world. These differences are due both to the rules governing international trade in the
two industries and to the underlying nature of these industries (footwear factories are
usually large, capital-intensive facilities, whereas garment factories are usually smaller,
easy to set up, and extremely labor-intensive operations). Whereas footwear quotas were
12
Twenty of these footwear suppliers manufacture shoes for Cole Hann, a Nike subsidiary. Thus, only
about 50 suppliers and manufacturing Nike brand shoes.
7
eliminated by the mid-late 1980s (leading to a consolidation of the industry), trade in
garments is still very much shaped by the existence of quotas (Multi-fiber Agreement).13
In 2005, according to the World Trade Organization Agreement in Textile and Clothing,
quotas in garments produced in WTO member states should also end. At present, neither
Vietnam nor Cambodia are WTO members and thus quotas will remain in place after
2005.
These industry differences have a significant impact on the kinds of relationships
that Nike can develop with its various suppliers. For example, in footwear, Nike has been
able to develop long-term relations with several large Korean and Taiwanese firms. With
some of these firms, Nike designers create and then relay via satellite new footwear
designs and styles for upcoming seasons to suppliers, who in turn, develop the
prototypes. Once these prototypes are approved, these lead suppliers fax the product
specifications to their various plants throughout Southeast Asia, where production can
take place almost immediately. This level of trust and coordination facilitates both
production and (usually) compliance activities for Nike. In apparel, given short product
cycles and volatile trends, the situation is completely different. Nike works with
numerous suppliers, most of whom are also working for other (often competitor)
companies. Given that different apparel suppliers specialize in particular products or
market segments, shifts in consumer preferences or fashion trends could translate into
very short-term contracts with and/or limited orders from Nike. This alters both the level
of influence which Nike has with these suppliers as well as its ability to monitor on a
regular basis the production processes and working conditions of these factories.
13
For a fascinating discussion of the impact of quotas on the international apparel industry, see David
Birnbaum, Birnbaum’s Global Guide to Winning the Great Garment War, (Hong Kong: Third Horizon
8
2. The Perils of Globalization: Wages, Working Conditions and the Rise of the AntiNike Movement
The same factors that permitted Nike to grow at an impressive rate over the last
several decades – taking advantage of global sourcing opportunities to produce lower cost
products and investing these savings into innovative designs and marketing campaigns –
have also created serious problems for the company in recent years. Already in the 1980s,
Nike had been criticized for sourcing its products in factories/countries where low wages,
poor working conditions, and human rights problems were rampant. However, over the
course of the 1990s, a series of public relations nightmares – involving underpaid
workers in Indonesia, child labor in Cambodia and Pakistan, and poor working conditions
in China and Vietnam – combined to tarnish Nike’s image. As Phil Knight lamented in a
May 1998 speech to the National Press Club, “the Nike product has become synonymous
with slave wages, forced overtime, and arbitrary abuse.”14
How Nike, a company associated with athleticism, health and fitness, and innovative
marketing and design, came to become the poster child for the anti-globalization
movement provides an interesting window into the potential risks and problems which
globalization creates for all multinational corporations. In what follows, we provide not a
comprehensive review of the various abuses of which Nike and its suppliers have been
accused in recent years, but merely three anecdotal illustrations of the kinds of problems
the company has confronted.
Press, 2000).
14
Quoted in “Hitting the Wall: Nike and International Labor Practices,” HBS Case # 9-700-047
9
Low Wages in Indonesia15
In the early 1990s, Nike products were being manufactured in six Indonesian
factories, employing more than 25,000 workers. Four of these factories were owned by
Nike’s Korean suppliers. As Nike’s presence in Indonesia increased, the factories
supplying its products (about six million pairs of shoes per year) came under greater
scrutiny. Reports by a variety of NGOs and labor activists claimed that these plants were
rife with exploitation, poor working conditions, and a range of human rights and labor
abuses. Many Indonesian shoe factories did not even pay the minimum daily wage (at the
time, 2,100 rupiah or about US$1). They petitioned the Indonesian government for
exemptions to the legal minimum wage, claiming it would cause them “hardship” to pay.
According to official Indonesian government calculations, this minimum daily wage only
covered 70% of the basic needs of one individual – let alone a family. Nike’s Korean
suppliers were seen as especially stingy with wages and abusive to local workers. “One
worker at Nagasakti Para Shoes, a Nike contractor, said that she and other Indonesians
were ‘terrified’ of their South Korean managers: ‘They yell at us when we don’t make the
production quotas, and if we talk back they cut our wages.’”16
The plight of workers in these factories became publicized through the skillful use
of media by several NGOs. Jeff Ballinger, founder of Press for Change, (but at the time
employed by the Asian-American Free Labor Association, a branch of the AFL-CIO),
spent nearly four years in Indonesia, exposing low wages and poor working conditions in
factories producing Nike goods. In 1993, CBS aired a report about workers’ struggles at
15
This section relies heavily on “International Sourcing in Athletic Footwear: Nike and Reebok,” HBS
Case #, 9-394-189, “Hitting the Wall: Nike and International Labor Practices,” HBS Case # 9-700-047, and
“Nike: What’s it all about.” Electronic memo, Global Exchange, 1999.
16
“International Sourcing in Athletic Footwear,” p. 5.
10
Nike’s Indonesian suppliers, featuring Ballinger. In 1994, harsh criticism of the
company’s practices appeared in an array of different publications: The New Republic,
Rolling Stone, The New York Times, Foreign Affairs, and The Economist.
At first, Nike managers sought to ignore and/or deflect these criticisms, arguing
that the Indonesian factories were owned and operated by independent contractors, not by
Nike. Nike’s Vice President for Asia at the time claimed that Nike did not “know the first
thing about manufacturing. We are marketers and designers.”17 The company’s general
manager in Jakarta argued, “They are our subcontractors. It’s not within our scope to
investigate [allegations of labor violations].”18 But by the mid-1990s, Nike instructed its
Indonesian contractors to stop applying for exemptions to the legal minimum wage. In
April 1999, after the Indonesia government raised minimum wages to 231,000
rupiah/month (US$26), Nike announced that it would raise wages for workers employed
by its suppliers above the legal minimum wage, from between US$30-37.50 per month.
Child Labor in Pakistan19
The city of Sialkot, Pakistan, is home to a cluster of small- and medium-sized
firms specializing in an array of labor-intensive, export-oriented goods, including handstitched soccer balls. About 70% of the world’s high-quality soccer balls are produced in
Sialkot – many of them for leading brands like Reebok, Nike, Mitre and Adidas. About a
dozen local firms dominate the local sports good cluster, in terms of employment and
17
“International Sourcing in Athletic Footwear,” p. 6.
Ibid.
19
This section draws heavily on Khalid Nadvi and Sajid Kazmi, “Global Standards and Local Responses,”
unpublished manuscript, Institute for Development Studies, Sussex, United Kingdom, February 2001.
18
11
production. Yet there exist a wide range of subcontractors and specialist input suppliers
also working in the area. Home work is also common in this region.
In June 1996,…
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