Dear Mr. Parker,

Many companies believe that corporate social responsibility (CSR) is an easy scheme to make money and create goodwill in the community. Though appearing easy, a CSR movement must be a carefully planned and executed strategy that aligns business objectives with the needs of society. We are currently providing funds for local community projects and we have an opportunity to increase our presence in the CSR arena. By analyzing other companies’ successes and failures, we can better determine if CSR is right for our company.

When committing to a CSR program, we must avoid three different traps. The first is flip-flopping on an issue to attempt to please all parties. No matter what cause we pick, we will encounter supporters and naysayers. Instead of changing our beliefs based on how much pressure each group puts on us, we should stay strong in our beliefs. Ford, for example, made the mistake of alienating an employee activist group, the Ford Gay, Lesbian, and Bisexual Employees, when it pulled all advertising from gay-oriented publications due to pressure from the American Family Association. While Ford made the AFA happy, it angered its employees—one of the most important stakeholders in the company. Ford then tried to please its employees by advertising certain cars in those publications, which then cause AFA to boycott all Ford products. Ford should have stuck with one position to eliminate anger on one side. Because gay rights are so polarizing, Ford could not really compromise to please everyone.

The second trap we must avoid is to commit to a CSR program just because everyone else is doing one. If CSR does not genuinely fit in with our core business values and beliefs, it may detract from our business and even cause further social grief. For example, in 2009, Whole Foods and Cadbury were just a few of the companies who jumped on the “anti-palm oil” bandwagon when Greenpeace and Friends of the Earth denounced it as an environmental evil. While Whole Foods and Cadbury thought that they were helping the earth, they really were increasing poverty in developing countries. Instead of checking the facts on the “danger” of palm oil, these companies just denounced the product all together. These companies now have ruined their chances for customers in these developing countries.

Third, we must avoid insincerity: if we say we are going to commit to a CSR program, we must actually commit to the program. One of the most notable cases of CSR failures deals with Chevron. A subdivision of Chevron, Texaco was accused of knowingly dumping oil in the Amazon for almost 30 years, despite saying it was environmentally friendly. Instead of accepting the blame for destroying the environment and surrounding communities, the company fought back in court because it was cheaper than cleaning the area. The “Chevron Way” was directly violated and ultimately created a poor image for the organization despite its CSR promotions.

One of the positives of a CSR program is that it can help us deal with activist groups that are always harassing us. Our CSR program could help us connect us to the activist group and move us both in a positive direction. If we both understand the other’s point of view and then work together to accomplish both goals, we will have fewer problems with the group. For example, if we wanted to convert Nike operations to be more “green” and sustainable and still remain economically sound, we could partner with Friends of the Earth to find the middle ground. It has tremendous resources that we could take advantage of. If we partner with them, we cannot only decrease the conflicts that happen, but we can also create a mutually beneficial partnership.

If we are to successfully plan and implement a CSR program, there are three actions that are imperative to our success. The first is to conduct effective research of constituents and business practices. We should do research to see how our employees, investors and customers

feel about the top issues pertaining to Nike. For example, we should know how these groups feel about overseas production, as many of our products are made this way. The only way to do this is to conduct research and continually update to make sure that we are addressing the needs of our stakeholders. One example of a very good listener is Microsoft. When it was fighting back and forth between activists and employees over supporting gay-rights legislation, it used feedback from employees to make its decision. We also should be doing internal research about our products to analyze if our CSR program is effective in whatever we hope to accomplish. Our program will not be as strong if we do not do proper internal research prior to planning and implementing the CSR strategy.

Second, we should create or join a trade organization. Even in the days of cavemen, there were powers in numbers. In a trade association, we will have more support against activist groups and government regulation. We may also be able to pool our resources to achieve an industry-wide CSR campaign. Joining a trade organization can give us the support we need while our CSR program becomes stronger. One very effective example of the benefit of being in a trade organization is the American Beverage Association’s fight for soft drink sales in schools. In 2005, all the soft drink companies were under fire for selling in schools when some people considered soft drinks unhealthy. After pressure from activist groups, the ABA created its own policy to show its commitment to healthy living in children. This policy added credibility to the association and gave it a better image in the community.

The third, and probably most important component of our CSR program should be to align every initiative with a business objective. We should not be picking random issues to support because they are troubling. We should pick ones that make sense to our organization. For example, we should not support animal shelters or become outspoken about animal cruelty because Nike has nothing to do with animals. One issue that would align our business objectives with the needs of society would be childhood obesity because exercise is an important part of being healthy and we could provide the tools to exercise. One company that very successfully aligns its issues with its business objectives is Whirlpool. One of Whirlpool’s strongest products is its energy-saving washers and dryers. To help increase awareness of its products and impact society in a positive way, Whirlpool donates an energy-efficient washer and dryer to every home that Habitat for Humanity builds. This partnership makes sense for Whirlpool because it fits with its business goals.

The time is ripe for a CSR campaign for Nike. If we can avoid flip-flopping on issues, jumping on the CSR bandwagon and being insincere while we do extensive internal research, join or create a trade organization and align our social and business interests, we can create an effective and profitable campaign. As I mentioned before, I think we should look into issues around healthy living, environmentalism and foreign workers rights, as they all will relate to our business objectives. Please let me know if you would like to proceed, and I will have a report outlining these issues and how we should proceed immediately.

Best,Virginia SoskeyNike CCO