Activity #5

2 Question I: Nike's Outsourcing Ethical Dilemma The particular setting and the form of the discussions will determine the ethical issues surrounding Nike's deployment of a credible threat during yearly pricing negotiations with its outsourced manufacturers. Deciding whether this strategy contains deceptive or dishonest acts that harm the manufacturers or contravene any legal commitments is crucial (Rothaermel, 2024). It is a legitimate negotiating strategy if the negotiations are carried out in good faith and within the confines of the already-existing commercial partnerships. Nike should exercise caution when potentially destroying long-term ties with its suppliers (Ogunranti & Banerjee, 2022). Healthy supply chain partnerships require trust and openness, and taking advantage of a credible threat without intending to implement vertical integration could undermine confidence and hurt the overall company environment. Nike may give vertical integration more thought for several reasons. First, by bringing the manufacturing process in-house, Nike would have more control over production, quality control, and delivery schedules. This might result in improved operational effectiveness and market responsiveness. Second, vertical integration can give Nike a competitive edge by enabling them to distinguish their products and enhance the perception of their organization as a complete provider of sports footwear (Freixo, 2023). Vertical integration may also present prospects for cost savings since Nike may be able to do away with the markups imposed by outside producers. The choice to seriously investigate vertical integration by Nike should ultimately be founded on a rigorous assessment of the potential benefits, risks, and consequences on stakeholders while ensuring that ethical business standards are maintained across the supply chain.
3 Question II: Verizon's Responsibility in Yahoo Deal Businesses bear a heavy burden for the safety of client information used in business operations. They are responsible for putting strong security measures in place to protect the sensitive data entrusted to them. When breaches happen, businesses should respond immediately to contain the damage, notify the impacted users, and improve their security infrastructure to prevent further occurrences. The scope and duration of the security concerns at Yahoo, discovered in the fall of 2016, were significant (Firoozi & Ku, 2023). Verizon, the prospective buyer, was entitled to reassess the contract in light of the ramifications of the breaches. However, factors including the strategic significance of Yahoo's assets, the possibility of improving security following the acquisition, and the overall long-term commercial prospects may have impacted the decision to proceed with the deal. The results of Verizon's decision to move forward with the Yahoo acquisition, although the security vulnerabilities may have impacted their later choice to sell Yahoo at a significant loss in 2021. The hacks and ensuing reputational harm may have reduced Yahoo's value as a brand and asset (Firoozi & Ku, 2023). Furthermore, there's a chance that the security worries put purchasers off, which would have decreased the number of interested parties and lowered the sale price. Ultimately, Verizon's choice to proceed with the transaction in 2017 probably impacted the costs associated with their later sale of Yahoo in 2021.
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