This article aims to discuss the reasons why Nike's audit of factories in its global supply chain is not sufficient to ensure lasting improvements in working conditions. Working conditions cover “a range of areas including working time, information and consultation of workers, occupational health and safety at work, as well as conditions for part-time, full-time and and through a temporary agency". (European Commission, 2014, p.3) Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Relevant to the topic of factories in Nike's global supply chain, this paper focuses on working hours and occupational health and safety because these are the main concern of workers. This essay will first describe compliance assessments, then move on to discuss the country factor, management audit limitation, and strategic suppliers. The main argument of the document is that the audit proved insufficient due to financial and technological constraints and a flawed audit system. Nike has faced criticism and public relations disasters since the 1980s for having its products produced in countries with poor working conditions by low-paid workers (Locke, R.M., 2002, p.9). In response, Nike conducted audits by Nike labor specialists and external consultants (Locke, R.M., 2002, p.17). However, audit results showed that the effort did not generate the level of improvements many had hoped for. Nike's factory compliance rating (CR) program is an A to D rating system assigned to suppliers based on audits and inspections by Nike personnel and the Fair Labor Association (FLA) (FLA, 2008, p.10) . The grade reflects the results of three types of audits that a Nike factory must undergo: an environmental, safety and health audit (SHAPE), a management audit (M-audit), and inspections by the FLA (Locke RM, Qin F. and Brause A., 2007, p.18). CR grades show that working conditions have not improved. Nearly half (42%) of CR grades remained the same, and 36% of them even decreased (Locke, R.M., Kochan T., Romis M., & Qin F., 2007, p.31). Nike has invested heavily in developing audit protocols and training its staff, as well as collaborating with third parties to improve working conditions (Locke R.M., Qin F. and Brause A., 2007, p.17). So why have workers not seen lasting improvements in working conditions in factories across Nike's global supply chain, despite efforts by Nike and the FLA? According to Locke, Qin, and Brause (2007), factories in the Americas and the Europe-Middle East-Africa (EMEA) region performed better in management audits (M-audits), often achieving scores above 50%, compared to their factories in the North. and their South Asian counterparts, who saw significantly more dispersed results. Many of the largest Nike factories that employ the largest numbers of workers are located in developing countries, with China and Indonesia taking the top two spots with over 170,000 and 100,000 workers employed respectively (Locke, R.M., 2002, p.6 ). Working conditions in factories in these countries with weaker legal and regulatory systems are poorer on average (Locke, R.M., 2002, p.15). Inspectors are unable to enforce labor laws and standards in these countries (Locke, R.M., 2002, p.20). For example, when Locke and Romis (2007) studied the working conditions of a Mexican factory producing products for Nike, it emerged during interviews and M-audits thatits workers are required and even forced to work more than 60 hours per week, which is above Mexico's legal limit and does not comply with Nike's code of conduct. However, working overtime is one of the ways workers can boost their low wages, so it makes sense that workers accept being overworked as the norm. It can be argued that the Mexican supplier simply has no incentive to change the excess overtime issue because its workers have no bargaining power and neither Mexican regulators nor Nike have taken action against the factory, despite it having a CR rating of D, which indicates a “critical” violation of the labor code (Distelhorst G., Hainmueller J., Locke RM, 2014, p.714). Nike's audit revealed compliance issues in many of its subcontractors in developing countries, but it is not always easy for them to strictly adhere to the code of conduct, due to technological and financial constraints, they may not have the capabilities to meet Nike's demand without overburdening its workers. For Nike, with US workers earning 76 times more per hour than their Indonesian counterparts (Ghogomu M., 2015), it can be argued that Nike is accountable to its shareholders by continuing to operate its chain factories supply to Indonesia rather than ceasing to do so. work with low-cost suppliers, despite lower labor compliance. The audit alone has very little significant impact on working conditions when neither suppliers nor Nike act in response to the findings. One of the main audit processes used by Nike is the M-audit. It provides a detailed assessment of labor management practices and working conditions in factories, covering over 80 items including the treatment and compensation of workers (Locke R.M. and Romis M., 2007, p.57). However, this means that two factories can receive similar results scores even when they have very different working conditions and different types of compliance issues, generating misleading results. In research by Locke and Romis (2007), two Mexican factories (Plant A and Plant B) with comparable M audit scores but very different CR ratings (modeled on Plant A) were compared, and it was found that workers in plant A are paid better and work less overtime and that plant A's leadership style is also more participative while that of plant B is more autocratic, resulting in significantly higher job satisfaction in plant A. M-audit also focuses on documentary evidence and company records. Since factories are informed in advance before an M-audit is carried out, suppliers can also achieve better results by preparing documents and even training their workers (Locke, R.M., 2007, p.20), making the results of the M- significantly less reliable audits. The documentary evidence is exactly where Plant B got a perfect score and where Plant A fell short. Since the CR rating system is more of a subjective evaluation, compliance personnel cannot be easily fooled when visiting factories and observing working conditions. Therefore, the apparent improvement in M ​​audits (Locke, R.M., Qin F. and Brause A., 2007, p.17) does not necessarily translate into an actual improvement in working conditions. Suppliers can learn to perform well on M audits and then increase their scores when they are audited for the second or third time, but when compliance staff visit factories, they find that while such audit scores give insight general than.