Emma Clopton 

Oct 1st, 2023 

Part 1: 

Fast forward to August 2021. Ugochi has found herself in a difficult situation, for it has come to light that three of the contractors that manufacture Spikey’s shoes in Cambodia employ children under the age of 12 at their facilities. One contractor restricts employment to 20 hours a week and, through their “studyto-work program,” mandates that children attend an on-campus school before they are allowed to work and support their families. The other two contractors expect the children to work upwards of 60 hours a week and provide no educational benefits. Spikey executives insist that the contractors are in compliance with Cambodian law and their PR staff are working aggressively to contain the fallout from the story. They have assured Ugochi that they remain steadfast supporters of SYE-T and might even increase the level of sponsorship with some strings attached. Ugochi is concerned not just about the labor practices employed by Spikey and their contractors but also how SYE-T is striving to address a major challenge in the U.S. while being complicit in perpetuating a similar problem abroad. She is wondering whether she should continue accepting sponsorship from Spikey or not. If you were Ugochi, what would you do?

Step 1: Determine the facts of the situation: 

• Spikey’s manufacturing hub in Cambodia hires children under the age of 12 years old 
• Ugochi launched SYE-T as a response to the challenges of poor education and systemic racism. 
• SYE-T was designed to address the vulnerability of young people who are caught in a cycle of poverty and the school-to-prison pipeline. 
• SYE-T’s mission of supporting youth does not align with Spikey’s labor practices

• Since Spikey has funded the project, it has grown very fast 
• Spikey also sees this sponsorship as an opportunity for major financial gain
• Of the manufacturing companies: one of the practices what appears to be ethical labor practices, while the other two practice much more harsh, and questionable labor practices

Ethical Issue: SYE-T’s leading cause (keep kids out of poverty, crime, illegal situations,etc.) that established the enterprise is being sponsored by a company (Spikey) who is potentially violating the cause. 

Step 2 & 3: Define the Stakeholders & Assess Their Motivations

Spikey 

• Profitability
• Positive PR
• Potential recruitment sponsorship 

Ugochi

• Is passionate about her enterprise and does not want to come off as being hypocritical.

SYE-T

• Improving the crime rate and reducing the school-prison-pipeline
• Connecting at risk youth with valuable community relationships 

Youth in SYE-T

• Connect with a community of people in similar positions. 
• Not falling into the school-to-prison pipeline 

Local non-profits, local education system, local criminal enforcement agencies, etc. 

•  Improved outcomes of local community members
• Better educated and informed youth
• Gaining awareness of the need for support of struggling communities and the impact it has on the youth

Youth of Cambodia

• Money 
• School 
• Relationship with Manufacturer
• Demand for their labor 

Step 4: Formulate (at least three) alternative solutions

1. End partnership with Spikey
   1. Ethical principle: Duty-based thinking
      1. Pros: Ending the partnership with Spikey publicly would save face for Ugochi and SYE-T as a whole. This also might reel in interest from other businesses who are more aligned with SYE-T’s mission.
      2. Cons: Lose a lot of support and money. Companies might not reach out to support SYE-T, causing the enterprise to lose traction and might not be able to scale up. 
2. Negotiate a deal with Spikey in which they ensure ethical practices are being performed at all manufacturing sites, otherwise, the sponsorship will end. 
   1.  Ethical Principle: Utilitarian 
      1. Pros: There will be a degree in exploiting children at least for this arrangement, Spikey would change their manufacturing
      2. Cons: The Spikey partnership will most likely be damaged and there is a large chance they say no to the negotiations. There is a good chance your ability to leverage an operational change in a company of this size is unlikely.
3. Search for new partners in lieu of failed negotiation with Spikey; or determine a way to improve the pool of capital that SYE-T has access to without a formal sponsorship (i.e., angel investors, wealthy athletes)
   1. Ethical Principle – Duty based
      1. Pros:
         1. Helps to maintain the program’s ethical and moral background and inherent mission to improve the youth, not provide a giant soccer event
         2. Could open doors to improved sources of funding/sponsorship access
      2. Cons:
         1. If you find a new partner, you risk losing the power and scalability of spikey
         2. Other sponsors may not be able to provide the level of exposure and awareness Spikey does

Step 5: Seek additional assistance

1. In the grassroots diplomacy case, we faced a similar situation in which we had a trade-off of kids benefiting/losing. 
2. Fact Check Spikey’s claims on the legality of their sweat-shop practices.
3. Research other potential partners of this project – See if there is anyone else willing to engage in ethical business practices. 
4. Example: Nike sweatshops 
   1. https://www.washingtonpost.com/opinions/2020/03/17/your-favorite-nikes-might-be-made-forced-labor-heres-why/ 

Step 6: Select the best course of action 

Negotiate a deal with Spikey in which they ensure ethical practices are being performed at all manufacturing sites, otherwise, the sponsorship will end. 

1. Leverage the partnership with Spikey not to end child labor but to reenact the values that the partnership was built on. Defocus competition and refocus skill building and support for the youth

Step 7: What are the implications of your solution on the venture. Explain the impact of your proposed solution on the venture’s technology, economic, social and environmental aspects.

By negotiating a deal with Spikey in which they must follow ethical practices at all manufacturing locations can bring up several issues. For one, Spikey could simply refuse any negotiations and exterminate their sponsorship for SYE-T. This is a major issue since a majority of SYE-T’s funding is derived from Spikey’s support. Second, being such a small organization, it is probably going to be exceedingly difficult, if not near impossible to make change within the supply chain practices of Spikey. This could only amplify tensions between stakeholders and leave devastating implications for SYE-T’s program. 

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Part 2: Ugochi has a meeting with the head of Corporate Social Responsibility (CSR) for Spikey. Mr. Mikey evades all questions about the Cambodia situation and insists that there is nothing to worry about. Based on his conversations with senior management, he proposes that the focus of the competition should not be on vulnerable youth. After all, last year there were a few confirmed incidents of youth smoking marijuana before playing soccer, which creates bad optics for Spikey. Also, Spikey wants the competition to only include men over the age of 18 to make it more competitive. Mr. Mikey makes an off-hand comment that there isn’t much interest in women playing soccer anyway. When Ugochi objects to the idea of excluding women, he suggests that women could be involved as cheerleaders. There is a heated argument that ends in Mr. Mikey threatening to stop sponsoring the event. Ugochi realizes that she stands to lose 80% of her funding if Spikey backs out of their sponsorship deal. With only 20% of her previous funding, she will have to scale down operations significantly and greatly restrict the number of participants, which would be devastating to thousands of youth, their families, and their volunteer coaches. Mr. Mikey asks Ugochi to think about it and come back in a week for a meeting at a venue of her choice. If you were Ugochi, what would you do?

 

Step 1: Determine the facts of the situation 

• The CSR officer wants to change the focus of the event away from at risk youth to adult males (allegedly because there were children caught smoking marijuana
• CSR officer discounts the cambodian dilemmas
• The CSR officer discounts the participation of women and makes a snarky comment that they can cheerlead
• Ugochi engages in a heated argument with the CSR officer
• The CSR officer threatens pulling spikey’s sponsorship; 80% of the programs funding
• This decrease would result in a major downscale of the program

Ethical issue: Mr. Mikey is willing to back out of the sponsorship unless Ugochi makes the competition to feature men ages 18+, completely removing women from the picture.  

Step 2 & 3: Determine and distinguish between the personal and professional motivations of the stakeholders. 

• Ugochi 
  • Personal: morals, including all people
  • Professional: combatting school-to-prison pipeline & systemic racism, have a successful and impactful venture, defining the true mission of the project. 
• Mr. Mikey 
  • Personal: Profit, job stability 
  • Professional: corporate power, transition SYT-E tournament to be more competitive. 
• Spikey 
  • Personal: NA
  • Professional: Good PR, Saving Face, recruitment connections 
• 18+ individuals (males) Spikey was looking to move towards.
  • Personal: Good place to spend time, good for skill development, spiky swag, meeting connections 
  • Professional: Good for potential career moves into professional leagues

Step 4: Formulate (at least three) alternative solutions – based on information available, to have a win-win situation for your relationship and your venture. 

1. End partnership with Spikey and expose company and Mr. Mikey
   1. Accountability 
      1. Pros: The values and mission of the ventures will be upheld and the venture will return to its original smaller-size soccer league. Save face for SYT-E, could draw in PR and interest from other companies to fund program. 
      2. Cons: Losing $6 million in funding and the negative PR of losing a spikey contract.
2. Work alongside Mr. Mikey to keep funding for SYT-E
   1. Compromise and collaboration
      1. Pros: The partnership will continue and funding will be kept
      2. Cons: There will most likely by a tradeoff or negative clause in the re-negotiated agreement, potentially would remove women from program
3. Come up with a new solution that will keep the program centered around youth but makes the competition more entertaining (keep women in the program). 
   1. Pros: This will increase PR for both Spikey & the non-profit 
   2. Cons: Mr. Mikey would most likely not budge/ not be willing to negotiate outside of his demands

Step 5: Seek additional assistance, as appropriate – previous cases, peers, reliance on personal experience, inner reflection 

https://www.msnbc.com/know-your-value/business-culture/women-s-soccer-outpacing-every-other-sport-america-here-s-n1306856 

You can prove to Mr. Mikey that women’s soccer is becoming exceedingly more popular than male soccer across the globe. This would encourage him to potentially stray away from his idea of having a male-centric focus. 

Step 6: Select the best course of action – that solves the problem, saves face and has the best short term and long-term implications for your relationship and venture. Explain reasoning and discuss your solution vis-a-vis other approaches discussed in class. 

We found the best course of action to be option 2. The goal of this project is to reduce crime rates by involving youth in confidence-building and team-growing activities, Spikey is helping them achieve the goal with its copious amounts of funding and ultimately that is not the kind of funding you can get from an already financially struggling community. While there is not much that can be done to sever ties with Spikey due to their funding, however, the recent bad optics can be used to leverage the relationship and encourage Mr. Mikey to be much more inclusive of all youth. Additionally, if Ugochi is able to confidently back herself with data supporting the increasing interest in women’s soccer, Mr. Mikey may be swayed to negotiate a deal and keep women involved and supported. 

Step 7: List the sequence of actions you will take to implement your solution

1. Meet with Mr. Mikey 
2. Present Mr. Mikey with the upcoming data of women’s soccer being in much higher demand than ever before, exceeding men’s soccer. 
3. See if there are major female stakeholders for Spikey, if there are any on the board, and ask for their support to keep women equally involved with the program. 
4. Gain media attention. Post on social media, have youth in the program post on social media, gain a following, reach out to news companies for a highlight reel talking about the mission of SYE-T. 
5. Hold your ground: come up with must-haves for when negotiating with Mr. Mikey, such as having women involved is a must if they want to maintain this partnership. 
6. Look into other funding opportunities: having pretty much all of your eggs in one basket is really difficult for the success and survival of the company. Find other organizations that would sponsor SYE-T to diversify the funding and provide more support in case future moral disagreements arise.