Options and Recommendations for Evaluating Overseas Production Facilities
Mark Nguyen, Craig Kocher, William Morton, Todd Cresenzo

Given the recent discussions and debates surrounding the expanded global economy and its affects on cultural microeconomics, the economics of the "family unit" from which globalization affects has become more significant as corporations find themselves exporting labor over seas. The cost benefits of such business maneuvers are self-evident; over seas labor pools are vast and provide massive sources of cheap unskilled labor. However, the swift manifestation of this "Global Economy" has alarmed many as to the short term and long term effects it may produce. NIKE, as a case study, is a prime example of a corporation taking advantage of the global expansion and hence has been under great scrutiny and criticism. In response to, and concern for the new global impact, NIKE has established the "Rising Tide" program where university students are given the opportunity to aid in the assessment of the global economic impact by performing focused studies on such topics as "The Economics of the Family Unit within Vietnam." Within this paper, we four-Craig Kocher, William Morton, Todd Cresenzo, and Markest Nguyen-, have attempted to provide a superficial glance at this single study, with the hopes of providing suggestions and considerations should such a study occur. Because family economics is such a young field of study, and because such little information has been gathered in regards to family structure in Vietnam, we have chosen to develop nutrition as a preliminary standard when assessing the status of the Vietnamese family economy. This standard was used due to its relevance to all populations in the global economy and because, as we assume, perhaps the best way to assess the benefits or detriments of the global impact is to first look upon its affect on the nutritional well being of those that are feeling the brunt of its presence.

Family Economics with Nutrition as a Standard

Family economics, due to its relative infancy within the economic field, has risen to encompass a wide range of factors and topics within its studies. From basic food consumption to leisurely expenditures, family economics in its definition alone retains many implicit and explicit connotations. In order to facilitate the understanding of this rather broad field of study, several definitions are helpful. The following definitions were compiled from the AAFCS (American Association of Family and Consumer Sciences).

Family: "The term "family" refers to a group of two or more persons related by birth, marriage, or adoption who reside together; all such persons are considered as members of one family. For example, if the sonís wife is a member of the household, they are treated as members of the parentís family. Every family must include a reference person (see definition for householder for primary families); two or more people living in the same household who are related to one another, but are not related to the householder, form an "unrelated subfamily." Beginning with the 1980 CPS, unrelated subfamilies were excluded from the count of families and unrelated subfamily members were excluded from the count of family members."

Family households: " Family house holds are households maintained by a family (as defined above). Members of family households include any unrelated persons (unrelated subfamily members and/or secondary individuals) who may be residing there. The number of family households will not equal the number of families since families living in group quarters are included in the count of families. In addition, the count of family household members differs from the count of family members in that the family household members include only the householder and his/her relatives (see the definition of family).

Households: "Households consist of all persons who occupy a housing unit. A house an apartment, or other group of rooms, or of a single room is regarded as a housing unit when it is occupied or intended for occupancy as separate living quarters; that is, when the occupants do not live and eat with any other persons in the structure and there is direct access from the outside or through a common hall.

A household includes the related family members and all the unrelated persons, if any, such as lodgers, foster children, wards, or employees who share the housing unit. A person living alone in a housing unit, or a group of unrelated persons sharing a housing unit as partners, is also counted as a household. The count of households excludes group quarters."

Householder: " A householder is the person (or one of the persons) in whose name the home is owned or rented. If the house is owned jointly by a married couple, either the husband or the wife may be listed first, thereby becoming the reference person, or householder, to whom the relationship of the other household is designated as the "householder." The number of householders, therefore, is equal to the number of households."

Gini ratio: " The Gini ratio (or the index of income concentration) is the statistical measure of income equality ranging from 0 to 1. A measure of 1 indicates perfect inequality, i.e., one person has all the income and the rest have none. A measure of 0 indicates perfect equality i.e., all the persons having equal share of income. For a more detailed discussion, see Current Population reports, Series P60, No. 123."

Income: " For each person in the Current Population Survey (CPS) sample 15yrs. Old and over, questions were asked on the amount of money income received in the preceding calendar year from each of the following sources: 1) earnings from the longest job (or self employment); 2) earnings from jobs other than longest job; 3) unemployment compensation; 4) workerís compensation; 5) Social security; Ö18) Financial assistance from outside of the household, and other periodic income. For the definitions of alternative measures of income see introductory text."

It should be noted that although the income statistics refer to receipts during the preceding calendar year, the demographic characteristics such as age, labor force status, and family or household compositions are as of the survey date. The income of the family/household does not include amounts received by persons who were members during all or part of the income year if these persons no longer resided in the family /household at the time of interview. However, income data are collected for persons who are current residents but did not reside in the household during the income year.

Data on consumer income collected in the CPS by the Bureau of the census cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Therefore money income does not reflect the fact that some families receive part of their income in the form of non-cash benefits such as food stamps, health benefits, rent free housing and goods produced and consumed on the farm; or that non-cash benefits are also received by some non-farm residents which often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. These elements should be considered when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. From analysis of independently derived income estimates, it has been determined that income earned from wages or salaries is much better reported than other sources of income, and is nearly equal to independent estimated of aggregate income."

Income deficit: "Income deficit is the difference between the total income of the families and unrelated individuals below the poverty level, and their respective poverty thresholds. In computing the income deficit, families reporting a net income loss are assigned zero dollars and for such cases the deficit is equal to the poverty threshold. The income deficit is a measure of the degree of impoverishment of a family or unrelated individual."

Mean Income: " Mean income is the amount obtained by dividing the total aggregate income of a group by the number units in that group. The means for households, families, and unrelated individuals are based on all households, families, and unrelated individuals. The means for persons are based on persons 15 years old and over with income."

Median Income: " Median income is the amount which divides the income distribution into two equal groups, half having incomes above the median and half having incomes below the median. The medians for households, families and unrelated individuals are based on all households, families, and unrelated individuals. The median for persons are based on persons 15 years old and over with income."

The terms above aid in defining family economics in terms of three primary focuses: income, consumption, and production. Income, as stated above, refers to the generalized influx of money and/or services into the family or household structure that help maintain the stability of the family and/or household. Consumption can be generalized as the items, property, and services that are needed by the family/household, and are purchased or acquired by the unitís income. Production, the final corner of the triangle, can be generalized to be services or sources of income that are established independently by the family unit itself.

Unfortunately, these three focuses are not the only considerations when determining the economics of a family unit. Specifications of the items of consumption play a key role in determining family economics. These specifications range from high and low food values to needed and leisurely consumption of goods and services. Furthermore, one must take into consideration such comparisons as income to expenditure rates, and inflation rates to influences on spending. Even more diverse are the demographic factors that are apart of the economic picture, such as ages, job availability, income basis i.e., agrarian or industrial, and mean family unit size. One may also find it difficult to define family economics without addressing such contemporary factors like single parented families and divorce. However, all these factors can be compiled to express certain expenditure patterns that form the roots of family economics.

Because such little research has been done in Southeast Asia concerning the economics of the family unit, specifically Vietnam, it is the suggestion of this group that a preliminary study of family economics be performed with nutrition as the standard by which family economics can be compared and focused upon. It is the opinion of this group, that, although economic deparities exist within cultures and that there are numerous factors that contribute to average family economics in many societies, the equalizing factor is the general health and well being of those that are being studied. The diversity of family economics are as dynamic as the cultures and nations that they are studied in, however, by using nutrition as the common standard of study one can easily create a study that is indicative and comparable to all global economies regardless of cultural and societal differences. Furthermore, by applying such a standard, one sets a precedent towards such subjects as wages and health conditions. Nutrition as a standard provides a marker by which a corporation such as NIKE can use to assess its performance in the global economy.

The Family Unit

In modern society the family is a central institution which serves as the core unit of most societies. We define institutions as an organized aspect of society that is perpetuated by various norms and rules. It is through family interactions that children become socialized to societal norms and values. Vietnamese family units and household structure are unique because they reflect a blend of Chinese and Southeast Asian traditions. As a result, the Vietnamese family, as with the larger Vietnamese society cannot be neatly fit with either East Asian or Southeast Asian social or cultural worlds.

Before we begin to define what constitutes a Vietnamese family unit we need to define some terms. A nuclear family refers to a unit which is a nucleus within a larger entity called the kin group. Common residence, which is typical for the monogamous nuclear family, facilitates the sexual access of the married couple, care for the offspring, and a familial division of labor. A household is defined as one or more persons who live together in a house or housing unit and who usually share some common expenses and often have meal together. Nuclear family households usually consists of a parent of each sex and their children. Extended family households on the other hand are when the aging parents live with their sons and the sonís wives and children.

Since Vietnamese family units reflect a blend of Chinese and Southeast Asian traditions we need to define both models. The East Asian model is often described with a reference to Confucian cultural heritage. Confucian cultural heritage is patrilineal, patrilocal and patriarchal. Newly married couples are obliged to live in co-residence with the groomís parents thus forming an extended family household. Classical China under Confucianism is frequently used as an example of a society in which the extended family pattern was prevalent. On the other hand some distinct features of Southeast Asian culture is bilateral kinship systems with women being of high status. Residential location is not a prescribed as East Asian culture so, residential location for married couples is reflected more by economic opportunity.

The following Statistics are courtesy of a study done in 1991 called the Vietnamese Life History Survey (VLHS). It is the only survey that illustrates the size and composition of Vietnamese family units. The survey was conducted by the Institute of Sociology in Hanoi and sampled 403 Vietnamese family households from January to March 1991. Four Primary sampling areas were reflected which included a medium sized city in Northern Vietnam (Hai Duong), a village called Tien Tien and a Southern Vietnamese city and village called Can Tho and Long Hou.


According to the Vietnam Life History Survey in the two rural villages of Tien Tien and Long Hou, over 80 per cent of households were headed by men, this gender composition of family headship is consistent with expectations based upon patriarchal family structure (VLHS). In the urban areas the headship pattern is strikingly different. Within Can Tho and Hai Duong 50 per cent of households had female heads which is not consistent with the Confucian model of family structure, where "Women were never heads of households" (Huou, 14).

Household Size:

Overall, the Vietnam Life History Survey found that household sizes varied from 4.4 persons in the northern city to as high as 6.2 in the southern city (VLHS). Obviously, households are larger in the rural areas and in general the households which were headed by males tended to also be larger. These levels are very similar to those found in southwestern China (Harrall, 8).

Extended Family Households:

Within the northern village and city of Tien Tien and Hai Duong the survey found relatively few extended family households. Yet, if we look at the southern city and village of Can Tho and Long Huo we find extended family households are much more common, but still few in numbers.

Proximity and Visiting Among Vietnamese Family Members:

Frequency of contact is directly correlated with proximity. More then 75 per cent of Vietnamese respondents to the survey with living parents saw them at least weekly-an extraordinary pattern of family ties (VLHS). Yet, as distance between family members increases, contact drops to about 50 per cent due to the constraints of transportation. Obviously, distance is a major obstacle for family members to overcome but the survey found that the overall pattern is of very frequent contact between VLHS respondents and their parents. Women keep close ties, but men keep even closer ties with family members.

In conclusion, we see that the most common Vietnamese family living arrangements are that of independent nuclear households. The patterns presented above show very little support for the Confucian cultural model of patrilocal residence and even less support of the bilateral kinship system which is characteristic of Southeast Asia. Vietnam appears to have incorporated East Asian Confucian culture in family organization, but has leavened it with considerable flexibility of gender roles and obligations that are characteristic of Southeast Asian family structure (Huou, 14).


Nutrition is defined as "the sum of the processes involved in the taking in of nutrients and in their assimilation and use for proper body functioning and maintenance of health" by Mosley's Medical, Nursing, and Allied Health Dictionary. For most Americans, good nutrition is a matter of informed choice and is not governed by harsh environmental or economic circumstances. Nutrition in America has meant different things over the country's existence; American nutritional concerns have changed greatly in the last half-century. Nutrition scientists before World War II held that nutritional problems stemmed from a lack of sufficient food or variety of foods. They were concerned with defining essential nutrients, primarily vitamins, in order to set guidelines for minimum food intake necessary for good health. However, today nutrition scientists are concerned with an overabundance of food or certain nutrients.

Healthy People 2000 is a nutritional initiative to improve American health through prevention and education. The overall goals of the program are to reduce health disparities among Americans, increase the span of healthy life and achieve access to prevention services. Nutrition is one of 22 target areas for Healthy People 2000. Another major concern of health officials in America is the nutritional value of children's diets. Information relating to the dietary needs of children, such as the necessity of at least 800 mg of calcium per day, are being pushed toward the public eye in hopes that parents will learn more about how to keep their children healthy.

The current dietary guidelines for Americans, published by the U.S. Departments of Agriculture and Health and Human Services in 1990, are recommendations to help Americans maintain and improve their quality of health through nutrition. They are:

*Choose a diet low in fat, saturated fat and cholesterol

*Eat a variety of foods

*Choose a diet with plenty of vegetables, fruits and grain products

*Maintain a healthy weight

*Use salt and sodium only in moderation

*Use sugars only in moderation

*If you drink alcoholic beverages, do so in moderation

All of these tips can also be represented by what is known as the Food Guide Pyramid that recommends how many daily servings one should consume of each food group.

This pyramid states that a healthy diet should consist of 6-11 servings from the grain group, 3-5 servings in the vegetable group, 2-4 servings of the fruit group and 2-3 servings of the dairy and meat and beans groups. The pyramid has been criticized because it accommodates politically powerful meat and dairy industries and it does not offer sufficient information to guide healthy food choices, but it is viewed as a handy and informative visual aid to nutrition information.

Also in 1990, the Nutritional Labeling and Education Act took on food labeling education as an important issue for the 1990's. This includes defining what misleading terms like "Calorie Free" and "Reduced Fat" really means (less than 5 calories and 25 percent less fat than the original version). Essential nutrients, defined as the chemical substances obtained from food and needed by the body for growth, maintenance and repair of tissues, are listed on food packages as mandated by the NLEA. The Recommended (Daily) Dietary Allowances (or RDAs), levels of nutrients recommended by the Food and Nutrition Board of the National Academy of Sciences, are also located on food packages and are scaled by age and gender. Below is a list of some ages and genders and their required RDAs for nutrients

Ages 1 year old 4-6 years old Males 19-24 Females 25-50


Vitamin C 35 mg 45 mg 60 mg 60 mg

Thiamin .3 mg .9 mg 1.5 mg 1.1 mg

Riboflavin .4 mg 1.1 mg 1.7 mg 1.3 mg

Niacin 5 mg 12 mg 19 mg 15 mg

Vitamin B6 .5 mg 1.1 mg 2.0 mg 1.6 mg

Folate 30 mg 75 mg 200 mg 200 mg

Vitamin B12 .4 ug 1.0 ug 2.0 ug 2.0 ug

Calcium 500 mg 800 mg 1200 mg 800 mg

Phosphorus 400 mg 800 mg 1200 mg 800 mg

Magnesium 50 mg 120 mg 350 mg 280 mg

Iron 8 mg 10 mg 10 mg 15 mg

Zinc 5 mg 10 mg 15 mg 12 mg

Iodine 45 ug 70 ug 150 ug 150 ug

Selenium 12.5 ug 20 ug 70 ug 55 ug

Protein 13 g 24 g 58 g 50 g

Vitamin A 375 ug 500 ug 1000 ug 800 ug

Vitamin D 7.5 ug 10 ug 10 ug 5 ug

Vitamin E 3 mg 7 mg 10 mg 8 mg

Vitamin K 7.5 ug 20 ug 70 ug 65 ug

As far as the necessary daily intake of calories for Americans according to the U.S. RDAs, these too are divided into categories: Most women and older adults need 1,600 calories. Children, teenage girls, active women and most men need 2,200 calories. And teenage boys and active men need 2,800 calories.

International standards of nutrition are not too dissimilar from those of the United States, and are governed primarily by the United Nations. Although, international standards are generally geared to countries with less access to the plenty of the United States and thus more similar to nutrition science in America 50 years ago, they provide valuable information about nutrition in general and repeat many things that have already been stated. The most recent proposal on nutritional standards was in 1996 when the U.N. Codex Alimentarius Commission defined several nutritional ingredients as dangerous and set minimum dosage limits of nutrients. The Codex Commission also reduced the RDAs for certain nutrients at significantly lower levels than U.S. RDAs. It also stated factors for child malnutrition, such as parent educational levels, belonging to an ethnic minority and order of a child's birth. Interestingly, gender bias, as stated by the report, does not play a role in child malnutrition.

At the 1992 International Conference on Nutrition, a declaration was made that "access to nutritionally adequate and safe food is a right of each individual [even though it recognized that] globally there is enough food for all and that inequitable access is the main problem." It also stated that about 780 million people in developing countries (20 percent of their combined population) "do not have proper access to enough food to meet their basic daily needs for nutritional well-being." Certainly, Vietnam falls into this category. The conference recognized that lack of education and poverty are the two primary causes of hunger and malnutrition. 43 percent of the 40 million annual deaths in developing countries are a result of infectious or parasitic diseases, mostly caused by improper nutrition or food preparation.

Nutrition as a Standard

In studying the Nike problem, one way to understand if Nike is, or is not doing an adequate job, is to examine the nutritional standing of Nike factory workers and their families. In going to Vietnam to study the nutritional standards of the country, the group will take on an important but difficult task. There has been little to no nutritional research done in Vietnam, therefore making it very difficult to get an accurate understanding of what is, and is not acceptable. However, if the group can find an acceptable way of defining nutritional standards, it can compare those standards to the actual nutritional intake of Nike workers and their families. This is one way Nike can critique its human rights performance in Vietnam.

Nutrition varies greatly from culture to culture and from person to person. "Recent studies show that 20 percent of Vietnamese households lived below the poverty line, eating fewer than 2,100 calories per day per person. A quarter of that group was found to be poor enough to be classes as 'hunger stricken'."

(WOTRO Programme, net . . . .) Because most of the factory workers are women, it will be easier to narrow the search somewhat if the focus is primarily on women. One way it has been shown that women are malnourished in Vietnam is the high mortality rate of infants and the high nutritional deficiency rates among new-borns, particularly with anemia. (pg. 2 WOTRO) Chronic malnutrition affects more than half-Vietnamese children between one and five years of age. Acute malnutrition is highest in the 12-23 month age group. There is also high frequency of anemia in the infant group. Several factors can explain this situation: low birth weight, anemia in the mother, duration of breast feeding, early weaning, inappropriate complementary feeding. In addition, vitamin A deficiency is a problem of public health significance in all areas of Vietnam and many children are affected. (WOTRO . . . .)

Much of the problems can be directed toward the limited variety in the Vietnamese diet. About 85 percent of the energy intake is supplied by rice and there is a limited variety of food intake. Supplementary feeding for pregnant women and children is inadequate. The precarious nutritional status of Vietnamese civilians and particularly children, reduces their immunity and makes them vulnerable to disease and infection. In order for nutrition to improve, education needs to improve. Citizens need to understand what is nutritionally important, but even more basic things, such as food preservation and forms of refrigeration.

The Vietnamese government is trying to better educate its population in regards to nutritional intake, but it has not been able to do a very good job. The company drew up a National Pan of Action for Nutrition (NPAN) which was officially ratified in March 1995. The Ten recommendations are as follows:

1. Consume foods according to the body requirement. We can have the recommended body weight by using the following formula: (Height(cm) - 100)/10 x 9 ex: A man 160cm tall is recommended to weigh as follows: (160-100)/10x9=54kg

2. Prepare a diversified meal, composed of different types of foods.

3. Reduce salt intake to below 10g/head/day.

4. Consume a little amount of sugar. Adults as well as children must not take candy, cakes or sweet beverages before the meal. Everyone is estimated to take about 500g of sugar every month.

5. Consume a certain amount of fat/oil with attention paid to the intake of oil, groundnut and sesame.

6. Consume a certain amount of protein of both sources: animal and vegetable. It is recommended to take fish at least three times every week and increase the intake of soybean products.

7. Increase the intake of fiber: consume a large amount of vegetables, roots, tubers, and fruits that can provide vitamins and minerals.

8. Take enough clean water, reduce the intake of alcoholic beers and other beverages.

9. Ensure food hygiene: it is recommended to take three meals daily on average. Do not have a big dinner in the evening.

10. Serve a healthy family meal that is delicious, wholesome, clean and economical, and served with affection.


By looking at these ten recommendations, it is easy to see why the country is struggling so much nutritionally. Although these recommendations are a good start, they are too abstract to do more than just give families vague ideas of healthy eating.

The largest segment of the Vietnamese population suffering from malnutrition is children, particularly pre-school age children. It has been found that young Vietnamese children are often lacking in protein, vitamin A, vitamin C, and minerals such as zinc and iron (British Medical Journal). The deficiencyís often lead to diarrhea and respiratory infections that are the primary cause of death in infants and preschool children in Vietnam and other developing countries (British Medical Journal). Effective home gardening has been found to alleviate these problems to some extent. The study group could make suggestions to Nike as to how to educate its employers not only on basic nutrition, but also on home gardening techniques.

The group would spend time with families at mealtime and nutritionally analyze the intake of food. It is likely that most families of Nike factory workers in the same areas would be consuming similar diets. After analyzing the nutritional intake of the families, the group would make a report to Nike outlining what the families are eating. The group would make comments about the positives of the diet as well as the negatives. Then the group would make suggestions to Nike as to how the families would be able to improve their nutritional intake. It would then be up to Nike to use its employer power to make suggestions to families to improve their eating habits.

The primary component of this research in regards to factory worker nutrition is Vietnam is likely to be education. It will be up to the group to analyze the average diets of the workers and their families. Not only will the group have to educate Nike on its findings, it will have to make suggestions to Nike on how to educate its workers. The process of changing workers diets will not be easy. Many workers may not have an understanding of the importance of nutrition, or comprehend the intricate differences between vitamins and minerals, or realize the need for a balanced diet.

There will be added benefits to Nike as well. Not only will Nike be improving its standings in the eyes of human rights activists, but also it will be improving the health of its workers. The result of keeping factory workers healthy will be higher production from the workers. Therefore, Nike will cut down on sick time by improving the overall health of workers. Not only will the workers be healthy, but the families of the workers will stay healthier. Workers will not have to be absent as often to take care of ill family members and will increase out-put because of a more relaxed mind.