Management: Nike Company

Executive Summary

NIKE Inc., formerly known as Blue Ribbon Sports (1964–1971), is a multinational company headquartered in America. The company develops, designs, markets, and sells apparel, accessories, footwear, and equipment for athletic activities across the world. There are six brand categories sold by NIKE Company, which include training, NIKE basketball, sportswear, running, the Jordan brand, and football. The company was established in 1964. Though based in Beaverton, OR the company conducts its activities in six major geographical segments namely Central & Eastern Europe, Japan, North America, Greater China, Western Europe, and Emerging Markets. Major subsidiary brands of NIKE include Hurley and Converse. The company is one of the successful corporations and boasts of revenue growth and strong management and leadership approach. The purpose of this paper is to provide a comprehensive description of NIKE’s management, as well as the role of the senior management and adaptability to the ever-changing market environment.  

Key Changes in Nike’s Management Style

Nike’s co-founder, Philip H. Knight, possess much experience and knowledge in regard to the company since he has been around since its inception. Through his leadership mantle, the company has undergone calculative management styles and strategic planning to attain its success. First, the company utilizes a relatively centralized management approach. Information flows upwards through the communication channel. It applies a laissez-faire management style where the top management does not interfere with the process of business management. The skilled staff usually do decision-making and problem solving while the management keeps its hands off from such issues (Spalding, 2011). NIKE applies self-managed teams and a delegative approach to create a boss-less environment. Laissez-faire management style has enabled NIKE Corporation to increase creativity and innovation in the long-term. Its staffs enjoy exclusive autonomy, a factor that enables them to utilize efficiently their expertise, skills, and knowledge. 

Secondly, the company relies solely on managerial controls and information technology. The company has a strong intranet that enables smooth flow of information from staffs to the top management. The company has put in place the latest communication software for demand management, strategic planning, financial management and supply planning. Such a management approach has enabled the company to have a comprehensive understanding of the business, minimize inventory, and an improvement in decision-making. The company is properly managed and has managed to remain on track since its inception in 1964. Its management approach allows for innovation and technological application. The company’s revenue keeps on increasing to reflect increased sales volume. 

The Role of the Senior Management

Nike has undergone tremendous changes to incorporate socio-cultural and technological aspects of society in its products. Such changes are usually facilitated and accommodated by the senior management. NIKE’s recent change towards innovation and technology provided a robust foundation for its success in the industry. The role of the senior management was to facilitate the change through the systematic organization, planning, and implementation of technology to rhyme with the cultural and social needs of all athletics. Senior managers offer incredible support to the agents of change. Their role was to maintain effective communication among key stakeholders. The latest technological application is its Nike Debuts Self-Fitting Smart-Sneaker (Newcomb, 2019). The sneaker is designed in such a way that it uses an app and an advanced power-lacing system that gives room for customization. Amazingly, the sneaker has the ability to detect and determine the tension of the foot and hence self-adjust accordingly. The idea behind this innovation is to do away with shoelaces to improve an athlete’s performance.

Therefore, the role of senior management in managing organizational change include proactive participation and visibility during all development phases of a project, the establishment of a strong coalition between resistance management and sponsorship, and conveyance of essential information to employees. The senior management at NIKE influences and gives priority and credibility to the workgroups, departments, divisions, as well as subsidiaries. 

Management’s Decision on the Use of Vendors and Spokespersons

Nike Inc. enjoys the largest global market share for its athletic footwear and apparel. The company uses vendors to sell its products. In addition, it sells its products directly to customers via an online platform. Surprisingly, independent suppliers manufacture their products. These are vendors mandated with management factories and stores for Nike’s products. The company does not have any factory. Besides, the company collaborates with major technology firms, professional services firms, and equipment factories. Such suppliers are responsible for Nike’s operations across the world. Based on six continents, Nike Corporation engages contract factories and boasts of approximately 800, 000 workers. It has several factories in Vietnam where a wide range of its products such as apparels, sportswear, and shoes are manufactured. The rationale behind choosing Vietnam was due to the presence of cheap and reliable labor. The average wage rate in Vietnam is 69 cents/hour whilst the average wage rate in America is approximately 30 USD, inclusive of other benefits and insurance cover. Nike’s subsidiaries enjoy autonomy in their operations. They are mandated with operational decisions restricted by the guidelines of the project. The merit of subsidiaries is to ensure positioning and consistency of its brand.

The company uses celebrities and well-renowned individuals to act as their spokespersons. Such a move has sometimes affected Nike’s business significantly. For instance, an ad featuring Colin Kaepernick and a tagline ‘just do it’, created a social media storm. Some individuals posted video clips where they are seen burning Nike’s products. Ironically, these people were destroying the items they had purchased with their own money. The company decided to mute on this issue and its related conversation. It was believed that Nike was aware of its decisions to feature the aforementioned football player in their ad. The explanations herein testify the management’s decision to use vendors and spokespersons and the impact of these decisions on the organization. 

Innovative Idea: Creative Workspace

Establishing a viable creative workspace will ascertain the maximum exploitation of new ideologies from both customers and employees. It will improve processes, service delivery, market acquisition, and product improvement. The product is an improvement in profits and efficiency. Several approaches can be used to foster innovation and achieve a creative workplace culture. Examples include positive psychological reinforcement, stimulation of the environment, and accommodation of deferent perspectives and points. Efficient information flow should be at the core of Nike’s objectives. By regularly having a conversation directly with employees, customers are in a position to articulate their concerns and air their complaints. Esteemed customers can be rewarded through coupons, badges, or discounts on the goods they purchase. The aim is to improve the customer experience and royalty. Consequently, employees can be recognized and honored through their exemplary work. Such employees can be motivated through promotions, salary raise, and other incentives. In the long-term, the company will enlarge its client base while keeping employee turnover rate at minimal levels. 

Nike’s Ability to Adapt to the Changing Needs of Customers and the Market Environment

Change in a business environment, as well as the customer’s needs,  are inevitable. As mentioned earlier, Nike enjoys the biggest market share of the world’s market for athletics wears and products. The nature of the market has been supportive and hence assisted the company to grow exponentially. Generally, America’s economy has a competitive tax system, low-interest rates, and stable currency. However, the company has faced several challenges, especially in the U.S. market. There are periods of the financial crisis during which customers postpone or simply cancel their spending on Nike’s products. Such a crisis has also impacted other parts of the world such as Asia where the cost of manufacturing and labor become unstable. However, Nike’s sales remain at a stable level due to slow economic and market adjustment rate, as well as the presence of strong movements that render unfavorable conditions weak. Henceforth, it can be predicted that the changing needs of customers and the market environment will have minimal impact on the company’s adaptability. The company has put into place a strong communication channel where information is conveyed efficiently from the market to senior management. The company has partnered with top research firms and technology firms to ascertain predictability of future trends and recommendations to avoid major business pitfalls. 

Conclusion

The paper sought to provide a comprehensive description of NIKE’s management, as well as the role of the senior management and adaptability to the ever-changing market environment. Based on the description provided above, Nike has managed to adopt laissez-faire management and managerial information control to achieve its goals. The senior management plays important roles such as establishing a strong coalition between resistance management and sponsorship and conveying essential information to employees. The company has managed to remain on top due to its wide market coverage and the presence of strong movements that affect the market environment. 

References

Newcomb T. (2019). Nike debuts self-fitting smart-sneaker technology as business model of future. (2019). Retrieved from https://www.forbes.com/sites/timnewcomb/2019/01/15/nike-debuts-self-fitting-smart-sneaker-technology-as-business-model-of-future/#2da208bd1c9b

Read Nike’s Mission Statement and find information about NIKE, Inc. innovation, sustainability, community impact and more. (2019). Retrieved from https://about.nike.com/

Spalding, A. B. (2011). The irony of international business law: U.S. progressivism and China’s new laissez-faire. UClA l. reV., 59, 354.