Nike Case Study: Overview

1. A decision to retain an in-house arm of agency Weiden & Kennedy by Nike exemplify the concept of organizational design by allowing Nike use the agency’s creative designers to focus solely on Nike work, giving them un-parallel access to executives, researchers and anyone else who might provide Nike advertisers with their next inspiration for marketing greatness before listening to any other organization.
Having the agency in the building is having them at their disposal at anytime they need them and also the agency will have to consider them first incase of any new ad or good idea discovered by the agency or when Nike needs to salvage a problem with the help of the agency. Thus, the agency at their finger-tips serves great advantages for not only trouble shooting. 2. I believe the organic design of Nike helped in posing the sweatshop labor problem Nike faced. Using a flat structure helps get a lot of work in a short time but none-the-less can cause a lot of trouble as seen in Nike.
With a more highly bureaucratic structure, also known as Mechanistic design, practices will be closely monitored to prevent such problems from arising. In a centralized design with many rules and procedures which have to be followed, a clear-cut division of labor and narrow ps of control and formal coordination, the higher management/ board of directors will be very well informed on what is happening in the organization at each and every level. Though organic design has more personal coordination a more strict coordination will help in preventing such issues.

For example, if Nike had a tight structure, they would have a predictable goal, centralized authority on whom to report directly to, many rules and procedures they must abide by, a narrow p of control so as to control their workers/management’s practices, everyone has his/her specialized task, and formal and impersonal coordinator. Having this sort of clear division of labor and coordination helps keep the management well informed and they would have known and remedied the sweatshop labor before the allegations surfaced.
Nike would have known the right factories to outsource to instead of using factories that fail to meet their standards. 3. Fig. 1 shows what Nike network structure looks like, Mark Parker (CEO) reports to the Board of Directors and in return almost every manager/worker reports directly to him when the need arises. Nike is a divisional company but retains some functional departments as well. The brands Nike sells comprise many of the divisions of the company.
Apparel for Nike brand, Converse, and Jordan brands are examples of some divisions created around specific products. Functional departments such as Nike design and investor relations are also part of Nike’s organizational structure. Nike‘s vertical structure includes CEO Mark Parker and a board of directors chaired by co-founder Phil Knight. Although Nike has functional divisions and divisions based on specific products it is not a matrix organization. In a matrix organization, employees report to a functional and divisional manage.
At Nike, employees report to the divisional manager and the president of each division reports directly to the CEO. Nike’s continued product innovation and successful marketing are due to the combination of functional and divisional organization using an operations department to insure communication between divisions. There is division of labor but it is not clearly identified. With a more pronounced division of labor and levels of direct supervision Nike can improve its business thereby staying ahead of competition like Adidas.
The bulk of divisions reporting to Mark Parker can be cut down introducing more managers to report to in other to lessen the workload on him. Having more layers can help ease the workload and also the more levels reported to will enable more ideas to be shared. A lower manager can have important ideas that will be welcomed by Mark Parker and Board of Directors but cutting such a manager from the line of report will render him unaware of the situation and not able to share his ideas, which may potentially be just the perfect solution to the situation.
No doubt he flat structure makes work faster and workers feel more involved in a project, but it’s not always the best because once a project goes wrong, salvaging it is not impossible but it is hard and more time consuming to investigate than in a mechanistic bureaucratic structure. REFERENCE Schermerhorn, John R.. Management. 11th ed. Hoboken, N. J. :Wiley; 2010

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