Characteristics of Nike’s Organizational structure

Characteristics of Nike’s Organizational structure

Introduction

Nike is a global leader in the athletic https://studygroom.com/amazon/, apparel, and equipment industry, but also a very reputable organization for the type of organizational structure that they use in their approach to the market. The characteristics of Nike’s organizational structure enables it to control and facilitate flexibility in their global market. Nike’s organizational structure reflects a company that is set up to stretch the limits and abilities of its operations to the very maximum level using the limited resources. The company’s organizational structure is designed to address regional differences in preferences and demand and to respond to various market according to studied influences. In essence, Nike’s corporate structure highlights the need to resolve differences among regional markets. The company realized that there were regional variations in their markets facilitated by factors such as climate and changes in preferences among customers. This essay discusses the various characteristics of Nike’s organizational structure that enables the company to remain a global leader in the sports footwear, apparel, and equipment industry.

Characteristics of Nikes organizational structure

Nike’s corporate structure design is a global marvel and has attracted the attention of several authors. Some of the authors wrote on Nike’s organizational structure to demonstrate the need for including regional variations in business strategies for global organizations. Others wrote to complement and display the characteristics of Nike’s organizational structure that makes it an exceptional organization in fulfilling their divergent market demands. One outstanding feature of the company’s organizational structure is its ability to facilitate the regionalization of business strategies. Nikes regionalization of business strategies approach to the market promotes their value chain by helping them to fulfil their customers expectations. Nike’s organizational structure’s characteristic of facilitating the regionalization of business strategies also enables the company to be flexible (Thompson, 2019). The flexibility allows the company to address the divergent customer demands and preferences in varied regions and respond to the frequent changes in these preferences. The fact that the company operates in a highly competitive business environment among competitors like Adidas, Puma, and ASICS prompts the need for the organization’s organizational structure to work together with the corporate culture to gain a competitive advantage in the market. Nike’s regionalization of business strategies is its silver bullet in the global athletics footwear, apparel, and equipment industry.

According to Business Management Journal’s author Andrew Thomson (2019), the current type of organizational structure used at Nike is known as geographic divisional organizational structure. The structure is designed according to the organization’s needs in its global organizations and the unique regional market conditions. According to Thomson (2019), one of the most notable characteristics of Nike’s geographic divisional organizational structure is the feature of its leadership structure. Nike’s organizational structure has a global corporate leadership structure, involving management through a centralized system of corporate managers based in their headquarters at Oregon USA. These corporate managers make significant decisions on the global market and the global corporate structure of Nike. The feature of a global corporate leadership structure enables easy decision making and implementation of organizational objectives.

Another feature of Nike’s geographic divisional organizational structure is its semi-autonomous geographic divisions. In essence, the company’s organizational structure is divided into market segments depending on the regional markets. Different components, including demands and preferences as well as geographical factors influence the divisions into market segments. Currently, Nike’s organizational structure is divided into six regions. There regions include North America, Western Europe, and Central & Eastern Europe. Other areas include Greater China, Japan, and Emerging Markets. The feature of a semi-autonomous geographic division allows managers of different regions to align their strategies and optimize production, with the trends and demands of their jurisdictions. Another feature of Nike’s geographic divisional organizational structure is the organization’s global division for Converse and Brand Licensing. This feature enables the organization to run a subsidiary brand of Nike through the converse footwear. Additionally, the global division of Brand Licensing enables Nike’s organizational structure to control its brand licensing through an independent brand management unit.

Another very significant characteristic of Nike’s organizational structure is the ability of the structure to support business resilience and capability through impacting traditions, values ethical standard expectations among their employees. The organization pays significant attention to the employees, specifically to facilitate their optimum productivity and relationship with customers and other employees. Nike’s employees are provided with rules, standards, regulations, and expectations on how to fulfill their tasks as a framework for ensuring that the organization’s structure is maintained. This characteristic enables Nike Inc.’s organizational structure to maintain the company’s corporate culture and achieve global success in their various industries (Young, 2017). Additionally, the organizational structure’s characteristic also reinforces the organization’s approach to business through resilience and competence as it compels employees to ensure proficiency in their production and optimum output.

The reason for the success of Nike Inc.’s organizational structure is its ability to employ creative and innovative ways of marketing their products. The company’s corporate strategy enables them to employ divergent strategies that facilitate creativity and innovation, such as visiting public places and getting the endorsement of several famous sports personalities and stars. They use these sports starts in their advertisements and gains significant public attention from the endorsed ads. The organization uses famous slogans such as the ‘Just Do It’ slogan, which is also popular parts of Nike Inc.’s popular organizational strategies that demonstrate the use of creativity and innovation in Nike’s organizational structure. Advegize author Sobiya (2019), in terms of leadership arrangement and division of duties, Nike Inc.’s organizational structure can be said to be a matrix structure. In essence, the organization’s leadership structure is the type where authority passes both vertically and horizontally. Nike’s organizational structure is designed to enable the company to respond to various changes in the different market segments that they serve swiftly (Sobiya, 2019). The company avoids an organizational structure where authority and decision making towards change is rigid as it has to come from the top executive downwards. Additionally, Nike’s matrix leadership organizational structure enables innovation, information sharing, and easy decision making among employees and management as the organization’s geographical distribution cannot allow them to use the rigid vertical decision-making approach.

Advantages and disadvantages of Nike’s organizational structure

Nike’s organizational structure allows for regional preferences, which enables them to provide different goods in the different regions according to the preferences and the needs of each area. The strategy also allows them to have a variety of Nike products in the various areas that they operate and exist. The approach has allowed Nike Inc. to dominate the global market by increasing its sales and enforcing their brand across the worldwide market (Buglerman, 2016). The move also prevents Nike’s competitors from dominating their markets and gaining a competitive advantage over them. Additionally, the organization’s strategy of regional division also enables them to facilitate cultural promotion by engaging them with the different cultures in the regions they exist and allowing them to tailor their designs according to the indigenous cultures’ liking. Apart from the cultural specification enabling employees to focus on specific fields and become experts in their areas, it also facilitates the collaboration and acceptance of the organization among the local markets as they respond to the needs and cultures of the indigenous people.

Additionally, Nike’s organizational structure also has several disadvantages. Among the most significant problem of Nike’s organizational structure is the limited approach to the management and operation of Converse. Much of the management and operation attention have only focused on the Nike original brand while ignoring the Converse brand, which has recently lagged behind in innovation and production of new products among its competitors in the rubbers footwear industry. Additionally, the matrix structure of leadership also leads to frequent communication challenges ad grudges that arise from instructions arising from different quarters (Brohi, 2016). Another significant disadvantage of Nike’s organizational structure is the problem of duplication of duties within the firm. This leads to frequent conflict among departments.

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Nike’s organizational structure is one of the most successful organizational structure due to the global acceptance of the organization’s products and brand. This article has provided a conceptual analysis of Nike’s organizational structure, including the disadvantage and advantages of the company’s organizational structure. The essay has critically demonstrated how the organization’s business structure enables it to gain a competitive advantage in the global market and to respond to the needs of customers in different market segments.

Refences

Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A., & Chawla, S. (2016). Strategic Marketing Plan of Nike.

Burgelman, R. A. (2017). Complex strategic integration at Nike: Strategy process and strategy-as-practice combined. In Handbook of Middle Management Strategy Process Research. Edward Elgar Publishing.

Sobiya. (2019). Nike’s Organizational Structure: Pros & Cons. Advegize Journal, https://advergize.com/business/nikes-https://studygroom.com/functional-areas-of-a-business/-structure-the-pros-cons/.

Thompson, A. (2019). Nike Inc. Organizational Structure Characteristics (Analysis). https://studygroom.com/team-exercise-3/Management Journal, http://panmore.com/nike-inc-organizational-structure-characteristics-analysis.

Young, J. (2017). Nike Inc. Organizational culture characteristics: An analysis.