An Analysis of an Organization Essay
According to IBISWorld (2008), the US footwear industry is being dominated by Nike, Inc. , Adidas AG, Jones Apparel Group, Inc. , and The Timberland Company. At the start, Adidas was the leading footwear brand especially when it comes to soccer and tennis shoes, however, Nike overtook Adidas when it came out of the market and has been the industry leader ever since – only overshadowed by Reebok for a time being (Alick, et al. , 2000a). Nike only got back on the lead with their launch of Air Jordan, enabling them to hold half of the athletic footwear market.
Nike only designs and sells the shoes while manufacturing relies on suppliers located in countries which offer cheap labor (Alick, et al. , 2000b). The technology being utilized by these countries was developed by Nike itself. Every week, Nike releases new products to sustain their lead other companies – predictions were made ahead of time instead of waiting for their retailers to inform them what the consumers would want to buy (Alick, et al. , 2000b).
Currently, Nike is manufacturing footwear, apparels and equipments that are being in almost 700 factories in 52 countries with almost 800,000 workers (Nikebiz,, 2009a). With 30,000
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Nike also owned several subsidiaries which are Converse, Inc. , NIKE Golf, Cole Haan Holdings, Inc. and Hurly International LLC. These subsidiaries are important in Nike’s objective to grow up to $23 billion revenues in 2011 and that 25% of these planned revenues will be coming from their subsidiaries (Nikebiz,, 2009b). They also made sure that they would have a chance to invest on opportunities where they could acquire high returns. Thus, Nike decided to sell Nike Bauer to Kohlberg & Co. and W.
Graeme Roustan for $200 million just recently on February 2008, a year ago, they have also decided to sell its Started brand to Iconix Brand Group, Inc. for $60 million, then they got hold of 19. 9% of Umbro plc shares from Sports Direct International which resulted to the completion of Nike’s newest subsidiary called NIKE Vapor Ltd on March 2008 (Nikebiz,, 2009b). The company has also acquired various recognition and awards in different aspects – some of them are regarding corporate responsibility, employer and diversity.
Nike was awarded as one of the World’s Most Ethical Companies by Etisphere and the 3rd in the Corporate Responsibility Officers’ (CRO) 100 Best Corporate Citizens List for two years in a row (2007-2008). They were also included Innovest’s 100 Most Sustainable Corporations in the World and World’s Top Sustainable Stocks by Sustainable Business and KLD Research and Analytics, Inc. Furthermore, Nike was also given top marks on Climate Counts’ first company scorecards (Nikebiz,, 2009c).
In 2005, Nike is the number 21 in the Oregon Business Magazine’s list of 100 Best Companies to Work for in Oregon and the number one when it comes to employee benefits in Oregon. In Business Week, Nike was the 55th on the 2007 Top 100 Places to Launch A Career list. Then from 2006 to 2008, Fortune Magazine placed Nike in their 100 Best Companies to Work For due to the company’s employee benefits such as paid sabbaticals, on-site childcare, 50% discount on the company’s product and corporate responsibility efforts in the overseas contract factories (Nikebiz,, 2009c).
Moreover, Nike was recognized at the 2002 National Congress of American Indians Awards. The Human Rights Campaign’s (HRC) Corporate Equality Index gave Nike 100% from 2002 to 2004. Lastly, on 2007, Nike was cited by the HRC Foundation as one of the 142 American companies at the 2007 best place to work for gay, lesbian, bisexuals and transgender (GLBT) (Nikebiz,, 2009c). History and Origin Nike, which was Blue Ribbon Sports (BRS) back then, was founded on 1964 by Bill Bowerman, a track and field coach of the University of Oregon, and Phil Knight, a runner who competed under Bowerman’s team (Nikebiz, 2009d).
When Knight earned his MBA in finance in Stanford University after graduating from University of Oregon on the fall 1955, he wrote a proposal which excellent rubber shoes could be made in Japan, however, the Japanese manufacturers did not paid any attention to his letters so he persuaded the manufacturer of Tiger shoes to make him the distributor of the product in the US through a phone call to Onitsuka Co. , Kobe, Japan.
He sent Bowerman some pairs when he got the first batch of samples since he was aware that Bowerman always attempt to provide his players with a competitive advantage and among his measures is innovating running shoes, he even had his own ideas that he offered to the established footwear manufacturers during that time but was ignored but when he received the samples, he then asked Knight to be his partner and to offer his ideas to Tiger (Nikebiz, 2009d).
Pledging $500 each, the partnership began and they ordered their first 300 pairs on 1964. Knight would sell the shoes out of his car and in local track meets while Bowerman strips the Tiger shoes to see how it still could be improve and ask his players to test them (Nikebiz, 2009d). They hired Jeff Johnson to have someone to take care of the needs of BRS while they attend their full-time jobs.
Johnson made the company’s first product brochure, print ads, marketing materials and catalogues, he was also the one who put up the company’s mail-order system and opened the company’s first retail store in Santa Monica, California on 1966 (Nikebiz, 2009d). Knight, then, quitted his job and totally focused on the company which is starting to grow; he and Bowerman were then prepared to start designing and manufacturing their own brand especially when the BRS-Onitsuka partnership started to falter.
Johnson, then, thought of the name Nike for the new company and brand, and Carolyn Davidson, a student from Portland State University, created the company’s brand mark that is presently known as the “Swoosh” – the new Nike, Incorporated along with its new designs (where Johnson was also greatly involved) was launched on 1972, and lastly, on 1973, they signed Steve Prefontaine, a runner from Oregon, as their first product endorser (Nikebiz, 2009d).
By 1980s, Nike became a “publicly traded company” and defeated Adidas which was then the number one athletic footwear company in the US. The company’s sales reached $270 million which was obviously higher compared to their sales back in the 1960s which only revolves around $20,000 in 1965 and $300,000 in 1969 (Porter, et al, 2002). However, Nike slumped down in the mid-1980s due to the “aerobics boom” where Reebok got the upper hand.
Nonetheless, Nike got back on track when they signed Michael Jordan, who was still a rookie, as their new athlete endorser on 1985 which was followed by a major product and marketing campaign which was dubbed as the “Revolution campaign” promoting Air Max and emphasizing their difference from other companies (Nikebiz, 2009d). The Revolution campaign was followed by a number of ads with the tagline “Just Do It” and the “Bo Knows” campaign starring Bo Jackson.
In contrast with their extravagant campaigns, Knight initially does not have faith in advertising since he has this notion that advertising would damage the runner’s relationship with his or her shoes. Porter, et al (2002) stated that the athletes that Nike chose as their endorsers were not just good at sports but also personify “determination, individually, self-sacrifice and winning” because of what Knight regarded as “Pyramid of Influence” where people would be easily convinced to buy their product if they saw that it is being worn by top athletes.
When Nike entered the 1990s, the company established its first headquarters in Portland, Oregon. It was the first venue of the Niketown – a “retail-as-theatre” – which was put up in other parts of the US soon after (Nikebiz, 2009d). The company also signed the whole Brazilian National Team on 1995 that won the World Cup the previous year and even designed their uniforms. On 1996, Nike signed Tiger Woods, who has yet, at that point, to make a name for himself, for $5 million per year and Lance Armstrong, who was diagnosed with cancer.
Living for its principle on choosing its athlete endorsers, they seem to have believed that Woods would make it big that they were willing to take a risk with him with $5 million every year, the same with Armstrong whom had lost his sponsors due to his disease, Nike chose to stay with him and was able to make a comeback. The company’s product revenues increased dramatically as well and this could be credited to the development of the shoe technology and efficient marketing campaigns (Enderle, et al, 2000).
Ever since Nike has regained their position on the late 1980s, they have never left their spot as the industry leader. However, their sales weakened during the mid-1990s due to decrease in demand on athletic footwear and the rise of the brown shoe market; and in the end of the decade due to the restructuring charges (Alick, 2000c; Enderle, et al, 2000). They started the year 2000 by launching Nike Shox, the said feature was said to have taken 15 years since the Nike designers have preserve the ideas until the technology would be enough to execute it (Nikebiz, 2009d).
Enderle, et al (2000) mentioned that towards the end of 1990s, Nike set a goal and that is to become a “truly global brand”, thus, on the new millennium, not only did their products developed but their marketing strategy as well. On 2002, Nike launched the “Secret Tournament” campaign which was different from their former campaigns which stars athletes with huge names, it was not also a very extravagant ad and is not also showcasing a product; however, it is considered to be the company’s first global marketing endeavor (Nikebiz, 2009d).
The campaign integrated various instruments to be efficient like advertising, internet, public relations and events for retailers and consumers. With a new formula for creating campaigns, Nike was clearly keen on developing ways on how to communicate effectually to consumers. Nike and its Employees Nike is well-known for its innovative and creative nature, and they associate this on diversity and inclusion (Nikebiz, 2009e). For Nike, a company is more efficient when they consist of a diverse population, background and skills.
The whole company also believed that it is because of diversity that Nike was able to attain the most dynamic people. It also gives the brand a comparative advantage from other footwear brands. Moreover, diversity connects Nike closer to their equally diverse consumers which are from different countries with different cultures, etc. (Nikebiz, 2009e). In order to strengthen this diversity, Nike conducts management training courses to make the employees understand the importance of diversity and to teach them how to work in a diverse type of workplace (Nike, 2004).
These workshops includes The Potential is Yours which are for US employees, Maximizing Diversity and Inclusion for the US managers, Diversity Workshop provided for senior-level managers, Competency-Based Selection for all managers and individual contributors, Managing to Win: Fair and Legal Employee Practices also for US managers, Managing to Win Refreshers again for US managers, Corrective Action which is available to all managers, Playing Fair, Harassment – Zero Tolerance provided to all employees, and Let’s Talk About it: Nike’s Grievance Process also available to all the Nike employees.
Since Nike consists of a diverse workforce, they also formed six employee networks. It is not formed in order to only manage the diverse nature of Nike but also to strengthen it. Some of the purposes of the employee networks are to promote professional development, improve work performance, discover the mentors, give a hand in recruiting diverse professionals, and to strengthen community interaction (Nike, 2004).
The six employee networks are the Native American Employee Network, Latino Employee Network, Gay, Lesbian, Bisexual, Transgender & Friends Employee Network, Disabled Employee Network, Asia Pacific Employee Network and Black Employee and Friends Network (Nikebiz, 2009e). The Native American Employee Network was established in 1998 and its mission is to “increase awareness and continue to educate Nike employees about the Native American culture.
” They conduct educational opportunities, seminars, speakers, community involvement, sport events and other youth programs in order to fulfill their mission (Nikebiz, 2009e). The Latino Employee Network which was formed in 1993 aims to “increase the awareness of the Hispanic/Latino culture at Nike, explore diversity in the Nike workplace, develop resources to increase career and cultural growth for Nike employees, strengthen ties to the Hispanic/Latino community and develop initiatives that align with Nike business strategies.
” Their methods are monthly network meetings and celebration of Hispanic/Latino cultural events (Nikebiz, 2009e). Then the Gay, Lesbian, Bisexual, Transgender & Friends Employee Network which was put up in 1998 aims to “increase awareness and understanding of Nike’s gay, lesbian, bisexual and transgender community through the promotion of various educational and supportive events. ” They conduct educational forums, invite speakers, make use of literary works, and help in corporate policies and procedures revision (Nikebiz, 2009e).
On the other hand, the goal of the Disabled Employee Network which was formed in 2000 is to “enrich Nike and its community by promoting the inclusion of people impacted by disabilities and fostering an environment that realizes everyone’s full potential. ” They provide partnerships and organize outreaches, and they also promote opportunities, Nike’s global diversity and inclusion initiatives, and development of a diverse, highly effective workforce (Nikebiz, 2009e).
The Asia Pacific Employee Network, on the other hand, was formed in 1994 has a mission of “promoting awareness and understanding of Asia Pacific cultures in pursuit of corporate objectives and employee growth. ” They help increase Asia Pacific communities’ involvement and they also support the company’s business strategies (Nikebiz, 2009e). Lastly, the Black Employee and Friends Network which was established in 1996, aims to “add value to the Nike business by promoting an environment that attracts, promotes and retains black employees.
” It helps black employees to adapt to the Nike corporate culture and it is capable of bringing in impressive candidates (Nikebiz, 2009e). The benefits that can avail by the employees are the sharing of bonus plan, a profit-sharing plan, discounted stock purchase program, multi-level health care plan, permanent partner health and adoption benefits, disability and optional long-term care and group life insurance, retirement savings plan, and tuition assistance (Nike, 2004). Nike also provides five-week sabbaticals to employees who have worked hard in Nike for ten years.
They also provide subsidized mass transit, wholesale prices of Nike products, limited full-time pre-school and daycare, alternative transportation incentives, discounts from business partners, local and national retailers, service providers and lending institutions (Nike, 2004). Conclusion Nike employees initially joined the company because of personal development and advancement (Nike, 2004). This can be explained by Douglas McGregor’s Theory Y and Frederick Herzberg’s Hygiene/Motivation Theory.
McGregor’s Theory Y states that people likes to work in order for them to achieve self-discipline and self-development while Herzberg’s Hygiene/Motivation Theory which says that people to satisfy their two types of needs which are “animal needs” (supervision, interpersonal relations, working conditions and salary) and “human needs” (recognition, work, responsibility and advancement) (Accel Team, 2008). Organizational development is conducted with various diversity workshops and different activities conducted by the employee networks.
However, Nike employees still feel as if the system of the company and its strategies has been remaining stagnant and insufficient in upholding the needs of the global company (Nike, 2004). They recommend putting up more infrastructures in order to strengthen people development systems – its absence hinders Nike to total success. Nonetheless, the employees could see the company’s effort in promoting diversity; however, they still feel that they are not enough to fulfill their missions (Nike, 2004).
Nike manages the behaviors of their employees by giving them their code of ethics entitled “Inside the Lines. ” This describes what kind of conduct Nike wants and expects from their workforce. This code talks about equal opportunity, harassment and zero tolerance, environment, safety and health, social responsibility, team equipment, product safety, protection of information and intellectual property, fraud and theft, gifts and gratuities, conflict of interest, antitrust and competition, political contributions, sportsmanship, no retaliation, performance violations, etc.
(Nike, 2004). Nonetheless, according to Enderle, et al. (2000), Nike has been efficient in implementing their policies, strategies, programs and processes. Despite their possible shortcomings in managing their diverse workforce, their employees have remained loyal to them and even gave recommendations for their improvement. The company’s top management is very committed in supporting diversity in their workplace and is very influential in motivating their employees to do their best.
They exert substantial effort in motivating their employees through various diversity workshops which focus on teambuilding, strategic planning, leadership development, management development, interpersonal communication, managing workforce diversity, developmental education, conflict resolution, creative problem solving, etc. It may be because of the huge workforce population of Nike that some employees still feel that Nike’s efforts remain inadquate.
After all, Nike has employees all the way to Third World Countries which manage their factories for manufacturing. References Accel Team. (2008). Employee motivations. Retrieved March 28, 2009 from: http://www. accel- team. com/motivation/theory_02. html Alick, M. et al. , (2000a). Industry leaders. Retrieved March 28, 2009 from: http://www. soc. duke. edu/~s142tm17/industry. htm Alick, M. et al. , (2000b). Nike. Retrieved March 28, 2009 from: http://www. soc. duke. edu/ ~s142tm17/nike. htm
Alick, M. et al. , (2000f). Major industry trends. Retrieved March 28, 2009 from: http://www. soc. duke. edu/~s142tm17/trends. htm Enderle, K. et al. , (2000). Strategic Analysis of Nike, Inc. Retrieved March 28, 2009 from: http://condor. depaul. edu/~aalmaney/StrategicAnalysisofNike. htm IBISWorld. (2008). Footwear wholesaling: US industry report. Retrieved March 28, 2009 from: http://www. ibisworld. com/industry/retail. aspx? indid=969&chid=1 Nike. (2004). FY04: corporate responsibility report.
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