First, the regional divisional structure allows Nike to provide different goods in different regions in relation to the preferences of people in those regions. combination of two or more types of organizational structures Nike’s flat structure, also known as a matrix structure, consists of several divisions separated into subsidiaries: Converse, Hurley and others, which all report to Nike’s global headquarters. The localization of the marketing activities has helped Nike to become more effective in attracting the customers. Nike Air Zoom track shoes. In particular, the case highlights Nike's organizational structure that consists of a global matrix organization that is replicated at a regional level for the European market. This strategy provides Nike suppleness for attending consumer's different preferences on sports attires in different markets at different regions of the world (Burgelman, 2016). (Photo: Public Domain) Nike Inc. Determine whether a matrix structure could improve performance for Nike. Learn how your comment data is processed. Nike is organized by a matrix structure, which entails multiple responsibilities and report- ing lines for each unit which might be problematicxxx. Creative organizational chart examples and templates. The Nike environment is a two-way, matrix organization, where team members often report into two areas such as geography and a global function. Hence, this prevents them from doing any unethical or inappropriate thing that might harm the entire firm’s image. This allows them to become specialists in their particular field, makes them best for the job. This site uses Akismet to reduce spam. : The organisational structure of the world's biggest sports goods manufacturers is a reflection of their operational abilities and limitations. The Matrix Structure and Nike. By this time, you should have got a clear idea of how the entire business operation is spread out in the organizational structure of Nike. Adding to this, the functional structure helps in enhancing the best form the workforce. The success of an organizational structure largely depends on the leadership styles and the organizational culture. North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging markets are the regional divisions of Nike structure. Even though there are multiple reporting authorities, the employees are well-aware of what is expected from them from their supervisors. However, it should be noted that the what makes it beneficial for the company is the streamlined approach to running the business operations. The regional headquarters are responsible for designing some of the marketing campaigns, which helps in localization of the communicational message sent to the target audience. It is important to understand that each of these subsidiary brands appeal and cater to different groups of customers. The global corporate leadership at Nike which involves corporate leaders makes sure to implement policies throughout the company that is, in all divisions. The success of the company can be largely attributed to it product and marketing strategy, but it can be also attributed to its organizational structure. Moreover, it can also help you to understand how a multi-nationally diverse company like Nike is structured. Under this leadership comes a functional structure that divides finance, global human resources, product & merchandising, administration &legal, global sports marketing, and operations departments. In a matrix structure, the authority passes vertically as well as horizontally. Type above and press Enter to search. Its Advantages and Disadvantages, Adaptation Level Phenomenon – understanding its importance, Risk Matrix – Factors of a risk matrix and how to implement it, Prioritization Matrix – Different types and how to use a prioritization matrix, Advantages of Nike’s Organizational Structure, Disadvantages of Nike’s Organizational Structure. Nike’s Organizational Structure MGT 330 July 12, 2010 Nike’s Organizational Structure Nike is a “Global marketer of athletic footwear” (Nikebiz, 2010) Nike operates in 160 countries and has many brands including Nike Golf and Air Jordan. The Nike sportswear company is organised in a matrix organizational structure, more commonly known as a flat organizational structure. The divisions according to products help the firm in developing its products as the employees in each division focus on their product only. Nike characterizes its organization as a collaborative matrix organization 0.02 3 0.06 3. The matrix organizational structure is a mix of two other organizational structures, the project system, and the functional system. Nike is known for a complex organizational structure that it describes as a matrix. People have specialization and perfect skill sets and their placement is with similar people in a group. A matrix structure is best suitable for Nike. Nike follows a matrix organizational structure which is a combination of horizontal and vertical structures. Org chart highlighting visualizing the Nike organizational structure. The market demand is highly dynamic, which compels the firm to be constantly on the lookout for new design trends, which can be turned to a new product. On the other hand, it follows a divisional structure on the product basis. Nike’s all-time popular slogan, “Just Do It,” is also featured in our best slogans list. The firm gets to know about the culture of people living there and it markets its products according to their culture’s liking. Employees report to a product (business unit) team which is led by the project manager and … It also enables the firm to establish an organizational culture which is universally accepted in the firm. The Converse is another footwear brand that Nike owns and management in its division controls its operations. The Matrix structure could improve the performance of Nike because each manager can achieve a specific task without having all responsibilities put on one person. On the other hand, the Nike licensing division, as its name suggests, controls the licensing of the Nike brand name. Nike came up with an organizational structure so as to aid in regionalizing of business strategy. The new structure is designed to be flatter and more efficient. It is important for you to understand that different companies have different organizational structure, which is responsible for respective growth and sustenance. Over the decades, the company has expanded its business through diversification into various international markets and by extending its brand portfolio. By creating sub-regions can help in streamlining the operations of the company. What is a Triple Net Lease? Creately diagrams can be exported and added to Word, PPT … Nike’s organizational structure is a matrix structure. Therefore, each of them will have to follow their own product development and marketing communication strategies. The operations of each division are separate from each other. We’re a strategy, business & marketing resource. All Right Reserved. This type of structure is needed so that Nike can focus on both The company also owns subsidiaries like Hurley International, Brand Jordan and Converse. Moreover, setting regional divisions at different places helps in promotion too. The employees have two reporting authorities, one from the functional department and the other from the product category. This means that the tasks of each functional group are done quickly. In a matrix structure, there are multiple reporting lines and responsibilities for the employee. Matrix structure combines both functional and divisional structures. At present, the brand of Nike is valued at USD 32 billion, with the largest market share in the global apparel sector. Strengths of Nike's Innovation Management Structure Over the year, Nike has been able to achieve a superior performances using matrix innovative management structure. Adding to this, the teams within the organization might start having unhealthy competition amongst them to win over each other. While this organizational structure allows Nike to respond to local consumer tastes it also ensures that the company benefits from integration advantages such as global marketing and sourcing. But there is a limitation to that autonomy. It allows the company to prioritize its goals, as having the right structure leads to the right flow of information. However, Nike’s performance figures (see appendix) seem to tell a different story. Throughout Nike, employees report to team managers who then relay the progress report to the department manager. Nike is a well-established sportswear company, headquartered in Oregon, US. Assess whether Nike’s organizational structure is still a major strength that contributes to its success, or if it is creating problems that will call for organizational design changes in the future. Nike is an American multinational company producing equipment, footwear, clothes, and accessories. Nike Organizational Structure By: Abby Huskey and Helena Harris Structure Efficiency Strengths ability and resources to make products managers have first hand information and experience with how their departments operate. Why Brand Architecture is Fundamental to Building Power Brands? A close check is kept on these divisions. Content Theories: What Really Motivates Us. For example, the research and development department may be planning to conduct research on a new kind of product, but at the same time finance department feels that there is too much idle money and it invests the money somewhere. Employees often report to multiple supervisors, which can often get cumbersome in this type of organizational structures but for Nike this has worked in favor of the company. Established in 1964, the company has now become one of leading sports shoes, apparel and equipment brand in the world. The matrix structure, as a whole, uses the scarce human resources of the firm very efficiently by employing a single person for more than one jobs. The research plan may face postponement due to low funds. The centralized decision-making structure of Nike helps the firm to streamline its information processing and focus on areas which matter the most. It not only brings about efficiency but also reduces the chances of error. The unnecessary grudges and conflicts arising from this can be detrimental for the firm as well as the employees. Penmypaper.com. Apr 16, 2019 - Nike’s organizational structure is worthy of study due to the fact that it has been a successful organization since its inception. A major part of Nike’s success is due to Nike’s organizational structure. The diagram above showcases the key individuals in operating in the global headquarters and are responsible for taking all the centralized decisions of the company. It is the world’s largest supplier of athletic shoes and apparel. The matrix structure of Nike also accumulates the disadvantages of all different types of organizational structures in it. The diagram shown above clearly highlights the multiple reporting lines in the matrix organizational structure of Nike. Nike follows a matrix organizational structure which is a combination of horizontal and vertical structures. Nike’s organizational structure gets a lot of praise, and it happens to be a matrix organizational structure. Nike has an organizational culture that encourages human resources to behave in ways that address business objectives. The company follows a highly standardized operational process, which helps the leaders to make quick decision and foster seamless communication. The global headquarter allows the company to take a standardized approach to run its business across the entire global operation. Training programs are designed to uphold such corporate culture that aligns with the Nike brand image for sports footwear, apparel and equipment. Each sub-region is overseen by a sub-regional manager. This is the reason why you can find different variety of Nike products in your country in comparison to another country. First, when a single person is working on more than one jobs, he is answerable to more than one bosses. From visiting public places to getting famous sports stars in their advertisements and holding shows with those sports stars to gain people’s attention. This leads to wastage of money and other resources of the firm. This not only increases their incomes but also motivates them to do even better. Even though, this structure may seem complicated, but Nike … Many organizations experiment with the structure of the company. Ans. The product design is done specifically for their needs. According to Flatworld Knowledge, Nike is a model of a successful company that uses this structure effectively. Nike Inc.ʼs organizational structureʼs characteristics facilitate control and flexibility in the business. The combination of standardization and localization has enabled the company to adopt marketing strategies which can seamlessly appeal to the local customers, while retaining the global Nike culture, which has helped the firm to bring itself closer to its customers. 5. Nike’s organizational structure is one of the best organizational structure examples in the world. This leads to confusion and conflicts, as to whose work should be given priority. The regional divisions are given autonomy in taking decisions in their regions. We cover stories to empower you with the knowledge, tools & advice to help you thrive in life and business. The company puts many targets that need team work; conclude that Nike has task culture. In a matrix structure, the authority passes vertically as well as horizontally. familiar with common problems and concerns in their Groups Nike’s organizational structure is a matrix structure. Nike: Spreading Out to Win the Race We will provide you with 100% authentic papers custom written to your assignment requirements, that can get you the grades that you always wanted. In a matrix structure, there are multiple reporting lines and responsibilities for the employee. Organizational Structure Characteristics (Analysis) Updated May 8, 2016 Andrew Thompson Nike Inc.ʼs organizational structure reflects the abilities and limits of the business in its operations. The company has gone through several controversies including the child labor Nike follows geographical divisional structure to facilitate customers in different areas. Press Esc to cancel. This worldwide company operates in an extremely different organizational structure than other companies, such as Reebok and Adidas. There will be a combination of vertical and horizontal reporting. The teams in Nike’s matrix structure are organized by business unit (apparel, equipment, and footwear) and functional unit (human resources, operations, finance, marketing, and sales). … Other divisions within Nike organizational structure are the subsidiaries’ and Nike licensing divisions. Nike is set up as a Matrix Organizational Structure, meaning that there are multiple lines of authority and some individuals report to at least two managers. It also oversees all regional operations, expect the EMEA, which is managed by the regional headquarter in Europe. The complex matrix organizational structure of Nike has worked out as expected for the company, but it does not necessarily mean that it would be good fit for another company. Nike is a powerful example of corporate culture because Parker is serious about reinvigorating his organization on a regular basis. The Organizational Structure of Nike Nike is the number one innovator in the world in athletic footwear, apparel, equipment, and accessories. Edit it online with your organizational information and import it as an image or PDF.--You can edit this template and create your own diagram. Other brands that Nike owns are Bauer, Hurley, and Exeter which also have the same structural characteristics as Converse. The global headquarter also holds the responsibility of market research, and product development, especially for the footwear segment. The company realizes that even though it operates with a global brand image, some of the marketing communications need to be adjusted for cultural differences. Enter your email address below to subscribe to my newsletter. Nike’s Organizational Structure Type and Features Nike has a geographic divisional organizational structure. The firm has chosen, from different types of organizational structures, the one that suits them the most. 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