Functional Area Interrelationships
Introduction
The organizational structure directly influences achievement of organizational objectives. According to Beach (2007), structures enable decisions to be implemented and goals to be achieved. Nike Company is a sportswear producer specializing in production of shoes and sports apparel. It operates in over 44 countries globally and employs more than 900,000 people. The company uses outsourcing strategies to maximize production and lower costs. Labor intensive activities are performed in Asia where labor is cheaper. It employs a matrix structure where teamwork is emphasized and tasks broken down amongst departments (Holmes, 2004). These include Marketing, HR, Production, Accounting and Development and Design departments. This paper will examine Nike’s goals and mission in relation to its existence. The organization structure employed will also be assessed as far as attainment of goals is concerned. Discussed issues will be summarized at the end.
Reasons for the organization’s existence
The values, vision and mission will determine the reason for Nike’s existence. Nike’s mission is innovating and inspiring the world’s athletes. According to Nike Website (2010), its vision is ensuring that all teams perform highly, and are inclusive and diverse. Its goals are cultivation of inclusion and diversity among teams to inspire and change their performance for the better. The company’s founders are sportsmen who believe all people are athletes. Development of sports is therefore the reason Nike is in existence, and provision of high quality sportswear ensures attainment of this objective. In addition to sports objectives, the company believes in empowerment and through corporate responsibility, it supports many individuals and communities. In addition to this, it generously donates towards environmental conservation and other important causes.
Reason for organizational structure employed
As discussed, Nike employs a matrix structure where teamwork is emphasized and tasks broken down amongst departments which include Marketing, HR, Production, Accounting and Development and Design departments. In addition to this, a centralized structure is present, with command at its Oregon headquarters. According to Bratton et. al. (2004), the matrix structure is used to increase efficiency in production. Division of labor increases efficiency and using these departments ensures that employees concentrate on core strengths. Centralized decision making controls operations in overseas production centers worldwide. For instance, Nike has faced employee complaints regarding employee exploitation in Asian production centers (Breen, 2010). A centralized damage control strategy was needed and a centralized command from Oregon helped restore faith in Nike products.
Key positions that support that organizational structure
The five key departments are Marketing, HR, Production, Accounting and Development and Design departments. Managers head these departments and are answerable to Knight, the CEO. Each manager makes independent decisions in consultation with the CEO. Overseas production plants are headed by plant managers and are independent. Nike has limited control over them in enforcing its policies hence the poor working conditions in such centers.
Conclusion
Nike is the leading sportswear producer. It operates in different continents and employs outsourcing strategies. Nike aims at innovating and inspiring the world’s athletes and ensuring that all teams perform highly, and are inclusive and diverse.
Centralization and use of the matrix structure increases efficiency and coordinates overseas production centers. Managers are independent and answerable to the CEO. However, independence has affected overseas production and employees are exploited since Nike headquarters is unable to control these plants. This can be resolved by purchasing stakes in the plants in order for Nike to become a shareholder and influence decision making in overseas plants.
References
Beach, L. (2007). The human element: understanding and managing employee behavior. New York: M. E. Sharpe.
Bratton, J., Grint, K., Nelson, D. L. (2004). Organizational leadership. Washington: L Nelson.
Breen, D. (2010). Why buy Nike? Retrieved on April 7th 2010 from http://webcache.googleusercontent.com/search?q=cache:HTfvUrr7lu0J:ihscslnews.org/view_article.php%3Fid%3D265+nike+exploiting+employees+in+asia&cd=9&hl=en&ct=clnk&gl=ke
Holmes, S. (2004). The new Nike. The BusinessWeek September 20, 2004. Retrieved on April 7th 2010 from < http://webcache.googleusercontent.com/search?q=cache:gURMzm6tH7MJ:www.businessweek.com/magazine/content/04_38/b3900001_mz001.htm+nike+matrix+structure&cd=1&hl=en&ct=clnk&gl=ke>
Nike Website. (2010). About US. Retrieved on April 7th 2010 from www.nike.com.