Organizational Design of Nike
- Pages: 3
- Word count: 525
- Category: Nike
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As most of us might already know, Nike is a very popular sportswear and equipment manufacturer, based in the United States. It currently holds the record as the world’s leading manufacturer and supplier of athletic shoes and other sports equipments and apparel.
Once founded in 1964 as Blue Ribbon Sports, the company grew at an increasing rate and in 1978, changed its name to the now more popular Nike. Averaging total revenue of 16 billion US dollars in the last year, 2007, least to say, Nike’s well-structured and well planned organizational design has paid off, and showed just how much it’s worth.
Organizational design refers to the well-versed process by which people, information, technology, and resources in a company are integrated. It is made in such a way that the chances that the company will achieve success will be maximized, taking in to consideration various factors such as geographic or geological location, matrix, type of product and departmentalization.
Based on the various criteria set by an organizational design, the basic structures needed by a company can be derived. As for example, the Nike Company is a company which focuses on the manufacturing of sports shoes. Several infrastructures are needed in order to ensure the success of this company. One of these would be the research office. This takes care of basic researches such as the types of shoe designs, colors, materials, that would boom on the global market. Next to the research office should be a factory that focuses in minimizing the production cost. The factory must also be based on a location in which manual labor can be achieved at low-cost, and where products can be easily exported and materials can easily be imported. After this, there must be a marketing firm that would take care of the distribution of the product across the globe. Running in the background are the other parts of the company structure that takes care of the advertising, product promotions and endorsements, and other things that can keep the product popular to the target market.
As for deciding on the type of functional structure for Nike, the functional structure can be a good option. Since the company is focused in being dominant in the manufacture of a single given product line, which is athletic shoes and apparel, this type of structure can be used so that each sub-unit of the company will be extremely adept at performing its required task. This type of structure will be economically efficient, and I believe will be effective for the company. The only possible downfall of this type of structure is that it lacks flexibility and there will be a difficulty in communication between functional areas, since each area is specialized in a specific task, and is most likely incapable of performing the task from other areas.
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