Nike Spreading out to Stay Together

Case 8: Nike Spreading Out to Stay Together

When Nike CEO Phil Knight stepped down and Bill Perez became CEO of the organization Phil Knight stayed as chairman of the board and was responsible for overseeing the affairs of the company. Considering Knight was also co-founder of the organization and previously held the CEO position for many years Perez was more than likely not at liberty to act as a true CEO typically would and set the tone at the top from his perspective.  One of the disadvantages of a former CEO sitting on the board of directors is that it often creates an informal organizational structure which can create an atmosphere in which workers feel comfortable resisting necessary changes. That lack of structure can result in a reduction in professionalism.

Nike can utilize both traditional and newer organization structures supporting the firm’s heavy strategic commitment to outsourcing by continuing to focus on core competencies and expanding scope to include new age technology products. A few recent examples of newer organization structuring include allowing customers to go online and create their own shoes, Apple’s IPod Nike Plus, and

The creation of environmentally sustainable products being launched. The company’s traditional approach to organization structure can continue by remaining focused on the Nike brand and outsourcing to others to make their products in an effort to contract with companies that specialize in products they create.

Nike’s in house collaboration with ad agency Wieden and Kennedy qualifies as an outsourcing alliance because they are purchasing a specialized service from the company. In a strategic alliance organizations join together in partnership to pursue mutual interest. The Nike organization is known for selling athletic apparel and Wieden and Kennedy is an advertising company, therefore I don’t consider the two organizations having a mutual interest.