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Case Study Nike Essay

1. How does Nike’s decision to retain an in-house arm of ad agency Wieden & Kennedy exemplify the concept of organizational design?

The decision to retain an in-house arm of ad agency exemplify the concept of organizational design, makes you look at how both companies interpret organizational design. Organizational design is the process of creating structures that accomplish the company’s missions and objectives. First looking at the text, you interpret the Nike’s mission is to design products that will have an outcome of a positive image and that positive image will encourage consumers to purchase Nike products.

This shows you that Nike’s image is one of the most viable and important aspects for their company’s success. Which would leave to the following aspects of customer satisfaction, because without that I could potentially ruin Nike’s positive image that they strive so much for. Another factor that plays into this positive image would be advertising. Advertising is an important factor because helps the company showcase their “consumer-aimed” designs to the public.

“Nike recently spent nearly $2.5 billion annually on advertising.” This textbook reference perfectly displays Nike’s commitment to their positive brand image. Nike’s current advertising agency, Wieden & Kennedy has portrayed this image successfully in the past and currently. This success was show by Nike providing them with “in-house arms” at the Nike headquarters. By Nike displaying this affection of placing a core contributor to their mission of having a positive image and taking placing them into their headquarters, embodies the concept of organizational design.

Not only does is embody the concept is gives the advertising agency the opportunity to have access to Nike’s executive officers, all other employee’s that fall under the top-down and bottom-up structures of change. Which will stimulate Weiden & Kennedy form to better and personalize marketing strategies and divisional structure for Nike’s mission and purpose to give them the competitive advantage that they have and strive for.

2. Given the problems Nike has had with sweatshop labor being used by some of its foreign contractors, are there parts of the firm that need to be run with a mechanistic rather than organic design? Give examples to support your answer.

In my opinion, Nike should run with a mechanistic design rather than organic. They should do this because when looking at the manufacturing departments that Nike employs it is common knowledge that they companies may not provide nor have the basic necessities that would be implemented by labor laws. Now, seeing that mechanistically control is exceedingly bureaucratic is only proves that this needs to happen within outsourcing departments. Nike should have more restricted limits of control to keep them on task when employing these realities of outsourcing.

The association with sweatshops is a big deal alone, and Nike is being accused of allowing then to be employed within their company. Looking back at the question above, this would impact their mission of having a positive image as a while. Referring to the text: Nike refused and refuted to comments made by the critics. Nike will destroy their mission of wanting a positive image, when being associated with allowing sweatshops and unsatisfactory work conditions. When looking at prevention of this negative image, you would have to go to the employees who watch the outsourcing and construct and organize the business dealing with the manufacturing firms. Like stated before they should have personalized and centralized tasks and authority at all times.

A way they could implement this in there current situation would be appointing Hannah Jones a Nike executive to watch over the efforts of improvements in the factories working and labor conditions. She could do this by simply appointing a position below hers to watch over a specific issue at a time and report back to her. This would give her department power of what is occurring in these manufacturing companies that Nike as a whole has decided to outsource to.

The manufacturing companies involved with Nike’s brand image and business, as a whole should be required to follow Nike’s standards of ethics. When referring back to organizational design, extreme use of supervision is key. Even if Nike were to implement the idea of taking action of supervising every factory to focus of labor issues alone, it would give them the information needed to know if they should be outsourcing with those manufacturing departments. This could lead to the manufacturing departments actually taking that information and collaborating to have well trained and the proper authority to give them the expectations needed.

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