Nike: P3 and M2
The aim of the entity reflects its long-term outcomes while its objectives indicate the short
term targets of the entity. Aim refers to the general direction or intent of an
individual/company. On the other hand, the objective is the specific goal of an individual or
company.
SMART is a mnemonic/acronym, giving criteria to guide in the setting of objectives. E.g. S-
specific M- measurable A-actionable R-relevant T-time bound.
Functional areas
The marketing department is concerned with finding out the needs and wants of potential
customers and promoting the company’s products or services. The main functional activities
carried out by the marketing department are advertising, market research, promotion and
selling products.
The human resources department manages the people who work for the organisation. The
main functional activities carried out by the human resources department are recruitment and
selection, staff training, industrial relations and health and safety.
The operations department is responsible for making the product or providing the services.
It is their responsibility to ensure that the product or service is of the required quality to satisfy
the customers’ needs and wants. The main functional activities carried out by the operations
department are production of goods or services, buying raw materials
and controlling the quality.
The finance department is responsible for managing the money coming into and going out of
the business. They will deal with all the financial aspects of the business such as paying suppliers,
paying staff wages and receiving payments from customers. The main functional
activities carried out by the finance department are raising finance, preparing budgets and
preparing final accounts.
Nike functional areas
Nike’s aims and objective is to become one of the largest manufacturers of athletic
apparel and sporting equipment in the world and the industry, therefore it has numerous,
distinct missions and aims. As with all publicly traded companies, Nike’s first objective is to
make a profit for the shareholders. In order to meet this objective, Nike identifies a
,number of smaller aims and objectives. These include manufacturing superior
products, maintaining the integrity of the global brand and innovating in the area of
product design. The company also balances these profit-driven goals with a number
of social and sustainable aims, including cutting water use, reducing waste and
strengthening communities1. And to make a profit and create awareness.
Nike Inc.’s organisational structure reflects the abilities and limits of the business in its
operations. A company’s organisational or corporate structure is the composition and system
design applied on the interconnections among employees, groups, and divisions of the business.
In Nike’s case, the corporate structure highlights the need to address differences among
regional markets. These differences are linked to region-specific demands of target customers,
such as variations in the preferences for apparel based on sports popularity and climate. As
such, Nike Inc. has developed its organisational structure to enable adjustments in dealing with
market differences. As one of the leading players in the athletic footwear, apparel and
equipment industry, the company and its corporate structure serve as an example of how
regional variations must be included in business strategies. Structural and strategic alignment
that considers these variations reinforces Nike’s competitive advantages, especially in
penetrating regional markets.2
Nike has three organisation structures.
A matrix structure is made up of different types of organisational structures. In a matrix
structure, the authority passes vertically as well as horizontally. Nike follows geographical
divisional structure to facilitate customers in different areas. The product design is done
specifically, for their needs. There is no manufacturing of standard products for the entire
world’s population. Advantage3 The matrix structure is to retain an organisation’s functional
structure, they allow for the rapid creation of efficient large-scale, project structure that
employ many members of the organization's functional structure but without disrupting or
destroying the structure in the process. However, the disadvantage 4 The matrix structure is the
increased complexity in the chain of command when employees are assigned to both functional
and project managers. It can also create a gridlock in decision making if a manager on one end
of the matrix disagrees with another manager. The matrix structure helps Nike to sort out
different levels of jobs. Nike pays their employees depending on what level of jobs they do; they
would give employees the right wages and bonus for their productivity. To earn a bonus Nike’s
1 https://www.reference.com/business-finance/Nike-s-aims-objectives-32bf2a20ac03c580
2 http://panmore.com/nike-inc-organizational-structure-characteristics-analysis
3https://smallbusiness.chron.com/advantages-disadvantages-matrix-organizational-structures-business-organizations-
26350.html
4 https://courses.lumenlearning.com/boundless-management/chapter/common-organizational-structures/
, employees would work even harder which would benefit Nike, as it would help them meet
their aims and objectives.
Nike follows a divisional structure on the product basis. This is to make sure that the
development and innovation keep happening in all products that Nike manufactures. Moreover,
there are functional departments under the Global corporate leadership, and there is also a
team structure in the organisation. The global corporate leadership at Nike which involves
corporate leaders make sure to implement policies throughout the company that is, in all
divisions. Under this leadership comes a functional structure that divides
finance, global human Ere-sources, product & merchandising, administration & legal,
global sports marketing, and operations departments. The advantage5 of the divisional
structures it includes a more efficient and effective ability in coordinating activities among
divisions, greater flexibility in responding to changes in the local market and a simpler process
in changing the size of the business by merely adding or removing divisions. However, the
divisional structure does have disadvantage6, including potentially dispersing technical
competence and expertise or fostering unhealthy rivalries among divisions. The divisional
structure also may increase costs by requiring functional specialists and better qualified
managers for each division. This structure helps Nike to stay focused and meet their aims and
objectives.
All the departments of a functional structure come under the president. North
America, Western Europe, Central & Eastern Europe, Greater China, Japan and
Emerging markets are the regional divisions of Nike structure. The operations of
each division is separate from each other. The regional divisions are given
autonomy in taking decisions in their regions. But there is a limitation to that
autonomy. A close check is kept on these divisions. Hence, this prevents them from
doing any unethical or inappropriate thing that might harm the entire firm’s image.
Other divisions within Nike organisational structure are the subsidiaries’ and Nike
licensing divisions. The Converse is another footwear brand that Nike owns and
management in its division controls its operations. Other brands that Nike owns are
Bauer, Hurley, and Exeter which also have the same structural characteristics as
Converse. On the other hand, the Nike licensing division, as its name suggests,
controls the licensing of the Nike brand name. Advantage7 of this structure is it
could enhance the work efficiency and productivity due to the specialised skills and
technology. Employees are highly motivated as they see clearly their career path
within the functional units. Functional specialisation can minimise the cost of
5 https://smallbusiness.chron.com/advantages-divisional-structure-organizations-26170.html
6 https://smallbusiness.chron.com/advantages-divisional-structure-organizations-26170.html
7 http://www.orgcharting.com/functional-organisation-structure-advantages/
