NIKE

SPREADING OUT TO WIN THE RACE

Prepared for
Jeffrey D. Cullen
Instructor for Principles of Management
Northern Alberta Institute of Technology
Edmonton, Alberta

Prepared by
Carolina V. Talosig
MGMT 1120 Section OA02
Northern Alberta Institute of Technology
Edmonton, Alberta

October 28, 2022

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 TABLE OF CONTENTS

INTRODUCTION 3

NIKE ORGANIZATIONAL STRUCTURE 3

MATRIX STRUCTURE FOR NIKE 3

NIKE ORGANIZATIONAL DESIGN 5

TRENDS IN ORGANIZATIONAL DESIGN 5

CONCLUSION 5

REFERENCES 6

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 INTRODUCTION

Nike is an American multinational corporation with a truly global presence and a name

that everybody recognizes. They are known for its footwear, sports equipment, apparel, and

accessories, none of which they make because of having a decentralized and networked

organizational structure. In this paper, Nike’s organizational structure and design will be

discussed, and the organizational structure and design that would probably best work for them.

NIKE ORGANIZATIONAL STRUCTURE

Nike was founded in 1964 by Bill Bowerman and Phil Knight, the latter of whom is still

active in the company today as its Chairman Emeritus. The company is headquartered in the U.S.

state of Oregon. It is the world’s largest supplier of athletic shoes and apparel and a major

manufacturer of sports equipment, with revenue of more than US$37.4 billion in its 2020 fiscal

year. As of the same year, the company employed more than 76,000 people worldwide and was

valued at more than US$32 billion, making it the world’s most valuable sports brand. Nike

ranked 89th in the 2018 Fortune 500 list of the largest U.S. corporations by total revenue (Nike’s

Organizational Structure [Interactive Chart], n.d.).

Nike’s overall operations are overseen by the global corporate leadership team, which

comprises 16 individuals holding C-level, presidential, and vice-presidential roles. Although

both the Chairman Emeritus and Executive Chairman are a part of this team, the company’s

President & CEO is responsible for ensuring that the company realizes its goals and vision.

Matrix Structure for Nike

Nike markets many products under its brand, with various branches working at different

locations worldwide. They have other product lines, campaigns, and projects running

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simultaneously. Having this information, the best organizational structure that would work the

best for Nike is the matrix organizational structure.

The matrix structure combines functional and divisional structures. This is accomplished

by creating permanent teams in a matrix that cuts across functions to support specific products,

projects, or programs. Workers in a matrix structure simultaneously belong to at least two formal

groups—a functional group and a product, program, or project team. They also report to two

supervisors—one within the function and the other within the team (Schermerhorn et al., 2020).

This structure is the best for Nike because they have different product lines like Nike+,

Nike Golf, Air Max, Air Jordans, and many more. So instead of having many separate teams for

each project, existing units can be split up and assigned their specific managers. The latter can

guide them through a scheme that runs alongside their current task and responsibilities.

President &
CEO

Sales & Strategy &

Innovation Manufacturing Finance
Marketing Development

Footwear

Equipment

Apparel

Figure 1. Matrix Organizational Structure for Nike

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 In Figure 1, Nike’s organizational structure was categorized into its three main product

categories: footwear, equipment, and apparel, with the functional departments: Innovation,

Manufacturing, Finance, Sales & Marketing, and Strategy and Development.

With this structure, there will have multiple reporting relationships which make

employees aware of what’s expected from them and to whom they need to report. Since

employees report to two bosses, there should be better communication and cooperation across

the functions. There will also have improved strategic management because the top managers

can focus on strategic planning and be freed from lower-level problem-solving (Schermerhorn et

al., 2020).

NIKE ORGANIZATIONAL DESIGN

Having a matrix organizational structure, it will also be best for Nike to have an organic

corporate design. These are horizontal structures that operate with decentralized authority,

fewer rules and procedures, less precise division of labor, wider spans of control, and more

personal means of coordination (Schermerhorn et al., 2020).

It is not new that Nike faces high levels of competition and the organization has overall

global oversight for its many brands and divisions. An organic design that creates an adaptive

organization will be instrumental for them to be flexible in dealing with changing conditions,

such as meeting the market-specific consumer needs of different countries.

TRENDS IN ORGANIZATIONAL DESIGN

As of this time, Nike follows a matrix organizational structure which made them cut

unnecessary management levels and shift to wider control spans. Even though the matrix

structure means multiple reporting relationships, Nike’s standardized operational and

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communications processes mean that employees know what’s expected from them and to whom

they need to report (Nike’s Organizational Structure [Interactive Chart], n.d.). These

characteristics of Nike’s organizational structure help to support growth and stability. The global

corporate leadership team can retain control over the organization’s operations, but the authority

and responsibility will be delegated to functional and product managers. The manager then

assigns responsibility to employees, grants authority to act, and creates accountability.

CONCLUSION

Organizational structures are essential to provide a precise reference point for reporting

relationships. It helps illustrate clear reporting structures for all employees within an

organization. Planning the structure allows managers and decision-makers to see potential

problems before they manifest, such as skills gaps or unbalanced teams (Organizational Charts:

Overview for Beginners, 2021). Nike may face challenges, but they always choose to step up

their game. From having a networked organization structure to having a matrix organizational

structure, staying focused on their strategies and consumers made them win.

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 REFERENCES

Nike’s Organizational Structure [Interactive Chart]. (n.d.). Organimi.

https://www.organimi.com/organizational-structures/nike/

Organizational Charts: Overview for Beginners. (2021, January 8). Organimi.

https://www.organimi.com/what-are-organizational-charts/

Pros and Cons of the Matrix Org Structure. (2020, February 7). Organimi.

https://www.organimi.com/pros-and-cons-of-the-matrix-org-structure/

‌Schermerhorn, J. R., Bachrach, D. G., & Wright, B. (2020). Management. John Wiley & Sons

Canada, Ltd.‌