What type of organizational structure does Nike have?
Which of the two types of international strategy does Nike seem to follow?© BrainMass Inc. brainmass.com December 24, 2021, 6:16 pm ad1c9bdddf
Nike's Organizational Structure
With over 21,000 employees worldwide, the company was organized into departments by both geographic divisions and product categories, which created overlapping management responsibilities and a fluid leadership structure. For example, a footwear manager in Europe answered to both the Vice President of Footwear and the Vice President of Europe. However, there was no formal communication link between the regional vice presidents (those in the United States, Europe, Asia-Pacific, and Latin America) and the product vice presidents (footwear, apparel, equipment). In the case of the World Shoe Project, Hartge operated under the supervision of Jerry Karver, Divisional Vice President of Footwear, and the guidance of Dan Loeb, General Manager of Nike China. (The chart below) shows how the World Shoe Project fitted into Nike's organizational structure. Nike" began in 1964 as "Blue Ribbon Sports," a seller of Japanese-manufactured footwear. In 1970, as the athletic footwear market grew, the Nike brand name was born.
In order to gain greater control over production and assembly, Nike opened a plant in New Hampshire in 1973 (which it closed in 1986). The bulk of its production, however, has always been overseas through subcontracting relationships of varying loyalty and intensity. Today, 100% of Nike's production is by subcontractors, or "production partners." Nike has three types of subcontracting relationships:
Developed partners: These production partnerships were first in Japan, but are now in Taiwan and South Korea). These partners produce the "upper echelon" of shoes, or expensive "statement" shoes, typically in smaller batches (10-25K pairs a day). They are more likely to collaborate in innovations with Nike, many are vertically disintegrated themselves, subcontracting "nonproprietary" shoe components and materials to other local producers. Those partners who produce solely for Nike receive monthly orders from Nike which don't vary more than 20% to preserve ...
This solution provides detailed explanations regarding organizational structure and international strategy.