Lecture 11 23/nov
Lecture 11 ←
Chapter 8:
←
Organizational skills •
23/nov
If you are an owner/manager of a company that had: o The most talented people under your control o Lots of money in the bank o The most ideal location o The latest technology
•
You still may not be an industry leader if you are unable to o Get the most of the resources that are available to you
• ←
You need exceptional organizational skills to get ahead
Organizing to maximize profits •
In today’s lecture, we want to understand how organizing as a management function may contribute to the profitability of the company
•
Company: Nike
Nike: Quick Facts •
Co-founders: Phil Knight + Bill Bowerman
•
Bike concept = introduced by BRS (Blue Ribbon Sports) in 1971 with the creation of the Nike “swoosh”
•
Officially launched in 1972
•
HQ in Beaverton, Oregon
•
Primary business: design, develop, market & sell footwear, apparel, equipment, accessories
•
Employs approx.. 44,000 workers worldwide (2012)
•
Approx.. 30% of global shoe market $24b in revenue (2012)
•
Outsources shoe production to approx.. 700 contract factories around the world (41% Vietnam, 32% Chine, 25% Indonesia)
Where’s the value? •
If Nike outsource virtually everything, what’s really left?
•
Where’s the source of value? o Brand recognition
Role of athletes … •
Starting with Michael Jordan in 1980s, athletes played a dominant role in building the Nike brand + marketing a range of profuct lines
Advertising •
2012 Nike spent $2.7 billion on advertising + promotion
•
all about building the brand!
Public relations troubles •
Nike recently came under harsh criticism for what some people view as the exploitation of workers abroad
•
now provides information online on labor + environment practices at its overseas contracted factories
Going beyond shoes •
Nike has successfully branded apparel since …..
Challenging times … •
Dec. 2004: Nike CEO and co-founder (Phil Knight) = replaced by Bill Perez
•
After barely a year on the job, Perez resigned … replace by Mark Parker in 2006
•
Stronger competition from Adidas after its purchase of Reebok (@ $3.8b)
Nike: Organizational issues •
When CEO Phil Knight stepped down + handed his job to Bill Perez, he stayed on as chairman of the board In what ways could Knight’s continued presence on the board have created an informal structure that prevented Perez from achieving full + complete leadership of Nike? - Since Knight stayed on as chairman of the board, those who reported to him when he was CEO would still look to him for leadership (instead of following Perez) - Through the informal structure, Knight = still “connected” + privy to information he would not otherwise know had he cut all ties with Nike + allowed Perez to assume the full leadership position for which he was recruited.
How can Nike utilize both traditional + newer organization structures to support the firm’s heavy strategic commitment to outsourcing? - Presently, Nike = following the non-traditional network structure (decentralization) which affords an outstanding strategy. This allows Nike to focus on its core strengths (design) and still produce a high quality product through contractors. - Along with the network structure, Nike is also focused on a traditional product structure divided between shoes, clothing, sporting goods, sunglasses, even electronics. With research + marketing aligned along product lines + production being outsourced, these combine structures work for Nike.
23/11/2012 14:08:00 ←
23/11/2012 14:08:00 ←
Chapter 8:
←
Organizational skills •
23/nov
If you are an owner/manager of a company that had: o The most talented people under your control o Lots of money in the bank o The most ideal location o The latest technology
•
You still may not be an industry leader if you are unable to o Get the most of the resources that are available to you
• ←
You need exceptional organizational skills to get ahead
Organizing to maximize profits •
In today’s lecture, we want to understand how organizing as a management function may contribute to the profitability of the company
•
Company: Nike
Nike: Quick Facts •
Co-founders: Phil Knight + Bill Bowerman
•
Bike concept = introduced by BRS (Blue Ribbon Sports) in 1971 with the creation of the Nike “swoosh”
•
Officially launched in 1972
•
HQ in Beaverton, Oregon
•
Primary business: design, develop, market & sell footwear, apparel, equipment, accessories
•
Employs approx.. 44,000 workers worldwide (2012)
•
Approx.. 30% of global shoe market $24b in revenue (2012)
•
Outsources shoe production to approx.. 700 contract factories around the world (41% Vietnam, 32% Chine, 25% Indonesia)
Where’s the value? •
If Nike outsource virtually everything, what’s really left?
•
Where’s the source of value? o Brand recognition
Role of athletes … •
Starting with Michael Jordan in 1980s, athletes played a dominant role in building the Nike brand + marketing a range of profuct lines
Advertising •
2012 Nike spent $2.7 billion on advertising + promotion
•
all about building the brand!
Public relations troubles •
Nike recently came under harsh criticism for what some people view as the exploitation of workers abroad
•
now provides information online on labor + environment practices at its overseas contracted factories
Going beyond shoes •
Nike has successfully branded apparel since …..
Challenging times … •
Dec. 2004: Nike CEO and co-founder (Phil Knight) = replaced by Bill Perez
•
After barely a year on the job, Perez resigned … replace by Mark Parker in 2006
•
Stronger competition from Adidas after its purchase of Reebok (@ $3.8b)
Nike: Organizational issues •
When CEO Phil Knight stepped down + handed his job to Bill Perez, he stayed on as chairman of the board In what ways could Knight’s continued presence on the board have created an informal structure that prevented Perez from achieving full + complete leadership of Nike? - Since Knight stayed on as chairman of the board, those who reported to him when he was CEO would still look to him for leadership (instead of following Perez) - Through the informal structure, Knight = still “connected” + privy to information he would not otherwise know had he cut all ties with Nike + allowed Perez to assume the full leadership position for which he was recruited.
How can Nike utilize both traditional + newer organization structures to support the firm’s heavy strategic commitment to outsourcing? - Presently, Nike = following the non-traditional network structure (decentralization) which affords an outstanding strategy. This allows Nike to focus on its core strengths (design) and still produce a high quality product through contractors. - Along with the network structure, Nike is also focused on a traditional product structure divided between shoes, clothing, sporting goods, sunglasses, even electronics. With research + marketing aligned along product lines + production being outsourced, these combine structures work for Nike.
23/11/2012 14:08:00 ←
23/11/2012 14:08:00 ←
