LCBB4003: Nike's Organizational Structure and Cultural Analysis

This report provides an in-depth analysis of Nike's organizational structure and its relationship with its culture, employees, and operational performance. It begins with an introduction outlining the impact of organizational structure and culture on a business's overall performance, efficiency, and employee behavior. The main body delves into Nike's geographic divisional organizational structure, examining its features and implications. It then applies the McKinsey 7S framework to analyze Nike's strategy, structure, systems, shared values, skills, style, and staff. Furthermore, the report explores Handy's model of organizational cultures, focusing on Nike's role culture and its effects on employee behavior and operational performance. The report concludes by summarizing the key findings and emphasizing the direct relationship between organizational structure, culture, employees, and overall business outcomes. The analysis highlights how Nike's structure, culture, and employee management contribute to its success in the global sports apparel market.

Nike

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
The organisational structure and culture of a business organisation has immense impact
on the overall performance, efficiency and decision making operations of the business
organisation in addition to influencing the overall operational behaviour of the employees within
the business, impacting their motivation and job satisfaction levels (Miśkiewicz, 2017). This
report analyses the relationship between the organisational structure, culture, employees and
operational performance within Nike, which is an international business organisation that
specialises in designing, creating and selling sports footwear, jerseys, apparel, accessories,
equipment etc. to the consumers. Nike was founded in 1964 and operates from its headquarters
in Oregon, USA. Through its sustained successful operations within the global sports industry,
Nike has grown on to become the largest supplier of sports apparel and athletic shoes in the
entire world and employs more than 75000 distinct individuals at various positions in its
hierarchical organisational structure.
MAIN BODY
Organisational Structure at Nike and its relationship with the culture, people and
performance of Nike:
Organisational structure of a business organisation such as Nike, governs how the various
and diverse employees within the business organisation operate, who they are required to report
to, how the decision making operations within the business organisation are conducted etc., thus
having an impact on the all the operations and functions of the business organisation. The
organisational structure of Nike reflects the potential capabilities and limitations of the business
organisation in the consumer markets and operations. There are numerous types of organisational
structures that Nike can implement as part of its organisation to operate under such as functional,
divisional, matrix, virtual organisational structures that Nike can implement in the business
organisation, with all different organisational structures having their own advantages and
disadvantages attached on how they influence the organisational culture, employees and the
operational performance within Nike.

Nike operates under the geographic divisional organisational structure, through which the
business organisation establishes its operational departments and divisions on the basis of the
geographical distinctions. Nike has implemented and incorporated the divisional organisational
structure within its business organisation because this organisational structure highlights Nike’s
need to address the various differences in the global and regional markets around the world
(Chión, Charles and Morales, 2019). These differences in the various regional and global
markets around the world relate to changing demands, needs and preferences of the customers
such as differences in the popularity of specific sports in different regional and global markets,
climate differences etc. The geographic divisional organisational structure within Nike allows for
the business organisation to make relevant adjustments when operating in different markets. The
main features of the geographic divisional organisational structure within Nike are as follows:
 Global corporate leadership: The leadership of Nike operate from its headquarters in
Oregon, USA and guide the entire operations of Nike’s various distinct geographical
divisions in order to effectively be able to accomplish their overall objectives and vision.
 Semi-Autonomous Geographic Division: The operations of Nike are divided into various
divisions or segments, all of whom are responsible for operating successfully in a
particular regional market. Nike’s organisational structure possesses separate regional
segments in Europe, North America, Japan, China and emerging markets.
The geographic divisional organisational structure of Nike has great impact on the
organisational structure within the business organisation in addition to impacting the employees
and operational performance of the business organisation. As Nike operates under the geographic
divisional organisational structure, it possesses employees from diverse nationalities, regions,
cultural backgrounds, races, religions etc., with all of these diverse employees having a
significant impact on the overall organisational culture of the business organisation. Because of
the organisational structure of Nike being geographic divisional, its organisational structure is
required to be highly inclusive, impartial and fair, treating all diverse employees in a fair and
ethical manner, with no organisational corruption taking place within the business organisation’s
culture on account of its highly diversified workforce (Nwachukwu and Chladkova, 2019). The
geographic divisional organisational structure of Nike also impacts its employees as the
organisational structure defines the individual roles and responsibilities of the employees, who

they are required to report to and which market segment they service within Nike. Further, the
geographic divisional organisational structure within Nike also has immense impact on its
overall performance of Nike, as it is directly through the geographic divisional organisational
structure, that Nike as able to effectively and successfully operate in the diverse global and
regional markets, all of whom possess different customers with distinct needs, requirements,
preferences and demands, with the geographic divisional organisational structure of Nike
allowing for the business organisation to conduct successful operations in the various different
global markets of the world.
Model of Organisational Design:
The McKinsey’s 7S framework is a strategic model of organisational design that
showcases the various different elements of a business organisation such as Nike needs to
possess. The McKinsey’s 7S framework for the operations of Nike is as follows:
 Strategy: Nike operates on the business strategy of manufacturing products and goods
that are able to effectively satisfy and meet the needs and requirements of their regional
and global customers, with these manufactured goods and products being highly valuable
and useful to the consumers. Structure: Nike operates on the geographic divisional organisational structure, through
which the business organisation is divided into specific divisions or segments, where
each individual division is responsible for servicing the distinct needs and requirements
of an individual market segment, with the operations of all different divisions
contributing to the overall success of Nike (Stalph, 2020). Systems: Nike possesses highly developed and innovative business systems and
processes, which allow for Nike to conduct its varied and diverse business operations in a
successful manner around the world. Shared Values: The values shared by the Nike brand relate to a global commitment
towards manufacturing of high quality goods and products, which are valuable to the
customers. Nike also places increased emphasis on the overall customer service provided
by the business to its consumers. Skills: Nike possess highly skilled, experienced and talented employees as part of its
organisational human resource.

 Style: Nike has styled the business organisation as an active lifestyle business with its
manufactured products and goods speaking of taste, fun and class within consumer
society. Staff: Nike’s staff portfolio consists of leadership and management who overlook the
entire operations of the business, employees working at headquarters, division and
employed by individual contractors as well.
Model of Organisational Culture:
In order to effectively analyse the organisational culture within Nike, Handy’s model of
organisational cultures can be used, which details four main types of organisational culture that a
business organisation such as Nike can possess. These four main types of organisational cultures
are as follows:
Power Culture: Business organisations operating under the power culture have the power within
the business organisation reside within special, high ranking individuals and personnel, with the
influence of these high ranking personnel spreading throughout the business organisation.
Individuals possessing power within such businesses are responsible to undertaking all the
decision making operations of the business organisation and creating all organisational policies
without consulting any other employee of the business organisation (Mannion and Davies, 2018).
As the employees are not considered for the decision making operations of the business, it makes
the decision making operations of the business quite fast, but also makes the employees feel less
valued and decreases their overall motivation and job satisfaction metrics.
Task Culture: Business organisations operating under the task culture place increased emphasis
on accomplishing certain tasks or operations within the business organisation which would
contribute immensely towards the business achieving its business objectives. Such business
organisations make use of organisational teams and groups, where employees possessing distinct
skills, experiences are brought together towards accomplishing a shared task or objective. Power
within businesses operating on task culture resides with the team members and team leaders,
with the team dynamics influencing the power shifts within the business organisation. Task
culture encourages teamwork and cooperation within the business organisation and allows for

employees to create and maintain meaningful interpersonal professional relationships which
increases the overall motivation and job satisfaction levels of the employees.
Role Culture: Business organisations possessing role culture have the power within the business
organisation delegated amongst the employees of the business, based on the employee’s position
within the business’s overall hierarchical chain of command. Within role culture, the employees
have clearly delegated individual roles and responsibilities based on their position. Employees
belonging higher up the chain of command of the business organisation possess increased power
when compared to their subordinates (Laforet, 2016). The decision making operations in such
businesses consult the opinions of all employees within various positions of the chain of
command, making the employees feel valued and respected, but also increases the overall time
duration it takes for the business to undertake the decision making operations as many different
employees need to be considered based on the chain of command.
Person Culture: Business organisation possessing person type of organisational culture identify
individual employees to be more important and superior as when compared to the parent
business organisation, with the parent business existing only to facilitate the individual
operations of its employees. This type of organisational culture provides the employees with
immense autonomy and creative freedom in relation to their roles and responsibilities towards
the business and hence cannot be used in businesses that require teamwork and cooperation from
its employees.
Organisational Culture within Nike and its relationship with the structure, people and
performance of Nike:
Nike possesses role type of organisational culture, as its employees operate on specific
positions within its overall hierarchical long chain of command, with the roles and
responsibilities of the Nike employees being based on their overall position within the
hierarchical chain of command within Nike. This type of organisational culture can only be
implemented within Nike due to Nike operating on a geographic divisional organisational
structure that allows for the business organisation to have a long chain of command within the
business (Erthal and Marques, 2018). Role organisational culture has a direct impact on the
employee behaviour and operational performance of the employees and the business organisation

itself. In role culture, the individual roles and responsibilities of all employees of Nike are clearly
specified and delegated on the basis of their position within the hierarchical chain of command
within the business organisation. This has a direct impact on the operational behaviour of the
employees as they are strategically aware of their individual roles and responsibilities within the
business and how their individual operations contribute effectively towards the overall success of
the business organisation. As the employees of Nike are also consulted for all the decision
making operations of the business organisation, the role culture also positively influences their
behaviour to possess increased motivation and job satisfaction levels, as the employees feel
valued, respected and critical towards the operations of the business organisation. The role
organisational culture also has a direct impact on the overall operational performance of Nike
and its employees. As the roles and responsibilities of the employees are strategically clear to all
employees, this allows for them to conduct their daily operations towards meeting optimum
standards and results, allowing for the business’s employees to increase their overall
performance, productivity and efficiency through the organisational culture of Nike (Lee, Howe
and Kreiser, 2019). As the role culture increases the overall job satisfaction and motivation levels
of the employees, it also allows for Nike to retain greater number of employees, enhancing its
overall productivity in the long run. However, as the role culture requires the various employees
of Nike operating at distinct positions in the business’s chain of command to be considered as
part of its decision making operations, it also increases the time it takes Nike to successfully
undertake decision making operations, hindering the overall operational performance of the
business organisation.
CONCLUSION
Through this report, it is concluded that there exists a direct and dependent relationship
between the organisational structure, culture, employees and operational performance within all
business organisations such as Nike. This report analyses the organisational structure of Nike,
the organisational culture within Nike and evaluates the relationship that exists between the
organisational culture, structure, people and performance within Nike. The report uses dedicated
models of organisational design and culture.

REFERENCES
Books and Journals
Chión, S.J., Charles, V. and Morales, J., 2019. The impact of organisational culture,
organisational structure and technological infrastructure on process improvement
through knowledge sharing. Business Process Management Journal.
Erthal, A. and Marques, L., 2018. National culture and organisational culture in lean
organisations: a systematic review. Production Planning & Control. 29(8). pp.668-687.
Laforet, S., 2016. Effects of organisational culture on organisational innovation performance in
family firms. Journal of Small Business and Enterprise Development.
Lee, Y., Howe, M. and Kreiser, P.M., 2019. Organisational culture and entrepreneurial
orientation: An orthogonal perspective of individualism and collectivism. International
Small Business Journal. 37(2). pp.125-152.
Mannion, R. and Davies, H., 2018. Understanding organisational culture for healthcare quality
improvement. Bmj. 363.
Miśkiewicz, R., 2017. Organisational structure in the process of integration on the example of
iron and steel industry enterprises in Poland. Difin.
Nwachukwu, C. and Chladkova, H., 2019. FIRM RESOURCES, STRATEGIC ANALYSIS
CAPABILITY AND STRATEGIC PERFORMANCE: ORGANISATIONAL
STRUCTURE AS MODERATOR. International Journal for Quality Research. 13(1).
Stalph, F., 2020. Evolving data teams: Tensions between organisational structure and
professional subculture. Big Data & Society. 7(1). p.2053951720919964.