This a review analysis of Nike Inc. in terms of the organization’s readiness for change. The need for change will be established from an existing gap in the company’s policies, practices or procedures with regard to human resource management (HRM) process. In the effort to identify the inherent human resource problem, the paper will establish some of the specific reasons as to why there is a need for change in either the organization’s HR practices, policies or procedures. The study will employ the services the diagnostic tools in the assessment of the HR problem. Thereafter, the study will then determine the readiness of Nike Inc. for change based on the findings of the diagnostic tools.
Describe the company (NIKE) in terms of industry, size, number of employees, and history.
At its inception in 1964, Nike Inc. was formally known as the Blue Ribbon Sports Company (Mathur, & Dabas, 2014). The organization retained the name until in 1978 when it changed to its current name, Nike Inc. The company deals with sportswear and it has its headquarters in Beaverton, Oregon, U.S.A. The founder of Nike Inc. was Bill Bowerman who was a former field and track coach profession at the University of Oregon (Mathur, & Dabas, 2014). He came with the idea of the company alongside one of his former students, Phil Knight. The two opened the first retail outlet of the company in 1966 but it would take six years (up to 1972) when they launched the first ever Nike shoe brand. Nike Inc. went public in 1980, two years after it changed its name in 1978. By the year 2000, the company had opened branches in over 170 countries and the company logo, “swoosh”, was a recognized brand worldwide.
The marketing strategy of Nike Inc. is use of celebrity marketing using athletics such as Michael Jordan, Tiger Woods and Roger Federer to popularize its products.
As of 2017, Nike Inc. was identified as the world’s largest manufacturer of athletic shoes and other sporting equipment (Mathur, & Dabas, 2014). The company had an employee base of 74, 400 by the year 2017 (Mathur, & Dabas, 2014). In the same year, the company collected revenues amounting to more than 314 billion U.S. dollars from its business venture. According to Mathur, & Dabas, (2014) North American region was the main contributor to the revenue with sales hitting 15 billion dollars followed by the Oregon branches which generated 9.7 billion U.S. dollars.
Analyze in detail the current HR practice, policy, process, or procedure that you believe should be changed.
The function of a human resource department in any corporation is to manage the most crucial of all assets within an organization, the employees. With this realization, Nike Inc. has ensured the best of HRM practices are implemented within the organization. This has replicated to huge success within the world’s largest sportswear manufacturer. However, that does not imply that the company gets it right althrough as far as its HR policies, procedures and practices are concerned. According to Cavaleri, & Shabana, (2018), the fact that the company has branches and accomplices all over the world means that it cannot closely monitor its third party associates. Some common third party partners include the company’s suppliers, buyers, workers and communities. Out of all these partners, it is the suppliers who face an estranged relationship with Nike Inc (Cavaleri, & Shabana, 2018). The shoe manufacturer has been noted to issue its suppliers with short product cycles. That translates to an overwork on the part of the supplier in efforts to retain a business relationship with Nike. Inc. In some cases, employees are overworked with no overtimes or salary reviews since the contract terms and conditions are not altered, while in other cases, the supplier opts for shortcut undertakings like employing underage people to meet Nike’s deadline (Cavaleri, & Shabana, 2018). In the view of this study, this is a HR problem that should warranty change at Nike Inc.
Formulate three (3) valid reasons for the proposed change based on current change management theories.
Nike Inc. has to adopt a change management strategy in order to remain relevant in the industry (Cavaleri, & Shabana, 2018). In McKinsey 7 S Model, staff capabilities, skills and working conditions are crucial for the reputation of the organization. In the case of Nike Inc., child labor or overworked employees is a bad publicity that would damage the company’s image.
Also, change is necessary at Nike Inc. if the company has to survive the test of time (Mathur, & Dabas, 2014). Kotter’s change management theory advocates for incorporation of change in organizations that would like to survive the dynamic business change. As such, change becomes inevitable and so is the Nike Inc. case.
Also, change in the HR policies and practices will lead to better terms and conditions of engagement between Nike Inc. and its suppliers (Cavaleri, & Shabana, 2018). The Nudge Theory talks of the beauty of change as an emotional appeal to show that the organization cares about others and that is exactly what Nike Inc. needs to establish healthy working conditions with suppliers.
Appraise the diagnostic tools that you can use to determine an organization’s readiness for change. Propose two (2) diagnostic tools which you can utilize to determine if the organization is ready for change. Defend why you believe the diagnostic tools selected are the best choice for diagnosing change in the organization.
In the case of Nike Inc., I wish to employ the Culture, Operations, People and Systems (COPS), the Seven-S and Burke-Litwin diagnostic tools. The COPS tool uses the four crucial factors within an organization to gauge whether the organization can be subjected to change or not. Mathur, & Dabas, (2014) says that these four factors are unique in that they define an organization and set it out from the rest of the firms in the same industry.
Bruke-Litwin model focuses more on independence of the exterior and interior factors surrounding an organization in as far as their ability to influence the company are concerned (Mathur, & Dabas, 2014). It further looks at how the organizational performances influence the external factors in return. The basics of this tool is the basic causal analysis.
The Seven-S on the other hand is an analysis of various organizational elements and how such factors can allow or inhibit the opportunity for change within an organization, the elements include Strategy, Structure, Systems, Staff, Skills, Shared Values and Styles.
To determine Nike Inc.’s. readiness for change, I would settle on the Seven S and the Bruke- Litwin tools. These because they are simple and predictive in nature. They lead to specific elements in the organization whose analysis will give leading results. As such, they eliminate ambiguity besides the fact that they are applicable to any standard organization with the elements herein.
Using one (1) of the diagnostic tools you selected, assess the organization’s readiness for change.
Provide results of the diagnostic analysis
Strategy: Nike Inc. uses celebrity athletes sponsored to advertise its products. According to Mathur, & Dabas, (2014) the strategy cannot be affected by changing the working terms and conditions of employees in third party companies since its trendy and changes depended on the popular athlete.
Structure: the company has a flexible structure with branches spread all over the world. Regional management make businesses in other regions immune to changes in other regions.
Shared values: Nike Inc. is focused on maintaining good working relationship with the various stakeholders like the athletes, customers, shareholders, communities and teammates. The close relationships, respect and professionalism offer the company immunity in the event of change.
Skills: through extensive market experience, the company has been able to stay ahead of competitions through effective marketing and advertising skills. As such, Nike has the capacity to survive change.
Staff: the company maintains low staff turnover which translates to extensive experience and understanding of the company by the existing employees. For instance Co-founder Philip Knight has been with the company since inception. Such key people would steer the company through change periods.
Systems- Nike Inc. relies heavily on heated advertising campaigns and Research and development programs to meet its consumer needs satisfactorily. As a result, the brand is big in the international market controlling 80% of the sportswear market. This dominance would ensure the company survival in case of change management.
Style: in the quest to improve employees’ welfare, the company has adopted lifestyle changes for its staff like teambuilding and sporting activities. The result has been stronger interpersonal and group relationship which are key to surviving unpredictable moments of change.
Explain the results
Nike Inc. reviewed form the 7S framework can survive the event of change management in the human resource department as stated above. All the seven factors of the framework points to positive outcome as far as Nike Inc. is concerned.
Cavaleri, S., & Shabana, K. (2018). Rethinking sustainability strategies. Journal of Strategy and Management, 11(1), 2-17. Retrieved from https://search-proquest-com.ezp-01.lirn.net/docview/2007478277?accountid=158399
Mathur, G., & Dabas, D. (2014). Innovation as a predicator of organizational sustainability in sports industry. Review of HRM, 3, 51-66. Retrieved from https://search-proquest-com.ezp-01.lirn.net/docview/1655997788?accountid=158399