BA206 – Nike Case Study
Due: February 16, 2011
Nike: Spreading Out to Stay Together
Informal structures are thought to be good during times of change, but can be the cause for big problems during change. When an outsider is brought into an informal structure, operating under a matrix, there may be friction as the outsider never really gets to be an insider. I think this is what happened with Perez. Perez was the outsider brought in to take over for the insider, Knight. Knight’s persona was still strong in the company and I think that overshadowed Perez and his views for moving Nike forward into new areas. Knight’s leadership style was to set the objectives and allow his management members to decide how those objectives are to be met (Gall, 2005). He choose Perez because he was an outsider and thought that it was time for a new look. Unfortunately, “Nike’s unique culture chewed up Perez in less than 18 months” was the feeling expressed by Sandy Bodecker, who is currently the VP of Nike global design (McGirt, 2010). When Perez resigned, the job was given to Mark Parker who has been with Nike for more than 27 years (Olson, 2006), moving back inside the matrix structure, an insider sitting at the head of the table. This move brought the strength of the matrix structure back to Nike and allowed them to move forward with cross-functional teams and introducing virtual organization teams to assist with their outsourcing of production. One of the media notable virtual teams of Nike posted information of all Nike’s factories used for production of their products (Schermerhorn, 2007). This was a bold move by Nike, but it was a very smart move. It quieted the talk of sweatshop operations and helped to move Nike back into the public as the good guys. Nike uses a cross-functional team structure with their advertising. The advertising is outsourced to Wieden & Kennedy of Portland, Oregon with the ad employees housed at the Nike...