Group 3

Bacani, Paula
Bihasa, Keizer
Castillo, Joshua
De Guzman, Bernadette
Geronimo, Sean
Maglaqui, Janica
Sugaya, Shunji

Bob Woodell’s Style

• Woodell tried to run the company as he thought Knight had intended and “to get
done the things that needed to get done.” That meant implementing the strategy the
management team established and addressing business problems as they arose. But he
then said, “It would have been a real trap to try to copy Phil. I’ve got to run to my strengths.”
• Woodell recalled the transition from peer to leader as difficult, “Twelve or 15 months
does not give you enough time to really get your style working in the right direction. My
approach was to try to identify the issues and get them under control one piece at a time.”
• Woodell added that the difficulty of this transition from peer to leader was
compounded by the tough business environment, as they began to realize that the
company’s business problems were larger and more deeply rooted that the management
team had recognized before Woodell’s appointment.
• Colleagues had immense respect for woodell.
o Dick Donahue, a member of the board of directors, called him “a very strong leader,
a very principled guy, a good board member.”

Business Problems Solutions

Changing Market Forces Restoring the Brand Magic

The demand growth slowed in the running-
shoe market, while general fitness boom arose,
such as aerobics. The competitor Reebok has
entered the athletic shoe industry, and its two
aerobics shoes for women, “Energizer” and
“Freestyle” was definitely a success on sales.
Because of this, Nike has produced an aerobic
shoes prototype but failed to meet the
standards. The main factor for this was Nike’s
“arrogance”, because they did not want to
change their style and durability, thinking that
they are the standard.
The major publicity in the 1984 Summer
Olympics in Los Angeles has become a
success for the marketing team, since they
have targeted known athletes that were of
great help in boosting the company’s
reputation. It was even acclaimed as the
official shoe of the olympic since every wore
one. However, the sales were left
unimproved so there must be something
missing.

Solution: Woodell asked Hayes to visit Exeter

to expedite product development.
Inventory Problems “Loading the Wagon” with Apparel

There has been an inventory build up,
therefore they needed to cut some orders.
However, they were reluctant to cut factory
orders to protect the relationships that Nike had
with them, and this will definitely piss people
off. The problem was there is difficulty in
cutting factory orders, and only Knight can do it
because he was the one who had develop the
good relationship among these factories, but
Knight has been rarely in action to get ahold of.
Nike has focused in its new venture,
apparel. It was a success in the sales after
they risked and invested so much in funding
it. The marketing style was also changed,
since the product line is new and has to
deal with doubting sellers, since they
thought that the apparel line is an
insignificant part of the company, or the “tail
of the dog”. The advanced booking for
Apparel was replaced with Futures program
where major customers booking 18 weeks
ahead of target delivery date gets discount.

Distribution Strategy

Regarding the distribution strategy, Specialty

Retailers has expressed dissatisfacton over
Nike’s marketing practices.Nike always
prioritizes big sellers and does not treat
retailers well. They were made to order 6
months in advance and at the same time still
did not receive good service, and the retailers
also said that Nike’s sales force were arrogant.

Inequities of Salary

Employees were starting to think that there are

inconsistencies in the salary budget
allocations. It was decided that the managers
will be the one to recommend the raise of each
employee. This method was found unworkable
as people thought “these guys don’t know me,
or my job. How can they make a fair decision
about my salary.”

Solution: Woodell has appointed a PPC

(Policies and Procedures Committee)
subcomittee, using the Hay system, to address
this compensation issue.

SWOT Analysis

Strengths Weaknesses
-The appointed COO, Bob Woodell was already a
member of the known Gang of Four of the company,
hence, his knowledge and background about the
company is unquestionable, along with his skills in
managing it.
-Woodell know how to use his strengths to run the
company as COO and didn’t bother to copy Knight’s
approach in business problems as this will be a trap in
jeopardizing the brand.
-His colleagues recognize and had immense respect
for Woodell as the new COO, which helped him easily
adapt in his new role.
-Wednesday club was initiated by Woodell, wherein
the employees get to debate and discuss about the
issue. Woodell’s goal was to get people more
involved, not only those who are on the organization
chart, but also those who contribute work. He uses the
“power of the whole management group”.
-NIKE “Cities Campaign” that began in Los Angeles
with a slew visual advertisements was expanded to
include 10 major metropolitan areas featuring
“outrageous”murals to get the attention of people.
Opportunities
-Knight were able to utilize the paper he had written in
Stanford’s MBA program to launch NIKE.
-The twin pillars of NIKE strategy - sourcing from low-
cost countries and targeting the top sections of the
market pyramid - were obtained from the paper
resulting to more job opportunities.
-Many people within NIKE including Knight had strong
personal ties to manufacturers in Asia.
-They have used the 1984 summer Olympics in Los
Angeles for a major publicity, including the
endorsement of known athletes.
-Woodell admits that there are things
that Knight can do but he simply
can’t, such as cutting factory orders.
-Woodell struggle to cope with some
ongoing business problems, most
notably a buildup of inventory when
Knight withdrew from operations to
focus on other strategic issues.
-There has been a difficulty in
transition because they discovered
that there are more deeply rooted
problems that were left and passed
on.
-People or employees were not used
working on Woodell’s way wherein
they have a lot of freedom and area
managers have to work alone to
develop their area’s sales, since he
is a hands off manager.
-Employees claim that there are
inequities in salary.
-Nike’s arrogance prevented them on
adapting to changes, since they did
not want to change their products’
standards even though they were
found profoundly ugly even by their
own employees.
Threats
-NIKE’s organization had grown
around Phil Knight and with the
appointed Woodell as COO
introduces new challenges on how to
handle the crisis and to make major
strategic and operational decisions.
-Woodell is aware that historically
the company had the tendency to go
to Knight for decisions which makes
it a potential problem if he will be no
longer available to handle such
concerns or issues.
 -Woodell used the Policy and Procedures Committee
(PPC) recommendation with NIKE’s most difficult
personnel problem which is the formalization of NIKE’s
widely divergent compensation practices to settle the
inconsistencies faced by the employees.
-Reebok has been trying to pirate
Nike’s marketing team and other
employee by offering them two and a
half times their salary on Nike’s
-Reebok’s market entrance in the
athletic shoes industry, and their
aerobic shoes was definitely a
success

-Adidas is the well known competitor

in the apparel line

Fishbone Analysis

The Nike Company invested in a firm that is unfamiliar of the business thus making it a burden for the
firm. Small steps at a time should be taken, because big projects cant be executed in a snap. It is also
expected that there will be good and bad effects in adjusting to the new technology that is being
applied. The supply chain theory should be applied first in a small scale or small portion of the business
before taking it to large scales or in other factories of Nike. Applying it in small scale makes it easier to
control when a problem arises. And immediate solution will be executed when the problem is
considered.

Figure head role

Phil Knight possess the managerial skills needed for a Top Manager. Given all
the managerial skills discussed, employees call him a father figure, a leader and a visionary.
Self-Managed Teams

Phil Knight likes to give a group of employees responsibility for supervising their own actions.

Leadership Model: Trait Model

That type of structure could lead to chaos but it goes back to Knight's ability to inspire, to
successfully tap into athlete's desire to strive for something bigger. He searched for people he
liked and hired them. (Relationship-oriented) - concerned with developing good relationships
with workers. He is likely to sit down and break it down for you. He believes you can figure it
out.... He focuses more on talking to you one-on-one to get the best out of you rather than
setting corporate strategy per se."

"He challenged us all to really get focused."

"He's the kind of leader -- you can head a pin drop when he speaks."

1. Empowerment/Resource Allocator Role

A leader empowers others to expand the tasks and responsibilities of others. Phil Knight makes
sure in finding people who cared about the product and letting them handle the details. He is not
the kind of CEO who has ever made it his place to know everything going on in the company.
Knight did what he does best: Find and Motivate talented people, then let them do their thing.
Knight puts people in positions to make decisions, not to come to him.

"Knight's genius: He gives his people freedom to breathe"

2. Leader Role

Phil Knight always inspires to encourage high employee performance. He is not a people
person in anyone's book and yet he manages to do three things better than just about anyone in
the business: hire good people, shuffle them around, and inspire them.

3. Personal Leadership Style

He hired people he liked hanging out with: Nike's early management meetings were
rowdy. When fights broke out among his men-and they were mostly men- Knigh would rarely
interrupt. He liked to see the passion.

He was equally hands-off about direction: "Sell shoes"

MATRIX STRUCTURE
He didn't leave ongtime executives completely alone. He liked to shuffle them around. That
habit created what Nike calls its matrix. The accidental internal structure that forces people to
answer to more than one boss.

Things that made the company successful

- Nike’s strategy sourcing from low-cost countries and targeting the sections of the
market.
- Athlete’s Mindset
- Self-Managed Teams
- Empowerment
- Matrix Structure
- Decentralized Structure

Issues that made the road to success hard.

- Lack of Scenario planning
- Has unclear organization missions and poor formulation of strategies
- Lack of Feedback to employees
- Feedback Control
- Flat Organization Structure