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TABLE OF CONTENTS
Introduction ………………………………………………………………..
Pg. 3
Hostile Work Environment
 Sexual Harassment ……………………………………………….……. Pg. 3
 Discrimination.…………………………………………………….…… Pg. 4
 Hostile Work Environment and Organization as Organisms ………….. Pg. 4
 Recommendations ……………………………………………………... Pg. 5
Overdependence on U.S. Market
 Lack of Market Development in Other Regions ………………………. Pg. 6
 An Organizational Learning Perspective……………………………..... Pg. 6
 Recommendations ……………………………………………………... Pg. 7
Conclusion …………………………………….............................................
Pg. 7
Reference List ……………………………………………………………...
Pg. 8
Turnitin Report …………………………………………………………….
Pg. 11
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NIKE
INTRODUCTION
Nike, is an American multinational sportswear company specializing in the design,
development, manufacturing, and worldwide marketing and sales of athletic footwear,
apparel, equipment, accessories, and services. Nike’s humble origins can be traced back to
1950s Oregon where Bill Bowerman, a renowned track and field coach began tinkering with
running shoes in order to trim valuable seconds off of his students running times. His
experimentations with these prototype running shoes would change the world of athletic
footwear as we knew it and give rise to one the most successful footwear brands in the world
(Nike News, 2015). Today, Nike has retail outlets and distribution partners in over a 150
countries and its iconic curved check mark logo is recognized worldwide (Britannica, 2018).
Despite the public perception of Nike as a premier provider of sportswear and equipment, it
has not been free from difficulties and controversy;

HOSTILE WORK ENVIRONMENT

According to the U.S. Equal Employment Opportunity Commission (EEOC), a hostile work
environment results from “unwelcome conduct that is based on race, colour, religion, sex
(including pregnancy), national origin, age (40 or older), disability or genetic information”
(EEOC, 2020). Therefore, any discriminatory behaviour and harassment derived from
protected characteristics can create a hostile environment that can lead to legal action and a
negative impact on a company's reputation (Bita, 2019). Despite the growing publicity and
awareness on workplace discrimination, people from disadvantaged social groups continue to
report unfair treatment at work, especially as the modern workplace continues to become
more diverse resulting in interactions between social groups that would previously have never
crossed each other (Cheung et al., 2016).

 Sexual Harassment
In late 2018, a group of women in Nike’s Beaverton, Oregon, headquarters led a small
campaign condemning Nike’s toxic work environment, exposing a “boy’s club” mentality
within the company culture that was detrimental to the safety and development of female
employees in the workplace (Creswell, Draper and Abrams, 2018). Former Nike employee
Kelly Cahill stated in her discrimination lawsuit against the company that she was forced to
leave the company due to a “hostile work environment” and the unwillingness of the HR
department to take her complaints seriously. Another former employee, Sara Johnston
reported an incident in which a male co-worker sent her inappropriate sexual messages and
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photographs after a company party, and continued to do so despite her protestations. This co-
worker refused to attend meetings organised by Johnston due to her complaints and was later
promoted to a position that forced her to work more closely with him. In addition, Johnston
alleged that she was given a lower rating on her annual review as a result of her complaints
(Meyersohn, 2018). Furthermore, other reports from Nike employees include instances of
“staff outings that ended in strip clubs, a supervisor who pushed his way into a bathroom and
forcibly tried to kiss a female staff member, another who referenced a staff member’s breasts
in an email to her, and an instance of a male manager throwing his keys at a female
subordinate and addressing her with a profanity” (Champ, 2018).

 Discrimination
Despite the exodus of a number of senior executives due to the 2018 allegations and a
number of damage control measures, Nike’s corporate culture continues to face public and
legal scrutiny. In 2019, Nike’s former senior director in data analytics, Ahmer Inam, filed a
lawsuit against the company citing racial discrimination. Inam’s experience at Nike indicates
a tendency to prioritize white males for promotions despite the superior qualifications and
work experience of employees of colour. According to Inam, his former supervisor
“criticized employees of colour, didn’t value their work and generally treated them like
second-class citizens” (Butler-Young, 2019).
Both the 2018 lawsuits and 2019 lawsuit indicate a pay gap at Nike based on race and gender.
According to Kelly Cahill, she was paid $20,000 less than her male co-worker for doing the
same amount of work, Sara Johnston claimed she was paid $2000 less than a male colleague
for the same position when she had better qualifications and work experience (Meyersohn,
2018), and Ahmer Inam alleged that he was paid $75,000 less than his white male colleague
when they both had similar qualifications (Butler-Young, 2019).

 Hostile Work Environment and Organization as Organisms

In opposition to previous comparisons of organisations to machines, the more modern
comparison of the organisation to a living organism describes the organisation as being made
up with living parts that share complex relationships with one another and need to interact
effectively and efficiently with one another to maintain the health of the organism and meet
all the needs of the organism for development, maintenance and improvement (Bertini,
2013). According to Morgan (1997), the success and health of an organisation, much like the
success and health of an organism depends on individuals and groups whose needs have to be
satisfied in order for them to operate efficiently. These needs have been identified through
Maslow’s Theory of Motivation as physiological, security, social, ego and self-actualizing.
The concept of organizations as an organism is rooted in the assumption that employees are
valuable and that providing them with “enriched, motivating jobs that encourage them to
exercise their capacities for self-control and creativity” is essential to organizational health
(Morgan, 1997, p. 36). A hostile work environment where employees are harassed, abused
and discriminated against is in direct violation of these needs. The most basic physiological
need of a female employee is physical safety, the assurance that she may be able to go to
work without the fear of being treated as a sexual object, the confidence that the company
will not tolerate obscene conduct and that she is protected as a person, the assurance that she
is safe when alone with her boss or co-worker. To achieve their security needs, employees
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need the confidence that they are not asked to perform mundane tasks, or that they are paid
less because of their gender or race. They need to know that they are hired because of their
skills not the company's attempts to show liberalism (Prendki, 2017). Victims of workplace
sexual harassment and discrimination have reported “increased mental and physical stress,
reduced satisfaction with work, colleagues and managers, a more negative attitude towards
the organization, decreased productivity, delays, absenteeism and increased turnover”
(Chamberlain et al., 2008).
These consequences, in addition to having a negative effect on the health of the individual
being harassed and discriminated against, will also negatively affect the health of the
organization. Employees are less likely to remain in a toxic environment and, according to
recent studies by (EVERFI, 2016), employee turnover is one of the most serious
consequences of a toxic work environment. Another aspect of the impact of toxicity in the
workplace is that it can be problematic to replace departing workers. A survey conducted by
the (EEOC, 2016) found that 58% of respondents who saw injustice at work somewhat
discouraged potential employees from joining the company. In addition, research shows that
when consumers witness or are made aware of workplace injustices, they develop negative
generalizations that reduce the likelihood of buying from a company. The survey also found
that employees facing unfairness in their work encourage potential consumers to take their
business elsewhere (EVERFI, 2016). In addition to this, in many countries discrimination is
against the law, and companies involved in famous cases are forced to pay significant
amounts in compensation. Former employees of Nike suing the company for damages are
asking for as high as $800,000 as compensation (Butler-Young, 2019).

 Recommendations
Ultimately, Nike needs to create a healthy working environment where all members of the
organization are valued and respected. The first step towards building and maintaining a
healthy organization is to develop a written “no tolerance” plan for any form of
discrimination and abuse in the workplace. This policy must be part of the strategic HR
vision and plan and must be followed by senior management within the organization. It is
important for senior management to maintain a policy that changes employees' perceptions of
how seriously the organization takes maintaining a healthy workplace.
Additionally, education and training programs are needed to address workplace abuse.
Managers and employees must participate in such programs to learn what behaviours are
acceptable in the workplace. Leadership training can help managers recognize and cope with
abuse, development programs can manage oversight of abuse, good governance can help
mitigate or prevent abuse, and employee support programs can improve supervisory
behaviour.
Once employed, employees in healthy organisations must participate in mentoring programs
to facilitate their transition. Employees also should have many training opportunities to help
them rise up the career ladder. In addition, employee support programs must be available for
those experiencing work-related or personal stress (Ebeid et al., 2011).
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OVERDEPENDENCE ON U.S. MARKET

Venturing into new markets can be dangerous. When companies have a steady revenue
stream coming in, it is easy to become complacent and reluctant to tackle fresh opportunities.
Most organizations don’t want to risk becoming one of the many companies that fail when
launching new initiatives or venturing into new markets. However, this method can make
organizations vulnerable. When their income stream is depleted due to some unforeseen
circumstance, they will have to pay to change their course and find new sources of income
(Hojeige, 2019).

 Lack of Market Development in Other Regions

A market development strategy is a business growth strategy that involves adding existing
products to new markets. In other words, a market development strategy helps organizations
identify and develop new opportunities to sell their current product line in a market where the
growth phase has not been developed previously (Lighter Capital, 2020). One of Nike's
strong primary growth strategies is market development. This strategy helps the company
grow by entering new markets or market segments. Nike, for example, is expanding into new
markets in Africa and the Middle East to increase shoe sales. Along with product
development, the company pursues an intensive market development strategy and is investing
in new technologies to enter new market segments such as one targeting bodybuilders. But
the saturation of Nike stores and retailers globally means that this intensive strategy plays a
role in supporting the company's growth (Gregory, 2017). Even after Nike established itself
as a global brand, it is still heavily reliant on the US market for the bulk of its revenue. The
company received 43% of its sales revenue in the North American market in the year 2019,
and fell to 41% in the year 2020. The company's sales declined in 2020 due to the outbreak of
COVID-19. This has had a huge impact on Nike's revenue during the fourth quarter of 2020.
The U.S. market accounted for 39% of total revenue in 2020 from 41% in 2019 (Nike, 2019;
Pratap, 2020).

 An Organizational Learning Perspective

According to (Senge, 1990), learning organizations are organizations where people
continually expand their capabilities to achieve the outcomes they truly want, where new and
broad thinking patterns are developed, shared ambitions are revealed, and people learn how
to continuously learn. Organizations learn as they gain experience and gradually adjust their
responses to similar issues as they receive feedback from previous solutions (Pennings,
Barkema and Douma, 1994). Nike must use the reduced revenue due to COVID-19 as a
learning experience, to understand the detriments to being overly dependent on one market.
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When COVID-19 started spreading in the United States, in two months, about 90% of Nike's
physical stores in North America, Europe, most of Asia and elsewhere were closed during the
quarter. Many Nike retail partners, such as Foot Locker and other chains, also needed to close
their stores. This would have forced Nike to confront their current assumption that they could
safely rely upon the U.S. market as their primary source of revenue. A learning organization
must have the ability to reflect the context of the situation and question the relevance of
current operating standards. This experience has forced them to adapt by focusing on digital
sales, a key component of the learning organization, its digital sales rose 79%, but it was still
only 30% of Nike's total sales (Vecchio and Argyris, 1983; Bain, 2020).

 Recommendations
Nike needs to further develop their market development strategy to expand into new markets
and regions. Using the concepts of the learning organization, Nike can Scan and predict
changes in the wider environment to research their development opportunities. In order to do
this they need to take into account the new target market's motivations, demographics, and
background to determine whether their development initiative is justified. They should also
conduct market research such as Porter's Five Forces or SWOT analysis to determine
strengths, weaknesses, purchasing power, alternative threats or other characteristics in
relation to competitors in this new market. In addition to the growth targets for each criterion,
Nike must also develop goals to develop facets of the business. For example, to add another
location they could set the following growth goals: increases customer base by 90% and
increase sales by 100%. At this stage, Nike should also consider the requirements it needs to
meet its growth goals, such as financing, equipment and software. Finally Nike must “allow
an appropriate strategic direction and pattern of organisation to emerge” by creating their
marketing plan (Morgan, 1997; Beltis, 2020).

CONCLUSION
Nike has faced a lot of backlash in the past few for their treatment of their employees and has
suffered significant damage to their public image as a result. And although they were quick to
react to these allegations by terminating guilty executives and reviewing their HR policies, a
more thorough cultural change needs to take place in the organization if any permanent
results are to be seen.
The coronavirus presented Nike with a new challenge and the company's sales and
profitability declined. Since the pandemic’s impact was the strongest in the US market, the
impact on Nike's sales was dramatic because the US is Nike's largest market. Nike has been
able to handle most of the pandemic's consequences through technology investments in
recent years. But there is no denying that if Nike had a better revenue stream from other
regions where the effects of the pandemic were less prevalent, they would have been better
able to weather the storm.
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Beltis, A.J. (2020). How to Build a Market Development Strategy [Free Planning

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Bertini, P. (2013). Organisations as organisms: Consciousness and Wellness. [online]

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Bita, N. (2019). Hostile Work environment: the Signs and Possible Cures | Workable.
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[Accessed 16 May 2021].

Britannica (2018). Nike, Inc. | History & Facts. In: Encyclopædia Britannica. [online]
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Butler-Young, S. (2019). Nike Hit with Racial Discrimination Lawsuit. [online] Footwear

News. Available at: https://footwearnews.com/2019/business/legal-news/nike-racial-
discrimination-lawsuit-employee-1202763011/ [Accessed 16 May 2021].

Chamberlain, L.J., Crowley, M., Tope, D. and Hodson, R. (2008). Sexual Harassment in
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Champ, N. (2018). How a female-led Revolt Took down Nike’s Toxic Boys’ Club Culture.
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toxic-boys-club-culture/ [Accessed 16 May 2021].
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Cheung, H.K., King, E., Lindsey, A., Membere, A., Markell, H. and Kilcullen, M. (2016).
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https://www.nytimes.com/2018/04/28/business/nike-women.html.

Ebeid, F., Kaul, T., Neumann, K. and Shane, H. (2011). Workplace Abuse: Problems and
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EEOC (2016). Select Task Force on the Study of Harassment in the Workplace | U.S. Equal
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TURNITIN REPORT
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