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Critical Analysis Of Nike’s Key Issues and Possible Recommendations

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Nike Inc. was founded in January of the year 1964 by the University of Oregon middle-

distance athlete, Phil Knight, and his coach Bill Bowerman (Rothaermel, 2019, pp. 2). The

company's original name was Blue Ribbon Sports. In the year 1971, it changed its name to Nike

after the victory goddess in the mythology of Greek. The company asked a graphic designer

student from Portland State University to design its "swoosh" icon and was compensated with 35

USD for the task. Initially, the company worked for Onituska Tiger, a Japanese shoemaker, as a

distributor. Recently, the cooperation has been subjected to a variety of challenges that have

adversely affected it. Some of the main issues facing Nike include competition from other

brands, poor organizational culture, and doping allegations. The issues mentioned above can

however be solved through organizational change management, integration of an ethical training

program, and rebranding its products.

Stiff and dynamic external competition is one of the key issues facing Nike as its

competitors are creating products of high quality. Nike's competitors include Adidas, Under

Armour, and New Balance (Rothaermel, 2019, pp. 5-6). For instance, Adidas has experienced

significant success through shifting its focus from apparel and performance-based footwear to an

approach that is fashion-centric. Kevin Plank, the founder of Under Armour, created a

compression t-shirt which was the most preferred as football apparel due to its ability to wick

away moisture in comparison to the traditional t-shirts. New Balance's products are exclusively

manufactured in the United Kingdom, Europe, and the United States under higher labor costs

thereby making the of higher quality as compared to Nike. Additionally, New Balance is the sole

supplier for the United States' military athletic footwear and this phenomenon was facilitated by

legislation that requires the Department of Defense to acquire athletic footwear from companies

that manufacture locally within the United States.

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Additionally, Nike has a poor work culture. This has led to a major proportion of

individuals speculating that Nike's culture engendered a boys club whereby there were

minimized chances of career advancement for the senior executives who did not operate

according to this culture (Rothaermel, 2019, pp. 11). The female employees of the company

raised complaints concerning inappropriate behavior at the workplace, gender disparities in

wages, as well as limited promotion opportunities. Also, there were incidents of staff-related

outings being held in restaurants but ending in strip clubs. According to Creswell et al., (2018),

Nike's female employees said that however much they reported their problems to the Human

Resources Manager, they were ignored. The occurrences mentioned above made workplace

environment in Nike toxic to a major proportion of the female employees, which further resulted

to the higher turnover rates among females.

Also noteworthy, doping allegations was a key issue facing Nike. Mark Parker, Nike's

former CEO, was briefed on several instances by Alberto Salazar, Nike-sponsored star running

coach, on his tests to utilize performance-enhancing medications for field and track athlete.

These occurrences led to the replacement of Mark Parker with John Donahoe as the new CEO at

Nike (Rothaermel, 2019, pp. 12). This was after a detailed announcement by the US Anti-Doping

Agency which subsequently banned Alberto Salazar for orchestrating and advancing doping of

athletes under his training. The incident mentioned above father led to Nike setting down its

Oregon Running Project which had facilitated the training and sponsorship of a set of best

American medal-winning athletes.

Some of the mitigation measures that can be implemented in Nike include organizational

change management, integration of an ethical training program, and re-branding its products.

Organizational change management can be relatively understood as an organized approach and

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implementation of tools, resources, and knowledge to deal with adjustments in a corporation. In

the contemporary dynamic and global societal contexts, various organizations are forced to adopt

new processes, practices, and regulations so as to survive in the market (Arif et al., 2017, pp. 32).

The issue of Nike operating like a boys club implies that Nike is an organization that supports

gender disparity. Nike should adopt the organizational change management strategy so as to be

an organization that promotes gender equality.

Additionally, integration of an ethical training program could improve Nike's corporate

image. Ethics training programs tend to explicitly facilitate the prevention of and effective

perception of unethical and behavioral patterns (Remisova et al., 2018, pp. 154). This should be

carried out semi-annually through offering of courses and means of enforcement which will be

appropriate for self-regulation. t1he program mentioned above will be fundamental in curbing

the issue of doping allegations in Nike. The effectiveness of the ethics training program can be

indirectly determined by analyzing its impact on the attitudes of the employees.

Finally, Nike can rebrand its product so as to deal with the issue of competition.

Universal competition requires an organization to be creative and consistent to emerge the best

through strengthening of optimal competitiveness (Sarjana and Khayati, 2019, pp. 53).

Additionally, it could improve the quality of its products through incorporating more innovative

features and offering a wider range of sizes, Nike should also shift its focus from apparel and

performance-based footwear to a fashion-centric products. This will lead to capitalizing on the

sportswear market which will further result in greater success of the company in terms of sales

thereby efficiently dealing with the competitiveness issue.

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References

Arif, M., Zahid, S., Kashif, U., & Ilyas Sindhu, M. (2017). Role of leader-member exchange

relationship in organizational change management: Mediating role of organizational

culture. International Journal of Organizational Leadership, 6(1), 32-41.

Creswell, J., Draper, K., and Abrams, R. (2018). At Nike, Revolt Led by Women Leads To

Exodus Of Male Executives: The New York Times

Remišová, A., Lašáková, A., & Kirchmayer, Z. (2019). Influence of formal ethics program

components on managerial ethical behavior. Journal of Business Ethics, 160(1), 151-166.

Rothaermel, F. T. (2019). Nike Inc., 1-16

Sarjana, S., & Khayati, N. (2019). Effective Business Strategy: Key to Winning Business

Competition in Industrial Estate. Advances in Economics, Business and Management

Research, 98, 53-57