Nike Footwear Sourcing Re-Organization

Organization Behavior: FB Group 42011-12-22

Abesolom Fidel (Abby) 11240012Alan 许鸿麟 11220002David 梁湲 11210272Felix 刘飞11210227Natalie 陶丽华 11210239Pat 苏培海 11210256Teerachon (Jiw) 11240020Thitiporn (Sunny) 11240024

Just Do It!

Nike Inc. Nike, the Greek goddess of victory, the world’s #1 maker of athletic

footwear and apparel company based in USA

Mission Statement To bring inspiration and innovation to every athlete* in the world. *if you have a body, you are an athlete

Nike, Inc. Profile – Founded in1964 by Bill Bowerman & Philip Knight as Blue

Ribbon Sports– Officially became Nike, Inc. in 1978– Approximately 30,000 employees globally– Indirectly employee over 700,000 world wide.– World Head Quarters (WHQ): Beaverton, Oregon, USA– Brand: Nike, Converse, Nike Golf, Cole Haan, Umbra, Hurley– Division:

• Footwear 60%• Apparel 30%• Equipment (Bag, Glove…) 10%

– Contracted with approximately 600 factories in 46 countries

Organization Structure

Collaborative Matrix–Team members report into two areas,

• Geography• Global function.

Nike, Inc. Collective Culture

– Dynamic & Innovative– Passion for Excellence– Shared goals and vision– Value diversity

• “diversity and inclusion are key levers in continuing to drive creativity and innovation.”

– Develop tomorrow’s leader today– Attitude: Just Do It!

Business Overview

20.8

17.5

8.2

3.9 1.4 1.2

Competition Overview

$B

• Leading position globally

WHQ vs. NLO

– World HQ (WHQ)• Supply Chain Centralization

– Product design– Factory contracting– Delivery

– Nike Liaison Office (NLO)• Sourcing and procurement

Nike Growth Path

• Nike fiscal year from June to May• Global economy crisis in 2008• 2009 economy crisis direct impact to Nike• FY13/14 are internal estimation

Old Organization Structure

FW SourcingVP (WHQ)

Finance Director

Material Director

HR Director

Engineer Director

Others

GM(China)

Finance Director

Material Director

HR Director

Engineer Director

Others

GM(Indonesia)

GM(Korea)

GM(Taiwan)

GM(Vietnam)

1. Each function has set up their operation in both WHQ and Asia countries (NLO)2. Both GMs and WHQ functional heads report to Sourcing VP3. All the functional heads in Asia solid line report to respective GM; dotted line to WHQ functional leaders4. All NLOs have similar organization set up

New Organization Structure (FY10)

FW Sourcing VP(WHQ)

Finance Director

Material Director

HR Director

Engineer Director

Others

GM(China)

Country Costing

Country Material

Country HR

Country Engineer

Others

GM(Indonesia)

GM(Korea)

GM(Taiwan)

GM(Vietnam)

1. Grouping & Linking: Regroup functions under newly created positions, Product Creation Directors and Regional function Directions

2. Objective:a. Drive functional consistency across entire sourcing base through regional functional leadersb. Drive in-country excellence through Product Creation Directors.

Regional Material

Regional HR

Regional Engineer

Others

Product Creation Director

Regional Costing

QUESTION

Why Change within existing structure?

ANSWER

Because business environment has changed in a direction which lead to the current linking and alignment mechanisms to under-perform

Strategic Design Lens – Fast growing business require appropriate organization

adjustment (before FY2010)– React to economy crisis (reduction workforce)– Prepare for future growth– Political environment require more flexible sourcing landscape

(anti-dumping, import restriction…)– Unpredictable macro economy factors require more diverse

sourcing strategy (labor cost, currency impact…)

Goal: Sourcing bases consistency, flexible & capable

Political Lens – Business growth require more leaders– Re-energize stagnated organization by creating new

opportunities for future leadership– Elevate role & responsibilities through entire organization– Balance business needs between country excellence and

functional excellence– Actively identify future leaders.– Provide employees with honest performance feedback CFE

(Coaching For Excellence) and 3600 feedback process.

Goal: Grow future leaders; Country / Function balance

Cultural Lens – Communication & Shared Vision

• strategy and business plan widely understood and accepted at every level of the company.

– Company resiliency• It afforded the company to quickly implement and ripe the benefits of the

change.

– Be flexible and adaptable to ever changing environment.

– Innovation is part of Nike DNA

Goal: Passion for excellence; Embrace change

Nike Growth Path

• Nike fiscal year from June to May• Global economy crisis in 2008• 2009 economy crisis direct impact to Nike• FY13/14 are internal estimation

Takeaway– Adjust organization structure to align with non-stop changing

business environment is important and critical.

– Organization change needs to have clear business vision, strategy and right leadership to implement changes for sustainable growth.

– Organization change takes time to prepare, communicate, execute and transform.

– Embrace change to create business future and develop future talents

Team 4 with Nike Rep

QUESTION & COMMENTS