By using the product structure, employees will be grouped by around the different products which are either in footwear division, apparel division or equipment division as in Figure 1.2. In the Proposed product structure in Figure 1.2, Nike will have more managers than in the Nike matrix structure in Figure 1.1 because it is broken down into the different product divisions and in each product divisions, there are functional teams for each of the product.
There will be three functional managers and one division manager who will in turn report to the corporate management. As Nike is thriving in a competitive environment and new market, the structure usually needs to decentralise authority so that managers can react quickly to changing environment. The jobs will be broken down in a way that each division will be given a functional team to work with. This way each specialist will be assigned to each division and both the functional teams and division can relate to one another. Delegation will be present at every level-functional level, divisional level and corporate management level.
The advantage of product structure is it accommodates growth easily and this advantage will be useful to Nike because new products can be added to existing divisions with little need for additional learning (McShane and Von Glinow 3rd edition: 458) and it saves time. There is also unity of command in product structure where employee has to report only one superior. Communication down the line will be much clearer and conflicts or misunderstanding in delegating duties can be avoided. Good co-ordination between team members as clear instructions is being passed down by only one superior.
For example in Figure 1.2, the R&D team in footwear division received instructions only from the manager of their own R&D team. This can also help to avoid confusion. Difficulties can be pin-pointed and with each functional department in one division possessing its own specialists and working as a team on its own, it can focus more on customers. Moreover, General Managers are developed and decisions are decentralised in order to meet changing demands and edge out competitors. The disadvantage is as product structure is decentralised in decision making, more of the decisions are made by lower level managers and the influence of top management is limited. Resources may be identical and under utilize.
The proposed process of management is to use the administrative management because it seeks to create an organisation that leads to both efficiency and effectiveness. By using administrative management, it can help Nike meet their stated objectives. In administrative management, Max Weber developed the concept of Bureaucracy and the five principles which are 1) written rules, 2) hierarchy of authority, 3) system of task relationship, 4) fair evaluation and 5) reward.
1) With a written rule, Nike employees know what is expected of them, the do’s and dont’s in the organisation. The rules, standard operating procedures (SOP) and norms to determine how the firm operates. Old and new employees of Nike can get a better understanding of the organisation operates. New employees can understand the organisation better and the old employees can always look back at the written rules to recap.
2) Hierarchy of authority is important in an organisation so that there is respect within an organisation, power to hold people accountable for their actions (gives people a sense of responsibility), and management control over employees. Nike employees will have a sense of responsibility and employees know who to report to. 3) Nike employees should know what is expected of them and every one of them has a part to play in building up the organisation. Employees will feel important. 4) Every employee should have an equal chance for promotion based on work performance and not contacts. There should be equity within an organisation.
5) Nike can give out incentives to their employees to reward them for their hard work so that employees will feel that their contributions are recognized and this can lead to increase in productivity which can benefit Nike. In administrative management, there are also Fayol’s principles. I am going to select six out of 14 of Fayol’s principles which I think is most appropriate for an organisaton like Nike. 1) Unity of command– Nike employees should receive instructions from one superior only to avoid conflicts.
2) Equity- In a big organisation like Nike, it is important that all employees are treated equally and with respect. 3) Order- Each of Nike employees should be place where they have the most value and their strengths can be utilize to the fullest so that it benefits both the individual and Nike. 4) Initiative-Being in a competitive environment, it is essential that Nike encourage innovation and creativity among employees to edge out competitors. 5) Stability or tenure of personnel-Employees usually wants to stay long in a job. Nike should retain their employees for as long as possible. Employees need job security so that they can fully concentrate on their work and will yield high productivity as they do not have to worry about losing their jobs.
6) Esprit de corps- Nike must focus more on employee morale. High morale is equal to high productivity. Good relationships between people in the organisation must be fostered as it is a great strength in the organisation. If possible verbal contacts are used.The strengths of administrative theory are, it is applied in some ways in most organizations around the world and research has proven that it works (Caroll and Gillen, 1987). The theory is more of commonsense and it is accepted. It is also used extensively in management training. The weaknesses are it is not much research based, it assumes an organisation in a stable environment, assumes a manager’s right to manage and takes conflict lightly.
My proposals and recommendations for Nike are to use both Product structure and Administrative management process for the organisation to be efficient and effective. The strengths of using the Product structure and Administrative management process outweigh the weaknesses of both structure and process. I chose both the Product structure and Administrative management process because I firmly believe that people is the most important asset in any organisation. Without people, organisation cannot function towards its goal.
As organisation using matrix structure is bound to have conflicts, stress will be place on individual and by using Product structure, it helps to break the dual chain of command and use unity of command. Product structure helps to break the dual chain of command concept and eliminate stress heap upon the individual. Some of individual expectations include job security, satisfying jobs and treatment with respect which are all in Fayol’s principles. Organisational expectations are also in Weber’s concept of Bureaucracy which is written rules and employees have to follow to uphold the image of the organisation.
And if individual expectations of job security, satisfying jobs and treatment with respect are all taken care of, it will pair up with the organisational expectations of not betraying trust and loyalty. This brings us to Maslow’s Hierarchy of Needs, people’s physiological needs and security needs are very strong. There are also the belongingness needs where individuals needs for socializing and according to Mary Parker Follett; informal groups within an organisation can improve productivity.
Esteem needs for individual to feel important and by using Weber’s concept of Bureaucracy by rewarding an individual for their hard work will make them feel recognized and an important asset to the organisation. Lastly the self actualisation needs, where individual has the need to be the best they can be and it can be beneficial to Nike as the individual may strive to work harder to realize their potential.
1) Mullins, L.J. (2002). Management and organizational behaviour Sixth Edition. London: Financial Times Pitman Publishing Imprint.
2) Steven L.McShane and Mary Ann Von Glinow. (2005). Organizational Behavior: Emerging realities for the workplace revolution 3rd edition. New York, The McGraw-Hill Companies, Inc.
3) Robbins, S.P. & Judge, T.A. (2007). Organizational Behavior Twelfth Edition. Upper Saddle River, New Jersey: Pearson Education, Inc.