Executive Summary
The focus of this study is the management efficiency of Nike. The subject of this research paper is the exploration of methods to enhance the efficiency and effectiveness of management within the organization. In the first part of this work, the theoretical aspects of Nike’s current management effectiveness and efficiency will be studied in detail. Further, the economic efficiency indicators will be studied in detail, and the processes and their characteristics will be described. In the final section of the paper, the challenges of enhancing Nike’s management efficiency and potential solutions will be examined in detail.
Introduction
The economic stability, survival, and efficiency of an organization in market conditions are inextricably linked with its continuous improvement and development. At the same time, the organization’s improvement should be carried out according to the principle of adapting to the external environment. The relevance of this paper lies in the fact that, in the context of the dynamism of modern production and society, management should be in a state of continuous development.
Today, it cannot be achieved without researching trends and opportunities, without choosing alternatives and directions of development. The principle of adaptive management lies in the constant desire to maintain the organization’s compliance with environmental conditions. It manifests itself in the use of progressive forms of labor organization and continuous improvement of human resources (Choi et al., 2021). Therefore, this paper will consider management operations for working with personnel at Nike and identify ways to optimize and improve them.
Purpose Statement
The purpose of this report is to analyze the efficiency and effectiveness of management at Nike in the processes of HR management operations and the development of measures to improve them. To achieve this goal, it is necessary to solve the following tasks. Firstly, it is necessary to examine the existing principles and frameworks related to the concept of efficiency and effectiveness in HR management.
Next, the factors affecting the effectiveness of personnel management processes at Nike should be studied, and the performance indicators should be described. It is then necessary to evaluate the effectiveness of personnel management at Nike, identify problems, and find ways to solve them. At the final stage, the goal will be to conduct a detailed analysis of the solutions and provide recommendations for their application within the company.
Context
Among the main problems identified at Nike are a lack of discipline, low motivation, poor performance and responsibility levels, as well as conflicts and a negative team atmosphere. Senior management and employees do not fully understand the social role of the organization. It is precisely this misunderstanding that hinders Nike’s clear and long-term development goals, and as a result, complicates the strategy for achieving them (Nica et al., 2021).
The next group of problems in personnel management is a lack of understanding of the differences between human and other resources. Human resources are an emotionally meaningful reaction of a person to external influences, which explains the staff’s negative reaction to some management practices at Nike. Thus, many of the problems of Nike personnel management arise due to ineffective personnel management.
Newly repositioned objectives include establishing personnel management to maximize the organization’s human resources potential with the greatest efficiency. They are designed to provide Nike with well-trained and motivated employees. Operations management principles prove that the goals of personnel management are to equip the staff with valuable personnel. At the same time, the ratio of experienced and young specialists should be 50/50 (Choi et al., 2018).
In addition, it is necessary to train a personnel reserve capable of instantly closing any vacancy, preventing downtime, regardless of any force majeure. At the same time, new repositioned objects must meet the material and social needs of employees, which is the only way to ensure that the staff will work effectively.
The new operational strategy for Nike will combine several HR management frameworks. The entrepreneurial strategy of personnel management will differ in the following features (Jiang, 2019). Nike will need to select employees who are willing to take risks and possess qualities such as initiative, drive, and a focus on long-term work. In addition, the company should introduce remuneration on a competitive basis that meets the expectations of employees and evaluations based on real results.
The second strategy, which will be combined with entrepreneurial elements, will be dynamic (Lin et al., 2022). The features of this personnel management strategy for Nike will include the selection and placement of personnel aimed at finding flexible and loyal employees who are willing to take risks when necessary. The same distinctive features of this operational strategy will include impartial and fair remuneration, evaluation based on clearly defined criteria, and an emphasis on developing the employee’s personality in the field of core activity.
The new vision required by the operations strategy analysis enabled us to analyze Nike’s operations strategy. The theoretical aspects of personnel management at Nike were revealed, and the potential evolution of views on employee management was analyzed. Following the disclosure of the personnel management issue, proposals were developed to enhance the organization’s personnel management system. The principles of building a management system in Nike that meet contemporary requirements were developed.
Process Description & Characteristics
The boundaries of the process are the inputs, which are data about current Nike employees and the current management style. Nike is a multinational company that has contracts with 750 factories in 55 countries worldwide, largely due to its multicultural workforce (Wang et al., 2021). The company has approximately 70,000 employees (Li et al., 2021).
The organizational structure of Nike is not sufficiently effective for a multicultural environment, as the same norms, rules, and procedures have been developed for staff across all countries. The rights, duties, and responsibilities reflected in the job descriptions of employees are identical across all branches of the company. The leadership style is authoritarian, which is not a contemporary approach to personnel management. The director listens to the comments and suggestions of employees, but does not provide them with sufficient independence; instead, they exercise strict control over the enterprise and make sole decisions.
As output boundaries of the management processes at Nike, employees are not sufficiently motivated to perform their jobs as efficiently as possible. Employees are not interested in improving the quality of their work. Initially, employees exhibit enthusiasm in their activities. Still, over time, it becomes increasingly difficult due to the authoritarian nature of management. This fact is a significant contributor to the reduced motivation of many team members who have been working at Nike for an extended period (Pal and Altay, 2022).
In addition, some employees begin to conflict with each other. Often, all these manifestations prevent employees from performing their duties productively (Dai et al., 2020). Such employees often struggle to organize their workday and frequently shift their responsibilities to other staff members.
Segments of the target audience for the Nike sporting goods store include various groups of buyers, such as professional athletes, amateur athletes, novice athletes, individuals who visit gyms or engage in fitness activities, as well as children and teenagers. The age of Nike customers can be different: people from 5 to 55 years old, and sometimes older, are engaged in sports (Nicolas, 2021). The needs of each segment of the target audience are similar, yet distinct. The primary similarity lies in the psychographic characteristics of the clients: customers from any segment lead active lifestyles, are engaged in their own well-being, and prioritize their health. Therefore, the task of the Nike manager is to organize the business in a way that meets the needs of each customer segment.
Employees are involved in all operational processes, including those involving direct interaction with customers. Among the working staff, it is possible to distinguish between valuable employees and those who are irreplaceable, whose presence adds value to Nike’s work. They bring significant benefits and are the main labor capital of the enterprise. Valuable employees are interested in the well-being of the company, are satisfied with their work, and perform it in a manner that aligns with their own goals and benefits the company (Cachon et al., 2020).
Every action of valuable employees is aimed at achieving the goal, resulting in high-quality work and increased company efficiency. Working independently and building on the work of their subordinates, they achieve high results in the shortest possible time. They have their own interest in the success of the Nike strategy, with which their additional value is associated. However, at Nike, processes for forming loyalty among employees do not align with the organization’s culture due to authoritarian leadership. The unfavorable socio-psychological climate within the team, along with the occurrence of conflicts, leads to a decrease in the efficiency of employees’ work.
In some branches of the company, there is a systematic manifestation of an unfriendly attitude towards employees associated with discrimination against women and minorities, or ageism (Agrawal et al., 2018). In a situation where an employee is constantly discriminated against at work, they experience alienation, oppression, and demotivation. The constant struggle at work for existence can cause frustration, stress, somatic and mental illnesses. Such characteristics of the personnel management process negatively affect not only the employee to whom negative manifestations are directed, but also the normal functioning of Nike as a whole.
Current Process Map
The current process map at Nike is built on an authoritarian style of employee management, which involves the following basic steps. Firstly, a system of strict control over all management processes and improvement of labor discipline is being established.
Next comes the analysis of the organizational and staff structure of the organization, along with its optimization. The head eliminates low-performing structural units by eliminating them, reorganizing, or changing tasks, among other measures. Moreover, at this stage, Nike regularly dismisses employees who fail to meet increasing requirements, do not adapt to new realities, and are deemed ineffective by management (Lin et al., 2022). At the final stage of the employee management process at Nike, a system is being built to increase labor productivity and reduce production costs.
HR Management Process
HR management analysis is a key concept in strategic management. Based on this, a forecast of the dynamics of the external environment is developed, highlighting trends and parameters, and identifying own resources. The essence of the personnel process analysis is to identify the key features of both the internal and external environment of the organization (Li et al., 2021).
It does not matter in what sequence the analysis of the personnel management system is carried out because all processes take place simultaneously. The internal analysis encompasses all the primary functions of HR management, taking into account corporate culture and characteristics. Based on the results of the external analysis, the strengths and weaknesses of the management system, as well as its areas for improvement, are identified.
Analysis
The methods used to analyze the personnel management process at Nike are not effective enough. The company does not allow for the collection of reliable and complete data on the results of research, as well as actual and potential problems in the system; instead, these data are often ignored (Cachon et al., 2020). The main performance indicators at Nike are negative (Nica et al., 2021).
Income or output per employee is lower than that of competitive sports networks. Labor productivity in an arbitrarily selected time period is lower than that of our competitors. At the same time, the company has a high turnover and a low coefficient of internal mobility (Choi et al., 2018). Additionally, Nike is actively seeking to reduce expenses incurred by the company for wage payments, including tax deductions.
Recommendation
It is possible to advance the operation to the next stage of the Hayes and Wheelwright Four-Stage model and utilize it as a means to deliver superior value to customers. At this stage, the process analysis is in the third stage of the model: the assembly line (Pal and Altay, 2022). To transfer it to the fourth level of the model, which is suitable for continuous flow, it is necessary to introduce the correct use of various techniques and their combinations for analyzing the employee management process.
For example, Nike’s manager can use intuitive approaches that are uncharacteristic of an authoritarian management style. A distinctive feature of this method of process analysis is the presence of unconventional approaches to conducting research and the application of a minimal amount of factual data. At the same time, it is the first group that is considered the primary one in solving personnel management-related problems.
Risk and Resilience
The main risk factors are employees’ resistance to changes within the company’s work environment. To mitigate this risk factor, it is necessary to apply the concept of financial certainty (Nicolas, 2021). Changes always involve costs; therefore, according to this concept, managers should carefully consider the plan for their implementation and communicate it to employees (Dai et al., 2020). This is because their resilience with a high degree of probability can be caused by the fear of a reduction in wages and various problems related to financial costs. Additionally, financial costs are associated with the entire change process and impact the company’s well-being and economic sustainability, potentially leading to unnecessary unrest within the team and resistance to change.
Analysis
At Nike, the authority of managers is quite high, so their influence on the change process is significant. In the organization, the manager has more prestige than the members of the labor collective to whom they are entrusted. However, the manager’s wishes at Nike are not a powerful incentive to initiate and sustain the process of change (Dai et al., 2020). This is because the official leader of the collective and the informal leader are not the same person.
Due to the authoritarian management style, employees are less inclined to trust the information they receive from the manager. Moreover, the facts obtained by individual employees or team groups have a significant impact on the change process. The lack of information among a group of workers leads to a false interpretation of data indicating a negative change in wages, which in turn leads to a misperception of resilience.
Recommendation
Currently, risk and resilience at Nike are at the second level of the Hayes and Wheelwright Four Stage model, characterized by a batch approach. To enhance the stage and make it a means to deliver superior value to customers, Nike needs to adjust its approach towards employees during the changes (Agrawal et al., 2018).
When developing and implementing a change program, it is necessary not only to avoid questioning the authority and competence of the manager. It is crucial to consider potential financial concerns for employees and demonstrate flexibility in addressing them (Choi et al., 2021). As a result of these changes, Nike’s risk and resilience will significantly decrease.
Overall Recommendations & Conclusion
In general, Nike needs to make changes in the operational processes of the company’s HR policy and change the main tools and stages of personnel management. The choice of methods of working with personnel, the development of rules for the selection and placement of employees, as well as setting goals and objectives in personnel work at different stages of the company’s development should be less based on an authoritarian style (Jiang, 2019).
The basis of Nike’s personnel operational processes should be proper interaction with the company’s personnel, traditions, norms, and rules that are officially formulated or adopted at the company level. At the same time, it is necessary to implement operational processes for personnel policy, taking into account not only external factors but also internal ones. To achieve this, Nike managers need to adjust the approach to process analysis, reducing risks and enhancing resilience among employees during the changes.
The new process map, based on recommendations, will look as follows. Operational processes at Nike will be carried out with a decrease in control over subordinate actions. At the first stage, the manager will explain the problem and create the necessary conditions for the team to start solving it, taking into account the internal risk and resilience. They will formulate the task and the outcome that should be visible as a result of the employees’ activities.
Next, the manager will leave space for the employees themselves to act and will evaluate not only the finished result, but also conduct an objective process analysis (Agrawal et al., 2018). These recommendations are likely to help achieve the new vision and bridge the perspective gaps as they will allow employees to feel more comfortable in the company.
Reference List
Agrawal, V. V., Atasu, A. and Wassenhove, L. N. (2018) ‘OM forum: New opportunities for operations management research in sustainability’, Manufacturing & Service Operations Management, 21(1), pp. 1–25.
Cachon, G. P., Girotra, K. and Netessine, S. (2020) ‘Interesting, important, and impactful operations management’, Manufacturing & Service Operations Management, 22(1), pp. 214–222.
Choi, T. M. et al. (2021) ‘Disruptive technologies and operations management in the industry 4.0 era and beyond’, Production and Operations Management, 31(1), pp. 9–31.
Choi, T. M., Wallace, S. W. and Wang, Y. (2018) ‘Big data analytics in operations management’, Production and Operations Management, 27(10), pp. 1868–1883.
Dai, Y. et al. (2020) ‘Twenty years in the making: The evolution of the journal of Manufacturing & Service Operations Management’, Manufacturing & Service Operations Management, 22(1), pp. 1–10.
Jiang, W. (2019) ‘Sustainable development of supply chain in footwear industry: Take Nike as the case’, Asian Business Research, 4(3), pp. 86–93.
Li, G., Tian, L. and Zheng, H. (2021) ‘Information sharing in an online marketplace with coopetitive sellers’, Production and Operations Management, 30(10), pp. 3713–3734.
Lin, Y. H., Tian, Q. and Zhao, Y. (2022) ‘Locating facilities under competition and market expansion: Formulation, optimization, and implications’, Production and Operations Management, 31(6), pp. 3021–3042.
Nica, I., Chirita, N. and Ionescu, S. (2021) ‘Using of KPIs and dashboard in the analysis of Nike company’s performance management’, Theoretical and Applied Economics, 1(626), pp. 61–84.
Nicolas, E. (2021) ‘SCM, social risk and organizational learning: An analysis of Nike’s FLA audit reports’, Logistique & Management, 29(2), pp. 73–87.
Pal, R. and Altay, N. (2022) ‘The missing link in disruption management research: Coping’, Operations Management Research, 58(1), pp. 59–74.
Wang, Z. et al. (2021) ‘Blockchain-enabled data sharing in supply chains: Model, operationalization, and tutorial’, Production and Operations Management, 30(7), pp. 1965–1985.
