External/Internal Business Factors at Nike, Inc.

Nike’s planning and organizing began in 1962 when Phil Knight, an accounting student and middle distance runner at the University of Oregon, had an idea to bring low-priced, high-tech athletic shoes from Japan to dislodge German domination of the U. S. athletic

footwear industry (Nike, 2007, p. 5). In 1972, Knight, along with Bill Bowerman, University of Oregon’s track and field coach, formed a partnership and introduced Nike, a new brand of athletic footwear named for the Greek winged goddess of victory. Leading its employees and controlling or monitoring the company’s worldwide operations, along with on-going planning and organizing as new goals are established, has made Nike, Inc. one of the largest sports and fitness company in the world.

When Nike first started selling in the foreign market in 1972, the company had to assess the economic trends of domestic and international markets during the planning stage. This would include the impact of the global market, technological advancements, and e-business which is rapidly growing. The planning and organizing process also has to be specific to the region where a new factory was to be built. For example, resources may be more available in the Nike Americas Region than in the Europe, Middle East, and Africa (EMEA) Region; government regulations may be stricter in the Asia Pacific Region.

To be successful in the leading or motivating process, Nike would have to assess a country’s culture and economic status. For example, in Indonesia, the take-home pay averages $65 a month which does not seem like much to the U. S. worker, but this pay scale is almost double Indonesia’s minimum wage of $34 a month. These wages also come with other benefits that include overtime and holiday bonuses, social security, free health care, free schooling, free clothing, at least one free meal a day, and sometimes free housing (Jenson, 2000, 1). In these countries where most of the population lives below the poverty line, Nike jobs are quite desirable. As with any global company, Nike’s success depends on the controlling or monitoring of the progress of its manufacturing and sales of athletic footwear and athletic gear.

When one thinks of technology, computers or electronic games may come to mind. For Nike, technology refers to product technology; new innovations in footwear, apparel, and equipment. As fitness evolves, Nike’s products are planned to give consumers a competitive edge and help athletes perform better. Each part of the manufacturing process is designed to accomplishing the goal of providing the world’s best athletic gear. When Nike Air was introduced, it made a revolutionary impact on the sports world for its versatility. Beyond its basic function of impact protection, it can be shaped and tuned to meet the specific demands of contemporary athletes (Nike, 2007, 6). As Nike monitored athletes’ needs, changes were implemented to make their footwear even better. For example, in 2001, Nike Shox was introduced, made with unique columns of engineered foam. This new product technology began a new revolution in footwear cushioning.

Although Nike is one of the largest sports and fitness companies in the world, Nike still has to challenge its competitors with new product ideas. In the planning process, Nike must continue to evaluate consumer demands. Recently, Nike decided to collaborate with Apple and bring sports and music together. According to Nike’s CEO, Mark Parker, The Nike + iPod Sport Kit is a wireless system that connects to the iPod nano to give people a personal running and workout experience (Apple, 2007, p. 1). Nike is planning to make many of their footwear and apparel styles iPod ready. Some of the designs now include jackets, tops, shorts and armbands designed specifically to carry iPods seamlessly. Nike’s CEO and Apple’s CEO will continue to work together to maximize the Nike and iPod experience. This partnership will help Nike to remain as the leading sports company.

Nike’s strategy focuses on diversity in the workplace (Nike, 2007, p. 1). In 2003, Nike created the Office of Global Diversity. Surveys are one way top-level managers communicate and receive feedback from Nike’s employees. The organization wants to know how satisfied the employees are and the effectiveness of management. Work teams and workshops are established to address employee recommendations (Nike, 2007, p. 2). The workshops emphasize employee interaction. Management is constantly monitoring the engagement of stakeholders and employees. Ideally, the company should build a data collection system to asses the issues and impacts in the workplace. Nike has a continued desire for improving performance and reaching new goals.

Companies that specialize in business ethics training and corporate social responsibility instill workplace ethics among staff by creating a business ethics policy (Fieser, 2006). In 1996, the ethical issue of child labor came to the surface regarding the hiring of young employees by Nike’s Asian and Latin subcontractors whose ages ranged from very young to teenagers. The teen workers would have not been so controversial; however, there were no regulations or work permits issued. For the last decade, Nike’s managers have had to plan and organize a world-wide public relations campaign to redeem their name and reputation related to this ethical controversy. Without proper management leading and planning in the Nike Corporation, the company would have suffered from the child labor issue. Nike has made a true bounce-back from the negative media attention, and continues to be successful due to their strong business ethic philosophy.

External and internal factors have an enormous impact on the productivity and success of a company. The process of assessing the external and internal factors that face an organization is a major part of the planning function of management. These factors also impact how a company is organized and how resources are used to accomplish the preferred goals and objectives established during the planning process.

Apple (2007). Nike and Apple Team Up to Launch Nike+iPod. Retrieved January 29, 2007 from http://www.apple.com/pr/library/2006/may/23nike.html
Jenson, H. (2000, July 2). Globalization ala Nike. Retrieved January 29, 2007, from http://www.internationalreportingproject.org/stories/indonesia/indonesia_globalization.htm
Fieser, J. (2006). The internet encyclopedia of philosophy – ethics. Retrieved January 30, 2007, from http://www.iep.utm.edu/e/ethics.htm
Nike (2007). After 30 year, Nike continues to lead innovation in footwear, apparel and equipment. Retrieved January 26, 2007, from http://www.nike.com/nikebiz/nikebiz.jhtml?page=6
Nike (2007). When Nike breathed its first breath, it inhaled the spirit of two men, Phil Knight and Bill Bowerman. Retrieved January 27, 2007, from http://www.nike.com/nikebiz/nikebiz.jhtml?page=5