Corporate Culture Responsibility And Profit Orientation – Analysis Of Nike Inc.

Mission, status and location of Nike

Discuss about the Corporate Culture Responsibility and Profit Orientation.

The aim of the following report is to make fruitful evaluation of certain factors of Nike Inc. such as the organization’s mission, its core purpose and its profit and non-profit orientation, impact of two individual factors from the general and specific environment of Nike and its corporate social responsibility. Moreover, the present assignment, which is going to be constructed as a profound report has intended to elaborate and evaluate the results obtained from the quiz of personal insight. Henceforth, it is to say that the purpose of the present report is to acquire a coherent understanding about the considered organization and thereafter to see whether personal competencies are potential and supportive enough in befitting into the organizational culture or not.

Prior to evaluate certain factors about Nike, it is essential to state that the considered organization – Nike is one of the leading multinational organizations for designing, developing, manufacturing and marketing apparel, equipment and footwear in an international level. Moreover, the organization is known to be a profit-oriented organization whose net revenue of the year 2015 has been US$3.273 billion (Blok 2014). On the other hand, according to the financial report of Nike of 2015, it has been found that the organization has 62,600 employees in terms of organizational size.

It has been identified that the core mission or purpose of the organization – Nike is to inspire  every athlete of the world for innovation. Moreover, it has been found that the organization’s statement for purpose has evolved over the         years for appropriately representing the business situation of Nike (Hollensbe et al. 2014). Most significantly, Nike’s mission statement acts as the guide for formulating the strategic policies as it includes inspiration, innovation and every athlete of the world. This particular mission of the organization is accompanied well by the organization’s prime object to make profit for the shareholders. Most importantly, in 2016, Nike has considered to stick to their age-old mission to bring both innovation and inspiration to the entire athlete in the world (MoranSendra et al. 2015).  

On the other hand, it has been understood that the organization is predominantly profit-oriented as per the fact that the organization aims to inspire athletes through their products. As per their financial report of 2015, the organization has received 13% growth in their fourth quarter excluding the currency changes and it seems that their quarterly profit has jumped nearly 20%. Most significantly, the organization’s profit orientation is related with Nike Golf, Nike Pro, Nike Blazers, Nike Dunk and Nike Skateboarding instead of its own brand. On the other hand, it is important to mention in this respect that with its growing profit orientation, the organization replaced Alcoa and became the member of Dow Jones Industrial Average in the year 2013 (Chung et al. 20130). However, in terms of location, it has been found that the organization is headquartered in Beaverton, Oregon of the Portland metropolitan territory. Nevertheless, Nike is located within more than 45 countries outside the US. Some of Nike’s locations outside the US include China, Indonesia, Thailand, Philippines and Pakistan (Blok 2014).

Impact of economy on Nike

Prior to examine one of the potential factors from Nike’s general environment, it is required to mention that in the last quarter, the organization has earned near about 5.7 billion dollars in terms of revenue and for their per share, they acquired one dollar. In the year 2016, it has been identified that the economic factor would have potentially influenced its operations. The economic factor is a strongly influential factor as in terms of opportunity, economic stability and rapid growth of the market work as opportunity for Nike, whereas recent slowdown in the Chinese economy would work as a threat for Nike in the year 2016 (Golden et al. 2015). However, it is unfortunate to note that in terms of international trade, recent incident of Brexit and the slowdown of world trade would affect negatively upon the business operations of Nike. Therefore, in the year 2016, the economic recession would prove adverse for the company.

Considering all these adversity, it can be said that Nike could deal with this situation by increasing its brand image. The company believes that their brand has already earned an impressive amount of trust and according to the organization’s financial report the economic recession of China has not till now affected the sales growth (Jovanovic 2015). Therefore, it can be said that the organization could improve its marketing strategies and increase its promotion. For instance, it can be said that the company has the capacity to reach to an extensive amount of customers by its target segmentation strategy (Robbins et al. 2013). Therefore, it can be said that Nike can utilize this quality to combat with the current concern.    

In terms of Nike’s specific environment, the buying behavior of the customers or the bargaining power of the customers in 2016 could be prioritized. It has been found that like other potential organizations, the customers of Nike hugely influence its operations. In this respect, it is to say that three particular aspects in terms of the buying behavior of Nike should be considered (Robbins et al. 2013). The first one is the low switching costs, which works as strong force whereas the second one is the availability of the moderate substitutes that works as the moderate force and the small size of the individual customers that works as the weak force. It has been found that in the year 2016, the buying behavior of the Chinese customers would not probably work in favor for the organization as per the Chinese recession. On the other hand, due to Brexit and the weakness of Euro, the buying behavior of the European customers would also fluctuate (Schiffman et al. 2013).

Keeping in mind about the current circumstances, along with anticipating their possible consequences it can be said that Nike may revise its brand prices for their customers in the Asian and European zone mainly. However, it is still a fortunate sign that the organization has achieved 30% increase in sales in the year 2015 in the market of China (Chung et al. 2013). Therefore, it can be anticipated that the behavior of Chinese customers would not probably change to a huge extent. Impressive amount of discount as well as product development and modification would help them in this adverse situation. Loyalty card, free coupons or festive sale in terms of discount and improvement of the existing products based on current customer feedback would help the organization to retain their existing customers as well as will attract new ones instead of the adverse circumstances (Szyma?ska and Walecka 2016).

Impact of the buying behavior of the customer of Nike

It is significant to state in this context that the Nike’s sustainable innovation in terms of corporate social responsibility (CSR) is one of the organization’s potential assets. The present vision of Nike’s corporate social responsibility is to bring individuals, community, planet and the profit in a balanced alignment for sustaining its success for a long time. In this respect, it is to mention that in the year 2010, the organization has ranked 23^rd in the index of “100 best corporate citizens 2010” (Hayhurst and Szto, 2016). Some of the organization’s prime contribution under the name of CSR includes 41.9 million dollar distribution for promoting education as well as sports, huge investments for averting risks for the adolescent girls in most of the impoverished countries (Lu et al. 2016).

On the other hand, in terms of ethical concerns, the organization has raised salaries in accordance with individual country laws and has gradually started to pay back those labors that belonged to the closed factories. Most importantly, considering both corporate social accountability and ethical concerns, Nike has impressed the world by recycling its old shoes into “Grind” – a material that is capable of being utilized into multiple ways (Lund-Thomsen and Coe 2013). Most importantly, the organization enthusiastically participates in RED, through which Nike donates an impressive amount of money to South America for combating aids and HIV. On the other side, Nike has also donated more than 100 million dollars to the Cancer Institute of Oregon in terms of their corporate social responsibility. It is significant to mention that in Australia, Nike began to charge 10% extra for each bag and donated the entire proceeds to the local charity houses for sports. Furthermore, it has been identified that more than $85 million has been spent by the organization for buying products from minority-owned business to support them (Blok 2014).

However, it is still unfortunate that the organization in terms of their ethical activities has been criticized for failing to raise wages in most of the foreign countries and the organization has also been highly criticized for doing excessive amount of child labor (Verbos et al. 2007). Nevertheless, it is fortunate that considering the need of recycling for maintaining a healthy environment, in the last year Nike has collected and recycled more than 25 million pairs of shoes through their program called – Reuse-A-Shoe.

As per the result of the quiz “What’s the Right Organizational Culture for me?” I have understood that I have the flexibility to work accordingly to a culture that is mechanistic, formal, rule-oriented and well structured. Furthermore, the result of the quiz has implied me that my ability can afford me to work in large organizations as well as in government agencies. In this respect, I should mention that the quiz has proved to be supportive for me as it has pointed out my strength as well as weakness. Prior to understand whether a person is eligible for an organization or not, it is required to review the strength and weakness of the person, which can be understood well by such assessment or personal insight quizzes (Corrin and de Barba 2014). Nevertheless, after having a coherent understanding about the considered organization’s purpose, profit-orientation, working-culture and corporate social responsibility, I can understand that my abilities according to the insight quiz are seemed well-aligned with the organizational dimension of Nike. It is because I have understood that Nike is a well-structured and rule-oriented organization and my capability to befitted in a similar atmosphere, is indicative of the fact that there is an impressive amount of compatibility between my traits and Nike’s corporate culture.

Nike’s corporate social responsibility and ethical concerns

However, in terms of organizational culture, it is to regard that, seven aspects should be prioritized – attention to detail, stability, capability of taking risk and innovating, aggressiveness and team orientation. The insight quiz indicates that I have the potentiality to stay attentive towards the details of each task; it means I would be able to accomplish every tasks. On the other hand, in the ground of risk taking and stability, my score in the insight quiz has been indicative of the matter that I have a preference for structure. Alongside, it has been mentioned before that I am rule-oriented and attentive towards details; it gives hint that I am able to find risks and can innovate. Nonetheless, the quiz has pointed out that I am less aggressive; therefore considering Nike’s culture to maintain rule-oriented chain of commands, I can say that I will be convenient enough to be fitted with the culture. Most importantly, I am fortunate in the premise of team orientation also as the quiz has implied that my personality can work with teams and can also work for the benefits of a team. Henceforth, I believe it would not be hard for me to get acquainted easily with Nike’s work-culture.

Conclusion

From the above report, it can be deduced that Nike’s purpose for 2016 is influenced by their fundamental mission to innovate and inspire every athlete of world. On the other hand, it has been identified throughout the report that Nike’s present business culture is hugely subjected toward the economic environment and the buying behavior of the customers. The report has also illustrated that both the economic factor and the buying behavior in the year 2016 would be highly influenced by the recession of the China market and the event of Brexit in Europe. Therefore, to avoid the adverse effect, Nike can increase the rate of discounts and can undertake product modification. However, the other side of the report has analyzed the result of the insight quiz and has stated that most of the characteristic traits of the concerned individual will help to get befitted in the corporate culture of the considered organization.

References

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Hollensbe, E., Wookey, C., Hickey, L., George, G. and Nichols, C.V., 2014. Organizations with purpose. Academy of Management Journal, 57(5), pp.1227-1234.

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Lu, X., Liu, H.W. and Rahman, M., 2016. The impact of corporate social responsibility on customer loyalty: a case of Nike and Adidas in China. Strategic Change.

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