This is a research which will examine the information of a company to develop a report to examine the impact of effective organizational culture on performance of the employees. In this context, Nike has been chosen as the organization which has been evaluated to examine the impact. In this current study, the report has gathered the information of Nike and as per the objective of the research, the data has been analyzed to develop relevant findings. The findings have been analyzed and interpreted to fulfill the primary objective of the research.
Organizational culture consists of the set of values, traditions, behavioral expectations and habits among the different elements in an organizations. Every organizations defines a particular organization based on their core values and beliefs. Similarly, the major companies like Nike are known for the organizational culture they have developed. This culture is responsible for motivating the employees to perform effectively and increase the performance of the business. This is because of the fact that effective organizational culture fosters growth of the employees and results in the increase in commitment of the employees towards their respective organizations. The use of effective organizational culture aligns the goals of the organization with that of the employees and the employees consider the wellbeing of the organization due to the immense level of jobs satisfaction they have received. The study will examine the scenario in case of Nike to examine the strategies and policies implemented for the growth of the organization. Moreover, it is essential to develop a organizational culture that promotes and supports diversity which is one of the major criteria for modern global organizational culture.
Nike, Inc. is one of the major multinational companies in United States of America that is involved in manufacturing, development, design, sales and marketing of footwear, accessories, equipment, services and apparels. Beaverton, Oregon, is the headquarters of the organization and is one of the largest suppliers of athletic apparels, shoes and manufacturers of equipment. The brand value of the organization is $29.6 billion and is one of the top companies in the fortune 500. The organization has expanded their business to all parts of the world and is one of the most popular brand is this segment of the industry. The company initially commenced with the name Blue Ribbon Sports and later on was renamed to Nike in the year of 1971. The portfolio brand of the company includes Converse, Hurley, Jordon Brand and Nike Brand. The company sells their products through physical retail outlets, independent distributors, licensees and online stores. Independent contractors develop the products offered by the organization. Since the year of 2016, the company has only focused on nine categories of product offerings such as action Sports, men’s training, NIKE Basketball, Football (Soccer), Women’s Training, Sportswear, Running, golf and the Jordan Brand.
The company not only offer products for the athletes, it also caters to kids and products for recreational purposes. The range of performance equipment and accessories that the organization sells consist of products such as sports balls, socks, bags, timepieces, digital services, gloves, bats, golf clubs, eyewear and other products. The major competitors for the organization are Adidas and Puma where they cater to the similar target segment in the market. Nike started buying back of their shares and bought $8 billion class B stocks of Nike. Nike initiated strategies to buy back shares from time to time and in the year of 2018, the company announced that they initiate the buyback of shares worth $ 12 billion after the previous programs are completed. Nike over the years has become one of the brand symbols of the urban youth and has been associated with the hip hop culture mostly among the consumers in the United States of America. The shell suits, track suits, Air Jordan, baseball caps, Air max and Air force 1’s are one of the mainstream products of the organization. Moreover, there are other premium products such as Quick Strikes have become of the one of the desirable products for the consumers. In the year of 2018, Nike has been able to increase their revenue by 6% where the annual revenue of the company was $36.397 billion.
Nike has always been promoting organizational culture with full of competence and resilience. The company has been known for their unique organization that encourages the workforce to address the objectives of the business. Nikes also uses training and development programs to develop and uphold a corporate culture that is in alignment with the brand image of the organization. There has been steady increase in the number of workforce in the organization in the past few years. However, gender discrimination is an allegation that the organization has been facing where questions have raised on the departure of dozens of senior executives due to biasness of the gender. Currently, the organization are introducing different measures to improve the workplace diversity of the organization. Inclusiveness, empowerment and respect has been key features of organizational culture in Nike but current incidents show a deviation from the ore values. This is the reason that organization has been making considerable efforts to improve the opportunities for women and establish gender equality.
The main aim of the study is examination of the effectiveness of organizational culture in Nike. In order to assess it, the different elements of elements of organizational culture and employee performance will be compared and contrasted to analyse the impact. The objective of the research are as follows:
Research methodology is the system way of collecting raw data and converting it into meaningful data for analysing the research problem. Methodology forms the foundation of the research and the overall process is based on it. The different methods, designs and approaches are described in the research methodology based on the Saunder’s research onion and each layer of the Saunder’s model will unfold the methods used in conducting the research. Research methods are chosen based on the goals and the objectives of the research. There are mainly three major objectives in a research, one is description of behaviours, second is prediction and third is the explanation of the phenomenon. In this study, the main objective is examine the cause and effect relationship between the variables so quasi-experimental method has been used.
Research philosophy defines the beliefs and assumptions made by the researcher. It facilitates in examining the nature and source of knowledge in the research. It also defines the methods to be used to collect and analyse the data effectively. The different types of research philosophies are positivism, interpretivism, pragmatism and realism. However, in this research, interpretivism has been as chosen as the philosophy for the research. Interpretivism facilitates in conducting subjective data analysis and facilitates in conducting in depth analysis of the collected data. Interpretivism is generally used for qualitative analysis but quantitative data can also be used based on the type of data and analysis to be conducted.
Research approach defines the way in which the data will be analysed and the relevance of the hypothesis is one of the major factor is choosing the most suitable approach for the research. There are three types of research approaches and they are abductive approach, inductive approach and deductive approach. However, in this study, deductive approach has been used in the research to validate the existing theories in the research. The inductive approach is used for developing new theories and paradigms. It is not suitable to use the inductive in the current research. Abductive approach is used to address the shortcomings of both inductive and deductive approach. The deductive approach will be used to deduce the relationship between organizational culture and performance of the employees. The deductive approach has also facilitated in examining the key elements of organizational culture and employee performance.
Research design has been defined by different authors and some considers it the method of data collection and analysis. On the contrary, few authors suggested that research design defines the overall plan of conducting the research, which will provide answers to the research question. The different types of research designs are exploratory, conclusive and explanatory. The conclusive research design can be further divided into causal and descriptive research design. The exploratory research design only explores the data but does not provide any definite conclusion to the research. In this research, causal research design has been used to examine the relationship between employee performance and organizational culture. Conclusive research will facilitate in both description of behaviour and degree and nature of association between the variables.
In this study, secondary data collection method has been used to collect the different journals, articles and web articles. The data has also been collected from the annual report of the organization to assess the performance of the organization. The secondary data collected has been analysed using thematic analysis. The study has developed themes based on the objective of the research to analyse the impact of the organizational culture on the performance of the employees. The study has also used coding where initially open coding has been used to analyse the raw data and axial coding has been used to provide meaning insights in the study. The study has also collected financial data from secondary sources to examine the impact.
Sampling is the method of choosing sample population from the overall population sample. Sampling is generally used in cases when the sample size is huge and analysing the overall population is costly, time consuming and difficult. In those scenarios, the research selects elements from the overall sample which represents the overall population. Probabilistic sampling and non-probabilistic sampling are the two types of sampling methods used in research. In the process of sampling, initially, the target population is identified and then the sampling frame is decided. The sample size is then selected after selecting the target population and sampling frame. In this study, non-probabilistic has been used to select peer reviewed journal articles, web articles and annual reports. Convenience sampling has been used to select the relevant data from online secondary sources.
Reliability and validity is difficult to interpret due to the involvement of the human element in the research. Reliability is the ability of the study to reproduce similar results with different data sets. However, as the data is mainly qualitative in nature, evaluating the reliability is tough as different elements have different opinion on the topic. In this study, the internal consistency of the research instruments has been checked to make sure that there is consistency among the data collected. On the other validity measures the accuracy of the instruments used in the research and in qualitative research, examining accuracy of the data is even more difficult due to the subjective nature of the data. However, in this study, construct validity has been used to measure the validity of the instruments and collected.
The ethic aspect of the study has been completely and three aspects of the research ethics which fabrication, falsification and plagiarism has been strictly avoided. In this study, none of the data has been fabricated which means that none of the data has been developed, added and manipulated to develop suitable result in the research. On the other hand, none of the data has been falsified which means that no false data been provided in order to prove the claims made in the research. None of the work submitted is plagiarised and the authors have been credited for their contribution to the research.
The organizational culture of Nike has been centred on innovation and creativity for meeting the exact needs of the consumers. The main characteristics of the organizational culture are to develop market competence and sustainable business by incorporating a workforce that is inclusive, diverse and talented. Innovation and talented workforce are two complementary aspect for successful product innovation and the company has emphasized on developing an organization that contributes to the innovation of the product line. The company has developed several programs for training the workforce and improve their level of skills so that they can contribute to the global growth of the organization. The culture has been developed in order to sustain infrastructure and talents to producing the best quality products for the target consumers.
Diversity has been continually developed in the organization over the years which has been done to develop a workforce that is dynamic in nature. Diversity has assisted Nike in establishing innovation, creativity and brand image. These three factors have been instrumental in developing competitive advantage for the organization in the global market. The company has developed human resource management programs to maintain the diversity of the workforce which facilities in sharing of ideas within the organization. This helps the organization in maximizing their product development lifecycle and creating new designs for all the products in the product line.
The next key feature of the organization’s culture is their inclusiveness which enables to reduce the barriers to optimal performance for the employees. The company uses a team-based approach is this case and other program to remove the different biases to innovative and creative ideas. This helps in streamlining the workforce within the organization and design products that are truly world class.
Figure 1: Revenue of Nike
Source:
|
NIKE Annual Revenue |
|
|
2018 |
$36,397 |
|
2017 |
$34,350 |
|
2016 |
$32,376 |
|
2015 |
$30,601 |
|
2014 |
$27,799 |
|
2013 |
$25,313 |
|
2012 |
$23,331 |
|
2011 |
$20,117 |
|
2010 |
$19,014 |
|
2009 |
$19,176 |
|
2008 |
$18,627 |
|
2007 |
$16,326 |
|
2006 |
$14,955 |
|
2005 |
$13,740 |
Table 1: Revenue of Nike
Source:
However, recently the organizational culture of Nike has come under scrutiny due to the increase in complaints regarding the workforce culture. Reports suggest that employees and executives have left the organization due to poor workplace culture and inappropriate behaviour. Gender discrimination is another factor that has creeped into the organization amongst all these policies and the company are making attempts to improve their workplace culture by establishing gender equality. However, Nike has been making efforts to improve their organizational culture and are developing training programs that facilitates in empowering women. This is the reason that it can be seen that number of workforces has decreased in 2018 where till 2017 there was steady increase in the workforce.
|
NIKE Annual Gross Profit (Millions of US $) |
|
|
2018 |
$15,956 |
|
2017 |
$15,312 |
|
2016 |
$14,971 |
|
2015 |
$14,067 |
|
2014 |
$12,446 |
|
2013 |
$11,034 |
|
2012 |
$10,148 |
|
2011 |
$9,202 |
|
2010 |
$8,800 |
|
2009 |
$8,604 |
|
2008 |
$8,387 |
|
2007 |
$7,161 |
|
2006 |
$6,587 |
|
2005 |
$6,115 |
Table 2: Gross profit
Source:
However, these issues have not affected the revenue generation and gross margin of the organization. This is due to the fact that the major problem was identified in some of the instances and in majority of the cases, the organization was able to maintain the core values.
The analysis of the findings suggest that the organization requires development of new strategies to improve on the loopholes. However, in majority of the case, the organization has been able to keep their core values, which is one of the major reasons that the organization has increased their profit margin by 6% in the year of 2017 and this has continued in the year of 2018. However, the organization is crucial for any organization in global context. Talent management has become one of the key strategies for gaining sustainable competitive advantage in the market. The organization promotes freedom and individual performance and this is the reason that power flows through the organization informally. The formal structure of other organizations is less prevalent in Nike. Therefore, the leaders give power to those that are like them or employees they like which leads to lack of diversity where people from same origin tend to people that have the same cultural values. There is less possibility of counterbalancing the gender and racial bias in such a structure which is the reason that a large number of executives left the company. Nike should make changes to their organizational structure to implement some structure where it promotes talent irrespective of their gender and race. This may cause the deserving employees to be held back due to the race, ethnicity, gender and sexual orientation. This is also not feasible for innovation due to the even distributive of power in subjective way, certain innovative ideas may not come up. Moreover, even if the creative surface, it would take a lot of time to reach the connection points due to the lack of the connection points between each of the teams. The survey conducted by the female clearly portrayed the scenario where the organization lacks consistency in terms of providing equal opportunity all types of people.
Conclusion
The conclusion has linked the findings and analysis with the objectives to provide suitable results. The study has revealed mixed elements of the organizational culture in Nike which consists of both positives and negatives.
Objective 1: To examine the impact of organizational culture of employee performance in Nike
The impact of organizational culture has been both positive and negative in the organization. Even though the organization has been able to inspire the workforce to produce innovative and creative ideas, the lack of organizational structure affects the accountability of the leaders and discrimination is the common phenomenon that has creeped within the workforce. This is the reason that a large number of executives have left the organization. even though, the issue is not affecting the organization currently but in the near future if this problem is not addressed there will be significant consequences that will affect the sustainable competitive advantage of Nike.
Objective 2: To identify the different elements of organizational culture and employee performance
The different elements of organizational culture are talent, inclusion and diversity and the different elements of employee performance are organizational commitment, motivation and job satisfaction.
Objective 3: To recommend suitable strategies to improve the organizational culture
These are the following recommendations for resolving the current issue faced by the organization.
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