Strategic Leadership

Nike has a corporate governance system that is made up of Mark Parker, President and CEO of Nike, along with 11 other board of directors members that have various backgrounds in business administration. These people come from a variety of backgrounds, which helps to bring different viewpoints and perspectives to the business, making it more well rounded. The board of directors is made up of both males and females, and only one member, Mark Parker, is a member of the board of directors and the main management team, which is good for the company, as too much overlap can cause problems within the organization. By having outside members as a part of the board, Nike attempts to avoid too many like-minded people, so there is more information and idea generation, rather than falling into the groupthink trap.

Along with the people serving on the board and through top management, Nike tries to be an ethical organization, and has policies that attempt to prevent any unethical behavior. While most organizations deal with unethical behavior at some point, Nike is proactive and regularly updates their policies. Their Code of Ethics, which they call Inside the Lines, outlines different areas of ethics, including respect, the environment, safety and health, protection of Nike property and ideas, fraud and theft, compliance with laws, conflict of interest, and other potential areas of ethical violations. Each and every employee must abide by these policies. While not every situation can be avoided, by having this document and informing employees about the expectations of ethical behavior, Nike has significantly helped the perception of their company, to a more ethical company overall.

By having a respectable company, brand image, and powerful corporate governance system, Nike has created a culture of success and ethical behavior, which is seen from the top down, with transparency in their financial statements, and easy access for employees and customers alike. This creates a confidence in the behavior of the organization as a whole. By taking steps to maintain their positive reputation as an ethical company, while also creating a direction and designing the organization around their strategic goals, Nike can continue to climb the ladder of success.

Organizational Structure

The organizational structure of Nike Inc. most closely resembles that of the divisional structure. A divisional structure is characterized by internally grouped products, projects, or product markets. Nike follows this organizational structure in the way that they group their divisions according to each sport. For basketball, soccer, golf, and track, among other sports, there is a branch of accounting, finance, marketing and research and development. This is an advantage for Nike because they are such a large corporation that splitting up their divisions is necessary to efficiently and more effectively run the organization.

Within each division, decisions are made that affect products, but generally only in their sport or division. While there is some communication between channels, sports, and divisions, they are separated in this way so that there is collaboration within sport. This also allows employees in each division to act as experts in their segment, leading to more successful products, as they know what is needed in the marketplace, as well as what has been happening in the industry of their sport.

While this organizational structure can be expensive, with accounting and finance segments for each sport, Nike is able to finance this and believes that the way the run their business adds more value to the organization than it costs. If they had one finance, accounting, or research and development team for Nike as a whole, there would be way too much to do, and not enough people to successfully get the work done. Even with enough people, there would be complications with splitting accounts up among employees, whereas with the divisional structure, it is clearly laid out to employees which sport and accounts they deal with.

In a large corporation like Nike, it is important that the structure works effectively and efficiently for them, and follows the strategy that is laid out throughout the organization. In Nike's case, this is true, as they focus on product lines that are specific for different sports. Therefore, it makes sense to structure their organization in this way as well.

Strategic Control

Among the leaders of the Nike organization, there are twelve members of the Board of Directors, which help to guide the organization to where it wants to go. Some of the main leaders of this organization include Phil Knight, as the Chairman of the Board, and Mark Parker, as the Chief Executive Officer. These two, along with the ten others, represent major leadership positions in company's such as Apple Inc, General Electric, FedEx, and Starbucks, among others. Their leadership positions in many different industries combine to create a vast knowledge pool upon which Nike can use their human capital to propel their organization forward in the sporting industry in which Nike competes. Together, they seek to make decisions that will benefit the company, its employees, customers, and shareholders alike. They help to monitor the performance of the company as a whole, and to redirect focus when things go awry. By engaging in meetings, these people can come together to evaluate the performance and actions of top management, and subsequently propel the success of the organization. 

These twelve Board members serve on various committees throughout the organization including the audit committee, compensation committee, corporate responsibility and sustainability, executive committee, finance committee, and the nominating and corporate governance committee. By splitting up into expert areas and smaller teams of board members, they can more clearly see the successes and areas of needed improvement in different areas of the organization. With many important segments and areas of coverage, Nike can more fully cover the needs of each group of shareholders, which ultimately will make the company more successful. Without these committees, their following would not be as strong and their company not as sound overall. 

In addition to their board of directors being held accountable for corporate responsibility, finance, audit, and corporate governance, Nike has a high expectation of ethical behavior from their employees as well. Their code of ethics, which they call "Inside the Lines", must be read and agreed to by each Nike employee, and includes policies on protection of intellectual property, accuracy in financial statements, fraud and theft, conflict of interest, and other important subjects in which corporations much follow in order to maintain investor confidence. 

Between the board of directors, the committees served on, and the code of ethics all Nike employees and members must follow, Nike has a strong strategic control system in place to avoid all possible violations of investor trust.