Nike Sustainability Traction - Case Study Example

Nike Sustainability Traction Introduction This article focuses on the contribution of Jones and other leaders in the change of culture and innovation at Nike Company. Jones played a great part in changing the company culture and relationship with the environment since she joined the leadership position in 2004. The company challenges including ethical problems at the level supply chain factories and toxic waste from their production. In the previous time, the company relied on innovation but the new strategy needed to incorporate CR in the company innovation. Jones together with other leaders brought change in the company through changes in organisation culture and innovation. These changes also needed to spread to the factories in the supply chain. Organisation culture refers to the shared values, visions, assumptions and beliefs that provide a guide of behaviours in an organisation. They have psychological and social contribution that is unique to the organisation. Innovation refers the process of translating the idea into the product that generates value. The main aim of innovation is to make the current situation better. In this article, we will look into the actions of Jones and other Nike leaders in promoting change in the organisation culture and promoting innovation. Summary In the 1990s, the company faced criticism over the supply chain in the practices of production companies (Mcnall, Hershauer and Basile, 2011, p. 22). At first, the Nike management denied their influence in the matter, which made the company come under more criticism. An interview with Michael Jordan shows that the company was not ready to take responsibility for workers condition to their contracted companies. This kind of denial by the management damaged the company image further. The company only regained public confidence after CEO Phil Knight showed acknowledgement of company association with low wages, forced overtime and general worker welfare (Hill, Jones and Schilling, 2014, p. 379). This acceptance of company involvement with unethical practices was quite different from the company earlier leadership strategy, which also had a positive effect on the company image. Acknowledgement by the CEO was a great step in improving its image in public and development of much needed corporate responsibility. In late 2004, the VP of CR, Hannah Jones noted that the company needed better ways of dealing with its problems about the environmental approach. The changes in the organisation culture needed strategy that Jones had to consider. She first created the urgency of incorporating CR in company agenda in having a sustainable business. However, this needed support from other manager and she got support from Parker, who she reported. The leaders including Jones also formed a group containing personnel from different departments to pursue the innovation through considered strategy. The vision was to produce environmentally friendly products and improve the company image. The group included marketers and designers who made sure that innovation met the required standards. The group experienced challenges including the way to create the shoes. However, the management overcame these problems by allowing designers to make professional choices. There were the measurement in the progress of development and awarding medals to the products according to meeting the required standards. Awarding of medals encouraged the working members of the group to be more innovative. The products from Nike needed to meet the standard of this innovative group with specific time deadlines. There was also collaboration with a different group to enable production of lesser waste materials. The urgency to incorporate corporate responsibility in the organisation marked the start of implementation of the new production strategy changed the supply factories production system. Bad ethical practices of supply chain factories forced Nike managers to investigate the causes. This new approach was quite opposite of the management previous view that they could not control supply companies actions. There was a need to save the company image to have a sustainable business. In their research, they found that some of the internal systems in the company encouraged these unethical practices by the contract factories. The internal systems that encouraged these practices included quality, prices, and speed delivery of orders that determined bonuses to procurement teams (Verbeke, 2013, p. 511). The management had to do away with these practices through strict measures to supply companies. The company leadership used considered a strategy to solve most of these problems that involved toxic wastes. Previously, most managers in the company did not support the use of corporate responsibility but actions of Jones changed their view. Change in culture The company had an unsuccessful corporate responsibility since early 1990s. In the new management era, there was the establishment of the countrywide training program by the leaders in 2000 started providing a solution when a team in the company managed to release shoes called considered. The timing was right at the start of millennium period with the need to be more successful in the market. The strategy started by creating the need to incorporating CR in the priorities of the organisation. The new strategy worked through looking at innovation from a different dimension. Positions of Hannah Jones as corporate responsibility vice president and Mark Parker as co-president of Nike brand favoured the implementation of programs to save Nike Company in 2004. Jones gathered the needed support from other leaders and later formed a team to help in inventing production of greener products. Her main idea was to push for innovations that ensure sustainability in business. Nike used corporate responsibility in the past but not in these new strategies. Conservation of environment was important amid the concern of global warming. The first initiative of Jones was to find how leaders in the corporation viewed the corporate responsibility. The findings were not pleasing as most viewed CR as a waste of resources and not lined with company focuses in the business. Most of the company leaders viewed it as an ethical responsibility that was not necessary for business. However, Jones believed that corporate responsibility was vital in having a sustainable business and looked for a way to incorporating it into the business strategy (Morgan and Barden, 2015, p. 184). She had to convince others to incorporate it in the system to have a sustainable business. She found a way of convincing other leaders to accept her new strategy of using corporate responsibility by making a requirement in having a sustainable business. Jones emphasized on CR and financial returns need for inclusion in business decision-making to have sustainability and profit. Jones had a vision in using innovation in the right manner to enable sustainability of the business. Group Formation The leaders including Parker, Hoke and Jones formed a team known as Considered Group that would formulate and produce these high performing greener products. The group consisted of individuals that would bring change to the organisation. This kind of group had not existed before in the company with a vision of reducing environmental footprint. The group management strategy was also different from the tradition where the sustainability depends on commanding and control by the leaders. This group became a critical part in the production of the company through the provision of the needed support, tools, knowledge and relating to the outside world. Letting designers finding their way of creating considered product was new another new management strategy. Jones and leaders showed great faith in the strategy through comments and support to the employees in overcoming challenges. There were evaluations of the products while still under development to see the effect of new development. This evaluation also included awarding medals based on the better product compared to the original products. One way of measuring this included reduction of waste material in production. There was silver rating of the product by 2009 after implementation of the strategy. The system encouraged those working to improve innovation through noticing of their work. Evaluation and rewards encouraged innovation culture to improve the products’ quality in meeting the set standards. The innovation of greener production under the leadership of Jones and other leaders works for Nike in many ways (Cramer and Karabell, 2010, p. 42). The production cost is lower than when they used a larger amount of oil per shoe pair production. This kind of improvement through guidance has led to the low cost of production, which increases profitability in the business. At the same time, there has been fall in the new product prices compared to the earlier ones. The fall in the product cost leads to higher number of customers having the ability to buy the goods. Hence, the innovation imposed through actions of Jones and other leaders led to better production practices and prices. Besides, innovation in the production causes less dependence on petroleum product. The introduction of the considered strategy amid the concern of pollution worked well for the Nike Company. The work of Jones to have corporate responsibility provided the company also with a way to improve their dented image. The showing concern for environmental matters by the management was very important in solving public relations problems besides correcting the action of supply factories. Having trained leaders in corporate responsibility and designing areas formed one of the greatest strengths for the company to succeed. Challenges Implementation of the new production style came with some risks in performance and aesthetics. An example is the possibility of recycled content of the sneakers degrading reducing the product durability that threatened Nike standards. At the same time, the synthetic leathers used in the products were no attractive by being dry. The product creation manager, Jim Ford, noted these negative qualities of the product. The products lack the high quality that non-EMPs had. However, the leaders including Jones provided a directive to use them due to potential gain by the organisation. Designing process by the considered group was complex through the requirement of thinking of efficiency in all angles. It was necessary to improve the product look before considering the cost of production. Besides, time strain made it even difficult due changing customer fashions and requirements. The employees at Nike Company had less time in the implementation of the considered strategy in production. However, the leaders offered designers with the opportunity to use their skills in overcoming these challenges. The profit margins on the considered product as added more pressure to the implementation. Some of the companies faced difficulties in implementing this requirement due to foreseen lower margins than the company require for sustainability. Companies affected dropped the EPMs and used non-EPMs that drop the product scoring to silver. Moreover, some of the partner companies had less efficient machinery and management focus to implement the new strategy. Other challenges evolved around the customers liking and valuing the considered products. All these challenges faced the implementation of the considered strategy. Upon complete implementation of the considered strategy in Nike, the company innovation culture changed. Evaluation of Considered In the CR report of 2006 by management, the company showed the new strategy reduced the wastes by a great percentage. The management shows the reduction of even toxic materials like the VOC by 95% since 1990s (Werbach, 2009, p. 107). However, most of the data relating to the company progress remain unreleased since 2006. Most of the employees and Nike CR feel confident that the new strategy is good for Nike’s production. In 2008, Jones felt contented with the achievement of the integration of corporate responsibility into the business. Her satisfaction included that changing for the organisation culture in innovation. Conclusion The action of Jones especially made sure there was a change in the innovation culture with the need to produce greener products. Nike Company needed sustainable business in sourcing and innovative production (Fisk, 2014, p. 214). The process involves a formulating strategy that included forming groups and overcoming changes and finally implementing the changes for a better outcome. Intervention by Jones to save Nike Company forms one of the bold moves by management in uncertain ways. She had seen that the company image would have an effect on the returns and wanted a way to reverse the situation. The use of eco-friendly innovation was one of the major implementation of the corporate responsibility in Nike Company. The change in organisation culture in innovation through the help of Jones proved helpful for the implementation and ensuring sustainability. With concern about the pollution and global warming, the considered strategy forms one of the best moves by Nike Company to improve the public relation. Bibliography Cramer, A. & Karabell, Z. (2010). Sustainable Excellence: The Future of Business in a Fast-Changing World. New York City: Rodale Fisk, P. (2014). Gamechangers: creating innovative strategies for business and brands. Hoboken: John Wiley & Sons, Inc. Hill, C. Jones, G. & Schilling, M. (2014). Strategic Management: Theory: An Integrated Approach. Boston: Cengage Learning. Mcnall, S. G., Hershauer, J. C., & Basile, G. (2011). The business of sustainability: trends, policies, practices, and stories of success. Santa Barbara, Calif, Praeger. Morgan, A., & Barden, M. (2015). A beautiful constraint: how to transform your limitations into advantages, and why its everyones business. Hoboken, New Jersey: John Wiley & Sons, Inc. Verbeke, A. (2013). International business strategy: rethinking the foundations of global corporate success. Cambridge: Cambridge University Press Werbach, A. (2009). Strategy for sustainability a business manifesto. Boston, Mass, Harvard Business Press. Read More