Nike and its Approach to Corporate Responsibility - Essay Example

Nike and its Approach to Corporate Responsibility Introduction Nike, Inc. is one of the leading US based multinational organizations that is engaged in the developing designing, marketing and selling of apparel, footwear, sports accessories, equipments and services. The organization is headquartered in Oregon. The organization is the largest seller of athletic apparel and footwear around the globe. The employee strength of the organization is more than 33,000. Nike sells its products in more than 175 countries. The organization generated revenue of 19.2 billion US dollar in the fiscal year 2009. Throughout its business operating years Nike is developing new strategies and approaches in order to achieve significant business growth rate. The organization established new approaches to the corporate responsibility in order to influence environmental and social change. The organization is made up of several small business units, regions, functions, centers. It is true that global business scenario is changing constantly due to frequent change in external environmental factors and market demand. Corporate responsibility helps an organization to adopt health business and corporate model that ensures potential competitive advantages for the company. The essay will discuss a conceptual framework that will explain the approach of Nike, Inc. to corporate responsibility. Discussion Nike is one of the popular apparel and footwear manufacturing and distributing organization around the globe. In the year 2004, the organization began a large scale and intensive review of its developed and implemented strategies. The management of the organization tries to take unique and new approaches to corporate responsibility in order to ensure future business growth. The organization understood that demand for sustainable business practices can help an organization to run a smooth business across the world (Rendtorff, 2009, p.50). They tried to understand future social and environmental trends before expanding their business in several emerging global areas. The social and environmental trend cannot be similar in all the countries. Therefore, they tried to implement effective review process to achieve potential competitive business opportunity. In the year 2004, Nike, Inc understood that no single corporation can attain systematic change alone. Collaboration, partnership and open source approaches can lead to provide an organization sustainable market based solutions to the challenges that can easily generate system change. In addition to this, the organization realized that in-depth understanding of innovative strategy development and business growth can help the organization to integrate corporate responsibility into these developed strategies (Ferrell, Fraedrich and Ferrell, 2013, p.14). Root cause analysis is important for an organization before implementing the change process. Without knowing appropriate problematic area, an organization can find it difficult to develop systemic change process. Lastly, it is important to listen to the partners and embrace transparency in the business process in order to develop an open source approach. In the year 2004, Nike, Inc expected multi stakeholder partnership during the strategy review process to get success from the newly developed and changed strategies (Kesler and Kates, 2010, p.17). The organization’s thinking process about new approaches to the corporate responsibility is highly justified. It is important that support from the stakeholders is required in order to implement a change strategy and approach. Nike is one of the leading organizations within the apparel, footwear and sports accessories industry. This particular industry is becoming highly competitive and saturated due to rapid change in market demand and intense market competition. Therefore, root cause analysis and partnership with the stakeholders can help the organization to develop new corporate strategies according to the future social and environmental trends. In the year 2005, the organization developed new corporate goals and programs. Nike implemented an effective, redesigned and more fully integrated approach to the corporate responsibility based on the developed goals in 2005 (Hickman, 2009, p.526). The organization developed a corporate responsibility team in order to ensure the decision making process. The redesigned integrated approach created huge value for the entire workforce for the organization around the globe. New matrix organization structure and several corporate responsibility functions enhanced organization’s strategic planning process and product developing process. This sustainable corporate approach helped the organization to achieve significant business outcome. In addition to this, Nike, Inc followed more formalized approach to the accountability and governance. The integrated and redesigned structure motivated the corporate responsibility team to report directly to the CEO of the organization. This effective and direct communication process helped the organization to maintain conflict free workplace environment and sustainable business practices. According to the organization, sustainable business practices and corporate responsibility of an organization entirely depends upon the healthy business model. Business operation of an organization includes sourcing, processing, manufacturing and distributing. Customers and employees are considered as the major growth driver of a successful business. Nike, Inc effectively understood the significance of maintaining transparency and corporate ethics in entire business processes. The organization tried to offer sustainable designed product to the target customers. They started to testing new approaches to several community investment programs. In addition to this, the management of the organization focused on violations and compliance in order to bring more efficiency in the supply chain management process. The state of workplace environment is an important aspect in the human resource function of an organization. Nike is popular due to its quality products and effective customer service. Skilled and effective employees are considered as the strongest asset of an organization. Therefore, it is important to maintain a healthy workplace environment to motivate the employees. The integration process of the organization helped its employees to share their views and strategies with the top management of the organization. Moreover, the organization began to measure the qualitative impact by adopting several systematic approaches (Hill and Jones, 2008, p.573). The organization was working with its key stakeholders to develop a simple state of strategies based on the baseline indicators in the financial year 2006-07. Effective global expansion strategy helped the organization to grab an effective market share. Innovative global expansion strategies ensured a potential global customer base. The organization took several key approaches to identify areas with greatest social and environmental impact. Demand for environment friendly and sustainable products helped the organization to offer green products for the global target customers. In these cases the organization developed several corporate responsibility programs, such as green awareness program, sustainable investment program and carbon footprint awareness program. These developed strategies and programs helped the organization to achieve huge social reputation. Nike tried to manufacture new products based on future social and environmental trend. They think tank of the organization tries to develop a long terms strategy that can ensure the significant growth rate for a longer time period. Nike, Inc has developed an effective financial formula named “ROI-Squared”. The purpose behind the development of this formula is to measure the exponential return from the integrated corporate responsibility approaches into the business as a significant source of innovation and growth. The organization always provides significant value to the employees. Adoption of decentralization organizational structure helped Nike, Inc in several ways. The decision discretion of Nike lies with the lower-level of employees. It is true that culture varies from country to country. The organization effectively understood the concept. Therefore, Nike appointed the line managers in several countries based on the cultural background. It helps the organization to maintain effective and conflict free workplace environment. In addition to this, decentralize organization structure fosters the decision making process. Major purpose behind this strategy to engage the employees with several key business processes. It increases the motivation and self-confidence level of the employees. Ultimately, it helped Nike to perform effective business practices around the globe. Organization culture is one of the key aspects of human resource function. Sustainable and ethical business operation is helping the organization to achieve business objectives. Nike, Inc. always believes in effective employee motivation processes (Ayers, 2003, p.70). The organization tries to employ and retain effective and skilled employees through effective organization culture. Organization culture of the organization depends of collective, behavior, attitudes and value of the organization. Effective communication among all the departments and strong employer-employee relationship enhanced the organizational culture of Nike. Corporate strategies of an organization include entire business strategy of an organization. The management of the organization discuss with entire team and all the line managers before implementing any kind of strategy and approaches. According to the organization, it is highly important for each and every organization to remove workplace conflicts through collaborative decision making process. Ultimately it will foster the business performance of the organization. The organization has developed different ethical codes for all the employees. These ethical codes are known as “Inside the lines”. The organization demands hard work and valuable effort from the employees against the developed employment friendly policies. Nike developed several environment friendly sustainable business policies in order to increase their good will among the global stakeholders. In addition to this, the organization motivates its suppliers to follow appropriate ethics in their supply chain activities. The corporate responsibility committee board of Nike was developed in the year 2001 to review and monitor significant policies and make recommendations based on the identified issues. Slowly and gradually, the organization committed to implement sustainable business strategies in order to meet the future market demand and customer’s trend. Workplace diversity, committee meeting regarding more sustainability and continuous review of developed strategies helped the organization to increase the interest among the global stakeholders (Lawrence and Weber, 2009, p.34). Apart from all these things, the organization provides appropriate financial information of the corporation in each and every financial year. This supreme corporate governance and business transparency helped the organization to attract the stakeholders towards business strategies. Employee and stakeholder engagement process enhanced the decision making process. Major concern areas for the organization are strategy development and implementation, overall business performance, communities, workplace and environment, and health and security of employees (Lussier and Achua, 2009, p.546). Engaging key stakeholders in the decision making process helped the organization to overcome issues associated with these aspects. Reporting process helped the stakeholder to know about the significance of current and future change strategies that may impact on overall business performance in near future. The global community is seeking for environment friendly products. Looking into this specific market demand, Nike is trying to increase the quality of product. In addition to this, the organization is trying to improve the environment of workplace environment. Effective workplace diversity and focusing on job satisfaction level of the employees helped the organization to retain their skilled and potential employees (Aras and Crowther, 2010, p.82). An employee cannot stay for longer period of time in an organization unless they cannot find any motivational aspect. Last but not the least; the organization understood the significance of effective community serving. It is the responsibility of the organization to provide something against the natural resources. The organization is planning to adopt several corporate social responsibility practices, such as water recycling and maintaining zero solid waste in business process. In addition to this, the organization is motivating their global suppliers to adopt several sustainable green approaches to reduce the level of carbon emission during the international logistics and supply chain processes (Contreras, 2004, p.77). It is expected that new sustainable approaches towards corporate responsibility will help Nike to maintain is significant market share for a longer period of time in future. Conclusion Nike Inc. is one of the leading manufacturers and distributors of footwear, apparel and sports accessories. The organization always tried to implement new unique and diversified business strategies in order to achieve several potential competitive advantages. Several leading organizations are realizing the significance of sustainable business and corporate strategies. It is important for all the organization to maintain effective ethics and governance in business to survive in competitive global business environment. Nike also has understood the significance of these aspects. Therefore, they started to review their existing strategies in the year 2004. They realized that the social and environmental trend will change due to change in market demand. Effective decision making strategy, organizational culture, decentralization process and significant communication process among the employees of all functions helped the organization to develop a long term plan for future. Nike has able to attract the stakeholders through several sustainable approaches towards the corporate responsibility. References Aras, G., and Crowther, D., 2010. A handbook of Corporate Governance and Social Responsibility. London: Gower Publishing. Ayers, J., 2003. Supply Chain Project Management. New York: CRC Press. Contreras, M., 2004. Corporate Social Responsibility. New York: IDB. Ferrell, O., Fraedrich, J., and Ferrell, L., 2013. Business Ethics. Stamford: Cengage Learning. Hickman, G., 2009. Leading Organizations. London: Sage. Hill, C., and Jones, G., 2008. Strategic Management: An Integrated Approach. London: Dreamtech Press. Kesler, G., and Kates, A., 2010. Leading Organization Design. New Jersey: John Wiley & Sons. Lawrence, A., and Weber, J., 2009. Business and Society. New York: McGraw-Hill. Lussier, R., and Achua, C., 2009. Leadership. Stamford: Cengage Learning. Rendtorff, J., 2009. Responsibility, Ethics and Legitimacy of Corporations. London: Routledge. Read More