Nike’s organizational structure is one of the best organizational structure examples in the world. A matrix organizational structure is a company structure in which the reporting relationships are set up as a grid (a network of lines that cross each other to form a series of squares or rectangles), or matrix, rather than in the traditional hierarchy. He joined Nike in 1999 and held leadership positions in EMEA and North America before taking on responsibility for global communications. In Bizfluent. “Nike is organized in a matrix organizational structure, more commonly known as a flat organizational structure. When a technology developed at the competitive big tall organizational structure of society can no longer be used in a big company, so many companies have changed into flat organizational structure. “Nike is organized in a matrix organizational structure, more commonly known as a flat organizational structure. The organisational structure in Apple is also a functional structure as the company is organised along functional line (Torrington et al. It allows more people to take on leadership roles, and always ensures you have the best person for a given problem. Companies like Zappos see this as a fundamental problem to solve. Does Nike Own Adidas? In a flat or matrix organisation, employees report to project or product teams led by a product manager as well as to the department manager. As we shed a manufacturing past for a digital future, many U.S. companies have come to embrace a flat corporate structure, one that does away with middle management -- or, sometimes, management altogether. How can organizational structure affect the organization's bottom line?→, Traditional vs. contemporary organizational structure→. Organizational Structure Nike is organized in a matrix organizational structure also knows as a flat structure. The Nike sportswear company is organised in a matrix organizational structure, more commonly known as a flat organizational structure. Flat World Knowledge: Contemporary Forms of Organizational Structures. But unlike good old-fashioned hierarchies, there are few checks and balances in place in flat firms. Photo by Keilidh Ewan on Unsplash Will Adopting a Flat Organizational structure Be Effective or Fruitless? Create a free website or blog at WordPress.com. For example W.L. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. There is never any illusion about what the … Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Global competition requires companies like Nike to react quickly to marketplace dynamics. It integrates the top down vertical organizational structure that highlights reporting relationships, with the flexibility of a flat organizational structure where cross-department teams report to project managers. The organizational chart of Nike displays its 145 main executives including John Donahoe, Matthew Friend and Andrew Campion × We use cookies to provide a better service. Since the 1980s, studies have shown that the number of levels between CEOs and their lowest-level managers has dropped. Flat organizational structure is defined as an entity where the top management is in direct contact with the front-line salespeople, employees at the floor levels as well as the customers. If someone does not have the level of expertise that their job requirements demand of them, the … Profits have grown 57% and Nike’s market cap has more than doubled. a distributed management system where no one is the boss and employees can make impactful decisions at all levels Nike's Vision Statement – The Asterisk Is There for a Reason. Nike is a powerful example of corporate culture because Parker is serious about reinvigorating his organization on a regular basis. Employees must have the abilities to think outside the box and understand things from a local and global business perspective (Lukinate & Sondaite, 2017). The subdivision for EMEA, which Nike’s European headquarters manages, replicates this structure, while the U.S., the Americas and Asia Pacific locations are housed within the global headquarters’ oversight. It Promotes Faster Decision Making Another advantage about a flat organiza… Chestnut holds a bachelor's degree in electrical engineering from the University of Mississippi (1980) and a Master of Business Administration from University of Phoenix (2004). However, each departmental head does report directly to the CEO himself, giving the department autonomy in decision making. The matrix organizational chart combines traditional organizational structures. Nike’s organizational structure has global corporate leadership, which involves corporate managers. In contrast to the tall hierarchical structure, a flat organizational structure is characterized by relatively few layers or just one layer of management. According to Flatworld Knowledge, Nike is a model of a successful company that uses this structure effectively. Nike's Flat Organizational Structure . At Nike and in other flat or matrix organisations, the product team and product managers make decisions regarding product specifications and production. Brand managers are allowed to make decisions independent of their Chief Executive Officer. Retrieved November 15, 2017, from-maxims-4138115. According to Qui & Donaldson (2012), within departments, there are sub-departments that are responsible for mini-task. Each department also has sub-departments or project teams responsible for handling mini tasks within each department.” They are thus responsible for organizing it’s own activities. Matrix organizational structure examples and templates. When a company doubles in size, the opposite happens. Nike CEO Mark Parker apologized to employees for permitting a workplace culture where some felt excluded and management didn't take complaints seriously, according to … (n.d.). Department managers focus primarily on policy-related issues. With Nike, each brand has a department, and each department makes decisions independent of the CEO. This is where your personal bookmarks are stored. The Nike sportswear company is organised in a matrix organizational structure, more commonly known as a flat organizational structure. Posted on June 28, 2015 by maleekamel. Nike Brazilian Corporate Structure. Organizational structure of the multinational company in this case is developed on … It consists of supervisors who oversee the employees in such areas as engineering, marketing, as well as projects (Guzman 2013). Gore & Associates which now has over 9,000 employees scaled their flat structure over many years since the company started. Considering this, what is Nike's organizational structure? The managers have offices in the company’s headquarters in Oregon, USA. ( Log Out / Nike Flat Organizational Structure An organizational structure can be defined as a pattern of relationships of different component in an organization. Nike's goal is to inspire and innovate sports people and athletes worldwide (Rothaermel, 2015). They promote the mindset of self-leadership, accountability, control, and self-development. Organization structure thus refers to the arrangement of relationships among different positions and people in an organization … This structure enables Nike as a company to track the performance of each of its brand separately. Because the flat organizational structure is essentially a “bottom up” type of hierarchy, there is tremendous reliance on the expertise of the front-line staff. Change ), You are commenting using your Google account. Difference Between Flat File & Relational Database, The difference between a CFO and a financial director. They decide for the global corporate structure of Nike. Organizational structure is the upright and flat configuration of departments, authority, and jobs within the organization. Change ), http://www.ehow.com/facts_6887850_nike_s-flat-organizational-structure.html. The reason is simple, this structure is to multi-layer system . Nike has a geographic divisional organizational structure. He has published several business articles online and written several business ebooks. To add bookmarks, please click the star on the bottom right corner of content tiles or at the bottom of every content page. ( Log Out / Tall organizational structure. When a city doubles in size, the productivity per person increases by 15%. With the opportunity to be dispersed remotely and to build complex products without factories […] What Are the Advantages & Disadvantages of Hierarchical Structure? http://www.ehow.com/facts_6887850_nike_s-flat-organizational-structure.html. 2005). My initial response to the question is that there are no “big company” examples. Each department also has subdepartments or project teams responsible for handling minitasks within each department. With Nike, each brand has a department, and each department makes decisions independent of the CEO. I wouldn’t put it in the “big company” bracket but it is large enough to demonstrate possibility. Under the matrix structure, Nike’s organizational culture is focused on creativity and innovation. The Nike sportswear company is organised in a matrix organizational structure, more commonly known as a flat organizational structure. However, Nike’s performance figures (see appendix) seem to tell a different story. An organizational structure defines task delegation, and line authority establishment within an organization. Eric Bailey’s response is useful. By continuing your navigation, you consent to their use. Change ), You are commenting using your Twitter account. Personalise. Starbucks operations are divided into the following geographic divisions or segments: Americas (US, Canada and Latin America) Europe, Middle East and Africa (EMEA) China/Asia Pacific (CAP) Channel Development All other segments 2. According to Flatworld Knowledge, Nike is a model of a successful company that uses this structure effectively. Nike’s annual revenue hit $24 billion last year, a 60% increase since he took the reins as CEO in 2006. This means that there are less wages, fringe benefits, and so on, to pay for management. In theory, a flat organizational structure is great; the best person for a given problem steps up and addresses it and everyone supports them. Salary-related expenses are reduced, enabling the company to save money as well as provide better pay for its workers.2. Also, because of the global competition Nike has to react to changes quickly and make rapid decisions. The matrix structure is divided into two categories by functional area and by product. Product Division. Geographic divisions. Prior to Nike, he worked at Edelman in Brussels, representing and advising clients on the WTO, EU relations, corporate reputation, issues … business image by peter Hires Images from Fotolia.com. Nike is an innovative company and such organizational structure helps it to handle research and development measures. A flat structure is an organisational structure with only a few layers of management. For them, the root lies in organizational structure. ( Log Out / NIKE INC. 21 Forbes. This structure is based on the company's needs in its global organization, as well as the uniqueness of conditions in regional markets. Netflix Inc.’s organizational structure is relatively flat but centers on a hierarchical form, similar to the corporate structures of other online organizations. Nike’s organizational structure is a matrix structure. Unfortunately, that’s not how it works in practice. Starbucks organizational structure can be classified as divisional and the business is divided into the following divisions: 1. (Public Domain Image) Netflix Inc.’s organizational structure is hierarchical but with modifications that account for business flexibility and responsiveness to global market changes. According to Mercer’s Global Talent Trends Study 2017*, 93 percent of companies are planning an organizational redesign in the next 2 years.Many of those organizations will be shifting from a traditional, hierarchical approach to a flatter management structure. The lack of formal rules and hierarchy masks a vicious informal power structure. Change ), You are commenting using your Facebook account. Your bookmarks. In such an organization leadership is decentralized, and there is no role and responsibility of the mid-management levels. 1. At Nike and in other flat or matrix organisations, the product team and product managers make decisions regarding product specifications and production. With Nike, each brand has a department, and each department makes decisions independent of the CEO. The Matrix Structure and Nike Dwight Chestnut has been a freelance business researcher and article writer for over 18 years. Apple's really efficient and very impersonal when it comes to making decisions [about killing a product]. Flat structure. Nike is organized by a matrix structure, which entails multiple responsibilities and report- ing lines for each unit which might be problematicxxx. Nike has a matrix corporate structure, also known as a flat structure. It Is Cost Efficient As mentioned, in this organizational structure, there are fewer (or no) manager layers between the executive and the staff. At Nike and in other flat or matrix organisations, the product team and product managers make decisions regarding product specifications and production. (2012). In flat organisations, production teams led by product managers can make decisions and react much more quickly than the traditional department head, who is often removed from the production line. What You Need To Know About Nike’s Phil Knight. Nike’s flat structure, also known as a matrix structure, consists of several divisions separated into subsidiaries: Converse, Hurley and others, which all report to Nike’s global headquarters. According to Flatworld Knowledge, Nike is a model of a successful company that uses this structure effectively. Retrieved from Farfan, B. ( Log Out / T put it in the company started are responsible for handling minitasks each. Commenting using your Twitter account organized by a matrix structure that uses structure. 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