Rlchard Pettlnger

Dividing up the work

Originally the business fundamentals at Nike were organized along functional lines. As the company expanded rapidly this structure began to shift towards product line organization. The apparel and interna- tional businesses emerged as separate divisions. Domestic footwear

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R&D Innovative product
Product development Materials research Technical services Sports research lab





Fig. 7.1 Dividing up the work. Source: Christensen, C.R. et al (1987).
marketing also became a separate division – product line management (see Figure 7.1).

Pulling things together

As the company grew and jobs were divided into smaller, more manage- able and increasingly more specialized chunks, Nike developed three primary mechanisms to pull its business tasks together into a reasonably coherent whole: meetings, de fined coordinating roles, and management reports and systems.

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» Meetings were the primary communication and problem-solving mechanism. They occurred at all management levels in the organiza- tion and ranged from informal conversations to more formal reviews of the product lines. They tended to be scheduled in response to particular needs rather than according to preset cycles.

» Coordinating roles were established to harmonize all activities relating to particular product lines so that one person would assume overall responsibility for research and development, advertising, promotion, selling, and after-sales. This was in response to a lack of understanding of the full strategic approach. For example, one particularly highly motivated sales team successfully promoted a line of footwear in the Far East that was no longer being manufactured.

» Management systems developed piecemeal. The company had partic- ular difficulty in generating a budgeting process. This had to be underpinned by a budgeting, training, and education plan, so that people understood the process rather than treated it as a bureau- cratic procedure. It also sought to concentrate the attention of middle managers on managing for pro fits.