Change Management of Nike Company
I. INTRODUCTION Change management cannot be separated from the organization. It is because change is inevitable. But some people do not like the change itself. They tend to think about the bad effect of the change in the organization, such as layoff, downsizing, pay cuts, or relocation. In fact, the change can be the good improvement, such as the improvement of the technology, building new products, and increase the market. The management has to be prepared of the change management in order to make the effective change management. The change is needed to improve the performance of the organization.
The change is used to make the good development of the organization, such as emerging in the bigger market place, getting the bigger revenue, etc. In this globalization era, the organization has to be dynamic in order to adapt to the environment that keep changing day by day. If the organization cannot implement the change management, the organization will not be competitive in the market because the other organizations keep improving and change the management to adapt in the change environment. II. THEORY Definition of Change Management
Change management is the process of planning, organizing, coordinating, and controlling the compositions of the environment, internal and external of the organization, in order to make sure that the changes are implemented to approved plans and objectives of the changes is going well and has the little disruption (Oseni, 2007). Change management is the art or science of making changes with the certain systems or methods to make sense out of the organizational chaos that happen in the company and affect its employees, its suppliers, its vendors, and its customers (Ledez, 2008).
External factors are the factors that force the company to do the change management. For example, the company need to adjust the price of the products to make it same as the market price, or to attract the customers. Process of the Change Change must be realistic and attainable. Instead of forcing change, it is better to ensure the number of participant that join into the change and the process of the change itself. Every change process should begin with these basic questions (Oseni, 2007): 1. What needs to be change? Change should not be introduced into the system only.
Change can be caused from the organization itself or outside of it. The question is best answered when the limitations of the process are identified. The answer of this question should be able to address why the change is necessary. 2. To what should it be changed? It is one thing to know that there is a need to change the current system, but another question is to what it should be changed. Change cannot be justified into the organization that doesn’t know the better alternative to the current system. The change must be offering the better benefits to the new system than the current system does. 3.
How should this change happen? Some changes are ended as a disaster. It only wastes the management time and investment. Whatever approach is adapted to effect the change must address the issue of how to minimize disruption to the system and minimize the cost also. 4. How can the change be sustained? If this question is not well addressed, all efforts are only a waste in the long run. This is the stage where many process changes face the problems. Stages of the Change In the change management, there are three stages of the change: 1. Pre-implementation Stage. In this stage, there are three parts: Conception of change idea This stage is where the need for process change is realized. For example, the need to improve the inadequacy in the current system. The need to reduce cost, the need to improve the service, etc. * Evaluation of the idea In this phase, the alternatives are identified. * Management’s eventual approval to introduce the process change At each of sub stage, especially the points at which the change idea was evaluated and approved, possible resistance by users and beneficiaries at the existing processes must be identified. 2. Implementation Stage In this stage, the process change is implemented.
It is necessary for management to set up a standing committee to be proactive in identifying problems and resistance during the implementation and finding solution. When it cannot prevent problems and resistance, it should at least find effective solutions. All of the stakeholders need to be carried along as the implementation progresses for better understanding and cooperation. 3. Post implementation Stage This stage is ensuring that the process change achieves the predetermined objectives and that post implementation stage problems are identified and sorted out quickly. Management should ensure that all staff members affected by the change.
All members should be given the feeling of importance in the successful of implementation of the process change. Change in any organization in one of stressful condition that company will have to deal with. How a company deals with change can, decides whether the company will continue to be profitable and forge ahead with new ideas and products and renew the organizational life cycle. Most companies that have continued to stay in business and stay profitable have continually added, renewed, and change the product line, the customer base and the general way to do the business.
Based on John P. Kotter theory, there are eight steps that will enhance the change in the organization and help lowering the amount of stress. They are as follows: 1. Increase Urgency This will help focus the employees on the change at hand and leave the little time to look back at the previous system. 2. Build the Guiding Team Management must be well informed and have capabilities to make the change. They have to be a capable leader who can answer most question and if not can adequately respond to the employees in a timely manner. 3.
Get the Vision Right Management has to be able to define the company vision form to all levels. 4. Communicate for Buy-In Management should be able to sell the workers of the need for the change. 5. Create Short-Term Wins Management has to set the small goals that can be reached realistically. This will increase employees moral and distract from the difficulty of the change. 6. Empower Action The managers have to have the capabilities to guide the staffs without fear of rejections. 7. Do Not Let Up The act of the change has to constantly be pressed onward.
Stop in the middle of process will only jeopardize the power of the new way since the employees will be stuck in the transition period. 8. Make Change Stick The company must live the new process. It cannot to go back in the old way once the change is made. Management cannot over communicate change. Both managers and employees have to know in advance about the situation. The managers have to have the power to take decisions on the spot based on the information that they have. But, they have to have the realistic goals.
Managers and employees have freedom to make mistakes and learn without fear of rejection or public embarrassment because solution of change sometimes come out from the mistakes and later will find the better way to resolve the problems. III. PROBLEMS Nike is one of big company in the world that does the change management. Company profile NIKE, Inc. (NIKE), incorporated in 1968, is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. NIKE is a seller of athletic footwear and athletic apparel worldwide.
The Company sells its products to retail accounts, through NIKE-owned retail stores and Internet sales, and through a mix of independent distributors and licensees, in approximately 190 countries around the world. The Company focuses its product offerings in seven key categories: Running, Basketball, Football (Soccer), Men’s Training, Women’s Training, NIKE Sportswear (its sports-inspired products) and Action Sports. It also markets products designed for kids, as well as for other athletic and recreational uses, such as baseball, cricket, golf, lacrosse, outdoor activities, football (American), tennis, volleyball, walking and wrestling.
The Company sells sports apparel and accessories, as well as athletic bags and accessory items. It also markets apparel with licensed college and professional team, and league logos. The Company sells a line of performance equipment under the NIKE brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, golf clubs and other equipment designed for sports activities. It also sells small amounts of various plastic products to other manufacturers through its wholly owned subsidiary, NIKE IHM, Inc.
In addition to the products the Company sells directly to customers through its Direct to Consumer operations, the Company has entered into license agreements that permit unaffiliated parties to manufacture and sell certain apparels, digital devices and applications and other equipment designed for sports activities. The Company’s wholly owned subsidiary, Cole Haan (Cole Haan), designs and distributes dress and casual footwear, apparel and accessories for men and women under the Cole Haan trademark. The Company’s wholly owned subsidiary, Converse Inc. Converse) designs, distributes and licenses athletic and casual footwear, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks. The Company’s wholly owned subsidiary, Hurley International LLC (Hurley), designs and distributes a line of action sports and youth lifestyle apparel and accessories under the Hurley trademark. The Company’s wholly owned subsidiary, Umbro International Limited, designs, distributes and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of football (soccer), under the Umbro trademark.
Change Management in Nike * Strategic Management Changes Nike changed some people in some positions in order to driving deeper consumers’ connection and expanding the market share. Nike hopes that the changes will strengthen the global management team and look forward to the leadership in these key roles. The changes are: (www. info. nike. com, 2010) * Global brand and general management veteran Joaquin Hidalgo as Vice President of Emerging Markets reporting to President of Nike Global Operations, Gary DeStefano.
Hidalgo brings over 20 years of Nike experience to the role, and most recently served as Vice President of Global Brand Marketing, where he was instrumental in building and expanding Nike’s brand globally through innovative product launches and highly successful marketing strategies. * Jayme Martin, a strong and strategic business leader with 13 years of Nike experience, becomes the company’s Vice President of Global Running reporting to Global Brand ; Category Management Vice President, Trevor Edwards. Martin has held various senior key global and geographic management roles across the Nike senior management team. Davide Grasso, a proven and seasoned brand leader becomes Vice President of Global Brand Marketing reporting to Global Brand ; Category Management Vice President, Trevor Edwards. Grasso brings 15 years of experience in various senior global and geographic marketing management roles in the U. S. , Europe and Asia Pacific regions. * Leslie Lane becomes the Managing Director and Vice President of the Nike Foundation, reporting to Nike Foundation CEO and President Maria Eitel. He will be responsible for leading the team to deliver the Foundation’s next exciting chapter of global impact.
Lane joined the company in 2003 to lead the acquisition and integration of Converse into the Nike portfolio. He also previously managed Nike’s Global Footwear strategy, finance and costing activities. * Product Design All product improves environmental profile as measured on Sustainability indexes evolved from Nike Considered Design ethos and indexes. Then, all new NIKE Brand global footwear will achieve silver rating and all new NIKE brand global apparel will achieve bronze rating. * Using of Water Improve the efficiency of utilizing the water by 15 percent per unit in apparel materials dyeing and finishing and footwear manufacturing. Waste Building the waste reduction in footwear manufacturing and reduced 10 percent reduction in waste from manufacturing across NIKE * Community Invest minimum 1. 5 percent of pre-tax income in the communities annually. The results of doing the change management in some factors are: (nikeinc. com, 2012) * The number of factory audits showing serious, repeated violations has remained low, at about 5 percent over the past five years. The number of contract factories with unknown conditions has decreased from 48 percent in FY09 to 8 percent in FY11, due in large part to increased monitoring against NIKE, Inc. s Affiliate base. * Human Resource Management training was conducted in 79 percent of focus contract factories (76 of 98) which covered 94 percent of footwear volume, 43 percent of apparel volume. * CO2 emissions from contract footwear factories used to source NIKE Brand product were down 6 percent from FY08-FY11, despite a 20 percent increase in production. * 97 percent of NIKE brand footwear achieved a baseline level or better on Nike’s Considered Index. IV. ANALYSIS Nike was doing the change management in order to improve the performance of Nike. By doing the change management, Nike builds Nike’s long-term strategic vision.
It is to decouple profitable growth from constrained resources. It is underscored by new targets and commitments, including a company-wide commitment to further integrate sustainability principles into its innovation processes, governance and portfolios. The work ahead is structured in two levels: continuous improvement targets against key impact areas to “make today better” and broader innovation commitments to “design the future” that establish how Nike is approaching longer-term change. Nike is known globally for innovative performance products and sustainability has now increasingly become core to Nike business approach.
Nike has continuously invested in reducing the environmental and social impacts within the business and supply chain and has made substantial gains over the last decade. Nike knows that they cannot achieve the bold sustainability goals simply by delivering incremental improvements, but need to deliver innovations that rapidly evolve the way things are done at Nike. Nike also unveiled its new factory rating system, the Manufacturing Index, which looks comprehensively at a contract factory’s. This Index elevates labor and environmental performance alongside traditional supply chain measures of quality, cost and on-time delivery.
Within the overall Manufacturing Index, the company has developed an innovative Sourcing & Manufacturing Sustainability Index (SMSI) which assesses contract factory performance on sustainability measures including measures of lean, environmental performance, health and safety, and labor management factors. After more than two years of development work and concluding a successful pilot program, the SMSI is currently being rolled out across NIKE, Inc. ’s global supply chain. V. CONCLUSION Change can be not really good at the first, because change is costly, wasting time, and become not useful thing.
In fact, it is very useful in the organization to improve the performance. The organization need to follow the situation and environment and it forces the organization to do some change. When doing some changes, it needs to be carefully thought and implemented. The organization needs to have plans to ensure that the changes are doing well in the process and in the implementation. The top management also has responsibility to ensure a successful process change. Change will be success if it is well managed. The management has to concern to the internal and external factors, such as employees, customers, suppliers, and also the competitors.
The major objective of doing the change is to improve the performance to be better than before. It is the reason why when doing the change; the management has to be very concern on that. It is very possible that the change may destroy the organization. Because of that, the change has to be managed in the proper way. The successful change management will give good improvement for the organization. It may give more benefit also for the organization. References Ledez, Robert. E. 2008. Change Management: Getting A Tunned Up Organization. Retrieved September 26th, 2012 from http://www. saycocorporativo. om/saycoUK/BIJ/journal/Vol1No1/article_7. pdf Ozeni, Ezekiel. 2007. Change Management in Process Change. Retrieved September 26th, 2012 from http://www. isaca. org/Journal/Past-Issues/2007/Volume-1/Documents/jopdf0606-change-management. pdf Profile: Nike Inc. retrieved September 26th, 2012 from http://in. reuters. com/finance/stocks/companyProfile? symbol=NKE. N NIKE, Inc. Announces Strategic Management Changes. 2010. Retrieved September 26th, 2012 from http://www. info. nike. com/media/pr/2010/05/20_StrategicManagementChanges. html FY 10-11 Sustainable Business Performance Summary. 2012. Retrieved September 26th, 2012 from ttp://nikeinc. com/news/nike-inc-introduces-new-targets-elevating-sustainable-innovation-within-business-strategy#/inline/10492 Nike, Inc. Announces Senior Management Changes. 2012. Retrieved September 26th, 2012 from http://nikeinc. com/news/nike-inc-announces-senior-management-changes–2 Werkman, Renate. 2010. Reinventing Organization Development: How a Sensemaking Perspective Can Enrich OD Theories and Interventions. Retrieved September 26th, 2012 from http://www. onderzoekenadvies. org/wp-content/uploads/2010/01/928458277. pdf Change Management NIKE Inc. Vanindya Permata Adi 014201000130 Banking Finance Class 2 President University