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