nike-organizational-structure

Nike Organizational Structure In A Nutshell

Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).

Understanding the Nike organizational structure

Nike is the world’s most valuable global apparel brand, estimated to be worth dozens of billions.

The company has a matrix organizational structure that combines aspects of a hierarchical and product-based structure.

To support the immense valuation of the Nike brand, teams are divided based on product and must report to project managers. These teams are also accountable to broader department managers who handle policy and regulation. The presence of multiple chains of command with overlapping responsibility is a key feature of the matrix approach.

There are four main components to Nike’s organizational structure. In the following sections, we will look at each of these in more detail.

Global corporate leadership

At the top of the hierarchy is global corporate leadership. This comprises managers who make corporate decisions that have global ramifications for the company. For example, the responsibility for creating a worldwide marketing campaign ultimately rests with a single group at company headquarters.

Each group is headed by a President, Executive Vice President, or Chief Officer:

  1. Nike brand.
  2. Finance.
  3. Global human resources.
  4. Administration and legal.
  5. Office of the President and CEO of Nike Inc.
  6. Global sports marketing.
  7. Operations.
  8. Product and merchandising.

Each is also based at the global headquarters in Beaverton, Oregon, and is responsible for managing operations in the United States, Americas, and Asia Pacific.

Nike executives note that this structure allows employees to identify with a streamlined company culture that makes consumer needs a priority. They also note that it enables the company to develop a valuable, globalized, and instantly recognizable brand regardless of geographic location.

Regional headquarters

In the case of the EMEA (Europe, Middle East, and Africa) region, operations for 27 countries are managed by a centralized European headquarters in the Netherlands.

EMEA is further segregated into sub-regions including France, Iberia, Italy, Northern Europe, UK & Ireland, AGSS (Austria, Germany, Slovenia, Switzerland), and CEMEA (Central Europe, Middle East, Africa). 

Here, the additional level of hierarchy seeks to reduce complexity by managing the number of direct reports for each senior manager. By grouping single markets into regions, fewer direct reports need to be funneled back to regional headquarters.

Sub-regions are semi-autonomous geographic divisions, allowing Nike to build synergies derived from the grouping of countries. For example, AGSS was created to streamline logistics, finance, and marketing operations for each member of the group.

Further streamlining is also seen by examining the way the countries themselves are grouped. They may be clustered according to:

  • Consumer similarities. For example, consumers in the UK and Ireland are likely to have similar preferences and expectations. This helps Nike adjust marketing strategies accordingly.
  • Retail similarities, or a likeness of retail structures.
  • Similarities in market size or market development stage.

Regional matrix structure and subsidiaries

Regional matrix structure

Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to:

  • Business unit – apparel, footwear, and equipment.
  • Function – human resources, finance, marketing, sales, and operations.

Again, the employee must report to two managers. In this case, the functional department manager and the product manager.

Subsidiaries

Nike has 54 wholly-owned subsidiaries, including Umbro, Cole Haan, Converse, and Hurley.

Like sub-regions, these subsidiaries enjoy some level of autonomy. However, projects exceeding limits set by either the regional or global headquarters must obtain approval.

Generally speaking, subsidiaries are free to make operational decisions at the country level. These decisions may encompass the implementation of plans, local initiatives, or adaptation strategies.

Key takeaways:

  • Nike has a matrix organizational structure with a strong preference for geographic and regional divisions.
  • At the top of the Nike hierarchy is global corporate leadership headquartered in Beaverton, Oregon. Senior executives head seven functional groups that manage operations in the United States, Americas, and Asia Pacific.
  • Nike also has regional headquarters in the Netherlands that manages Europe, Middle East, and Africa. Countries in these regions are segregated to streamline operations and group consumers with similar preferences or attributes.

Read Next: Organizational Structure, Nike Business Model, Nike Mission, Nike SWOT, Nike Pestel.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"