Puma Organizational Structure

Puma utilizes a U-form organizational structure. Otherwise known as a functional structure, this allows the company to effectively structure its business operations around the world.
Some of Puma’s functional groups include Finance, Sourcing, Supervisory Board, and Office of the CEO. There are also over 100 subsidiaries that perform various tasks at the local level, such as administration, distribution, marketing, and product development.
Puma’s organizational structure consists of three product-based divisions: footwear, apparel, and accessories. There are also three geographic divisions: Americas, Asia-Pacific, and Europe, Middle East, and Africa.

Department	Type of Structure	Structure Details	Advantages	Drawbacks
Corporate Leadership	Hierarchy	– Puma’s corporate leadership operates within a hierarchical structure, with clear levels of authority and decision-making. The structure includes executive leadership, senior management, and various divisions and departments, such as finance, marketing, and product design.	– Clear lines of authority and accountability. Efficient decision-making process. Well-defined roles and responsibilities.	Potential slow decision-making due to multiple levels of approval. Limited flexibility in responding to rapid changes in the sportswear industry.
Product Design and R&D	Functional Structure	– Puma’s product design and research and development (R&D) functions follow a functional structure. Specialized teams focus on product design, innovation, and development. These teams collaborate on creating and improving athletic footwear, apparel, and accessories.	– Efficient product design and development processes. Specialized expertise in product innovation.	Potential challenges in cross-functional collaboration between product design and other business units. May not align with specific business divisions.
Marketing and Branding	Divisional Structure	– Puma’s marketing and branding operations are organized into divisions responsible for different geographic regions or product categories. Marketing teams develop strategies tailored to specific markets and demographics. Branding efforts focus on promoting Puma’s image and values.	– Customized marketing and branding strategies for different regions and customer segments. Quick adaptation to regional market conditions. Specialization in sportswear marketing.	Potential coordination challenges between regional divisions. May lead to variations in marketing strategies across regions.
Retail and Store Operations	Divisional Structure	– Puma’s retail and store operations follow a divisional structure, with divisions responsible for different regions or types of retail stores (e.g., Puma outlets, flagship stores). Each division oversees retail operations, store management, and customer experience within its designated area.	– Tailored retail strategies for different markets and store formats. Quick adaptation to local market conditions. Specialization in retail management.	Potential coordination challenges between regional divisions. May result in variations in retail strategies across regions.
Supply Chain Management	Functional Structure	– Puma’s supply chain management functions follow a functional structure. Specialized teams handle logistics, transportation, inventory management, and procurement. These teams manage the flow of products from suppliers to distribution centers and retail locations.	– Efficient supply chain management and logistics. Specialized expertise in inventory and distribution.	Potential challenges in cross-functional collaboration between supply chain and other business units. May not align with specific business divisions.
E-commerce and Digital	Hybrid Structure	– Puma’s e-commerce and digital functions combine elements of both functional and divisional structures. There is a centralized digital team responsible for global online initiatives and platforms. However, digital teams within different divisions focus on e-commerce strategies tailored to their specific markets and customer preferences.	– Efficient management of global e-commerce platforms. Specialized digital solutions for division-specific needs. Flexibility to adapt to regional e-commerce trends.	Potential challenges in balancing centralized and divisional digital initiatives. May require effective coordination between central digital and divisional e-commerce teams.
Finance and Accounting	Functional Structure	– The Finance and Accounting functions operate with a functional structure, comprising specialized teams for financial reporting, auditing, and financial planning. Each team handles financial matters, including budgeting, financial reporting, and risk management.	– Efficient financial management and reporting. Specialized expertise in financial matters.	Potential challenges in cross-functional collaboration with other business units. May not align with specific business divisions.
Sustainability and CSR	Cross-Functional	– Puma’s sustainability and corporate social responsibility (CSR) efforts involve cross-functional collaboration. While there is a dedicated sustainability team, sustainability initiatives require collaboration across various departments, including supply chain, marketing, and product design. The company’s sustainability goals are integrated into its overall business strategy.	– Holistic approach to sustainability and CSR, integrating it into business operations. Collaboration across functions for a shared purpose.	Potential challenges in ensuring consistent sustainability practices across the organization. Requires effective cross-functional coordination and alignment with corporate strategy.

Table of Contents

Introduction

Puma is a German multinational that specializes in the manufacture and design of footwear, apparel, and related accessories. The company, which was founded in 1948 by Rudolf Dassler, is the world’s third-largest sportswear manufacturer behind Nike and Adidas.

Puma utilizes a U-form organizational structure. Otherwise known as a functional structure, this allows the company to effectively structure its business operations around the world and maintain a competitive advantage in a dynamic industry.

Let’s take a look at the U-form approach in more detail below with some additional commentary on secondary aspects of Puma’s organizational structure

U-form or unitary organizational structure

Puma’s U-form organizational structure consists of a hierarchy with company headquarters overseeing various business components along functional lines. This hierarchy is a predominant feature of Puma’s structure, with decisions passed from headquarters down to the most junior of employees.

Each business component (or functional group) consists of employees and/or business processes that are grouped according to commonalities in material utilization, human resource expertise, or operational activities.

In terms of corporate governance, Puma has a dual management and supervisory structure. There is a four-member Management Board comprised of the Chief Executive Officer, Chief Sourcing Officer, Chief Commercial Officer, and Chief Financial Officer. There is also a six-member Supervisory Board with management consultants and employee representatives, among others.

Otherwise, the main functional groups in Puma include:

Office of the CEO.
Finance, and
Sourcing.

The company also directly or indirectly controls over 100 subsidiaries that perform tasks at the local level. These tasks are related to product development, distribution, sourcing, marketing, and administration.

Puma’s U-form structure gives corporate headquarters full control over business operations and strategic decision-making. It also promotes employee specialization and economies of scale for global operations.

But the structure is not without its drawbacks. In some cases, senior management at Puma may be less responsive in the face of complex problems that are specific to a particular group.

Product-based divisions

Supporting Puma’s functional groups are product-based divisions. These divisions help the company maintain its position as an innovative producer of sports-related goods.

There are also three product-based divisions:

Footwear – the most lucrative source of revenue for the company with sales of €3.163 billion in 2021.
Apparel, and
Accessories.

Geographic divisions

For the purposes of internal reporting, Puma’s business activities are divided into three broad geographic divisions:

Americas.
Asia-Pacific, and
EMEA (Europe, Middle East, and Africa).

Comparison with Nike

Similarities: Both Puma and Nike utilize a matrix structure that includes product divisions and regional divisions, enabling both companies to efficiently manage a global brand presence while focusing on product innovation.
Differences: Nike’s structure is more complex due to its larger size and broader product range, incorporating additional layers such as global brand divisions that oversee multiple product categories. Puma’s structure tends to be more streamlined, which may allow for quicker decision-making and implementation.
Implications: Nike’s extensive structure supports its vast global operations and diverse product lines but could potentially slow down decision-making due to its complexity. Puma’s simpler, more nimble structure might allow it to adapt more quickly to market changes, though it might lack the same level of global reach and product diversity.

Comparison with Adidas

Similarities: Like Puma, Adidas operates with a mix of product and regional divisions, ensuring focused product development alongside localized market strategies.
Differences: Adidas places a stronger emphasis on direct-to-consumer channels in its organizational structure, integrating these operations closely with both regional and product teams. Puma, while also focusing on direct-to-consumer strategies, maintains a more traditional separation between product innovation and regional sales strategies.
Implications: Adidas’ integrated approach can enhance customer experience and streamline operations, potentially driving higher sales efficiencies. Puma’s approach might offer clearer specialization between product development and sales, which can be advantageous for innovation and tailored marketing strategies.

Comparison with Under Armour

Similarities: Under Armour and Puma share a focus on performance apparel and footwear, with organizational structures that support rapid product development and market responsiveness.
Differences: Under Armour’s organizational structure has historically been more centralized, with a strong focus on North American operations. In contrast, Puma offers a more balanced global divisional approach, which might provide better leverage in international markets.
Implications: Under Armour’s centralized structure allows for strong brand cohesion and messaging but may limit its agility in global markets. Puma’s balanced structure supports global market penetration and local responsiveness, which is crucial for competing effectively on the international stage.

Key Highlights

U-form Organizational Structure: Puma employs a U-form or unitary organizational structure, which is also known as a functional structure. This structure allows the company to effectively organize its business operations around the world and maintain competitiveness in the sportswear industry.
Functional Groups: Puma’s U-form structure involves various functional groups or business components that are organized along commonalities in material utilization, human resource expertise, or operational activities. Some of the main functional groups include:
- Office of the CEO
- Finance
- Sourcing
Corporate Governance: Puma has a dual management and supervisory structure. The Management Board consists of top executives such as the CEO, Chief Sourcing Officer, Chief Commercial Officer, and Chief Financial Officer. The Supervisory Board includes members like management consultants and employee representatives.
Subsidiaries: Puma controls over 100 subsidiaries that perform various tasks at the local level. These tasks include product development, distribution, sourcing, marketing, and administration.
Product-Based Divisions: Puma’s organizational structure incorporates three product-based divisions:
- Footwear: The most significant revenue source for the company.
- Apparel
- Accessories
Geographic Divisions: Puma’s business activities are divided into three broad geographic divisions for internal reporting purposes:
- Americas
- Asia-Pacific
- EMEA (Europe, Middle East, and Africa)
Advantages of U-form Structure: The U-form structure gives Puma’s corporate headquarters full control over business operations and strategic decisions. It allows for employee specialization and economies of scale for global operations.
Challenges of U-form Structure: While the structure promotes control and efficiency, it might lead to less responsiveness to complex problems specific to individual functional groups.
Revenue Streams: Puma generates revenue through the sale of footwear, apparel, and accessories. Footwear is the most significant revenue source for the company.