Strategic Leadership of Nike

To enhance corporate leadership, Nike has established Strategic Leadership Team, chaired by CEO Mark Parker. This team is responsible for directing NIKE, Inc.'s mid- and long-term strategy. Strategic leadership of Nike is based on the principles of heterogeneous top management team and evenly distributed powers among top management. NIKE, Inc.'s Board of Directors is responsible for corporate governance in compliance with the U.S. Sarbanes-Oxley Act and other laws, and representing the interests of shareholders. As of November 19, 2009, the board was composed of 13 members, 11 of whom are considered independent, non-executive directors under the listing standards of the New York Stock Exchange. As is obvious Nike encourages outsiders to become part of board, in order to avoid bias connected with “corporate conformism”. Having board members assigned from heterogeneous backgrounds makes Nike’s corporate leadership very successful.

Corporate responsibility and organizational culture are crucial elements of successful Strategic leadership. The Corporate Responsibility Committee of the Board of Directors was established in 2001 to review significant policies and activities and make recommendations regarding labor and environmental practices, community affairs, charitable and foundation activities, diversity and equal opportunity, and environmental and sustainability initiatives. Either the company chairman or the chief executive officer attends the Corporate Responsibility Committee meetings.

NIKE, Inc. has a code of ethics for all employees called Inside the Lines. It defines the standards of conduct company expect employees to follow and includes a range of topics on employee activity, ethical behavior, product safety, legal compliance, competition and use of resources.

Each year, all NIKE, Inc. employees are required to verify that they have read and understand Inside the Liness. NIKE, Inc. also operates a global toll-free AlertLine for employees to confidentially report any suspected violations of the law or code of ethics. Any reported concerns around accounting, auditing or internal control are communicated to the Board's audit committee, which determines appropriate action.

In order to enhance innovation and support corporate traditions Nike uses both internal as well as external managerial labor market for employment. As already mentioned many of board members are outsiders on the other hand board member Jeanne Jackson, who also served on the CR Committee, stepped down from the Board in late FY09 to become an executive of NIKE, Inc.

Cooperation Strategy of Nike

           To achieve successful growth, companies use three means of cooperative strategy – internal development, mergers and acquisitions and cooperation. Nike uses all of the mentioned approaches. In previous blogs I was discussing internal development and acquisition strategy. It is interesting to define cooperative strategy of Nike. Strategic alliance is primary source of business and corporate level cooperation strategy of Nike. There are 3 types of strategic alliances – joint venture, equity strategic alliance and nonequity strategic alliance. Nike successfully exploits all three types of strategy.

            The example of joint venture alliance is deal according to which new audio sport producer company was established. In 2002, “Royal Philips Electronics, Europe's largest maker of consumer electronics, and Nike, the world's leading maker of athletic shoes, said today that they had signed an agreement to develop audio sports products”(The new York Times) Using advantage of joint venture, Nike managed to establish new dimension of its product while cooperating with Philips and sharing entrepreneurial  risks with the partner.

            Nike also uses nonequity strategic cooperation with Apple. “NEW YORK—May 23, 2006—Nike and Apple today announced a partnership bringing the worlds of sports and music together like never before with the launch of innovative Nike+iPod products. The first product developed through this partnership is the Nike+iPod Sport Kit, a wireless system that allows Nike+ footwear to talk with your iPod nano to connect you to the ultimate personal running and workout experience”( http://www.apple.com/pr/library/2006/may/23nike.html) As a result, companies share their unique resources and capabilities to create cooperative competitive advantage.

Nike Inc. has equity strategic alliances, each of them bordering on multiple locations around the world; Nike's factory locations are divided across the overseas based on the technological achievements of those chosen facilities. South Korea, Japan, Taiwan, Hong Kong, Philippines, Thailand, China, Malaysia, Indonesia, Yugoslavia are important destinations. Nike coordinates efforts in designing shoes using technology in countries such as South Korea, Japan, Taiwan, and Hong Kong (producing 10,000 pairs of shoes per day) while less developed countries such as Malaysia, Indonesia, Thailand, and Philippines produce the generic casual line of shoes. Most of above mentioned destinations have strict governmental regulations requiring to have local partner when starting new plant. For example Chinese government requires that government owns certain percentage share in new business. Consequently major plants of Nike are either entirely outsourced or established on the bases of equity strategic alliance.