Philip Knight’s Impact on and Contribution to Nike’s Success

TABLE OF CONTENTS

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Introduction

Research Summary

Week 2

Assessment of the employee satisfaction in the organization

Assessment of the “mood” and level of the Emotional Intelligence of the Leader

Application of the Big Five-Personality Model to the Leader; assessment of how much if any of the Dark Triad applies to this Leader

Application of the DeVry library, the article- Narcissistic Leaders; the Incredible Pros, the Inevitable Cons. Authors: Maccoby, Michael

Application of the criteria on Creative Behavior to the Leader and how does the “Choosing to Lie” apply

Week 3

Assessment of the leader using Maslow’s hierarchy of needs

McGregor’s theory X-Y model

Hertzberg’s two-factor theory

McClelland’s theory of needs

Contemporary theories of motivation

Motivational concepts

Week 4

Assessment of the Employees’ Behavior under the Leader

How did teams get implemented in the Leader’s organization?

Were they successful?

What could have been done better?

Week 5

Was this Leader an effective communicator?

What Contingency Theory of leadership allies to this leader?

Examine and apply the two theories of charismatic and transformational leadership

Determine the level of authenticity, ethical, and trustworthy behavior of this Leader

Leaders exercise of power and Chapter 13 concepts

Was this Leader an effective negotiator?

Week 6

Concepts from Chapter 15 and the organizational structure of the organization

Characterize the culture of the leader’s organization using tools from Chapter 16

Nike’s Organizational Culture Inventory

Literature Review

Analysis

Charismatic Leadership

Authenticity Leadership

Path Goal Theory

Transformational Leadership

Conclusion

References

Introduction

Team A chose to research successful leader, Philip Knight, cofounder of Nike, Inc. According to thefamouspeople.com (2017), Philip Hampson Knight was born in Portland, Oregon on February 24, 1938 to William and Lota Knight.  William worked as a newspaper publisher and was a caring father that encouraged and supported Philip and his two siblings, Joanne and Jeanne.  Knight graduated from Cleveland High School in Portland and went on to college at the University of Oregon (UO) and graduated with a journalism degree in 1959; later enrolling in Graduate School of Business at Stanford University and graduated with a MBA in 1962.  Running is one of Knight’s passions that he started as a young boy, continued through college and still does to this day.  Through his love for running he met track coach Bill Bowerman and through their friendship, the two of them went on to discover Nike, Inc. together.

With just $500 each and a lot of love for athletic shoes, Knight and Bowerman created Blue Ribbon Sports; that later became Nike.  Their initial business plan was to buy athletic shoes from Japan and sell them in the United States for a profit (Martin, 2015).  This strategy worked well until they started to have conflicts with the manufacturers of the shoes.  This prompted Knight and Bowerman to make their own brand of shoe and go out on their own; creating Nike.

Nike officially launched in 1971 and used popular athletes’ choice in wearing Nike shoes as a marketing strategy. This proved to be successful and is still used today.  From 1971 to the early 1980’s, Nike’s revenue went from $28.7 million to $867 million (Martin, 2015).  Today, Nike has made over $30 billion in sales and continues to represent some of the top athletes in the world. Forbes currently lists Knight at the 24^th richest person in the world with a net worth of $25 billion.  Knight continues to be very confident in Nike and anticipates even more growth for the company (Golden, 2015).

Over weeks 2-7 of this course, Team A researched and studied Philip Knight’s impact on and contribution to Nike’s success.  We applied organizational behavior topics and concepts to Knight’s leadership style; studying assessments of Nike employee satisfaction, Knight’s mood and emotional intelligence, his personal models, the big five personality, and the dark triad application model.  Pros and cons of narcissistic leaders, creative behavior, and “choosing to lie” were additional topics that we researched and applied to Knight as well.

Team A dug further into the mind of Philip Knight and got a better understanding of his logical thinking through the use of various psychological theories.  Maslow’s Hierarchy of needs, McGregor’s Theory X-Y model, Hertzberg’s Two-Factor Theory, McClelland’s Theory of Needs, Contemporary Theories of Motivation, and Motivational Concepts were all used and applied to Knight to help understand how he became one of the most successful businesspersons in the world.

Nike Inc.’s culture and group behavior was also analyzed by Team A.  This revealed the sort of culture that Knight established while creating Nike and continues to foster.   We examined Knight’s leadership styles and how they affected Nike’s group behavior.  Part of this research had to look into how Knight’s organization team was implemented and how successful they were.  Additional comments on what the organization could have done differently or better were also provided by Team A.

Various concepts from chapter 11 to 14 were studied to find the primary means of communication used by Philip Knight.  The contingency and two charismatic theories, study the transformation of leadership to determine the level of authenticity, ethical, trustworthy behavior, and power exercised by Knight to resolve conflicts were theories examined. It was also questioned if these tactics used were effective and political.

Philip Knight’s leadership style was found to fit the path-goal theory; as he prefers leading, rather than managing.  Chapter 15 concepts were used to determine Nike’s organizational structure and revealed that Nike’s structure is based on innovation, creativity, and staying ahead of the competition.  Organizational tools from chapter 16 were discussed and Team A found that many of them were used to provide a great working environment.  An organizational culture inventory for Nike was provided by us.  The inventory describes Nike’s visions and values and how they played an essential role in improving performance and productivity.

Research Summary

Week 2

The team’s submission for Week 2 includes an assessment of Knight’s employees’ satisfaction, leader mood, emotional intelligence, personal models, the big five personality, and the dark triad application model.  We will then look into the pros and cons of narcissistic leaders, creative behavior, and “choosing to lie”.

Assessment of the employee satisfaction in the organization led by the Leader (Chapter 3)

Philip Knight is committed to his employees and the communities where they live, work, and play.  This has always been at the forefront of his corporate principles (Nike, 2006).   Job satisfaction plays a very important factor into the company’s success. Nike continues to monitor the satisfaction of its employees with random surveys to random employees.  These surveys help Nike keep up its commitment to his employees.  Several branches of this company’s stores located around the world as well as in their headquarters are continuously scored in four categories credibility (communication to employees), respect (opportunities and benefits), fairness (compensation and diversity), and pride/camaraderie (philanthropy and celebrations) (Nike, 2006).

Assessment of the “mood” and of the level of Emotional Intelligence of the Leader, applying the analysis on pages 109 – 113 of the textbook (Chapter 4)

The emotional intelligence of Phil Knight is high which is the most common trait shared by other great industry leaders of our time.  It was Knight’s self-awareness of his passion for running and his tenacity that fueled his entrepreneurial spirit.  Knight believed that failure was going to happen when taking risks and it’s important to do it fast so you can recover faster and learn from your mistakes.  His weakness was marketing and advertising, so he strategized on having famous athletes endorse his footwear would do the marketing for him which was a huge market innovation and success (Gunderson, 2009).

Philip Knight’s leadership and mood in defining Nike’s culture is what separates them from their competitors.  Nike believes that happy employees are productive employees and try to keep their employees motivated and satisfied.  His leadership style is one of very personable and compassionate leader, but a very demanding boss.  Knight is always leading from the front and listens to all his employees regardless of their position in the company.  By rewarding the top performers for their efforts and achievements and penalize the low performers, it reinforces his atmosphere of competition (“Phil Knight Leadership”, 2014).

Application of the Big Five-Personality Model to the Leader; assessment of how much if any of the Dark Triad applies to this Leader

Using the Big Five-Personality Model to assess how much of any of the Dark Triad applies to Philip Knight.  The big five model consists of extraversion, agreeableness, conscientiousness, emotional stability, and openness to experience (Robbins & Judge, 2015).

For extraversion, Knight is passionate about the business and the relationship with the athletes at the top of the list.  He is extraversion person, who often enjoys being around people, but he’s not a person of many words, but he is assertive and knows where he’s coming from (Clark, 2012).

For agreeableness, as a strong business leader, Knight is described as having good-natured, cooperative, and trusting.  He cooperated to alter Nike from a product-oriented company to a marketing-oriented one.  He began appealing to the everyday customer, eventually turning around sales around (Martin, 2015).

For conscientiousness, Knight created the Fair Labor Association in the wake of Nike being accused of tolerating sweatshops.  It is a nonprofit group that combines companies, human rights, and labor representatives to establish independent monitoring and a code of conduct, including a minimum age and a 60-hour work week, and pushes other brands to join (Nisen, 2013).

For emotional stability, Knight has a high emotional intelligence and the ability to identify and manage his own emotions.  He can also recognizes the emotions of others which includes cognitive and conscientiousness (Robbins & Judge, 2015).  He has continuously used his emotional stabilities to guide his company to where they are today as justified by various aspects in his career.  For openness to experience, Knight’s dimension addresses range of interests and fascination with novelty.  He is creative, curious, and artistically sensitive.

Application of the DeVry library, the article- Narcissistic Leaders; the Incredible Pros, the Inevitable Cons. Authors: Maccoby, Michael (Chapter 5)

Philip Knight, the founder of Nike, is not a narcissistic leader.  He is humble, quiet, kind, and stays connected to his roots; no matter how wealthy he becomes.  Knight is eccentric and always tries to remain out of the public except for his love for the University of Oregon where he donated millions of dollars (Clarke, 2012).  Narcissism may be a label that some industry leaders carry, but Philip Knight does not. Philip Knight is a kind, selfless industry leader that leads with humility.

Application of the criteria on Creative Behavior to the Leader; how does the “Choosing to Lie” box on page 178 apply

People can be easily distracted from their own truth and our leader Phil Knight is not exempt from this statement.  Knight has been as ethical as possible in providing a good quality product for consumers to purchase.  Despite the allegations about the “sweatshops” and abusive labor behavior, Phil was able to face the truth and give Nike a better image.  CEO Phil Knight started to aggressively and publicly make changes within the company.  The key to Nike’s turnaround was being honest and transparent about the labor issues it faced.  Knight was able to reward their employees by raising the minimum wage it paid workers, improved oversight of labor practices, and made sure factories had clean air.  Honesty is what it’s all about. We may choose to lie for the moment or come forward and face the truth in order to provide a different perspective for the entire world to be a part of.   Nike is a global brand and they must be able to continue to keep consumers engaged in their products.

Week 3

Team A will use various psychologies theory such as, Maslow’s Hierarchy of needs, McGregor’s Theory X-Y model, Hertzberg’s Two-Factor Theory, McClelland’s Theory of Needs, Contemporary Theories of Motivation and Motivational Concepts to further dig into the mind of Philip Knight and get a better understand of his logical thinking.

Assessment of the leader using Maslow’s hierarchy of needs

Philip Knight is self-actualization, he listened to his crazy idea and dedicated himself to it because pursuing that idea, and making it a reality was a worthy use of his life.  He set goals, painted a vision of the future, and guided them in the general direction, but he never told his people how to do their job.  When Nike sales were doubling every year, so was the stress in Knight’s life.  It was time for some physiological needs.  Eventually Knight married Penny, his wife of 48 years, and soon they had two boys.  Now he had a family and a business, and both were demanding more and more of his time.  To cope with all this, Knight started running six miles every night.  It became a ritual, a sort of meditation, giving his mind the space to reflect on the day, process decisions, and dream of the future (Murray, 2014).

McGregor’s theory X-Y model

Nike employs around 74,000 people and Philip Knight has responsibility to find what motivates his employees.  The Theory X employees are motivated by the lower order physiological and safety needs as mentioned in Maslow’s hierarchy of needs (Robbins& Judge, 2015).  Nike has great job security and the turnover rate is very low, so that satisfies the Theory X employees.  Using McGregor’s Theory Y, managers assume that employees “like working, creative, seeking responsibility, and can exercise self-direction (Robbins & Judge, 2015).”  The Theory Y employees are motivated by higher order esteem and self-actualization needs.  The culture that Knight has created at Nike is made for Theory Y employees and there is plenty of competition throughout the organization, which leads to promotion opportunities and personal growth.  Nike is appealing for employees with either Theory X or Y motivations (“Nike Employee”, 2017).

Hertzberg’s two-factor theory

Nike employees are very well paid and have good relationships with each other.  The working environment is safe and beautiful with a lot of amenities such as an employee gym and diverse cafeteria (“Phil Knight Leadership”, 2014).  Employees are mostly satisfied so, the hygiene factors barely exist in the organization.  The motivators are imbedded into Nike’s culture.  The competitive environment challenges all the employees that can lead to promotional opportunities, recognition, and achievement (“Nike Employee”, 2017).  Nike has tried to keep all their employees motivated and satisfied and that’s why it is one of the best companies to work for.

McClelland’s theory of needs

Philip Knight has created a competitive environment where employees are routinely challenged and accomplish their goals.  The second is the need for power where the employee is motivated by promotions or opportunities to manage others.  Nike provides many management opportunities for employees that are willing to work hard and earned achievements within the organization.  The third is the need for affiliation where the employee is motivated by having harmonious relationships in their working environment with other people and need acceptance from others.  Knight has greatly satisfied this need at Nike by creating a work environment where all the employees feel like they are family and strong ties have been formed between the employees and the company.  All three needs in McClelland’s theory are satisfied by Philip Knight (“Phil Knight Leadership”, 2014).

Contemporary theories of motivation

Part of Philip Knight’s employee motivation is Nike exhibiting the power of creating a sense of shared purpose among talent.  Knight believes in the power of embracing obstacles and using them as unite to motivate and inspire employees.  The best course of action is to take a seemingly dark situation and use it as a way to motivate your talent to find a way out of it. Sometimes the power of shared purpose is enough to get over whatever challenge stands in the way (Kalman, 2017).

Motivational concepts from Chapter 8

Philip Knight has chosen to use a variable-pay program to motivate Nike employees.  Nike utilizes the piece-rate pay plan which pays a fixed sum for each unit of production completed and Nike also offers competitive wages.  Employee stock ownership, a benefits plan that allows employees to buy stock in the company at below-market prices; Nike offers a 15% discount on their stock for their employees.  Having a flexible benefit plan is another way Nike rewards their employees.  This allows each employee to put together a benefits package individually tailored to his or her own needs and situation.  Intrinsic rewards are also used to motive Nike employees.

Week 4

Team A will examine Philip Knight as the leader at the top of his organizations and assess what the group behavior was like under his Leadership.  The team will then look into how his organization team was implemented and how successful they were.  Team A will provide additional comments on how Knight’s organization team could have done more to succeed.

Assessment of the Employees’ Behavior under the Leader

Under Philip Knight leadership, employees enjoyed fairness and sense of purpose.  Nike has an iconic, enviable brand is known worldwide, it is deeply associated with athletes and sports, and is increasingly admired as a digital and design innovator.  One of the most important parts of maintaining that reputation is building an extremely committed workforce.  The way Nike is committed to its employees determines their behavior and if they do enjoy their workplace or not.  Knight’s culture has set the standard and made it possible for employees to have great things to say about the company.

At Fortune, Nelson Farris, Nike’s head of corporate education, describes what the company expects from its employees.  “Figure out where you want your career to go, and when you see something that would help you get there, ask us for it,” he said.  That attitude helps create intensely loyal employees (Nisen, 2013).

The textbook described few group properties related to Nike’s culture.  These four chosen properties hold true such as: Roles, Norms, Size and Diversity.  All group members are playing a role and have expected behavior patterns attributed to someone occupying a given position in a social unit (Robbins & Judge, 2015, p. 248).  All groups have established norms; acceptable standards of behavior shared by their members that express what they ought and ought not to do under certain circumstances.  However, the Size of a group affects the group’s overall behavior.  But the effect depends on what dependent variables are looked at.  Groups with a dozen or more members are good for gaining diverse input.  Therefore if the goal is fact-finding, larger groups should be more effective (Robbins & Judge, 2015, p. 251).  Philip Knight believes in diversity and the values it brings a dozen or more members are to Nike.  Although global virtual teams present challenges, such as ensuring smooth coordination, establishing trust, and overcoming cultural differences in communication, they also present opportunities.  The company utilizes them to make sure the most qualified individuals are assigned to top projects (Robbins & Judge, 2015, p. 259).

How did teams get implemented in the Leader’s organization?

The teams in Nike’s matrix structure are organized by business unit (apparel, equipment, and footwear) and functional unit (human resources, operations, finance, marketing, and sales).  Employees report to a product (business unit) team which is led by the project manager and also department (function) manager.  These managers report to the upper management within their regional headquarters.  When forming a team for a particular project, the project manager can take employees from various functional units (Chestnut, 2017).

Were they successful?

Nike is successful in using the matrix organizational structure and implementing their teams.  Nike can react more quickly to regional marketplace dynamics due to the semi-autonomous operation that teams and their managers are given in this structure.  Project teams benefit from this structure because it leads to an efficient exchange of information due to the collaboration between functional units.  Team members contribute information and feedback in the decision making process which leads to increased motivation (Guzman, 2017).

What could have been done better?

There are a few things Nike can do to make the teams more efficient or better.  The common problems for teams in the matrix organizational structure are psychological stress, management conflict, inefficiency, and overall cost (Nordmeyer, 2017).  Starting in 2018, Nike has simplified and cut costs to its matrix structure by consolidating and reducing six regional headquarters down to four.  Nike is also reducing its global workforce by two percent, about 1,400 employees (Thomas, 2017).  This latest change will improve on efficiency and cost.  Overall, Nike is reported to be a great company to work for and is tremendously successful; mostly credited to Philip Knight’s choice in leadership style.

Week 5

Team A will study various concepts from chapter 11 to 14 to characterize the primary means of communication used by Philip Knight.  The team will examine theories such as, the contingency and two charismatic theories, study the transformation of leadership to determine the level of authenticity, ethical, trustworthy behavior, and power exercised by Knight to resolve conflicts.  Were these tactics used effective and political?  Team A’s analyzes will provide these answers.

Was this Leader an effective communicator?

Philip Knight is an effective communicator who communicated to his employees by any effective means possible especially through performance review.  Knight’s informal approach enabled him to get to know his employees, interact with them, and get involved in all aspects of the business.  He also takes enjoyed putting his personal touches in his communications to the employees such as the handwritten memos sent to employees.  But while being known as personable and persistent, he is also renowned for being a hard and very demanding leader, which is necessity for him as a leader of such large corporation as Nike (Kahn, n.d.).

To excel as an effective communicator, Knight exercised self-confidence.  While Knight was the CEO of Nike, he firmly believed in rewarding employees at top performers handsomely; this is an attitude he had retained since his first job at Nike.  Therefore he established performance-review program which was used to identify the top 20 percent of employees, who were accorded bonuses while the bottom 10 percent, known as the “lemons,” were typically fired and replaced.  Knight believed in the distribution of wealth and supported it as far as possible throughout the company and understood that life-changing fortunes were at stake when considering bonuses (Kahn, n.d.).

It is of utmost necessity that the leader communicate effectively to his employees because communication fosters motivation by clarifying to employees what they must do, how well they are doing it, and how they can improve their performance.  Without this form of communication, employees are in the dark and they do not know how they are doing.  Performance review is very important in this case because it will help them know what it is they did not know.  This helps employees with operating goal-setting theory discussed in Chapter 7; formation of goals, feedback on progress, and reward for desired behavior all stimulate motivation and require communication (Robbins & Judge, 2015, p. 299).

What Contingency Theory of leadership allies to this leader?

The path-goal theory best describes Philip Knight’s leadership style.  This theory states that the leader’s duty is to provide followers the necessary resources, information, and support to achieve their goals and also clearing the path of any obstacles and roadblocks along the way (Robbins & Judge, 2015, p. 340).  Philip Knight organized Nike as a competitive team environment and encouraged all his leaders to stop managing and start leading.  Knight is all about the competition and believes that winning teams have the best players.  Investment in coaching, critiquing, and supporting his employees are a top priority.  He uses performance evaluations to rank his managers.  All the top performers receive rewards and recognition.  He frequently fires his poor performing managers and those that do not fit into Nike’s culture (Ambos & Schlegelmilch, 2010).  This might seem like a high stress and demanding work environment, but Knight’s leadership has made Nike number one in the industry.

Examine and apply the two theories of charismatic and transformational leadership

According to Robert House, charismatic leadership theory states that followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors.  Philip Knight has the characteristics of a charismatic leader.  The key characteristics are vision, personal risk, sensitivity to follower needs, and unconventional behavior (Robbins & Judge, 2015, p. 343).  He is a visionary and his vision was to make Nike the world’s most competitive enterprise.  Philip Knight is ultimate risk taker dating back from his days at Stanford.  He was always willing to try new ideas and introduce new technologies.  Marketing was not Knight’s strength, so he was the first to use popular athletes to market and promote his shoes such as Michael Jordan, John McEnroe, and Tiger Woods (Gunderson, 2009).  Knight’s unconventional behaviors are what made Nike successful.  A few years before Nike went public, Knight was struggling with cash flow and most of his advisors and consultants urged Knight to take the company public.  Knight feared that he would lose control and his vision of Nike’s future would have been destroyed.  He finally went public when he found a way to keep control of his company by offering two different classes of stock.

Philip Knight is a transformational leader because he provides a vision and mission to his employees.  Transformational leaders are innovators and creative and create a more effective working environment by inspiring their followers to be creative and innovative as well (Robbins & Judge, 2015, p. 346).  He is always coaching, critiquing, and supporting his employees to excel and perform at a high level. Transformational leaders encourage risk taking and with the risk comes great rewards.  Knight inspires and empowers his employees by encouragement, rewards, and recognition because it’s his desire to see his employees succeed.  Those managers that do not perform or conform to the leader’s vision are quickly moved or fired (Ambos & Schlegelmilch, 2010).  Nike is on top of their industry because of Knight’s ability to effectively influence and motivate his followers.

Determine the level of authenticity, ethical, and trustworthy behavior of this Leader

Philip Knight is an authentic leader of the highest level.  Being an authentic leader requires the leader to openly display his or her beliefs and values (Robbins & Judge, 2015, p. 349).  The entire culture of Nike is based on Knight’s vision and his commitment to making his vision a reality.  He also leads with passion and heart and all his employees know how he feels because he communicates with everyone regardless of their position in the company (Kruse, 2013).   Ethics was never an issue with Knight until 1996 when allegations of Nike using sweatshops to manufacture their products surfaced.  This issue caused Nike to lose profits and damaged the Nike brand name.  Philip Knight resolved the ethical and social issues to restore their brand name and reverse the decline in profits (Gunderson, 2009).  He trusts his employees to make the right decisions and encourages them to takes risks and make changes.  It is the ethics and trust that makes Knight an effective and authentic leader.

Leaders exercise of power and Chapter 13 concepts

Philip Knight is a compassionate, exciting, personable professional.  He leads by example and has a true interest in his employees.  However, he is also a very demanding and strict boss.  Practices and policies are important to him and he ensures that they are followed.  Philip Knight gages performance and expects the best, but also rewards hard work.  Nike provides bonuses for great work, but will fire those that are not meeting performance expectations.  Philip Knight exerts his legitimate power as owner over Nike employees and uses rewards to motivate them.  Knight also has personal power, due to his unique leadership characteristics.  Knight does not possess expert power, but does have reverent power; due to him being well liked, admired and respected within the shoe and athlete world.

Legitimacy, rational, inspirational appeals, consultation, exchange, personal appeals, and coalitions are power tactics Philip Knight is known to use.  He exerts his power and relies on his position as owner to enforce Nike policies.  Logical arguments and factual evidence were used when creating Nike and continue to be used to further its success.  Knight appeals to his employee’s values, needs, hopes, and aspirations to inspire and motivate them to do great work for Nike.  He allows his employees to be a part of the Nike team and make decisions on their own.  Nike’s individualized benefit package is used to reward employees for their accomplishments and years of service.  Knight also used his personal relationships with athletes as leverage and asked them to help him promote Nike.  Being able to utilize most of the power tactics has substantially increased Philip Knight’s ability to succeed.  Knight is also considered to be politically skilled within organizational politics, due to his ability to utilize these power tactics.

Was this Leader an effective negotiator?

William Perez was hired to fill Knight’s position as CEO of Nike.  Knight felt Perez was the right fit to overseeing the growth of a profitable consumer products company.  He had all the qualification they were looking for, strong managerial discipline, and financial background with a good track record.  Perez triggered a dysfunctional conflict, causing widespread staff revolt when he hired a consulting group to conduct a full review of Nike’s strategies and practices.  Nike conformed this was not were not part of the culture.  Knight and Perez also had clashed over a highly charged political battle where the city of Beaverton was trying to annex the Nike campus against the company’s wishes.  Nike insiders felt Perez didn’t have an intuitive sense of Nike as a brand (Holmes & McGregor, 2006).

Philip Knight is not an effective negotiator, because there was a breakdown in the communication process between him and Perez.  Philip and Perez should have spent more time listening to each other, asking questions, review business goals and  job responsibilities this would have resulted  in both parties seeing eye-to-eye and  agreed on many decisions.

Week 6

Team A has analyzed concepts from Chapter 15 and has been able to determine Nike’s organizational structure.  Nike is structured based on innovation, creativity, and staying ahead of the competition.  Chapter 16 discusses organizational tools that are used to provide a great working environment and the team has been able to apply concepts to Nike.  The team has provided an overview of the organizational culture inventory for Nike and how they have played an essential role to improve performance and productivity.

Concepts from Chapter 15 and the organizational structure of the organization

Nike was established to function under a matrix structure, in which dual lines of authority are created, functional and products are combined and then grouped together.  Nike employees report directly to a product teams.  Product and department managers supervise these teams.  All departments make decisions independent of Philip Knight to support the product they are responsible for.  Within each department, you have sub departments for assisting with other tasks (Chestnut, 2015).

Under the matrix structure, Nike’s organizational culture is focused on creativity and innovation.  They promote the mindset of self-leadership, accountability, control, and self-development.  Employees must have the abilities to think outside the box and understand things from a local and global business perspective (Lukinate & Sondaite, 2017).

Characterize the culture of the leader’s organization using tools from Chapter 16

Philip Knight has created and promoted an organizational culture based on innovation, creativity, and competition.  Organizational culture is defined by seven main characteristics and the characteristics are quantified with a rating of low to high.  The first characteristic is innovation and risk taking; Nike’s culture would be rated high.  Knight is the ultimate risk taker and encourages his employees to think outside of the box.  The second characteristic is attention to detail, which is low.  Knight is not a micromanager and allows his employees to take control of their projects.  The third characteristic is outcome orientation, which is high.  Philip Knight has created a competitive working environment and demands results from his employees.  The fourth characteristic is people orientation, which is moderate.  Knight values and invests in his employees and is committed as a leader to support them.  The fifth characteristic is team orientation that is high.  The organization structure is best suited for teams and Knight promotes inclusiveness in Nike’s culture.  The sixth characteristic is aggressiveness and Nike ranks high.  Philip Knight has created a competitive working environment and motivates his employees with rewards and recognition.  The seventh characteristic is stability that is low.  Philip Knight is anti-status quo and always wants change (Robbins & Judge, 2015, p.465).

Nike’s Organizational Culture Inventory

Nike would have high scores in these cultural styles: achievement, humanistic/ encouraging, and self-actualizing.  All of the high scores are in the constructive norms and that leads to high organizational effectiveness and performance.  Nike would have low scores in these cultural styles: conventional, oppositional, dependent, and avoidance.  Nike doesn’t micromanage and allows employees to work independently.  Most of the low score are in the passive/defensive norms and that hinders performance.

Analyzing the organization’s culture will determine if the company’s culture is an asset or liability.  It also helps identify what needs to be changed or improved and provides insight on the organization’s operating culture compared to the organization’s vision and values.  It is important to have the operating culture align with the ideal culture to achieve the desired outcome (“Organizational Culture Inventory”, n.d.).

Literature Review

In the assessment of Charismatic Leadership, this article talks about charismatic leadership in organizations and how such leadership can, through levels of management and analysis, impact organizational performance.  Leaders who are charismatic and inspirational in the eyes of followers tend to serve as role models for organizational members at lower levels. Philip Knight charismatic leadership would be considered as a close.  In a close charismatic leadership, relationships could develop between a leader and followers in close proximity based on positive interactions and leader behaviors (Waldman & Yammarino, 1999).

In the assessment of authenticity in leadership, this article will be used to look at and the review of authentic and transformational leadership and showing how authentic leadership can be successfully in the workplace.  As an authentic leader, Knight understands his purpose, knows his values, learn with passion, establish allied relationships, and demonstrate self-discipline.  The entire culture of Nike is based on Philip Knight’s vision and his commitment to making his vision a reality.  Author Yaacoub (2016) posit that authentic leadership ignites positive attitudinal and behavioral outcomes, which in turn both piggyback on each other in a virtuous cycle of positivity.

While researching different leadership styles, an article was discovered to discuss the path-goal leadership theory.  The path-goal theory of leadership (House, 1971; House & Dessler, 1974) is a sophisticated theory.  However, in most research, the hypotheses have been tested as the lower the task structure (routinization, standardization, etc.) of subordinates, (1) the higher the relationship between subordinate job satisfaction and role clarity and instrumental leader behavior, and (2) the lower the relationship between supportive leader behavior and the same dependent variables (Schriesheim & Von Glinow, 1977).

Another leadership style discussed in the course was transformational leadership.  Gyanchandani (2017) suggested that transformational leader is one who motivates followers to perform beyond expectations (Bass, 1985; and Qu, 2015).  Burns defines transformational leadership as the process in which leaders and followers are coordinated toward more elevated amounts of ethical quality and inspiration.  An article below provided the different leadership style and how each style should be a determinant of growth for the organization.  Nike will be analyzed and how Philip Knight demonstrated the transformational leadership style

Analysis

Charismatic leadership

Charismatic leadership theory states that followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors.  Most charismatic leaders will have an effect on business culture.  That is, leaders who are charismatic and inspirational in the eyes of followers tend to serve as role models for organizational members at lower levels. Philip Knight charismatic leadership would be considered as a close.  In a close charismatic leadership, relationships could develop between a leader and followers in close proximity based on positive interactions and leader behaviors.  Philip Knight a charismatic can be demanding.  He shows persistence and interest in pursuing goals over the long haul.  His high performance expectations and is confidence that followers can achieve those expectations (Waldman & Yammarino, 1999).

Philip Knight has the characteristics of a charismatic leader.  The key characteristics are vision, personal risk, sensitivity to follower needs, and unconventional behavior (Robbins & Judge, 2015, p. 343).  He is a visionary and his vision was to make Nike the world’s most competitive enterprise.  Philip Knight’s vision dates back from his early days, selling Japanese track shoes from the trunk of his car and evolved as the company grew.  The vision never changed up to his last day at Nike and made sure it continued by picking his successor, Mark Parker who also shares his vision.  Philip Knight is ultimate risk taker dating back from his days at Stanford.  He traveled to Japan to acquire running shoes and created his first company, Blue Ribbon Sports which later became Nike.  He was always willing to try new ideas and introduce new technologies.  Marketing was not Philip Knight’s strength, so he was the first to use popular athletes to market and promote his shoes such as Michael Jordan, John McEnroe, and Tiger Woods (Gunderson, 2009).

Knight’s unconventional behaviors are what made Nike successful.  A few years before Nike went public, Knight was struggling with cash flow and most of his advisors and consultants urged Knight to take the company public.  Knight feared that he would lose control and his vision of Nike’s future would have been destroyed.  He finally went public when he found a way to keep control of his (Robbins & Judge, 2015, p. 346). He is always coaching, critiquing, and supporting his employees to excel and perform at a high level. He also encourages his managers to embrace change and treat each day as if it was your first.

Authenticity Leadership

Philip Knight is an authentic leader of the highest level. Being an authentic leader requires the leader to openly display his or her beliefs and values (Robbins & Judge, 2015, p. 349).  Philip Knight is an authentic leader who seeks self-consciousness and reflection.  He has a transparent relationship with his staff, always seeking inputs from others and will always maintain his objective while doing so.  As an authentic leader, Knight understands his purpose, knows his values, learn with passion, establish allied relationships, and demonstrate self-discipline.  The authors posit that authentic leadership ignites positive attitudinal and behavioral outcomes, which in turn both piggyback on each other in a virtuous cycle of positivity (Yaacoub, 2016).

The entire culture of Nike is based on Philip Knight’s vision and his commitment to making his vision a reality.  He also leads with passion and heart and all his employees know how he feels because he communicates with everyone regardless of their position in the company (Kruse, 2013).   Ethics was never an issue with Knight until 1996 when allegations of Nike using sweatshops to manufacture their products surfaced.  This issue caused Nike to lose profits and damaged the Nike brand name.  Philip Knight resolved the ethical and social issues to restore their brand name and reverse the decline in profits (Gunderson, 2009).  From that point on, Philip Knight learned from his mistakes and Nike has been operating transparently to address all ethical and social issues.  Trust is what Knight gives to his employees and what he expects from them.  Trust between leaders and followers encourage risk taking, effective exchange of information, and increased productivity (Robbins & Judge, 2015, p. 354).  He trusts them to make the right decisions and encourages them to takes risks and make changes.  It is the ethics and trust that makes Knight an effective and authentic leader.  He leads by example and his followers strive to do the same.

Path Goal Theory

The path-goal theory best describes Philip Knight’s leadership style.  It states that Knight has chosen specific behaviors that best fit the needs of his employees and their working environment.  Leaders must be able to motivate their employees in their paths so that they have goals that are attainable.  Processes of the path goal theory are:

• Understanding employee characteristics & environment
• Motivation for employees to help them create their own path
• Adapting and adjusting to all leadership styles.

This theory states that the leader’s duty is to provide followers the necessary resources, information, and support to achieve their goals and clearing the path of any obstacles and roadblocks along the way (Robbins & Judge, 2015, p. 340).  Philip Knight organized Nike as a competitive team environment.  He encouraged all his leaders to stop managing and start leading.  Leaders that controlled and monitored their teams slowed down progress and complicates decision making.  Leaders that motivate, support, and communicate effectively with their team will perform at higher levels and have greater success in reaching their goals.  Knight is all about the competition and believes that winning teams have the best players.  Investment in coaching, critiquing, and supporting his employees are a top priority.  He uses performance evaluations to rank his managers.  All the top performers receive rewards and recognition.  He frequently fires his poor performing managers and those that do not fit into Nike’s culture (Ambos & Schlegelmilch, 2010).  This might seem like a high stress and demanding work environment, but Knight’s leadership has made Nike number one in the industry.

Transformational Leadership

Knight would be considered a transformational leader because he inspired his employees to rise above their self-interests and in return this has helped to grow his organization. Transformational leaders are very observant to the concerns of their employees.  They promote encouragement and creativity.  Gyanchandani (2017) indicated that transformational leadership theory was developed by Burns (1978) and Bass (1985).  Transformational leader is one who motivates followers to perform beyond expectations (Bass, 1985; and Qu, 2015).  Burns defines transformational leadership as the process in which leaders and followers are coordinated toward more elevated amounts of ethical quality and inspiration. Unlike traditional leadership theories, which principally concentrate on coherent procedures, transformational initiative speculations accentuate feelings and qualities.  Today, transformational authority plays a major role in expanding the energy of people and organizations for creation, use, reestablishment, and utilization of information for creating essential prerequisites for development of organizational learning (Grant, 2012; and Mittal, 2015).

Furthermore, transformational leaders encourage risk taking and with the risk comes great rewards.  Philip Knight affords his managers to have the ability to make the changes necessary to improve the process or product.  Knight inspires and empowers his employees by encouragement, rewards, and recognition because it is his desire to see his employees succeed.  Those managers that do not perform or conform to the leader’s vision are quickly moved or fired (Ambos & Schlegelmilch, 2010).  Nike is on top of their industry because of Knight’s ability to effectively influence and motivate his followers.  He is a role model and earned the trust and respect of his peers.

Conclusion

In conclusion, Team A’s research of successful leader, Philip Knight, revealed a story not about the typical CEO, but an inspirational one about an entrepreneur.  Knight’s values and attributes created his unique leadership style that allowed him to create a small company into a sports empire.  Tenacious, passionate, visionary, and risk taker are just some of the positive words used to describe Knight.  Nike and Knight are one in the same; one being the extension of the other.  Knight is one of the greatest transformational corporate leaders of our time and he used his talents to create a multi-billion dollar company.

Philip Knight started his small company with a personal contribution of $500 and started selling shoes out of the trunk of his car.  He did this by utilizing Maslow’s self-actualization theory, McGregor’s theory X and Y models, Hertzberg’s motivation theory, all three of McClelland’s theories, the self-determination theory, and the goal setting theory.  A motivational culture has been established by Knight.  This culture provides a competitive environment with opportunities for promotions, recognition, and achievement.  Also, a variable-pay program with flexible benefits that cater to Nike employee’s individual needs is offered to all Nike employees according to performance.

Nike culture is non-corporate and Philip Knight’s charismatic style has served this culture well.  “Butt face meetings” and tequila fountains are just a couple examples that explain the Nike culture.  Although the work environment is fun, it can also be very demanding.  Knight holds his employees to a high standard and expects the best out of each of them.  Nike also has established roles, norms, is large and has diversity.  It is matrix organizational structure consists of Global Headquarters, Regional Headquarters, and Subsidiaries.  There is a hierarchy within Nike’s structure with Global Headquarters being at the top.  This structure has allowed Nike to be very successful in a highly competitive global market.  However, Nike has also had its struggles; almost crashing in the 1980s.  Nike had to make some adjustments and learn from mistakes over the years.  Some common problems include; psychological stress, management conflict, inefficiency and overall cost.  All things considered, Nike is a great company to work for and most of that can be credited to Knight’s choice in leadership style.

Philip Knight is an effective leader who uses an informal approach to communicate with his employees.  He gets involved with his employees on a personal level and does not allow any company politics to get in the way of that.  The goal setting theory applies to Knight’s choice of leadership style due to him being a firm believer in rewarding employees according to their performance.  Downward communication is used and has proven to stimulate motivation within Nike.  Knight’s leadership style can also be applied to the path-goal theory, as he encourages leading, rather that managing.  Being a charismatic and transformational leader has enabled Knight to create Nike’s vision and mission that he expects each employee to follow. Authenticity, ethical and trustworthy is words used when describing Knight.  Also, being able to tactically exert his tactics has labeled him as politically skilled within organizational politics.  The only are that Team A has found Knight to be lacking in is negotiation skills.

Nike’s structure, guided by Philip Knight’s encouraging and hands-on leadership style, is made of innovation, creativity, and competitiveness.  This has created a matrix organizational structure with several managers, competing goals, influence without authority, and accountability without control.  This structure has had a big impact on Nike and allows decisions to be made outside of Knight’s control and encourages self-leadership in his employees.  Nike’s visions and values utilize organizational tools to provide an excellent working environment.  Rating high in innovation, risk, outcome orientation, team orientation, and aggressiveness.  Lower ratings were in attention to detail, people orientation, and stability. These results reflect Knights choice in not micromanaging his employees, no hesitation to fire unsatisfactory employees, and a belief in change leading to success.

Accomplishments of Nike’s culture include achievement, humanistic/encouraging, and self-actualizing cultures.  But lacks in conventional, oppositional, dependent, and avoidance cultural styles.  This is due to Nike demanding that employees conform to its culture, vision and values.  Nike’s unique structure and culture has proven to be affective and result in success for Nike and its employees.

Philip Hampson Knight started out with $500, a partner, and the trunk of his car and built an empire worth billions.  Team A did an excellent job of working together to find out what lead to his success and also looking at what he could have done a little different.  In the end, it was Knight’s ability to communicate and connect with his employees to motivate them to do their best.  Knight’s leadership style is carried on to this day through Nike’s vision and mission.  There is no doubt that Nike will continue to go down in history as one of the most successful shoe companies out there and Knight as it is legendary leader.

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