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1、Corporate structure and strategy: the case of Nike(lecture prepared by Deron Fergus on, Departme nt of Geography; see sources in no tes at end)Why are con temporary corporati ons forced to restructure, and how are they doing it?How is the structure of a corporati on related to its Ion g-term competi
2、tive strategy?What are the geographic implicatio ns of this relati on ship with regard to mult in ati onal corporatio ns and transn ati onal producti on?In todays lecture, we will address these questi ons by look ingat the case of Nike. ( references for this material)SETTINGTHECONTEXTPost-Fordism, F
3、lexibility, and the athleticfootwear in dustryBefore look ing at the relati on shipbetwee n Nikes corporate structure andcompetitive strategy, it will help to review the cha nging bus in essen vir onment faced by large and small firms alike. The cha nging bus in essenvironment faced by firms in adva
4、need capitalisteconomies and societiesis grounded in the transition from Fordism to post-Fordism. The chart below reviews the basic characteristics of this tran siti on.Fordism (post-WWII to mid 1970s)Post-Fordism(pasttwodecades)Production* large batches of sta ndardized goods large inven tories* sm
5、all batches of non sta ndardized goods* just in time deliveries of materialsLabor* collective barga ining (unions)* hierarchical man ageme nt* rigidly defi ned job descripti ons* implicit con tract of workers ben efits betwee n the state,* in dividual con tracts* team man ageme nt* multi-skilli ng (
6、high wage jobs) and de-skilli ng (low wage jobs)bus in ess, and labor erosi on of ben efits and the growth of temporary laborTechnology in flexible machi nes in creme ntal inno vati on* programmable mach in es; CAD systems* rapid and radical inno vati onGovernment* macroec ono mic in terve nti on(Ke
7、 yn esia ni sm) and provisi on of a safety n et* regulati on of in dustry andan titrust* in dustry-gover nmen t-u nion cooperati on* n eoliberalism and disma ntl ing the welfare state deregulati on decreas ing support for unions* decli ne of the military in dustrial complexConsumption andMarkets mas
8、s con sumpti on ofsta ndardized goods relative market stability domin ati on of in ter nati onalmarkets* greater dema nd forni che goods* high market volatility* intense intern ati onalcompetiti onCorporate Structure vertically in tegrated large firms rigid corporate orga ni zati on* vertically dis
9、in tegrated small and medium-sized firms* flexible orga ni zati on; subc on tract ingLocation of Production* corporate fun cti ons (R&D, producti on, marketi ng,adm ini strati on) located together regi onal concen trati ons of producti on* corporate fun cti ons dispersed, e.g., R&D in one place, pro
10、ducti on in ano ther* in dustrial districts and agglomerati ons (e.g., Silic on Valley.)Buzzwords and phrases* sta ndardized; routi ni zed* mass producti on* hierarchical* acquisiti ons and vertical* flexible* small batchproducti on; just intimein tegrati on welfare state distributed dow nsizi ng n
11、eoliberalismThe gen eral trend over the past two decades has bee n a moveme nt from astandardized to a flexible economy (Stutz & deSouza, pp. 358-361).Many excepti ons can be found to this con cepti on of how econo mies are cha nging (e.g., the rece nt acquisiti on of McDonn ell Douglas by Boe in g)
12、, but eleme nts of it can be found virtually everywhere, depe nding on the type of in dustry invo Ived.In this example, we will look at the athletic footwear in dustry .In particular, we can focus on the athletic footwear market as an example of the formatio n of n ew, highly volatile, competitive m
13、arkets. Chan ges in the footwear in dustry can be summarized as: footwear product ion has grow n rapidly / Overhead Fig 2 intense competitio n and market volatility are in dicated by the explosi on in the nu mberof styles of athletic shoes, and competiti on among brands / Overhead Fig 1* a key to su
14、ccess in the in dustry is inno vati on and the rapid turn-around of desig n and producti on* however, the product ion of shoes remai ns in here ntly a Fordist, labor- inten sive process* producers must have output and desig n flexibility producers must preserve proprietary in formati on and tech no
15、logy, yet be orga ni zati on ally flexibleNike has succeeded in competing in the footwear industry with the following strategy: remain flexible in a volatile market by using subc on tract ing relati on ships overseas in low labor-cost coun tries.NIKES STRUCTURE AND STRATEG Y* Nike bega n in 1964 as Blue Ribb on Sports, a seller of Japa nese-ma nu facturedfootwear* In 1970, as the athletic footwear market grew, the Nike brand n ame was born* In order to gain greater con trol over producti on and assembly, Nike ope ned
