Nike and Knowledge Management Research Paper

Pages: 10 (2900 words)  ·  Bibliography Sources: 10  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Management

Nike Knowledge Management

Nike (NYSE:NKE) has successfully transformed knowledge management (KM) into a significant competitive advantage in their company by creating an organizational culture that seeks interpret, use and embed intelligence quickly into each strategic area. Nike is unique in that it has created an organizational ecosystem that learns over time, which is comparable in scope and function to the Toyota Production System (Dyer, Nobeoka, 2000). Due to their focus on KM, Nike has been able to successful transition from relying purely on price or products exclusively, and is now competing with knowledge. The intent of this paper is to analyze how Nike has been able to successfully use KM to turn their company into a learning organization, and what the company's best practices. The areas they need to improve from a process standpoint are also analyzed, as is the future direction of Nike globally based on their KM expertise and ability to turn knowledge into competitive advantage. The specific strategies the company needs to take from a KM standpoint are also analyzed, as are the use of KM models relative to leadership strengths. Nike's transformation to a learning organization continues to be a catalyst of innovation, market growth,. And the ability to manage relationships throughout their value chains.

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Research Paper on Nike and Knowledge Management Assignment

The transformation of knowledge from a functionally defined and often siloed resource to that of strategic competitive force for Nike is analyzed in this section. Too often organizations allow siloed focus of their knowledge to stay balkanized, often leading to political infighting and a lack of being able to execute strategies corporate-wide (Senge, Lichtenstein, Kaeufer, Bradbury, Carroll, 2007). What instead emerges from a study of Nike is a heavy reliance on informally structured teams that are known for their exceptional work ethic and passion for getting results (Stonehouse, Minocha, 2008). Organizationally what Nike has done to create a successful learning organization is to first concentrate on creating a strong bond of trust within and between teams. Creating a high level of trust across functional teams of an organization is critically important for the foundation to be set for creating a learning organization (Dyer, Nobeoka, 2000). The immediate benefits of a strong basis of trust between functional areas are that work is done faster; there is no need to double-check motivations or insist on validation of direction. It is assumed, in a high trust environment, that this level of cross-checking is not necessary.

The catalyst of trust as a means to share information freely to enrich other individuals and teams is also a key characteristic of a learning organization (Collins, 2003). In the Toyota Production System the use of techniques to create trust across suppliers, while considered unthinkable in the American auto industry, is a regular practice in the Japanese auto industry to further develop lines of communication and speed of response (Dyer, Nobeoka, 2000). No learning organization is perfect however, as has been seen with the recent recalls Toyota has experience. However, having a learning organization is a strong catalyst for being able to overcome major interruptions to production and quality, as the experiences of Toyota and its brand have shown over the last year. Without a strong learning organization, Toyota would have been even more impacted by the implications of the recalls they are going through. Nike, like Toyota, has created a culture that actively rewards and encourages the sharing of information and knowledge across functional and department boundaries (Stonehouse, Minocha, 2008). This ethic of information sharing is a strong catalyst of trust and makes the most simple to complex process more scalable and responsive to the market conditions each company faces as well. While both Nike and Toyota has completely different organizational structures, their insistence on trust being the primary catalyst of ensuring knowledge becomes a competitive advantage are comparable, as can be seen from studies of the Toyota Production System (Dyer, Nobeoka, 2000) and Nike (Stonehouse, Minocha, 2008).

Third, the organizational structures themselves are built specifically to enable better information and knowledge cross sharing over time. While Nike initially organized their knowledge management strategies by functional area, starting with design and development being the primary focus (Stonehouse, Minocha, 2008) the company quickly developed a passion for managing it customer information and insights about customer preferences at a level that few other companies have attained (Tsai, 2006) (Stonehouse, Minocha, 2008). Customer insights-based research including ethnography and intensive use of demographic and psychographic research also is part of the baseline of performance and knowledge generation that Nike relies on for each new product development project and eventual new product launch (Rayport, 2005). What emerges from the study of Nike's use of knowledge management strategies is that marketing, sales, design and development and finance are all intertwined to create a knowledge ecosystem that quickly regenerates itself based on inbound knowledge and insights. This regenerative aspect of the Nike knowledge management system (Stonehouse, Minocha, 2008) has as its catalyst the levels of trust that individuals and teams have with each other. There is also a work ethic and passion for results that pervades the Nike culture that is based on the belief they are the leaders in innovation in their chosen markets (Stonehouse, Minocha, 2008).

Fourth, the supply chain structure of Mike shows what happens when an organization has very strong internal trust and has the ability to create a learning organization, yet is facing the challenge of recruiting suppliers who can meet progressively more aggressive pricing structures. When this happens, communication, shared learning, and trust often break down. This is the case with Nike's supply chain in the past yet due to the ethics violations over sourcing products from unethical suppliers (Kanter, 2008), Nike has placed a strong emphasis on creating a more compliant and socially responsible supply chain. Ironically, the heavy costs of getting into compliance to corporate social responsibility (CSR) initiatives have helped Nike to bring better practices of knowledge management into their supply chains (Tsai, 2006). Nike has since concentrated on creating supply chain audit and supply chain management systems that have the specific goal of increasing knowledge transfer and the development of more efficient communication and collaboration as a result (Sridharan, Caines, Patterson, 2005). Nike has had to create a closed-loop supply chain in order to manage the increased supplier audit, compliance and supplier management processes (Kumar, Malegeant, 2006).

What also made knowledge management difficult throughout the Nike supply chain are the diverse locations of suppliers in cultures that have different perspectives on ethics and information sharing compared to the U.S. Nike relies on suppliers in throughout the BRIC (Brazil, Russia, India and China) nations with heavy emphasis on Brazil and China (Stonehouse, Minocha, 2008). These cultures have drastically different approaches to knowledge management relative to the U.S., especially in the areas of collaboration and transparency, two areas shown to be exceptionally import by studies of the Toyota Production System (Dyer, Nobeoka, 2000). The lack of knowledge transfer with these suppliers, coupled with the intensive focus on ethical compliance to production standards, has made supplier partnerships in these regions of the world strained and often distanced as a result -- all further limiting knowledge transfer (Stonehouse, Minocha, 2008). Lack of effective knowledge transfer within supply chains will pose a long-term ethical and CSR risk to the company if they do not resolve it soon (Boje, Khan, 2009).

The fifth area where Nike both excels and struggles with knowledge management is in the area of their distribution channels. The positive aspects of knowledge management in their channels are the ability to gain tacit and implicit knowledge of how to streamline their channel management strategies through experience with distribution partners including mass merchandisers globally (Stonehouse, Minocha, 2008). This is an enterprise-wide process of serving distributors that Nike does exceptionally well at. In contrast to how effective Nike is at managing their large distribution networks and partnerships is their black of ability to execute at the retail level. The turnover rate that shoe retailers including Nike experience hover between 100% to 400%, which makes the work of sales associate training even more challenging and difficult -- and constant (Sweeney, 2004). Nike faces this knowledge transfer challenge due to the rapidity of its product lifecycles, customization options for consumers through its NikeID program, and wide breadth of sports Nike manufactures shoes and accessories for (Stonehouse, Minocha, 2008). Nike has found that the lack of successful training for retail sales people can affect their revenues by 30% or more on any given new product introduction (Sweeney, 2004). Nike as a result continues to focus on automating knowledge management processes for retail locations through an online portal that is used for in-store training (Sweeney, 2004). The effectiveness of this program however has been mixed due to the sheer volume of turn-over occurring in the retail channels. As is the case with many manufacturers who rely on retail channels, knowledge management through these channels has proven to be problematic and difficult to consistently achieve over time (Higon, Bozkurt, Clegg,… [END OF PREVIEW] . . . READ MORE

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