Example Of How Internal And External Factors Affect The Four Functions Of Management Critical Thinking
Organizational management continues to be a crucial element in the growing world. The rapid advancements in technology and innovation bring with it new challenges as well as opportunities. Indeed, the changes taking place in information processing, chain production, and supply have brought new models and ideas in organizational management. For this reason, it is crucial for managers to appraise and critically think about the effects of internal and external factors on the functions of management. This paper gives a critical look at the impact of internal and external factors on globalization, technology and innovation, ethics, and diversity in Nike’s management.
A brief background of Nike
Nike is an Organisation that supplies sportswear across the globe. Nike is the world’s largest athletic shoe company despite the merger between Adidas AG and Reebok International Ltd. It currently provides more than 33% and 36% of the world’s athletic footwear market and US sports shoes respectively. It currently has 24,291 direct employees (Locke & Romis, 2012).
Factors affecting Globalization
Globalization continues to play a fundamental role in market expansion and inter-linkages. However, there are various factors, which influence the management of Nike as about globalization. One major challenge is the uprisings of political activism against globalization. These cause-oriented activities tend to target not only parliament and governments, but also non-profit, public, and private sectors. Examples of these movements include women’s NGOs,anti-capitalism forces, transnational environmental organizations as well as anti-globalization movements. As a result, Nike, among other companies has experienced consumer boycotts, which have significantly affected production (Norris, 2007). The expansion of markets because of globalization poses the need for large-scale and market-relevant management models in Nike.
Factors affecting Technology and Innovation
Technology and innovation are major impetuses to the development and growth of Nike. They have helped harness and solicit novel ideas to build the reputation of Nike and improve its products. For instance, Nike has expanded its product range from footwear to the production of sports equipment and apparel. In fact, 70 of Nike’s 830 suppliers make shoes (Locke & Romis, 2012).One factor affecting technology are the side effects of social media. For instance, according to Norris (2007), the rise of television has contributed to the erosion of social connectedness in US. Additionally, it has made the postwar generation disengage in civic matters (Norris, 2007).
Factors affecting Ethics
Ethics and codes of conduct significantly enhance proper management. One factor affecting ethics in Nike is the practice of double standards in among some suppliers. For example, Locke and Romis , did a study on two companies supplying Nike. They found that one factory had better working conditions than the other despite scoring well in Nike’s primary monitoring tools. One company gave its workers higher discretion concerning their work in the shops. In addition, the company limited its employees overtime and paid them higher wages than the other pay. On the other hand, the other company had longer work hours for their staff and employed more hierarchical and traditional management practices (Locke & Romis 2012)..
However, in response to the bitter recriminations of Nike’s critics, Nike developed a code of standards and ethics for its suppliers. Additionally, Nike formed a team of 29 compliance officers who assess compliance indices among its suppliers (Locke & Romis 2012). The code of ethics and practices was set up with an aim of ensuring and promoting fair treatment of its overseas employees. Part of Nike’s work reform policy included the establishment of a minimum hiring age (Frisch, 2008).
Factors affecting Diversity
Diversity is a core function in the management of any organization. The variety of supply systems and outlets poses both challenges and opportunities. Various factors affect the efficiency of diversification in Nike’s management. One factor is the working conditions in Nike’s supplying points. In the 1990s, Nike faced criticism from trade activists that it was sourcing its materials from countries, which had poor working conditions and practices. The critics included countries like Pakistan and Cambodia for child labor, Vietnam and China for poor working conditions, and Indonesia for underpayment of workers(Locke & Romis, 2012).
On the other hand, the association of Nike with prominent sports personalities and figures has contributed immensely to the expansion of its market range. For example, Frisch noted that Nike entered into the largest endorsement deal with a sportsman in 2000. Nike endorsed Tiger Woods into a $105 million contract in 2000. Also, Nike produced female-focused ads that aimed to penetrate and promote female involvement in sports towards the end of the 20th century. Another factor that affects Nike’s diversity is the pulling out of certain prominent personalities from Nike. For instance, Frisch noted that Knight stepped down as Nike’s ambassador in the sports world. In effect, this dealt a heavy blow on Nike’s sale (Frisch, 2008).
In sum, internal and external factors play key roles in determining the efficacy of management practices. Ethics has helped in the development of codes of good conduct and practice for the Nikes direct and indirect employees. Globalization has helped in the expansion of Nike’s market jurisdictions and fame. Additionally, technology and innovation have propelled Nike into new production and management horizons. On the other hand, diversity has significantly broadened Nike’s management, intellectual and expertise variety bringing out real synergy. As such, prudent measures should be taken to safeguard against the dismal effects of both external and internal factors on Nike’s management.
Frisch, A. (2008). The story of Nike. The Creative Company.
Locke, R. M., & Romis, M. (2012). Improving work conditions in global supply chains. MIT Sloan Management Review, 48.
Norris, P. (2007). Political activism: New challenges, new opportunities. The Oxford handbook of comparative politics, 628-652.
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