Social Performance of Organizations

Social Performance of Organizations

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Social Performance of Organizations

            Business is defined as a prevailing institution globally. Regarding this classification, business includes all the organizations that indulge in the exchange of goods and services at a profit. Business activities have a massive impact on other activities within the society. Similarly, the decisions of various social actors influence the way in which people engage in commercial activities. It is necessary to manage, eliminate, and mitigate these interdependencies by clearly comprehending the nature of the relationship between their companies and the society. In particular, the analysis will center on the social and economic systems. The case study for the relationship between business and the community is Nike Inc., an international manufacturer and distributor of footwear and sports apparel.

            A common phenomenon is the dynamic and evolving nature of the business environment. Accordingly, different stakeholders interact consistently at the international level. Nike, Inc. must be able to deal with a combination of ecological, ethical, political, communal,and technical change that generate opportunities and threats in equal measure. For instance, Nike, Inc. has to ensure that their processes and activities respect the traditions and beliefs of different religions across the world (Boyd et al., 2017). Therefore, their products and image stand to reflect the belief systems of Christians, Muslims, Hindu, and other religions. Across the world, society’s expectations of businesses are evolving.

Nature, Structure, and Main Products

            Nike’s organizational structure is geographic. This structure is developed from the company’s scope that covers the different regional markets all over the world. The company also embraced a global corporate structure with managers in the headquarters making the major decisions for the rest of the local departments. At the lower levels, Nike is further divided into semi-autonomous divisions that run concurrently and independent from the mother organization. Each division is headed by a manager that attempts to maximize the sales of apparel, sports shoes, and equipment within the region. To that extent, Nike has divisions in most of Europe, North America, and Asia. The unique aspect of Nike’s structure is that Converse has been segregated as an independent division.

            Nike is an international company that designs, manufactures, and markets diverse products and services that are consumed by the sports fraternity including soccer, football, and basketball. Their footwear has gained popularity among activities such as athletics and running games. The company also promotes sports-motivated commodities for the younger customers. Sections of their products, such as Converse and Hurley, have been advertised for high-end fashion enthusiasts. The multinational firm sells these products across 1,000-owned retail stores globally. Nike also uses their online website to sell their products and deliver remotely (Boyd et al., 2017). As such, the firm possesses a broad physical and digital reach within the sports industry.

External Factors that Affect Nike’s Success

One external factor that has the potential to change Nike’s success is organizational diversity. The company’s strategy to address professional and cultural diversity needs to be useful, considering the global nature of its recruitment practices. Although Nike has a dedicated department that focuses on inclusivity, the firm has an uphill task of ensuring that employees from different regions of the world can comply with a standardized model of work. Aside from concentrating on integration, Nike must also maintain a close relationship with the employees. Regularly interacting with its workforce will make the organization aware of the subordinates’ level of satisfaction and the significance of enhancing their efforts. The best way to implement the particular aspect is by creating collaborative teams and seminars in which employees can express their concerns, and illustrate their relations with one another (Cooper, 2017). Monitoring the way that employees engage in the workplace is also a pertinent component of the process. All these processes can be simplified through the creation of an elaborate database that can identify the cultural background of each employee.

Nike also struggles with constant innovation. Currently, the sportswear and apparel company has been recognized as an inventive player concerning the diversified nature of its products (Cooper, 2017). The degree of innovation is a standard that must be upheld to ensure that Nike continues to sustain consumer demands. The most recent move by Nike involved teaming up with Apple to enhance the sporting experience using music. The idea came in the form of a specialized suit that allowed for a wireless connection with Apple’s iPod ensuring that the users can have the ultimate workout experience. Nike has plans to establish that they remain innovative by introducing dynamic features in its clothing and footwear offerings.

Stakeholders’ Influence on Organizational Financial Performance

The title of a stakeholder is wide and includes actors that contribute towards the success of the organization. The main parties include company owners, creditors, suppliers, employees, and the immediate community. These stakeholders can determine the organization’s financial performance. Customers are essential to the firm because of their massive number and their ability to change the environmental approach by determining the price (Cooper, 2017). Consumers can also place pressure on the manufacturer to improve the product quality. Furthermore, the suppliers can determine the financial strategy by identifying and eliminating the areas that run unnecessary expenses. Cost-efficient tactics can include shortening the supply routes and recycling the raw materials. Lastly, the top management has the power to change the financial strategy in several ways. The leaders can determine the short and long-term goals. Aside from this, the managers can reallocate aspects of the budget to ensure that they make profits (Cooper, 2017). The opinions offered by the firm’s top individuals are highly respected due to their impact on the selection of the most preferred decisions by the board.

The general and business community has an impact on the financial performance of a company. This group of stakeholders is interested in supporting activities that benefit the community members in different ways. Having mutual interests increases the chances for businesses to succeed since the immediate community supports them (Cooper, 2017). In fact, companies tend to invest and provide jobs to the locals when they experience favorable settings such as tax rebates and subsidies (Leenders, Bacharach, & Gabbay, 2009). The business community can also assist in the implementation of zoning laws that can allow companies to operate in strategic locations. Firms usually serve the interests of the population by supporting local charities through donations (Cooper, 2017). Local and international business communities can also influence a company’s financial performance by encouraging the growth of enterprises in a specific industry. For instance, Nike will find a ready market in regions in need of durable and affordable footwear.

The employees are another group of stakeholders that contribute towards the financial performance of the company. The workers implement the vision and mission on behalf of the organization. Employees are also responsible for determining the degree of the productivity in several ways. Most businesses already place employee interests as a priority in their operations. Within small businesses, it is possible for one employee to have a basic understanding of all the departments. For instance, subordinates may be better equipped to specialize in one or two vital skills. In this way, workers can increase their productivity, and impose an incremental effect on the financial performance. Contented employees will eventually become more industrious since they fit into the company. In the process, companies can save finances, energy, and time, which are valuable resources in the long term (Epstein, 2018). By maximizing efficiency, coming up with new ways of doing business will increase revenue growth. Apart from direct input, employees can also drive the financial performance in other ways. The workforce can raise the brand profile through positive representation, hence, ingraining a positive reputation for the firm. In this respect, productive employees will be able to attract customers without necessarily having any form of contact with them.

Controversial CSR Concern Affecting Nike, Inc.

One of the major controversies surrounding Nike focused on their poor working conditions. The company decided to relocate their manufacturing wing overseas to evade the stringent and expensive regulations imposed by the United States. The firm selected developing countries within the Asian continent that could offer cheap labor. Even though they argued that their decision was motivated by the need to diversify their position and expand into new territory, the decision was inspired by reasonable working conditions and access to labor (Epstein, 2018). Offshore production in Asia meant that Nike was able to exploit the uncontrolled labor situation that involved employing child workers and paying them below the market rate. By condoning such malpractices within their factories and offices, Nike deliberately supported the violation of several human and workforce rights. Allowing sub-par conditions in the major areas within the firm’s factories lowers their ranking as far as corporate social responsibility is concerned. A company with 78,000 employees needs to able to observe the international and national laws surrounding employment (Leenders et al., 2009). Even after these misconducts were illuminated, Nike delayed in rectifying the situation. The strategy was an indicator that corporate social responsibility was not a key priority for the company.

References

Top of Form

Boyd, B., Henning, N., Reyna, E., Wang, D., Welch, M., & Hoffman, A. J. (2017). Hybrid organizations: New business models for environmental leadership. New York, NY: Routledge.

 Bottom of Form

Cooper, S. (2017). Corporate social performance: A stakeholder approach. New York, NY: Routledge.

Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. New York, NY: Routledge.

Leenders, R. T. A. J., Bacharach, S. B., & Gabbay, S. M. (2009). Social capital of organizations. Los Angeles, CA: Emerald Group Publishing Limited.