Defining, Examining and Designing an Organizational Structure

952 words (4 pages) Essay in Business

5/12/16 Business Reference this

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An organizational structure can be defined as a pattern of relationships of different component in an organization. Organization structure thus refers to the arrangement of relationships among different positions and people in an organization (HRM GUIDE 2009, Para. 2).

Importance of organizational structure

Organization structure gives authority and responsibility to individuals. It directs who is in charge of what and who is responsible for what outcome. The structure helps individuals to know their roles and how to relate to each other in the organization (HRM GUIDE 2009, Para. 3).

The organization structure gives the pattern of communication and coordination in the organization. By grouping activities and individuals, organization structure helps to facilitate communication between individuals centered in their responsibilities. This enables information sharing and problem solving.

Location of decision centers: organization structure determines the centre of decision making and the source of power in an organization.

Proper balancing: organization structure ensures good coordination between different groups in the organization.

Nike Company

It is a publicly traded supplier of sportswear and equipment in the United States. The company headquarters are based in Beaverton. Nike is the world’s greatest manufacture and supplier of athletic shoes. The Company adopts a hybrid of both functional and divisional structure. The chief executive officer is in the top of the hierarchy and the following managers directly report to him: the corporate vice president, manager operations, manager Jordan brand, manager Nike brand, manager global basketball, manager Americas brand, manager administration, manager Brand and category management, manager footwear, human resources manager, sports marketing manager and the manager in charge of Nike design (Official Board 2009, Para. 1).

Looking at the Nike structure we realize that each brand has a department that organizes its activities. Each brand operates independently such that it organizes on the production and marketing. Each department then has sub-units or sub-departments like production and accounting. This enables the company to track the performance of each of its brand separately.

Each departmental head reports directly to the C.E.O. this gives departments autonomy in decision making. There are other departments that are utilized by all the departments but they also report directly to the C.E.O.

The human resource department is responsible for recruitment and placement of employees in the whole organization. This department deals with the employees affairs in the whole organization. The manager (operation) is responsible for coordination of operations within the whole company. It has the responsibility of making sure that all activities in the organization are run smoothly and are well coordinated. This reduces conflict and facilitates interdepartmental cooperation (Official Board 2009, Para. 2).

The marketing department is the department that deals with all the marketing activities of the products produced by the Company. This department organizes sales and promotion campaigns for all the brands. This department is responsible for brand development and growth. It works together with other department to determine sales forecast and expected demand for the products. This department is an important part of the firm because it is responsible for maintaining a strong brand for her products.

Comparisons of Nike’s organizational structure and the divisional type of organization structure


Divisional type of structure has a decentralized form of communication such that different department make their own decisions on consultation with the C.E.O., this is the same communication channel that is practiced in Nike. Each brand manager is directly answerable to the head office. The department makes its own production schedule and organizes its internal affairs ( 2009, para.5).

There are some differences in the Nike structure and the convectional divisional structure communication. In the Nike structure there is the operations department which facilitates the interdepartmental communication. This department ensures that information flow between the departments is smooth. The information between the departments doesn’t have to go to the CEO first so that it can be communicated to other departments.

Division of labor

The organization structure at Nike is organized such that each department is responsible for organizing its own activities. This shows that each departmental manager is the boss of a given department. The employees of a given department are answerable to the departmental head. This is similar to the divisional type of organization structure where the departments are usually given the autonomy to carry out their own activities and answerable to the top management ( 2009, para.4).

The Nike Company organizational structure gives the departmental head control over all the processes and the human resources in the department. However there is an overall human resource department that harmonizes the human resources in the whole organization. This shows that the human resources in the organization have two centers of control. The department controls the working of employees while the human resource department is concerned with staffing and the employees’ welfare.


Nike’s organization structure coordination is similar to that of divisional organizational structure. Each departmental manager in the Nike Company reports directly to the C.E.O. and the board of directors forms the reference point to each department. Each departmental head organizes the activities in his/her department and makes sure they are well coordinated to produce maximum output.

Nike has got also the operation department. This department is responsible in overall logistical planning in the organization. It is responsible for bringing logistical harmony in the company’s operations. This is different from the divisional organizational structure which relies with all its coordination from the top management

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