External and internal factors in organizational performance

External/Internal Factors

Nike is an organization that is highly successful and highly adaptable. It has endured many years of good and bad times enduring several significant scandals having to do with both internal and external factors. Management within the domestic sphere of the company has utilized the four functions; planning organizing, leading and controlling to answer external market threats such as competition as well as scandals associated with the global production of their merchandise. Internal factors that are associated with the four factors combined with external pressures to keep prices low by seeking out global manufacturing sources have come into conflict in the past few years and Nike has had to apply planning, organization, leadership and control to external contractors through a Code of Conduct that is inclusive of many U.S. national labor standards. This development has taken significant planning, organization, leadership and control to implement and requires near constant compliance auditing enforcement (control) among both domestic mangers and contracted manufacturers.

The code of conduct itself, is a binding agreement between Nike (including all codes it would itself implement in domestic production and some that are specific to overseas markets. Contractors must sign the code, enforce the code and then document its utilization over time to remain manufacturers for the company. The code contains statements regarding forced labor, which is banned, child labor which is applicable to U.S. standards, benefits by legal mandate, payment for hours of work and overtime by Nike set standards that include both local and U.S. laws, environment, safety and health implementation standards and transparency through documentation and inspection, both internal and Nike supported.

NIKE designs, manufactures.and markets products for sports and fitness consumers. At every step in that process, we are driven to do not only what is required by law, but what is expected of a leader. We expect our business partners to do the same. NIKE partners with contractors who share our commitment to best practices and continuous improvement in:

Management practices that respect the rights of all employees, including the right to free association and collective bargaining

Minimizing our impact on the environment

Providing a safe and healthy work place

Promoting the health and well-being of all employees

Contractors must recognize the dignity of each employee, and the right to a work place free of harassment, abuse or corporal punishment. Decisions on hiring, salary, benefits, advancement, termination or retirement must be based solely on the employee's ability to do the job. There shall be no discrimination based on race, creed, gender, marital or maternity status, religious or political beliefs, age or sexual orientation. Wherever NIKE operates around the globe we are guided by this Code of Conduct and we bind our contractors to these principles.

Nike Code of Conduct, 2007 (http://www.nike.com/nikebiz/nikeresponsibility/tools/Nike_Code_of_Conduct.pdf)

The above excerpt from the Code of Conduct sufficiently explains its intentions and also support the four factors of management, planning, organization, leadership, and control.

Globalization and the impact of price competition is significant for Nike as public awareness has grown to such a degree that the only way the situation, in contract companies who produce a great deal of Nike's products can be controlled is through conduct audits performed by Nike comptrollers. Managers plan, organize, control and lead these audits collaboratively with managers in contract plants all over the world.

Technology has developed internally and externally to match pace with production, and concurrently highly skilled managers in contract and domestic plans have had to adapt employee bases to utilize production saving technology without overstepping the principles of the "code of conduct." Plant technology has to be implemented through strategic planning, resource organization and disbursement, offline and online leadership and quality control.

Innovation has always been an aspect of Nike, as it has sought to engender every member of its domestic staff to produce new and innovative product lines for both the sport and non-sport markets. The planning of innovation occurs when managers seek to elicit new ideas from other staff. Organizing the distribution of these ideas can be an immense task. Leadership for the development of those innovations that are deemed effective for the current market is also significant in that it can change with each market lead idea, to be implemented in old or new product lines.

Diversity is an essential element in every global business and leadership, organization, planning and control play a significant role in how Nike managers seek to integrate even contract employees into the major running of the business, on the manufacturing and design ends. Contract global employment under the Nike Code of Conduct has been altered significantly, as diversity of legal and social standards for employment come into play in Nike factories all over the world. Nike also actively seeks to allow contractor managers and employees visits to domestic operations of both management and manufacture and hires within these pools when they can to increase domestic diversity.

Ethics are an essential aspect of the manner in which Nike has come to adopt standards that apply to both domestic and global manufacture, as their early exposure to public criticism in the global market led them to a completely different set of goals that enforce greater compliance with and the planning, organization, leadership and control of the Code of Conduct itself. External audits by outside interested parties have concluded that the Code of Conduct and its enforcement are novel and frequently uphold a standard that many other global manufacturers do not uphold or enforce, beyond marginal levels.

Taken together, our quantitative and qualitative findings suggest a multifaceted, evolutionary model for improving working conditions in global supply chain factories in which codes of conduct are only one, albeit important component. Nike's code emerged out of pressures from consumer and NGO groups. And the corporation has put considerable organizational resources into monitoring its code by building up a sizable staff of compliance and production specialists and multiple auditing processes. The data generated by these processes show that on average its plants are rated above the mid-points on its rating scales but that there continues to be wide variations both in compliance and in the broader evaluations of operations and working conditions in its plants. (Richard, Kochan, Romis & Qin, 2007, p. 21)

This external opinion of how Nike's implementation and enforcement of its code of conduct, designed specifically to answer ethical concerns brought by the public has helped the overall business climate in the many nations where it does business. The ethical change can in fact be seen much as a benchmark for other nations as they attempt to enforce better compliance with national and international ethics regarding work conditions, hours, compensation and many other factors that are specific to ethical business development.