Governance and Sustainability at Nike: Change Management

Transparency, which Nike used as a means to demonstrate its new approach toward authentic CSR, represented its shift to proactively opening itself up to scrutiny for the sake of collaboration and improvement. Publishing its list of global suppliers was an unprecedented and innovative approach to accountability (Paine, Hsieh, & Adamsons, 2016). Nike also published annual CSR reports, which included its targets and performance, for all to see (Paine et al.

, 2016). Nike made public the findings from its in-depth face-to-face interviews of about 67,000 factory owners, managers, and front-line workers in its VGC “in the hope that transparency would help effect change” (Paine et al., 2016, p. 5). Through transparency, Nike demonstrated its responsibility for the people, planet, and profit welcomed accountability, and challenged others to engage in CSR for themselves.

Collaboration

Collaboration was a crucial element of Nike’s CSR approach as it realized its interconnectedness with other stakeholders as well as shareholders. Nike knew that it alone could not make a big enough impact to improve the working conditions of its suppliers.

Although an industry giant, Nike only accounted for about five percent of a supplier’s business (Abnett, 2016). Thus, if Nike required its suppliers to adhere to its strict CSR policy, the likelihood of compliance was minimal due to the suppliers’ diverse portfolio of partners. Therefore, Nike engaged in collaborative relationships with NGOs and other industry stakeholders to co-create responsible business practices (Abnett, 2016).

Nike made collaboration a conviction. According to Zadek (2004), Nike espoused the growing ideal that it is “essential to work with others to move toward the adoption of a common approach to labor compliance codes, monitoring, and reporting to help ensure broader accountability across the whole industry” (p.

Get quality help now

RhizMan

Verified

Proficient in: Collaboration

4.9 (247)

“ Rhizman is absolutely amazing at what he does . I highly recommend him if you need an assignment done ”

+84 relevant experts are online

Hire writer

132). Towards that end, Nike serves as a convener by leveraging diverse knowledge resources to address timely CSR issues (Zadek, 2004).

Innovation

Innovation was a key element of Nike’s new CSR approach. Nike used innovation in its reporting model, processes, and product designs to engraft sustainability into every aspect of its business. Nike changed the name of the CSR department to Sustainable Business & Innovation to symbolize the marriage of the two ideals. To hardwire the concept of sustainability into its business model, the SB&I team was engaged in operational activities, such as product development, and was a key participant in strategic planning (Paine et al., 2016). Sustainability was also embedded into the financial aspect of the organization to better align with the vision of “decoupling profitable growth from scarce resources” (Paine et al., 2016, p. 14).

Nike’s leadership empowered the organization to pursue sustainability through innovation, becoming one of a few large, public companies to make such an investment in “game-changing innovations for the sake of sustainability” (Abnett, 2016, para. 12). With a focus on closed-loop manufacturing, recycling waste, using renewable energy, and eliminating toxins, Nike launched innovative sustainability initiatives to not only design sustainable products, but also influence CSR in its sourcing and production from its VGC (Abnett, 2016).

The Effect of Nike’s New CSR Approach on its Departments

Nike’s transparency caused its various departments to prioritize the most pressing issues confronting the global community (Nike, Inc., 2018). This placed a level of ownership on the various departments to consider their interconnectedness and the need to work together in identifying the right targets as well as in achieving the goals (Berggren & Bernshteyn, 2007). Towards that end, Nike used scenario planning among key executives and external stakeholders to identify the most salient CSR issues (Paine et al., 2016). In addition, the SB&I business integration team developed a strategy to influence sustainable consumption by including consumers as key stakeholders in its CSR approach (Paine et al., 2016).

The effect of collaboration on the various departments was that it removed silos and spread out the decision-making beyond the executive level to an empowered workforce. Nike created a check-and-balance process for interdepartmental sign-offs of the sustainability targets (Paine et al., 2016). The SB&I team consulted “with business and functional heads across the company to ensure that everyone was on board with the targets” (Paine et al., 2016, p. 15). The consultation process resulted in a shared understanding of the implications for each target, including their feasibility and financial impact (Paine et al., 2016). In addition, the various committees and working groups facilitated interdepartmental collaboration.

The effect of innovation through sustainability was a completely rewired organization as the various departments had to report to SB&I and include sustainability in performance measures (Paine et al., 2016). The departments were inspired to innovate new processes, designs, and communication strategies to achieve sustainability while sharing these innovations with their network for the common good. Nike’s non-toxic adhesive was one such innovative product shared with competitors towards its new CSR agenda (Paine et al., 2016).