The Nike Company

Motivation theories and

management practice
Helping in decision making in organization

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Table of Contents
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EXECUTIVE SUMMARY
This report contains information about the motivation theories & its management practice and
the factors, which really have an important influence on the behaviour of individuals and
teams along with their application in Nike's company. It is also helpful to make decisions
regarding management style and selection of the individuals for an organization.
LEADERSHIP
Leadership is the backbone for the success of an organization. Normally there are four types
of leadership styles, which are Autocratic, Persuasive, Participative and Democratic. These
leadership styles have different effectiveness in different circumstances.
MOTIVATION THEORIES AND
MANAGEMENT PRACTICE
Motivation is get the maximum output from an individual by providing him different types
facilities and fulfilling various needs. There are three types of motivation theories, which are
Hierarchy of Needs, Two-Factor motivation theory and Expectancy theory. There is a
profound link between motivation theories and management practice, because without
implementing these theories, an organization cannot get maximum output from its
employees.
INDIVIDUAL BEHAVIOUR
Behaviour of an individual in an organization is very much important, because better working
environment in an organization cannot be developed as far as individuals in that organization
do not behave decently and manner fully.
GROUPS AND GROUP
BEHAVIOUR
Any collection of people together is called Group. There are two types of groups; formal and
informal. Each group consists of a Leader and Team members. Formal groups are also called
teams. When a group of people comes together, they do behave in a similar way, such as all
people in the ground come to see the Match, which is common behaviour of all these people.
The analysis of:
1.MOTIVATION: THEORIES AND
MANAGEMENT PRACTICES
2. BEHAVIOUR OF INDIVIDUALS
3. GROUP AND GROUP DYNAMICS

INTRODUCTION
The analysis of Motivation theories, and behaviour of an individual & group in an
organization and their application is very much necessary to lead an organization, because
knowledge of these areas helps to get the maximum output from the employees and to run
and organization effectively.
PURPOSE, SCOPE AND LIMITATION
The purpose of this report is to analyze the Motivation theories, leadership styles, and
behaviour of individuals and groups along with their application in the Nike's company. Tried
best to get the maximum information about these issues, but due to national boundary
limitations and terrible circumstances of the country, it is not very much detailed report.
SOURCES AND METHODS
In preparing this report, hints took from Syllabus book of Marketing and Organization &
Behaviour, although Internet also paid an important role in its preparation. The sites visited
and magazines for references are also mentioned in the Endnotes.
REPORT ORGANIZATION
This report evaluates the Motivation theories and leadership style, also the behaviors of
individuals and groups during the work time in Nike company. General information about
these areas is also covered.
LEADERSHIP
Usually there is no big difference in the leader and manager. Manager performs seven
functions, which are planning, organizing, staffing, directing, coordinating, reporting and
budgeting.
Whereas the some special functions make leader different from manager, which are:
FIG.1: Special Leadership Functions
Normally there are four types of leadership styles, which are:
> Autocratic (Tells)
> Persuasive (Sells)
> Participative (Consults)
> Democratic (Joins)
1. AUTOCRATIC
In this type of leaderships leader dominates rest of the team members, by using his authority,
to attain a particular goal. It is not very much effective to get the utmost performance and

outcomes from the team members. This type of leadership style faces a huge confrontation
from the team members, but in order to get the things done, leader keeps a pressure over his
team members.
Effectiveness
In some cases Autocratic leadership is very much effective, especially where urgent decisions
are required. For example in a battlefield, soldiers need to take a quick decisions, there they
don't get time for consultation, so there Autocratic leadership is required and on this point it
works very efficiently.
2. PERSUASIVE
In this type of leadership all the decisions are taken by leader, but in order to persuade the
team members, for their motivation & involvement in the task and to make them feel that
they are also involved in decision-making, leader describes his decision to his employees or
subordinates. It makes the leader little lenient and the team members not very much loyal to
all decisions.
Effectiveness
Up to some extend this type of leadership is also very effective. Such as nowadays in our
country Pakistan, Persuasive leadership is working; all the political decisions are taken by
Gen. Musharaf, but in order to persuade the citizens and other politicians, he involves Prime
Minister and other few politicians.
3.PARTICEPATIVE
This leadership style includes taking reviews and suggestions from all the team members
regarding the decision-making, but still leader holds the authority to take the final decision.
This type of decision-making takes a long time, but as many people think over the same
aspect, so decision is more accurate. This makes subordinates motivated and involved in that
task.
Effectiveness
This leadership style is very much effective, it makes team members involved and motivated
along with the final decision taking right only to the leader. Such as in EDWARDES
COLLEGE, before making a new rule or taking any decision, Principal consults to the staff,
but still he got the authority to implement or reject that rule or decision.
4. DEMOCRATIC
In democratic leadership whole team together takes the decision; it means that the leader
alone does not take the decision, but according to the willingness, suggestions and reviews of
the team. Team members can select tasks for themselves. It makes them very much involved
and motivated, because they work according to their wish. Decisions become more accurate
but on other hand, leader loses the authority of decision making lonely.
Effectiveness

In few cases this leadership is very effective, such as in our HND class, group assignments
are given, in each group one leader is selected to observe all the members, but he has no
authority to take decisions, because in each group everybody selects the task himself, which
is convenient to him. There is no compulsion of doing any specific task.
MOTIVATION THEORIES
"Motivation is the process by which the behaviour of an individual is influenced by others,
through their power to offer or withhold satisfaction of the individual's need and goals".
(Organizations and Behaviour)
HND Text Book
1. The hierarchy of needs Maslows
2. Two-factor theory
3. Expectancy theories (Employees reward and motivation theory)
4. X Y theory
1. THE HIERARCHY OF NEEDS
Abraham Maslow proposed the hierarchy of needs, which describes the motivation priorities
that an ordinary employee keeps:

FIG.2: Maslow's Hierarchy of Needs

According to this theory an employee or group member will be motivated if the above given
needs are fulfilled.
> Physiological needs represent the needs for food and air etc
> Safety needs represent needs for security from danger & threats etc
> Social needs represent needs for relationship and belongingness etc
> Esteem needs represent needs for position, recognition and respect from other etc
> Self actualization needs represent needs for achievement of self fulfillment etc
In order to fulfill this theory requirement, Nike has established The SHAPE inspection Team.
It is working since 1997 and its basic purpose is to measure the overall performance of the
company towards its employees, including environment, safety and health needs. For this
purpose Nike factories are safe, environmental friendly. The following are some places where
Nike appoints its employees:
Source: www.nike.com FIG.3: Nike's Safe and Environment friendly Buildings
For further fulfillment of this theory in 2003, Nike has founded its Global Women's
Leadership Council (GWLC), the purpose of this Council is to promote the professional
development of women, within the company.
2. TWO-FACTOR THEORY
Fedrick Herzberg, who was an American psychologist, interviewed 203 Pittsburgh employees
in 1950s. He asked them that what thing motivated them and what demotivated. After this
interview he came to a conclusion that there are two basic requirements of individuals:
> Need of the 'hygiene factors' which includes, company conditions, wages, interpersonal
relations, job safety and management etc, if these are according to employee requirements, he
will be motivated and if not, it means dissatisfaction of the employees.
> Motivator factors are more concern about individuals higher needs such as selfactualization and personal development. These factors motivate individuals, which leads
them towards more performance and efforts regarding their work and job fulfilment. These
factors include, responsibility, promotion and achievements etc.
The fulfilment of this theory at Nike is done by providing various facilities to its employees.
For example Nike's wages to its employees are more than rest of its competitors; therefore
people love to work here. About Ethical values Nike believes:
Our code of ethics is called Inside the Lines; it defines the standards of conduct we expect of
our employees. Every year, all employees are required to verify that they have read and
understand Inside the Lines.
(Jill Ker Conway)

Committee Chairman
The relation among employees and administration is very good and each employee submits
its annual confidential report regarding the administration and other employees, which is
given due importance.
3. EXPECTANCY THEORIES
It consists of two theories, which are Vroom's and Handy's theories.
a) VROOM'S THEORY
Victor Vroom was another American psychologist; in 1964 he developed the formula,
supported by expectancy theory for the measurement of human motivation degree. He
recommended that the strength or motivation degree of an individual, is the product of two
factors:
F=VxE

FIG.4: Vroom's formula for Human Motivation Measurement

> V stands for the strength of an individual's preference for certain outcome. V can be zero,
negative or positive integer.
> E stands for an individual's expectation, which will be the resultant of that outcome from
certain behaviour. As it is just an imagination of an individual's expectation, so it can be any
number from 0 (no chance) to
1 (certainty)
b) HANDY'S MOTIVATION
CALCULUS
Charles Handy introduced a model, which describes the way that an individual deals with
own decision for the fulfilment or rejection of that decision. This model is different from the
expectancy model.
Handy recommends that there is a motivation calculus, which can be deliberate or insensible.
It evaluates following:

> An individual's own requirement

> Preferred results or outcomes
> E factors, which include, energy, excitation, enthusiasm, emotion and expenditure etc
At Nike this theory is fulfilled by providing its employees their preferred jobs, which makes
them motivated and they start putting their more efforts on their jobs. For example if a
distributor gets some new design idea and (s)he shares it with the design makers, his or her
suggestion is appreciated, which makes them feeling an importance in the company.
4. XY ANALIYSIS:
> RELATION BETWEEN MOTIVATION THEORIES AND MANAGEMENT PRACTICE
(Y-FACTOR)
There is a profound relation between the management theories and management practices,
because without the application of these theories in an organization, the management of that
organization cannot work effectively and cooperatively with the workers of that organization.
At Nike, in order to promote the employees, Nike has made such a rule that the
'Compensation Committee' is responsible for overseeing the performance evaluation of even
the CEO. It means that at Nike, in order to make the employees satisfied from its
management, management deals equally to its entire personnel. Global Alliance was launched
in 1999, it interviewed workers more than 16,000 and it launched a number of development
projects towards making management more effective and efficient towards personnel.
> FACTORS INFLUENCING INDIVIDUAL BEHAVIOUR (X-FACTOR)
Mainly there are seven factors, which influence the behaviour of an individual at work. The
relation between these six factors including seventh 'ability', is given by following:
Source: www.busi.mun.ca

FIG.5: Mars Model of Individual Behaviour

1. VALUES
Values are the perceptions or expected behaviour that an individual keeps to achieve the
result. At Nike, employees believe that satisfaction of the customer and the good
interpersonal relation between personnel can lead Nike towards leading Sportswear Company
and that makes them very much successful.
2. PERSONALITY
It is the overall outline of characteristics of an individual's consistent internal states that
explains the behaviour of that individual. Nike appoints people with impressive personality
and creative mentality, because without innovation Nike is nothing. So personality has an
important role at Nike.
3. PERCEPTION
Perception is the point of view of an individual, which he keeps towards its surrounding
environment. Nike prefers broad-minded people, because it deals with almost people from all
nations, races and religions, and a narrow-minded person cannot work according to the
equalizing policies of Nike.
4. EMOTIONS
Emotions are the inner feelings, sentiments or passion of an individual towards any work.
Most of the Nike's personnel are also athletes. This is, because it is natural thing that people
like that which they can do practically. So therefore athlete people will be more concerned or
passionate about those things, which facilitate athletes. So therefore Nike personnel try to
produce best possible thing passionately, for its athlete customers.
5. ATTITUDE
Attitude consists of the manners in which an individual acts or reacts to the different people
and situations or circumstances. Nike employees possess a very much positive attitude
towards their colleagues, administration and their organizational culture. It means there is a
respect for seniors and support for juniors etc along with almost no interpersonal conflicts.
6. STRESS
Stress is a state of feeling tension or pressure, due to any harsh circumstances, overburden of
work and insecurity of something. Stress influences a lot efficiency and behaviour of an
individual. So in order to avoid this, Nike encourages its employees to contribute some time
for refreshment. For this, Nike has constructed many parks for its employee's community and
no employee is overburdened due to work, in order to avoid the stress.
7. ABILITY

Ability stands for capabilities or skills that and individual possesses. Nike appoints
individuals with multi-skills and creative mentality, because Nike's whole business depends
upon innovation, so only people with extra qualities can make it possible.
INTERPERSONAL BEHAVIOUR
An individual's own behaviour in an organizational role is very much important, because
organizational role is the role, which an individual gets in relation to his surroundings. For
example same person would be son at home, boss in office player in a ground.
WORKER SURVEY:

In FY05/06 we shared a target that 100 percent of workers in focus factories would be
surveyed. However, due to worker turnover and best-case response rates, we realized that
100-percent participation was not possible. We created a survey for factories to measure a
statistically valid sampling of workers and revised the target accordingly. Surveys must be
complete in advance of participating in HRM training and are referenced in the training.
One important first step in improving the lives of factory workers is for factory management
to hear directly from them. We have integrated worker surveys into our HRM training.
In advance of the training, factories conduct a statistically relevant survey among workers
that asks 70 questions about demographic information, employees' perception of pay and
benefits, health and safety, management culture, hours worked, their empowerment as
employees and general job satisfaction. We developed the survey in FY08, built on topics
considered core to workers and validated with factories.
A third-party provider administers the survey through an on-site questionnaire, employee
interviews and a factory tour. Results are reported confidentially to factory management and
in aggregate to Nike.
In FY09, 24 factories in China and Vietnam participated in the training and conducted the
worker surveys in advance of the training.
OUTCOMES: Survey Results
The employee satisfaction survey has been administered by third-party service providers at
24 contract factories in Vietnam and China to date. The survey questions cover the following
topics:

HR general status and factory regulation

Recruitment and selection

Training and development

Living conditions

Working environment

Safety and health

Work hours and overtime

Compensation and benefits

Performance management

Teamwork and supervision

Worker-management communication
OWN BEHAVIOUR IN NIKE
As Nike is an internationally recognized, well reputed and no.1 sportswear manufacturing
company in the world, so an individual's own behaviour in Nike means a lot.
We consider the example of Nike's sales Manager Mr. Alexander Mathew, in order to
understand an individual's behaviour in relation to Nike's organizational role.
Mr. Alexander is working here from last 8 years. His job is to manage the promotion and
sales of the Nike products. He has a big Number of subordinates, which makes him senior to
them. On the other hand he is junior to CEO and other Directors. His organizational role is to
guide the subordinates regarding the selling and promotion of the products.
To fulfill the social roles, he gives respect and importance to his juniors and seniors both.
This makes him close to them. His communication style is very effective; he delivers the
orders in such a polite way that every employee obeys his order. He works with cooperation
with all employees. He has such a job, where he has to supervise a number of employees and
in order to keep them together he does not let the conflicts to come among their relation. He
has a number of interpersonal skills such as the fluent message delivery, awesome personality
the very much important and effective managing style, through which he is managing for last
eight years.
GROUPS
A group can be defined as:
A group is any collection of people who perceive themselves to be a group
(Organizations and Behaviour)
HND Text Book
Source: www.learnthings.co.uk
FIG.6: A photo of a Group doing Business Meeting

There are two types of groups, which are:

> FORMAL: Groups are those, which are formed deliberately to achieve any specific objects.
These groups are also called teams. It consists of team members and one Leader from the
same team, such as platoon of the soldiers etc. These groups are self made or made by
organization.
> INFORMAL: Groups are those, which are loosely structured. It means there is no preplanning for their development. For example a group of friends going to a trip. These have no
specific objective and leader; leader can be different at different situations, depending upon
circumstances.
GROUP BEHAVIOUR
When a large number of people come together, they form group or large group. At this
situation they all behave in a similar way, which is different from the individual behaviour.
For example when a large number of people come to the ground, either they march or protest
for something, which is their collective or group behaviour. There are some special behaviors
of groups:
> CROWD: When their would be panic among the people
> SPECTATORS: When group of people come together to participate in any event, such as
Cricket Match and Movie in Cinema.
> PUBLIC: Exclusion to the rule that group must reside in same physical place. People
watching same channel on television may react in the same way, as they are occupying the
same type of place - in front of TV - although they may physically be doing this all over the
world
FACTORS INFLUENCING
TEAMWORK
The factors, which make a team an effective and ineffective team, are given below:
FACTORS TO EFFECTIVE
TEAMWORK
Usually there are a large number of factors, which lead a term to effective team, but some of
them are given below:
> Team object or purpose must be clear to all team members.
> All the team members must be committed and sincere regarding their job.
> Individual interest should not overcome the group objective.
> There must be 'Democratic' leadership style in the group.

> Each member of the group should be given due respect.

> Members must be cleared about their job.

There must be no conflicts among the group members and there should be trust and open
discussion among the members.
> Members should obey the leader.
> No member should be overburdened.
> Leader's behaviour should be balancing towards all team members.
> Each member should fulfill own job within the specified time.
THREATS INFLUENCING
TEAMWORK
As there are a large number of factors, which make teamwork effective, similarly there are
threats, which influence the performance of team. Some of them are given below:
> When there would be 'Autocratic' leadership style.
> Each member tries to achieve own interest.
> A big number of conflicts among the members.
> Everyone in the group agrees to a decision thinking that everyone else supports the
decision, but in fact no one supports the decision.
> Leader only supports to the people, which are more close to him or her.
> There is no estimated outcome.
> No coordination among the team members.
> No trust and helping spirit among the team members.
ENDNOTES
References for the preparation of this report are taken from the following sources:
WEBSITES
> www.nike.com
> www.see.ed.ac.uk

> www.learnthings.co.uk
> www.busi.mun.ca
> www.niketown.nike.com