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Chapter 10 Building an Organization Capableof Good Strategic Execution
243
ASSURANCE OF LEARNING EXERCISES
1. The foundation of Nike’s global sports apparel dominance lies in the company’s continual ability to
outcompete rivals by aligning its superior design, innovation, and marketing capabilities with outsourced
manufacturing. Such a strategy necessitates a complex marriage of innovative product designs with fresh
marketing techniques and a global chain of suppliers and manufacturers. Explore Nike’s most recent
strategic management changes (http://news.nike.com/leadership and select the article titled: NIKE, Inc.
Announces Management Changes in Retail and Women’s Business). Howwelldothesechangesreect
the company’s focus on innovative design and marketing strategies? Has the company’s relentless focus
onapparelinnovationaffecteditssupplychainmanagement?Dothesechanges—orNike’sstrategy,more
broadly—reectthecompany’subiquitousSwooshlogoand“JustDoIt”slogan?VisitNike’scorporate
website for more in-depth information: nikeinc.com/pages/about-nike-inc.
ACTIVITY
This Assurance of Learning exercise is available as a Connect Assignment. The assignment can be
graded and posted automatically.
Response:
Forthefirstquestion,thestudentshouldidentifythatthecreationofaVPspecificallyinchargeofNike’s
GlobalRetailPresenceisasignificantmarketingmove.Thisallowsclosecoordinationandcontrolofall
for close coordination and control while facilitating world-wide learning within this market sector.
For the second question, the student should also identify that Nike’s focus on apparel innovation creates
challenges for their supply chain management function. While continuous changes in product mix and
features improve the value proposition for the consumer, it forces the firm to re-tool their production
function within Nike.
2. SearchonlinetoreadaboutJeffBezos’managementofhisnewexecutives.Specifically,exploreAmazon’s
“S-Team” meetings (management.fortune.cnn.com/2012/11/16/jeff-bezos-amazon). Why does Bezos begin
meetings of senior executives with 30 minutes of silent reading? How does this focus the group? Why does
Bezosinsistnewideasmustbewrittenandpresentedinmemoform?Howdoesthisreectthefounder’s
insistence on clear, concise, and innovative thinking in his company? And does this exercise work as a de-
facto crash course for new Amazon executives? Explain why this small but crucial management strategy
reectsBezos’overridinggoalofcohesiveandclearideapresentation.
ACTIVITY
This Assurance of Learning exercise is available as a Connect Assignment. The assignment can be
graded and posted automatically.
Response:
For the first and second questions, the student should identify that Bezos has recognized that writing a
complete sentence, as opposed to the chopped language of power point, forces clear thinking and the process
of writing and reading the narratives brings the S-Team to a common point before the discussion begins.
Chapter 10 Building an Organization Capableof Good Strategic Execution
244
For the third question the student should identify a similar theme. The process of writing a memo for all new
ideas forces clear and concise thinking on the part of the imitator and allows the other members of the team
to reach the same point before a discussion begins.
3. Review Facebook’s Careers page (www.Facebook.com/careers). The page emphasizes Facebook’s
corevaluesandexplains how potential employeescouldfitthatmold.Boldanddecisivethinkinganda
commitment to transparency and social connectivity drive the page and the company as a whole. Then
research Facebook’s internal management training programs, called “employee boot camps,” using a search
engine like Google or Bing. How do these programs integrate the traits and stated goals on the Careers
pageintospecificandtangibleconstructionofemployeecapabilities?BootcampsareopentoallFacebook
employees, not just engineers. How does this internal training prepare Facebook employees of all types to
“move fast and break things”?
Response:
The student should identify that Facebook expresses several key values on their career page including (1)
Focus on Impact, (2) Move Fast which includes the idea that moving fast includes sometimes breaking
things,(3)Be Bold, (4)BeOpen,and (5)BuildSocialValue.A reviewofarticlesdiscussing employee
boot-campswillshowthattheseindoctrinationsessionechoandreinforcethesevalues.Forexample,first-
Move Fast and Break Things.
4. Review Valve Software’s company handbook online: www.valvesoftware.com/company/Valve_Handbook
_LowRes.pdf . Specifically,focusonValve’scorporatestructure.Valvehashundredsofemployeesbutno
managers or bosses at all. Valve’s gaming success hinges on innovative and completely original experiences
like Portal and Half-Life. Does it seem that Valve’s corporate structure uniquely promotes this type of
gaming innovation? Why or why not? How would you characterize Valve’s organizational structure? Is it
completely unique, or could it be characterized as a multidivisional, matrix, or functional structure? Explain
your answer.
Response:
The student will likely focus their review on two sections of the Employee Handbook (1) Valve Facts that
Matter,and(2)WelcometoFlatland.InthesetwosectionsthefirmclarifiesthatValveisself-funded,owns
itsintellectualproperty,andthattheyarediversifiedintoentertainment,software,andplatformdevelopment.
Importantly, the Valve manual explains that there is no hierarchy within the company and that all employees
Chapter 10 Building an Organization Capableof Good Strategic Execution
245
5. Johnson&Johnson,amultinationalhealthcarecompanyresponsibleformanufacturingmedical,pharma-
ceutical, and consumer goods, has been a leader in promoting a decentralized management structure. Perform
an Internet search to gain some background information on the company’s products, value chain activities,
and leadership. How does Johnson & Johnson exemplify (or not exemplify) a decentralized management
strategy? Describe the advantages and disadvantages of a decentralized system of management in the case
ofJohnson&Johnson.Whywasitestablishedinthefirstplace?Hasitbeenaneffectivemeansofdecision
making for the company?
Response:
Johnson & Johnson’s Management Strategy—The student should identify the company’s management
strategy as Decentralized. Johnson & Johnson describes their Operating Model to include a Decentralized
Management Approach. The company’s 2014 Annual Report describes their organizational structure to
include 1) Executive Committee responsible for Strategic Operations, 2) Group Operating Committee of
managers from critical operations responsible for Business Segments, and 3) Senior Management in each
Operating Company responsible for the Operating Company’s Strategic Plan.
situation and train them to weigh all the factors and exercise good judgment.
The student should identify that key advantages include Key advantages include encouragement for
employees to exercise initiative and act responsibly, promotion of greater motivation and involvement in the
business on the part of more company personnel, and the development of new ideas and creative thinking.
Importantly, this model allows for faster response to market change and entails fewer layers of management.
The student should also identify that key disadvantages include the possibility that higher-level managers
may be unaware of actions taken by empowered personnel under their supervision and organizational risk
Why was it established—According to the company’s 2013 Company Fact Sheet, The decentralized
patients are in the best position to understand and respond to their own unique customers’ needs.
Has it been effective—Areviewofthecompany’sfinancialstatementsshowsaveryconsistentgrowthin
revenue(setbackin2015and2009)overthelast10years.Grossprofithasbeenconsistentlyinthe69–70%
