Section One: Theories on Organisational Culture
In the words of Geert Hofstede, culture is, “the programming of the human mind by which one group of people distinguishes itself from another group. Culture is learned, not innate. It derives from one’s social environment rather than from one’s genes.” (Hofstede, Hofstede, and Minkov, 2010, p. 6) When placed within the context of an organisation, culture is the result of an organisation’s values and practices. According to the Chartered Management Institute, “Organisational culture is the way that things are done in an organisation, the unwritten rules that influence individual and group behaviour and attitudes.” (CMI, 2015) Organisational culture is crucial to any company’s success as it influences its operation at every level. A positive culture can breed success and employee satisfaction, but one which leaves employees unhappy can harm an organisation’s success.
One of the most prominent theories on Organisation Culture is Schein’s Culture Model (Schein, 1980).
Level 1: Artefacts
Schein defines artefacts as “the constructed environment of the organization, its architecture, technology, office layout, manner of dress, visible or audible behavior patterns, public documents such as charters, employee orientation materials, etc., etc.” (Schein, 1983, p. 2)
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Figure 1: Schein’s Culture Model (Schein, 1980)
Level 2: Values
Described by Schein as “what people say is the reason for their behavior, what they ideally would like those reasons to be, and what are often their rationalizations for what they have done.” (Schein, 1983, p. 2)
Level 3: Basic Assumptions
Schein explains that an organisation’s basic assumptions “will ultimately derive from two sources: 1) the prior assumptions of organization founders, leaders, and members based on their own experience in the parent or host culture, and 2) the actual experiences which that organization has as it copes with its external and internal problems.” (Schein, 1983, p. 4)
With this model, Schein describes organisational culture and its impact on an organisation with regard to learning and group dynamics (Schein, 1983, p. 1). Schein’s model breaks down organisational culture into three levels: artefacts, values, and basic assumptions.
Put simply, artefacts are the characteristics of an organisation easily observable by somebody inside or outside of the organisation. These can include office décor, dress code, company reports, employee’s behavioural patterns, and more. According to Schein, although artefacts are observed with relative ease, there is very little to interpret or analyse about them, and they offer very little insight into an organisation’s culture (Schein, 1983).
Values are explained as an organisation’s proposed motivations for their practices. When applied to an organisation as a whole, values might be found in a mission statement or corporate charter. They are often presented in writing and come in the form of rather vague statements. Values are more indicative of an organisation’s culture as they provide insight into how it wishes to be viewed by outsiders as a result of what it believes outsiders value.
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Assumptions are unconscious and unspoken beliefs which dictate values and behaviours within an organisation. The assumptions of an organisation are the foundation of its culture, and they dictate all activity within an organisation. The key distinction between values and assumptions, according to Schein, is that values are what one says, and assumptions are what one believes; as a value transforms into an assumption, it is no longer seen as “debatable and confrontable” (Schein, 1983, p. 3). Schein states that “as a value leads to behavior, and as that behavior solves the problem which motivated it in the first place, the value gradually becomes transformed into an assumption about how things really are and, as it is increasingly taken for granted, drops out of awareness.” (Schein, 1983, p. 3) Assumptions, as Schein says, are “the essence of the culture” (Schein, 1983, p. 19), and offer unparalleled insight into the culture of an organisation.
According to Schein, the way to ascertain the true culture of an organisation is through complex observation, interview, and inquiry between selected members of the group and outsiders to reveal the underlying basic assumptions of the organisation (Schein, 1983).
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organisations are viewed as effective if they maintain harmonious internal relationships, while others are viewed as effective if they succeed against competitors (Cameron, 2009, p. 2). When combined, the dimensions form four quadrants, each one encompassing a different set of organisational values. These four values are thought of
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as the most common organisational values of any company and are constantly competing with each other for resources.
This model can be utilised to develop new strategies or styles of management and organisational development. Using the framework, leaders and managers can be trained within the context of an organisation’s culture and the ambitions of the organisation, acknowledging its current problems. This allows companies to ensure that the necessary time and resources can be dedicated to all four organisational values, so that they are no longer competing with one another. The CVF can also be used as a tool to measure the importance of each value to an organisation, allowing organisations to use a consistent strategy for individual organisational development and improvement (Cameron, 2009, p. 2).
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Section Two: Secondary Research on Nike
To further explore the topic of organisational culture, it can be studied within the context of a major fashion brand.
Established in 1964, the culture that Nike has since developed has been influenced by the values and ethics of nearly six decades of history. Nike’s culture is encapsulated in two key principles: firstly, Nike’s mission statement, “to bring inspiration and innovation to every athlete in the world, which includes the belief that if you have a body, you are an athlete.” (NIKE, 2022, p. 6) Secondly, the company’s eleven maxims:
1. It is our nature to innovate.
2. Nike is a company.
3. Nike is a brand.
4. Simplify and go.
5. The consumer decides.
6. Be a sponge.
7. Evolve immediately.
8. Do the right thing.
9. Master the fundamentals.
10. We are on the offense always.
11. Remember the man [the late Bill Bowerman, Nike co-founder]."
(NIKE, 2022)
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From these principles, three fundamental ideas can be derived: innovation, collaboration, and positive change. These ideas are the driving force of Nike’s business and are reflected in everything Nike does.
Consumers have been consistently reminded of Nike’s commitment to innovation since its inception. Nike has reinforced its reputation through the release of industrychanging products like Dri-FIT technology, “a unique high-performance microfibre construction that supports the body's natural cooling system by wicking away sweat
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Figure 3: Nike’s Original Mission Statement (NIKE, 1978)
and dispersing it across the fabric's surface to evaporate faster” and Nike Flyknit, a material “made up of strong yet lightweight strands of yarn that have been woven into a one-piece upper, securing an athlete's foot to the shoe platform” developed through over 40 years of research (NIKE, 2023). However, this rich history of groundbreaking innovation does not come easily, a huge portion of Nike’s success can be accredited to the emphasis Nike has placed on building a creative and diverse team, supporting its employees and allowing them the opportunity to reach their full potential, and giving them the tools to shape the culture in which they work. In 2022 Nike was ranked #34 in Forbes’ World’s Best Employers list, 8 places higher than its 2021 ranking. This speaks not only to Nike’s commitment to creating a positive corporate culture that places great value on employee advancement and job-satisfaction, but also to Nike’s dedication to positive change in general. In Nike’s 2021 Impact Report, CEO John Donahoe is quoted saying “We’re more focused than ever on building a diverse, inclusive team and culture, because creating the change we want to see starts with us. And through our platforms and partnerships, we’re inspiring and empowering others to join us in working toward a more equitable future.” (NIKE, 2021, p. 4)
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Figure 3: Nike’s Diversity Achievements as of 12/2021 (NIKE, 2021)
Another fundamental theme of Nike’s culture is collaboration, Nike’s partnerships with professional athletes have been crucial to its success, not only from a marketing and financial standpoint, but because of the feedback Nike has taken from these athletes and applied to its product development. In a 1992 interview with the Harvard Business Review, Nike Co-founder Phil Knight described this collaborative relationship, saying “When we started making shoes for basketball, tennis, and football, we did essentially the same thing we had done in running. We got to know the players at the top of the game and did everything we could to understand what they needed, both from a technological and a design perspective. Our engineers and designers spent a lot of time talking to the athletes about what they needed both functionally and aesthetically.” (Willigan, 1992) Additionally, Nike is a founding member of the Sustainable Apparel Coalition (SAC): “an industry-wide group of more than 200 leading apparel and footwear brands, retailers, suppliers, academics and NGOs working to reduce the environmental impacts of apparel and footwear products.” (NIKE, 2023) Nike has worked with the SAC since 2009, paving the way for other major fashion brands to reduce the apparel industry’s environmental footprint (NIKE, 2023). This is just one of a number of Nike’s collaborative efforts to encourage sustainability, diversity, and improved labour conditions in the fashion industry.
Since the creation of the brand’s mission statement, Nike has expanded its focus on innovation beyond products and begun working to create positive change in the world. This work is detailed in Nike’s Impact Report. In 2021, Nike invested 36.6 million USD to support organisations working to level the playing field and addressing racial inequality (NIKE, 2021). Nike has also addressed racial inequality within its workforce with programs like the Serena Williams Design Crew, “a six-month apprenticeship program to diversify talent within the design industry.” (NIKE, 2021) Of the three cohorts that have already completed the program, 14 have already been recruited to full time positions, and that number will only grow as the program continues (NIKE, 2021). Lastly, Nike has acted in communities all over the world with its ‘Made to Play Commitment’, working with over 100 community organisations to increase children’s
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access to sport. In 2021, Nike’s Made to Play Commitment impacted nearly 600,000 worldwide – 55% of whom were girls. Nike also shared practices and tools with over 24,000 coaches and helped train nearly 6,400 of them in delivering fun, inclusive experiences to all kids (NIKE, 2021). These examples represent only a fraction of Nike’s work in communities, but clearly show Nike’s commitment to positively impacting communities all over the world by with outreach and philanthropy.
Since 1964, Nike has built a strong and positive culture by adopting a clear set of values and ensuring that everything the company does is in conjunction with these values.
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Conclusion
In 2023 Nike is one of the most recognisable names in the apparel industry, and over the years has created a culture that is apparent in everything the brand does. Nike is governed by its commitment to innovation, collaboration, and positive change. These themes can be defined, according to Schein’s model, as Nike’s basic assumptions, the essence of its culture. Nike shows evidence of its commitment to these assumptions in what can be categorized by Schein’s model as its artefacts: the brand’s products, corporate structure, and employee support programs as well as in its values: Nike’s mission statement and 11 maxims. Examining Nike’s culture using the Competing Values Framework, it is clear how unique the brand’s culture is, as Nike has developed a structure that ensures sufficient resources are dedicated to each of the four organisational values described in the model. As discussed, Nike’s culture places great emphasis on internal harmony and collaboration, external competition, innovation and change, and quality enhancement. Nike has developed an organisational culture that effectively addresses the need for flexibility while also maintaining stability and consistency, and places value on internal unity, while also outcompeting rivals. As a result, there is little to no room for improvement for Nike to better apply the prominent theories of organisational culture to its business. Nike can be viewed as an example of how to build a strong culture that benefits business on every level and dedicates ample resources to each of the competing values.
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