The Diversity and Workplace Civility in Nike and the 21st Century American Workplace

19-06-2019 16:06

Changes in entertainment, telecommunication, the introduction and mass adoption of the internet, data processing machines and other technology coupled with globalization have fundamentally altered consumer and workplace patterns.   20th Century advances in communication, and technology innovations which became available to the masses and had infinite applications, like radio, television, and telephones were just the beginning. Innovations are ongoing, there are new products, applications and systems hitting the market and impacting everything, including how our consumers shop and how they see new advertisements. The mall and shopping as an experience previously had a special place in the hearts of many Americans since the General Store in little towns, to the introduction of what later became the Sears Catalog in the late 19th century. But the average individual in 2018 cannot indulge and spare the time to leisurely walk in a mall or shopping center on a regular basis, causing a decline in foot traffic. In the present day, online shopping has become the go-to method for everything from groceries to clothes. Stores and brands that were anchor stores in virtually every mall across America a few decades ago, Broadway, Montgomery Ward, Claire’s, BCBG Max Azria and Toys R Us, have closed the majority or all of their brick and mortar locations.  Others were recently merged with another brand or holding company who is looking to capitalize on their name and value.  Iconic, respected brands that were once globally known are closing divisions, limiting services offered and losing market share. But there are still other aspects of doing business that impact a wide array of organizations.

The past 100 years of innovation have moved life and work ahead rapidly and the brands that have survived to make it into the 21st Century American Marketplace, must continue to take internal measures to assess and adapt. The Organizational Mission, Vision and Values for most, typically include diversity-related aspects.  But in light of the #MeToo movement, a plethora of employee-reported scandals and an increase in discrimination claims with various agencies, it becomes necessary to ask the question if diversity practices match the policies and statements.

An entity in the media recently for allegations of workplace bullying, resignations of various executives and a renewed interest in changing workplace culture is the multi-billion dollar revenue generating athletic Company, Nike.  Nike is publicly traded on the New York Stock Exchange and has a stock price of $74.90.  Named after the Greek goddess of Victory, the Nike Organization Mission Statement is: ‘To bring Inspiration and Innovation to every Athlete* in the World. *If you have a body, you are an athlete’ (Nike, Inc., 2018). The qualifier: if you have a body makes it clear that Nike’s target demographic is every human being who would need clothing.  Lululemon pushed Nike and other Athletic companies to become more innovative in their women’s designs.  For years, many companies made athletic clothes that were similar to their male counterparts.  As athletic wear became more fashionable and wearable throughout the day, all athletic brands, including Nike changed their designs and assortments. Nike has famously been a main sponsor of athletes like Michael Jordan, Tiger Woods, and currently sponsor Kevin Durant. The Air Jordan line of shoes is one of the most popular of all time, rivaling Converse All-stars.  Converse was acquired by Nike in the early 2000s. 

Founded in 1972, employing over 74,000 employees in locations around the world (Glassdoor, 2018) this American manufacturing and consumer products brand with a global presence, has their headquarters offices in Beaverton, Oregon. Some of Nike’s competition has already experienced the cradle to grave existence in the marketplace, and no longer exist as a standalone brand, or at all. Notable current competitors are other athleisure/athletic companies like Adidas, Lululemon, and newest company for men and women, to this space is Under Armour (Glassdoor, 2018). 

Nike is one of the oldest American athletic brands and has, to date, survived, addressed and recovered from various scandals related to the conditions in overseas factories, accusations of bribery of athletes and other ethics violations.  Most recently a few male executives have left the company and two different groups have made allegations of unlawful harassment and disclosed that certain behaviors that are still accepted, are basically bullying, and is a very big part of the culture in the workplace  (Townsend & Deprez, 2018).   

Societal attitudes related to discrimination and discriminatory practices have shifted from acceptance and support of the discriminatory behavior, to outrage towards entities or individuals who are identified as engaging in this behavior.  Title VII protections were the initial protections which began the drive to ensure that groups who did not enjoy equality in the past, would have recourse when allegations of discrimination or discriminatory practices, now deemed unlawful, were reported through the process detailed by the EEOC (Reed SPHR & Bogardus, 2012). Many companies began to change their policies to have an internal process for reporting.  There is no leadership team or Human Resources team who wants allegations shared externally before they are made aware.  Therefore the open door policies, hotlines or email inboxes are now the most common ways that employers have established for their employees to report incidences, especially when they did not feel comfortable going through the chain of command (Reed SPHR & Bogardus, 2012).  

For individuals race and gender are two of the universally agreed upon inherent characteristics and (Hewlett, Marshall, & Sherbin, 2013) along with age and sexual orientation.  These two external characteristics have been the initial issues since the late 19th Century and into the 20th Century not only in society, but in the workplace. Even before an individual is hired with a company, if unlawful hiring practices are found to be typical rather than a mistake, oversight or an exception on the part of the organization, most companies generally do not have a reporting mechanism to receive the feedback of candidates, there is the potential for the individual to go to a state or federal agency and engage them to take action on their behalf. A recent survey of 59 African-American, female executives at varying phases of their career, mentions that this group constitutes 12.7% of the American population, but holds less than 2% of Executive (Sr. Manager or higher) positions at S&P 500 companies and less than 3% of seats on Fortune 500 boards of directors (Smith, Baskerville Watkins, Ladge, & Carlton, 2018).  This article chronicled barriers, coping strategies and discusses the glass cliff and what the attraction is to be visible in a positive way.  KPIs are such a big part of how business needs are justified, HR leaders sometimes struggle to quantify the various initiatives that are important to them, unless there is a clear financial impact. Statistics and workplace anecdotes support the need for diversity and innovation, but there is still a disconnect with obtaining the buy-in of Senior leadership.

Another identified group protected from discrimination is on the basis on sexual orientation. Generally, the encouragement is to leave personal matters outside of the workplace, but as was mentioned by one of the female executives that was part of the study, it is difficult to be inauthentic to yourself, or pretend to be someone else (Smith, Baskerville Watkins, Ladge, & Carlton, 2018).  Furthermore, if protected classes are spending too much time trying to fit in, rather than be themselves, things will never change. The Nike Consumer site shows a new initiative, the 2018 BETRUE collection, inspired by the LGBTQ community.  This external, marketplace initiative stems from an internal shift in doing business in a new way.  The inclusionary language is: “…celebrate the passion and pursuit of sport by all athletes” (Nike, Inc., 2018). In order for a company to understand the shift in the marketplace and innovate to reach new groups, diverse voices were not only given airtime or a place to be heard, but also either influenced and had support of someone with the ability to make decisions or were in a position to greenlight and go live with special groups marketing (Hewlett, Marshall, & Sherbin, 2013).

Within some companies there is a lack of alignment and a lack of diversity at the executive level. A WSJ article details some of the events that precipitated the resignation of a few executives at Nike in early March (Germano & Lublin, 2018).  In 2017 after a few high-ranking female executives left the company, a group of female employees essentially engaged in their own fact-finding process by creating and distributing a survey.  When the employees do not trust their manager or HR to advocate for them, they either leave the company or find ways to take matters into their own hands.  It is important for a manager or supervisor who has a team to understand and follow the Company’s policies and procedures, especially as employees generally model the behaviors of the leaders of the company. The female employees alleged that when certain male colleagues engaged in workplace misconduct, it was overlooked or covered up (Germano & Lublin, 2018).

Nike’s workplace culture has only been made public to consumers in the last four months, but with the articles that discuss their recent woes and resignations of executives appear in The Wall Street Journal, Industry publications like Business of Fashion and US News and World Report, these are not publications that the average consumer reads on a regular basis.  The majority of the public is most likely not aware of what his happening yet as this is not on the news. Nike has withstood other scandals in it 46-year history including the negative publicity and stock price plummet associated with the use of low-wage labor outside of developed countries like the United States.  When that scandal first broke, the internet was beginning to be introduced and was in the early stages of radicalizing how we receive the news (Carty, 2002).  Recently when other scandals involved a consumer and their client experience with an entity like United Airlines, American Airlines or Starbucks, these spread very quickly online because of cell phone videos, online reviews and word of mouth. The brand still has a very strong image with stockholders, is an ideal that startup or new-to-market athleisure brands look up to, but as is the case with all aging, mature brands, there are some declines in earnings, sales and profit margin (Halzack, 2018). A recent restructure was announced, which includes cutting approximately 1400 jobs and a decrease in the product line (Duggan, 2018).  With the changes to the US retail segment, and declines in those areas, there is a clear impact as Nike aims to handle the competition. Product quality and innovation are key factors and should never be overlooked, but this is an area that is extremely fundamental and typically varies based on who works in that segment of the team. Diversity and inclusion drives differences in thinking (Hewlett, Marshall, & Sherbin, 2013) to spur new ways of doing things. It is possible that a lack of diversity in branding, merchandising, product design and marketing, has created a place for new competition who are looking for a piece of the market that Nike once clearly dominated.

Most companies do not release current versions of their employee handbook, but internet research did net a policy that shares the rules of the game when ‘playing the game’ as a part of  the Nike playing field (Nike Corporation, 2018). The introductory message is from Phil Knight, Chairman Emeritus and co-founder of the company (Nike, 2018), and is not from current Chairman, President and CEO, Mark Parker. Most organizations including Nike mention diversity and inclusion in their values, the policies contain the Equal Employment Opportunity verbiage and state that they engage in fair hiring practices, fair administration practices and investigate allegations (Nike Corporation, 2018).  Others have created an affirmative action hiring plan at some point and may still utilize it or have targets for increasing diversity. Another standard is the mention that there is zero tolerance for harassment and the need that witnesses or those who experience harassment, must immediately report matters to a Supervisor, Human Resources or the Employee Relations department (Nike Corporation, 2018).  The mention that there is a separate department that handles Employee Relations matters in addition to the Human Resources team drives home that there are more eyes on any potential issues and they have the bandwidth to handle an investigation in a timely manner, from start to finish. Employees need to be able to trust that leadership says what they mean and vice versa (Lutrell, 2014).

            A quick browse of the Executives page of the About Us section of the Nike Corporate website shows that all of the leaders pictured are not a racially diverse group, there are two female executives: Senior Counsel and the highest-ranking HR leader (Nike, 2018). This does not showcase what is happening one or two levels down to prepare any diverse future leaders for the C-level roles, however we see no movement at that moment. Multi-national organizations with established operations in different countries and are always working to improve how those units collaborate and work together. By working through individual differences in language, location and culture, effective organizations engage and challenge their employees to adopt company culture (Mishra, Boynton, & Mishra, 2014). But this needs to happen in a more tangible way at the very top levels of Nike. Some ways that Nike can drive inclusion are by taking a multi-pronged approach with short-term, mid-range and long-term action items that can move the Diversity and Inclusion efforts forward.  Most notably, training, access to information for a broader group of employees that is typically shared only in an informal network or at non-work events that some employees where some employees are not invited. Lastly granting access for current and future leaders are to acquire experiences where they see the value of diversity, whether in a mentor-mentee relationship, or a segment or division change. (Hewlett, Marshall, & Sherbin, 2013).  Assigning an up and comer with an experienced member of leadership will be a valuable experience and serve to retain new employees who may not have experienced certain professional conversations or may not have the same contextual experience as one of their contemporaries of another racial or socioeconomic background. Diversity should exist in many divisions within the company so that there are changes to hiring policies and how testing and interviews are conducted (Mishra, Boynton, & Mishra, 2014). Sometimes we see diversity in department, or at one level, and the numbers appear to support diversity, but a couple more levels of analysis would change that perception.

Communication training is certainly vital in a Multi-National Corporation environment, but in a multicultural environment it is possible that Senior leadership needs additional diversity competency training to understand those verbal and non-verbal cues from potential leaders (Lutrell, 2014).  Seemingly simple customs that one group engages in, and already knows through an existing informal network where information is exchanged, gives some groups an advantage over others who start out without access to certain aspects, unspoken rules and informal mannerisms that no one ever explained to them. Most verbal cues have been addressed and are taught across the board.

Some leaders see certain assignments in a developing country or a segment of the company that is not doing as well, as a risk to their career.  When one of these assignments is available that no one else will take, some diverse executives have stated that this is their way to be noticed in the best way possible (Smith, Baskerville Watkins, Ladge, & Carlton, 2018).  The Glass Ceiling has been discussed, researched and brought to light; whereas the Glass Cliff is not as well known. 

It is very telling that for diversity and inclusion in the American workplace, the 1960s and 1970s in the United States is heralded as an especially pivotal time of change and progress for groups who were virtually silenced or hidden in society. Women, minorities, and those who were of the lower to middle income group were expected to contribute to society but were not consistently granted equal access to the American Dream, educational opportunities, or granted the means to speak up for themselves.  Nike’s CEO released a memo which states that some internal behavior by an executive is not reflective of the Company values (Duggan, 2018) but is a press release and a resignation enough to affect any long-term change?  A resignation based on behavior that already took place is not a proactive approach to ensuring that diversity and inclusion initiatives are taking root at all levels of the organization. 

Present day, there are more consumer groups who actively review the landscape and are willing to call for mass consumer boycotts of purchasing new products and involve activists to obtain publicity in these efforts. Even after the establishment of the EEOC these inconsistencies still have the potential to negatively impact some of these protected groups. Many organizations including Amazon are pushing the boundaries in more than just changing consumer expectations,  Amazon is also enacting a practice similar to the NFL’s Rooney Rule.  While it was good progress that Title VII acknowledged and established what entails disparate treatment and disparate impact and allowed for oversight of compliance with the CRA; there should also be more progress at different levels for executive and board inclusionary activities (Lutrell, 2014). Succession planning is one of the processes that has some documentation, but there is generally a lack of publicity to what truly goes into choosing who is categorized for promotion, laterals and being managed out (Deloitte, 2018). This is an area that still tends to be a gray area and gives those who have similar knowledge, skills and abilities to those in the C-Suite. The succession planning and recruitment process is an area that has not seen much change in the last 18 years. While most legal departments will advise their HR and recruitment leaders to only put in writing what is required by law, it may be necessary to give additional guidance to internal managers who only want to toe the line and not do anything beyond what is required.

References

Carty, V. (2002). Technology and Counter-hegemonic Movements: The Case of Nike Corporation. Social Movement Studies, 129-146.

Chen, C. (2018, June 10). Business of Fashion: News & Analysis. Retrieved from Business of Fashion Web Site: https://www.businessoffashion.com/articles/news-analysis/nike-looks-to-transform-troubled-workplace-culture-with-new-diversity-initiatives?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202018-05-15%20HR%20Dive%20%5Bissue:15336%5D&utm_term=HR%20

Deloitte. (2018, May 10). Analysis: Deloitte. Retrieved from Deloitte Corporate Web Site: https://www2.deloitte.com/us/en/pages/about-deloitte/articles/board-diversity-survey.html

Duggan, W. (2018, June 8). Workplace Enviornment is Latest Concern for Nike. Retrieved from U.S. News & World Report L.P.: https://money.usnews.com/investing/stock-market-news/articles/2018-03-16/nike-inc-nke-stock

Germano, S., & Lublin, J. S. (2018, June 8). Business: The Wall Street Journal. Retrieved from The Wall Street Journal: https://www.wsj.com/articles/inside-nike-women-staffers-circulated-survey-about-workplace-behavior-1521451801

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Mejia, Z. (2018, May 15). CNBC: Closing the Gap. Retrieved from CNBC Web Site: https://www.cnbc.com/2018/04/26/ubers-diversity-report-shows-women-account-for-just-38-percent-of-staff.html

Nike. (2018, June 9). Executives. Retrieved from Executives: About Nike: https://about.nike.com/pages/executives

Nike Corporation. (2018, June 9). Inside the Lines: The Nike Code of Ethics – Defining the NIKE playing Field and the Rules of the Game. Beaverton, Oregon, United States of America.

Nike, Inc. (2018, June 9). About Nike: Nike Coroporation . Retrieved from NIke, Inc. Corporate Web site: https://www.nike.com/us/en_us/

Reed SPHR, S. M., & Bogardus, A. M. (2012). PHR/SPHR Professional in Human Resources Certification. Indianapolis: John Wiley & Sons.

Smith, A. N., Baskerville Watkins, M., Ladge, J. J., & Carlton, P. (2018). Interviews with 59 Black Female Executives Explore Intersectional Invisibility and Strategies to Overcome It. Harvard Business Review, 1-8.

Townsend, M., & Deprez, E. E. (2018, May 14). Is the Corporate Bully the Next Workplace Pariah? Bloomberg Businessweek. New York, New York, United States.

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