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NIKE reoganizes

Under the leadership of new CEO John Donahoe, Nike is moving away from its classic discrete sports categories (Nike Basketball, Nike Soccer, etc.) in favor of a system where all products are shoveled into one of three divisions: men’s, women’s and kids’. Obviously Nike made clothing tailored to the specificities of all these groups before, but now, Nike is emphasizing gender over sport. Gone is the model of the product appealing to basketball fans because they are basketball fans. It’s now replaced by a model of, say, the product appealing to women because they are women. (https://houseofstrauss.substack.com/p/nikes-end-of-men)

Posts from an old blog on Organizational Architecture

https://e610vcu.blogspot.com/search/label/Organizational%20architecture?fbclid=IwAR2_9sDNY2FxjorjBmGxCwr_sW2DU-ZKVz7tdBr-dbrP3ljgzRJkt_9qGhI

An intelligent piece on the future of WFH

Big tech and universal telecommuting

by  Tyler Cowen June 20, 2020 at 2:12 am in 

• Economics
 
• Web/Tech

It has gone great so far, but I don’t think it is socially optimal to be doing this forever.  Here is my latest Bloomberg column on that topic, 2x the usual length, excerpt:

If Twitter, Facebook and other tech companies shift toward everyone working from home, it will mean less reliance on esprit de corps and morale to ensure performance, and more management using direct financial incentives and project- and output-based monitoring. Virtual tools can help organize teams, but they simply can’t replicate the intellectual frisson of “gathering the smart people” together, and this could damage performance and innovation.

And:

There is some evidence that when employees work at a distance, they don’t put in extra hours or extend themselves for the benefit of co-workers. That probably means a better work-life balance for many people, but perhaps also inferior performance from a lot of companies over the longer haul.

This move away from workplace morale as a motivator will help self-starter employees, but it may not be good for tech labor overall. In essence, without a local workplace ethos, it is easier to commoditize labor, view workers as interchangeable and fire people. The distinction between protected full-time employees and outsourced, freelance and contract workers weakens. A company can make the offer of, “If you hand in your project, we pay you,” to virtually any worker around the world, many of whom might accept lower wages for remote roles.

Bringing new workers on board is an especially difficult problem for this model.  In the short run, of course, that is a minor concern but over time it grows.

Olly has died

This obituary of Oliver Williamson describes the focus of his work and some of his main conclusions (WSJ, June 2020).

"All feasible forms of organization are flawed. We need to understand the trade-offs that are going on, the factors that are responsible for using one form of governance rather than another, the strengths and weaknesses that are associated with each of them.”

Will AI => Centralization?

This article in the WSJ (Nov. 2019) discusses the role that AI may have in increasing or decreasing centralization.

What Changed?

This WSJ article (Sept. 2019) reports that Boeing has changed its organizational chart in response to the crashes of its 737 MAX. Here are my questions.

1. Did the change move decision rights?
2. Did the change affect information flows?
3. Did the change affect incentives?
4. Did the change affect the extent to which the company is centralized?
5. Did the change alter the extent to which the firm is organized around functions or products?