MBA FIRST YEAR 2012

MBA 8105 – ORGANISATIONAL BEHAVIOUR

LEADERSHIP CONUNDRUM: NIKE AFTER KNIGHT

Prepared by Narendra Hirani
Registration Number MBA/2443/12
April 2012

1a) Discuss and evaluate the appropriateness of the leadership style adopted by Phil Knight. Philip Knight’s leadership style can be analysed using the various leadership theories that have been developed. Their appropriateness can be evaluated based on the information available in the case study. Rensis Liekert developed four systems of leadership, exploitative autocratic, benevolent authoritative, participative and democratic. Knight’s leadership style at Nike can be described as democratic as per the systems developed by Riekert. According to Riekert, the
The style of leadership demonstrated by Knight at this time can be termed the self monitoring approach, whereby the Leader modifies his/her behavior depending on the circumstances. Although Knight had great faith and trust in his executive management, he changed his style in the early 1990s and during that time changed the approach of Nike from shoes only to include apparel.

1b) Justify whether you think the management style followed by Phil Knight is suitable for this organization. Phil Knight’s style of management is vindicated by the success achieved during his tenure and the downturns observed whenever he stepped down as the CEO. It is important to note that although he adopted the democratic leadership style and let his senior executives make decisions, he was instrumental in making the key decisions that transformed Nike at crucial points. He decided to venture into apparel when he realized that Nike had limited itself by offering shoes only and thus would not be able to keep growing at the rate that they wished. Knight was also responsible for making a decision to allow retailers to pre-order inventory. This ensured that they are manufacturing what is required by their distributors and thus avoids them having unnecessary excess inventories. This was very fundamental to the success of Nike at that juncture. Therefore, when assessing Knight’s approach, it is critical to take into