Answer to Question 1
B
Answer to Question 2
Nike uses a network structure to make, distribute, and sell its shoes. At the center of the network is Nike's product design and research function located in Beaverton, Oregon, where Nike's designers are constantly developing new, innovative sports shoe designs. However, that is almost all that Nike does in Beaverton, besides the corporation's administrative functions. All the other functional work that Nike needs to make and sell its shoes has been outsourced to companies around the world.
Nike manages its relationships with the companies in its network through advanced IT. Its designers use sophisticated computer software systems to design its shoes, and all of the new product information, including its technical and manufacturing instructions and specifications, are stored electronically. When the designers have completed their work, they then relay the blueprints for the new products electronically to Nike's network of suppliers and manufacturers in Southeast Asia.
The advantage of this network structure is that Nike can respond quickly and flexibly to changes in customer needs and tastes. If demand for a particular kind of shoe drops and demand for another soars, Nike can rapidly transmit new instructions to its network of manufacturers abroad to change their production plans. Moreover, because it does not have to coordinate many different functional activities, Nike can preserve its flat hierarchy and stay small and nimble. In essence, a network structure allows Nike to act in an organic way.
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