Implement and Monitor the Decisions

Once the best available alternative has been selected managers are ready to make plans to cope with the requirements and problems that may be encountered in putting it into effect. Implementing a decision involves more than giving appropriate orders. Resources must be acquired and allocated as necessary. Managers set up budgets and schedules for the actions they have decided upon, allowing them to measure progress in specific terms. Next, they assign responsibility for the specific tasks involved. They also set up a procedure for progress reports and prepare to make corrections if new problems should arise. Budgets, schedules, and progress reports are all essential to performing the management functions of control.

Potential risks and uncertainties that have been identified during the earlier evaluation of alternatives stages must be kept in mind. There is a natural human tendency to forget possible risks and uncertainties once a decision is made. Managers can counteract this failing by consciously taking extra time to reexamine their decisions at this point and to develop detailed plans for dealing with these risks and uncertainties.

After managers have taken whatever steps are possible to deal with potential adverse consequences actual implementation can begin. Ultimately a decision (or a solution) is no better than the actions taken to make it a reality. A frequent error of managers is to assume that once they make a decision, action on it will automatically follow. Even if a decision is a good one, if others are unwilling or unable to carry it out, then the decision will not be effective.

Actions taken to implement a decision must be monitored. Are things working according to plan? What is happening in the internal and external environments as a result of the decision? Are people performing according to expectations? What is the competition doing in response? Decision making is a continued process for managers – and a continual challenge of dealing with other human beings over time. At Nike, even after choosing Michael Jordan as a spokesperson, Knight had every reason to watch the sales patterns of Air Jordans very closely in 1984, and 1985. With many managers trying to gain endorsements from NBA stars, Nike products were vulnerable to competition from Reebock products.

From a humble Beginning:

The Nike organization grew out of an Idea Philip Knight expressed in a graduate school paper he wrote in 1962 while he was getting his MBA at Stanford. In 1964 he and Bill Bowerman, Knight’s former track coach from the University of Oregon, started an athletic shoe company called Blue Ribbon Sports, to evoke the image of a winner That year they sold 1,300 pairs of running shoes at local track meets from the trunk of a car, in the meantime, Knight also worked as a CPA and an accounting professor until 1969, when he decided to devote himself full time to Blue Ribbon Sports. Then, in 1972, Blue Ribbon Sports became Nike, named after the mythological goddess of victory.

Between 1972 and 1990, Nike experienced tremendous growth. Sales in 1972 were $2 million. By 1982, sales had reached $694 million, with an average annual growth rate of 82 percent. In 1990, sales reached $2 billion, with part of this phenomenal growth due to Michael Jordan’s endorsement. Even before Jordan stunned the sports world his retirement announcement, however, Knight and his managers had reason to be on the lookout for future opportunities. After all, they knew that as unique as his talents are, Jordan would not play professional basketball forever.

One new venture was the “Nike Town” concept. A “Nike Town” was part sports museum part store and part amusement p=ark, and was intended as a celebration of Nike’s “energy and youth and vitality” product image. Nike Towns feature 3-D commercials, giant tropical fish tanks and basketball courts. Initially Nike built Nike Towns, one in Portland, Oregon, and the other in Chicago, Illinois, but was planning for more throughout the world. It is part of a whole programs of image making, said David Manfredi, partner in Elkus/Manfredi Ltd., the Boston based firm that designed a similar store for Sony. This is an opportunity to have direct control over how your company is presented to the world. The idea here was to focus on image, not cost; merchandise was not discounted. When the Chicago Nike Town opened, it attracted 5,000 customers a week who spent approximately $50 each.

To keep up with the changing marketplace, Nike managers have already started diversifying. In 1992, Nike opened retail outlets in which apparel, shoes, and Nike paraphernalia are sold. Nike managers attribute a $100 million increase in gross profits in 1992 to its retail sales division, which operates 30 Nike owned outlets for factory seconds and the two Nike Town stores. A far cry from the company’s humble beginning with shoes being sold from the trunk of a car. The stores promote the growth of the Nike apparel business, which is experiencing much faster growth than the athletic shoe business.