Application of Goal Setting Theory to Nike
Goal Setting Theory
Edwin Locke’s goal setting theory was created with the help of Thomas A. Ryan who was the first psychologist to study this theory and came up with the following statement: “goals of consciousness affect actions” as cited in the book “Building a practical and useful theory to establish the goals and motivation of tasks”. However, Locke’s objective was to resolve the hesitation of “how the level of intended achievement is related to actual level of achievement” (Miner, 60). Although Locke already had a hypotheses that if you have higher levels of motivation towards accomplishing a task, you will more certainly have higher levels of performance.
Locke’s approach assumes a “common sense” perspective, which can be checked with a brief reflection. Take a few minutes and think about when you want to achieve a goal, you feel motivated to achieve it. Locke showed that, when situations seem difficult, the motivation of the people towards their achievement increases. Performance is also superior when people are committed to the goals and are given correct feedback.
At the same time, Gary P. Latham conducted a series of studies that supported Locke’s theory. He found that, indeed, there is a strong relationship between setting clear goals and working performance. Both authors, focused on the idea of setting specific goals to improve motivation and performance; what is nowadays called as the goal setting theory and task performance.
The specific objectives motivate and guide the behaviors. They promote the best performance. In fact, goals formulated in the style of “work as best as possible”, “improve the quality of customer service” or “reduce the number of complaints about the product” will not work. They will not maintain the same success because they are not concrete and do not accurately report what they want to achieve.
In order to have a better understanding of goal setting, Locke established five different points in order to achieve your goals. He called them the SMART Objectives. The S stands for Specific, simple or significant; meaning that your goal has to be clear, and has to motivate you. People say that in order to have a clear understanding of your goal you should write them down. The M stands for Measurable or meaningful; it has to be something that will tell you how your process is going in order to accomplish your goal, and once again has to motivate you. The A stands for Achievable and has to be something real and attainable. The R stands for Relevant and has to have a purpose to an organization and has to follow the company objectives. The T stands for Time-bound; you have to put a deadline on your goal and has to be tangible.
Every organization set goals to reach their objectives. An organizational objective is a desired situation that the company tries to achieve; it is an image that the organization intends for the future. Moreover, all organizations should set goals in order to grow within their company and create competitive advantages in their respective industries. As Zig Ziglar once stated: “a goal properly set is hallway reached” (Ambler, 2018). If you can identify what specific goal will improve or increase your company’s revenue or growth, it will be easier to accomplish as well as the performance being higher. Moreover, as in every organization, eentrepreneurs usually set the guidelines for their organization. The mission of the company, vision, and values are always an extension of the characteristics of the owner of the company. In addition, entrepreneurs can set objectives to ensure that all employees work in harmony in the company and they must understand the purpose behind the business to increase production efficiency. Employers can also set goals to ensure that employees meet the minimum requirements of their behavior for the business.
The company, Nike, published a report “Summary of Performance of Sustainable Businesses FY10-11”, which addresses its new objectives and describes its progress in business, work and environmental goals. The report also analyzes the main challenges it faces and the business strategy that lies ahead, demonstrating its commitment to a more transparent and sustainable future.
In the longer term, Nike’s strategic vision – to dissociate the growth of limited resources – is underlined by new goals and challenges, including a commitment by the entire company to further integrate the principles of sustainability into its processes of innovation, corporate governance all in your wallets. The challenge for the new year is structured in two levels: continue with the objectives of improvement in the areas of key impact to “Make today a better day” and expand the commitments in innovation to “design the future”. These two levels establish the way Nike is working for long-term changes.
“Nike is recognized worldwide for our innovative performance products and sustainability has increasingly become the core of our business approach,” said Mark Parker, President and CEO of Nike. “We have continually invested in reducing our environmental and social impact, from our business and supply chain, and we have made substantial progress over the last decade, we know that we cannot achieve our sustainability goals, simply by adding improvements. Let them quickly evolve the way we do things. ” (Parker, Nike).
Also introduced was the new industrial rating system, the Manufacturing Index, which evaluates the total performance of a factory and includes a more in-depth look at the way in which sustainability is sought. This index raises the environmental and labor performance against traditional measures that measure the delivery of quality, cost and time. Together with this index, the company has developed another that evaluates the origin and manufacture of Sustainability (SMSI), measuring the performance of the contracted factory in terms of sustainability, including measures of environmental performance (water, energy, carbon, and waste), on issues of health, job security and work management. After two years of work on the development of the index and its application in a successful pilot program, the SMSI is being used throughout the global supply chain of Nike.
Nike’s report focuses largely on the role of innovation, transparency, and collaboration in dealing with sustainability issues. Besides of becoming more aware of the environment, Nike also wants to be the reference brand in sports products worldwide. To be more specific, I am going to list the most important objectives Nike wants to accomplish in the short and long-run.
1) Improve working conditions by eliminating additional work time in the brand factories. The additional or excess of time is one of the biggest issues the company is facing. Nike is one of the biggest companies in the world, and I am most certain that it is very demanding to keep every customer happy. Therefore, Nike’s first objective in order to improve their growth and sales is to keep their employees happy by eliminating the additional work time. Nike’s priority is continuing to improve their conditions for almost 800,000 employees.
2) Change every Nike store in order to be environmentally friendly. Nike has exceeded their objectives reducing CO2 emissions in the last two years through the Climate Savers of the World Wildlife Fund program. I am sure nowadays a lot of companies have any kind of mechanism to reduce CO2, and by regulating the CO2 it will not only decrease pollution but it will also help to reduce unnecessary energy and to optimize production; focusing on customer wants. Furthermore, Nike also will decrease the waste in product design and packaging by changing the volatile compounds with greater material use for the environment. Eliminating plastic is something necessary and important that every company and every single person in this world should strive to do. It may be a bit more expensive, but in the long-run it will benefit the oceans and will decrease pollution.
3) Invest in community-based initiatives that will use the sport power to unleash people’s potential and improve lifestyle. By saying this, Nike plans to invest $11,000 million with its women’s division by 2020; a year in which they are expecting to check around $50,000 million. This strategy is based on focusing on some key sports for women, such as running and yoga to encourage them to exercise more. In order to accomplish this goal, Nike has designed two different apps called Nike Training Club (NTC) and Nike+ (Nike+ Running) where personal trainers will help you work out and follow your progress.
4) Achieving, maintaining and managing the leadership of the sportswear sector worldwide so that our products reach as many consumers and places as possible. By doing this, Nike also wants to expand horizons in terms of sponsorship not only stagnate in the sports field but also launch other areas such as culture to be the patrician par excellence. In order to do this Nike has focused on the blogger community which will create an impact in their brand as they influence a lot of customers around social media. They will also focus on small sport groups that will be interest in participating with the brand so they can get better and more known within the sports industry, and by collaborating with more sport shops etc.
In addition to all the goals already mentioned above, Nike continues its commitment to transparency in the supply chain by updating the public disclosure of more than 700 factories around the world that produce Nike items. Furthermore, in 2005, Nike was the first company in its industry to unveil its factory base to foster industry transparency and collaboration.
On the other hand, we can also find some misconceptions in this theory. To start with, some companies believe that it is better to set a goal and maintain and embrace the path, even if a challenging task gets in the way of achieving said goal. In my opinion, I believe that if major obstacles get in the middle, it is always good to reconsider the path the company has set to achieve the certain goals and see if it is better to improvise and modify it in order to attain the goal; always keeping the motivation and the company values at best interest. Another downfall I found is the “only setting one goal at a time” mentality. I could understand this from a small business standpoint as they need to focus on one thing at a time in order to grow, but for big companies this won’t work. One big goal may require multiple smaller goals to accomplish the larger goal at hand. Single goals could work for short-term, but multiple goals can help you to build a larger and more supportive progression. By saying all this, one bad thing that companies tend to do is have a clear end point of their goals which is good, but is not completely effective when they have a precise visual of what the end goal will look like. As I mentioned above, the process of attaining the goal can help you overcome difficult obstacles which will change your original goal. I think you have to be flexible with your end point, and know that most things in life don’t turn out exactly the way you expect/plan them to. Following with this, when some companies write the goal down, it could be misguiding to their employees as goals can change at the end of the journey due to the same reasons I just mentioned above.
Furthermore, sometimes a company may focus on creating competitive advantage with their competitors. For example, Coca-Cola wanted to have a better product than Pepsi and so they made their beverages sweeter. However, they did not contemplate which their customers would prefer, their new modification or the traditional product in itself. This change in Coca-Colas product was one of the biggest product failures in history in 1985. This example represents how companies at times may accidentally set “wrong goals” in order to strive to be “bigger and better” within the industry related to their competitors but seem to forget about the most important thing which is keeping their customers happy.
Companies also put a lot of stress and pressure on their employees. If companies set goals that are too aggressive, it can result in a miscarry or backlash. If employees keep failing to achieve the company’s goals, it can result in a decline of their performance. This can also produce some anxiety and demotivation for their employees which will affect the company’s success.
In conclusion, even though there are misconceptions, I believe that by establishing objectives in an organization or life in general, it will be more effective than if there is not a goal planned to attain. According to Locke, in his book called “Motivation through conscious goal setting” itstates “The more specific or explicit the goal, the more precisely performance is regulated.” By having in mind what you want to attain for the future of the company, or even for your future in general, it will be easier to keep your motivation. It is also necessary to measure your process so you can see the improvements towards the goal. Additionally, organizations have to be committed to their goal; they have to keep their employees motivated and make them see the goal is attainable so their performance will be better and stronger: “High commitment to goals is attained when (a) the individual is convinced that the goal is important; and (b) the individual is convinced that the goal is attainable (or that,at least, progress can be made toward it).” (Locke). A good example that shows results by having the whole organization committed and motivated towards achieving the goal is Nike. Nike has made significant progress in most of its set goals, including the reduction of waste in footwear manufacturing, application of its index, sustainable design guidelines, and the implementation of training programs for the Human Resources area in the contracted factories. In other areas, including the reduction of excess overtime in the contracted factories, progress was slower than anticipated. Nike has also changed the focus of some of its objectives, including those related to carbon emissions, based on a deeper understanding of the challenges in order to improve alignment with the business strategy. The progress achieved in its objectives was a key driver to redesign its factory evaluation process and supply criteria to achieve long-term improvement in performance.
This is why, goal setting theory helps entrepreneurs and/or organizations at the time of considering writing a business plan and creating a section for their objectives. The business plan can act as a map in guiding the entrepreneur through the activities of his/her company. Entrepreneurs can review the plan and evaluate how the company’s objectives have been achieved. Business plans can also be easy-to-update documents in which owners can continually re-state the company’s objectives. Setting new goals can help entrepreneurs stay motivated in their company. Therefore, as Locke mentioned, by having goals set, keeping the motivation, and working hard, it can create a significant advantage which usually increases the company’s market share and business profits. A really good statement of Sir Edmund Hillary supports Locke’s theory which I believe all organizations and individuals should consider: “You don’t have to be a fantastic hero to do certain things – to compete. You can be just an ordinary chap, sufficiently motivated to reach challenging goals.”
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