Internal Alignment and External Competitiveness for Adidas' and Nike
Internal Alignment is the set of strategies, policies and systems laid by an organization. They are also the relationship between jobs, skills and competencies in the organization. On the hand, external competitiveness refers to how an organization pays for jobs in relation to its competitors. For example, Adidas pays its employees in relation to Nike’s pay to its employees. The organization sets its pay limits with respect to the lower limit pay rate and upper limit pay rate (Hill &Irwin, 11). According to Nike code of conduct, the organization uses both internal alignment and external competitiveness. This is because it pays minimum wage to its employees or the popular industrial wage. The organization compares the two rates and pays it employees the higher rate. The same applies to Adidas, which comes second to Nike in competition. Adidas has to use the same strategies as Nike so as to maintain its employees and attract others (Nike). Nike Inc. uses the flat organization structure also known as matrix structure. In this structure, employees report to product managers and to department managers. The advantage of flat organization structure is that product managers make decisions faster than the usual department heads. This is necessary because of the dynamics of the market. Jobs based salary is whereby an employee is paid in relation to the job they do. In this system, there is evaluation of task and employee performance. On the other hand, person based system is when an employee is paid in relation to the skills they have regardless of the job they do. In both organizations (Nike & Adidas), they use the job based system because it creates a clear link between the job and pay. It also enhances employee performance and commitment. Pay level is the financial return for employment. There is a close relationship in pay levels of Nike and Adidas, but Nike pays slightly higher. For example, a sales associate is paid at the rate of £8.93/hr
Cited: Beder, Sharon. Putting the Boot In. Retrieved from http://herinst.org on 12th March 2012. 2002 Hill Mc-Graw & Irwin. The Pay Model. Retrieved from http://highered.mcgraw-hill.com on 12th March 2012. 2002 Nike. Business code of Conduct. Retrieved from http://www.nikebiz.com on 12th March, 2012.