Knowledge and Process Management

Volume 15 Number 1 pp 24–31 (2008)

Published online 12 February 2008 in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/kpm.296

& Research Article

Strategic Processes @ Nike—Making and

Doing Knowledge Management
George Stonehouse 1*,y and Sonal Minocha 2z
1
Napier University Business School, Edinburgh, Scotland, UK
2
Raffles University, Raffles Education Corporation, Singapore

This paper contrasts theory with practice through a case study of strategic processes of
knowledge management (KM) at Nike Incorporated. From its origins as a small specialist
enterprise in 1972 to a multi-billion dollar global brand, the corporation has been continuously at
the forefront of developments in management practice and business innovation. This case study
has been compiled from interviews with senior managers and numerous secondary sources. The
paper begins with a discussion of an insider perspective on the trajectory of the organization in
terms of its strategic goals and decisions on markets, customers, products, services and business
processes. It then goes on to explore and critique the dynamic interplay of the processes of
strategizing, learning, creativity and innovation at Nike as the basis for its knowledge-based
competitive advantage (CA).
The case thus represents KM as a unique combination of processes in which learning; strategy
and creativity are organized and strategically embedded within a large global organization. This
has implications for future theorizing in KM, which, as we illustrate in this paper, demands a
more integrative approach to research and practice. One of the key lessons for practice is that
span of activity, as well as strategy, will influence the relationship between strategizing,
organizing and learning and this interplay determines the success (or failure) of KM. Copyright
# 2008 John Wiley & Sons, Ltd.

INTRODUCTION are based on its customers and customer knowl-

edge, design and development, supply chain
Nonaka (1991) argues that knowledge is the only management. We conclude that this configuration
source of lasting competitive advantage (CA) in of strategic knowledge processes does not fully
the 21st century. This paper illustrates how knowl- account for Nike’s competitive edge as these
edge management (KM) and related processes are sources of superior performance could easily
employed in Nike Incorporated, the global market become imitable and thus unsustainable if not
leader in the sports apparel industry (Stonehouse supported by the unique ways in which Nike
et al., 2003) as the basis of its competitive edge. integrates the processes of learning, creativity and
We begin with a discussion of Nike’s CAs, which innovation which are, as yet, unparalleled by its
competition. Kiraka and Manning (2005: 288)
have argued that processes drive or are driven by
*Correspondence to: Professor George Stonehouse, Craiglockhart the strategy of the organization, yet there is very
Campus, Edinburgh EH14 1DJ, Scotland, UK. little empirical work on globally successfully
E-mail: [email protected]
y
Dean. organizations to support this proposal. This case
z
Dean and Associate Professor. study thus presents a conceptualization of KM as an

Copyright # 2008 John Wiley & Sons, Ltd.

Knowledge and Process Management RESEARCH ARTICLE

integrative phenomenon in which learning and tional knowledge of: its customers and their
creativity and strategy processes interact dynami- motivations; marketing, design and development
cally. This has implications for organizational of new products; and management of its supply
practice and future theorizing in the discipline. chain. These knowledge domains are melded
together into the unique strategic knowledge, which
constitutes Nike’s core competences and CA. This
NIKE’S COMPETITIVE ADVANTAGES section of the paper details and explains the
knowledge base upon which Nike’s core compe-
Nike is widely recognized as the market leader in tences draw. The subsequent section presents a
the sports apparel industry by virtue of its market detailed theoretical and critical analysis of the
share, profitability and global reach (Stonehouse knowledge base and the ways in which it has been
et al., 2003). The company was launched in 1972 and created and deployed so as to gain and sustain a
Nike’s name (that of the Greek goddess of victory) significant competitive edge.
and the ‘swoosh’ have come to symbolize its success
as the leading performer in the industry. By
Customers and customer knowledge
examining the knowledge that underpins Nike’s
exceptional performance, and the processes In 1972, when Phil Knight and Bill Bowerman
through which it has been created, it is possible formed the company, its products were targeted at
to shed significant light upon the nature of strategic the narrow market sector of serious, competitive
knowledge and its creation and application. athletes. Of course, most serious athletes are young
Since the birth of Nike in 1972, from its humble men and women, so that Nike’s main customers
origins in the 1960s as Blue Ribbon Sports (BRS), the were in their late teens and early 20s. The targeting
company has become the global leader of the sports of this customer group of serious athletes led Nike
apparel industry. In 1969, BRS employed 20 people to focus on the development of high performance
and revenues from its several retail outlets running shoes. Having been keen amateur athletes
amounted to the princely sum of $300 000. By themselves, Knight and Bowerman had consider-
1972, the year of the launch of the Nike brand name, able tacit and explicit knowledge of the perform-
it had more than doubled in size to 45 employees ance that athletes demand from their shoes. In fact,
with revenues having increased substantially to it was their personal dissatisfaction with existing
almost $2 million. By 1979 revenues were up to $149 athletic shoes, which led them to set up Nike to
million, its shoes were being sold in several produce shoes, which were fit for purpose in
countries including Canada, Asia and Australia, terms of comfort and durability. They launched
and its products were being manufactured in the their offerings at the US Olympic track and
USA, Taiwan and Korea. Nike had almost become field trials and in the mid 1970s they developed
global. In 1981, Nike International was set up to look the first impact-absorbing sole drawing upon their
after the company’s increasing international oper- tacit knowledge of runners’ needs and their explicit
ations, which now encompassed more than knowledge of the properties and potentialities of
40 countries. In the same year Nike-England became modern materials. This combination of tacit knowl-
the company’s first wholly owned foreign distri- edge of customer needs and explicit knowledge of
butor. As a direct consequence of this global technology was translated into their knowledge-
expansion by 1990 Nike’s revenues had reached based core competences in design and develop-
$2 235 244 000 and it was directly employing some ment, and became their earliest source of CA. These
5300 people. The global expansion of the company core competences combined with the attention
has continued at an unprecedented rate so that in gained from launching the company at the high
2006 its revenues stood at $16.33 billion dollars with profile US trials, led to rapidly growing sales among
a gross profit of $7.2 billion, employing 29 000 athletes.
people worldwide, and a further 650 000 workers in The next stages in the development of Nike’s
contracted factories around the world. Nike has knowledge-based competences were possibly for-
gone on to win numerous awards for its design tuitous but were quickly followed by further
including the Industrial Design Excellence award in organizational learning and the creation of new
2005 and the company has also gone on to overturn strategic knowledge. Many high profile American
much of its negative press in the 1990s to be athletes adopted Nike’s training shoes and the
recognized as one of the world’s most ethical distinctive swoosh logo made the shoes instantly
companies in 2007 by Ethisphere Magazine. recognizable to television audiences watching their
Nike’s sustained global market leadership in the heroes perform. At the same time there were huge
sports apparel industry is based upon its excep- increases in the desire by young people to dress

Strategic KM at Nike 25
DOI: 10.1002/kpm
RESEARCH ARTICLE Knowledge and Process Management

casually and a consequent expansion in this market The design and development process still takes
in the 1970s and 1980s. Almost by chance, rather place at Nike’s headquarters in Portland, Oregon on
than by design, these young people began to copy the 75 acre World Campus, where there are some 2500
their athletic heroes and wear Nike training shoes employees focussing on developing strategic pro-
alongside the other casual items in their wardrobe. duct and customer knowledge.
Nike was very quick to learn from this develop-
ment in the market for its products and adapt its
strategy accordingly. Considerable attention was Marketing
paid to understanding the psyche of young people
The other main strategic activities taking place at the
in their teens and early 20s, which inevitably meant
World Campus are centred on developing market-
trying to gain insight into their thinking and the
ing strategy based on explicit and tacit knowledge
ways of behaving, which resulted from it. Clearly
of customers. Nike’s competitive success cannot be
these young people admired successful athletes but,
fully explained in terms of the excellence of its
at the same time, Nike recognized that many young
knowledge base relating to design and develop-
people go through a rebellious stage, particularly
ment. Marketing, promotion and brand name are as
in their teens and early 20s. Their association was
important to Nike’s success as are product devel-
therefore more likely to be with athletes who were
opment and quality. Again Nike’s knowledge of the
not only successful but who also displayed a
psyche of its young customers is critically important
rebellious streak. It was on the basis of this learning
when the company attempts to communicate with
and knowledge that Nike took some of the key
them and persuade them to buy its products. In
strategic decisions in terms of design and develop-
order to promote its products Nike employs the
ment, marketing, sponsorship and promotion and
services of athletes to endorse it products. These
supply chain management which led to their global
athletes are not only successful but are also stylish
market leadership.
and are often controversial figures. As noted above,
the controversial side of many of the athletes
Design and development sponsored has appeal to the rebellious streak found
in many young people. Examples of athletes
In order to meet the needs and wants of its wider
sponsored by Nike over the years include Michael
customer base of athletes and young fashion
Jordan from basketball, John McEnroe and Andre
conscious people Nike took two key strategic
Agassi from tennis, golf’s Tiger Woods and soccer’s
decisions. The first was to extend its product range
David Beckham, Ronaldo and the Brazilian football
to cover an array of different sports, including some
team.
like soccer which did not have much of a following
in the USA. The second was to extend the scope of
its apparel range so that it was both suitable for
Supply chain management
competition and also for casual fashion wear. This
demanded a broadening of Nike’s knowledge base Nike has also developed and embodied strategic
beyond footwear into the knowledge necessary to knowledge throughout its value chain. This has
develop and market a full panoply of sports apparel involved strategic decisions in terms of which
and into the world of fashion. Design and devel- activities to conduct in-house, those to outsource to
opment became key knowledge areas and were at its suppliers, its logistics and relationships with
the heart of their core competences and their customers and suppliers. The founders of Nike
growing competitive success. Central to these core quickly realized that they did not have the necessary
competences was Nike’s ability to combine knowl- strategic knowledge of manufacturing to produce
edge of its customers with knowledge of the their own products. Engaging in this strategic
technology and materials used in the manufacture learning enabled them to concentrate on key
of footwear and sports clothing. A final ingredient knowledge areas relating to design, development
was the ability of Nike’s designers to match the and marketing and, in addition, supply chain
fashion tastes of young people in the design of its logistics, together with customer and supplier
products. Probably the most significant technologi- relationships.
cal and design development was the invention of Once a new product has been designed and
the ‘Air’ principle, based on a sole and heel which developed in Portland, its manufacture is then
incorporated an air cushion. This was of benefit to outsourced to countries like Taiwan, China and
athletes in absorbing the impact of their sport on Brazil. Nike imposes stringent quality control
their bodies but also became an iconic in a fashion standards on its manufacturers. At the same time
sense among trendy young people. Nike is willing to share its knowledge of customers,

26 G. Stonehouse and S. Minocha

DOI: 10.1002/kpm
Knowledge and Process Management RESEARCH ARTICLE

technology and design with its suppliers to ensure apparel industries. As a consequence there is a
the quality of their products. strong emphasis on strategic learning and the
Nike has built special relationships with the creation of strategic knowledge. Nike’s leaders
retailers who are permitted to sell its products. They encourage its employees to think creatively and
are vetted for their financial security and for their there is a strong but informal team-based work
expertise in relation to sportswear apparel. Retailers ethic. Informality is used as a mechanism for
value Nike not only because its products are promoting forward thinking and the sharing of
popular among consumers but also because of the ideas, which are essential to the creation of new
service that Nike provides to them. Clearly it is strategic knowledge. Design teams work in informal
important to retailers that they make an attractive and picturesque surroundings to develop new
return on the products that they sell. Nike supports concepts and products to keep the company in
its retailers by sharing its customer knowledge with touch with its customers. Laboratories and test
them and by sharing a generous proportion of its tracks to test out new products are also located on
premium price with them. This has the effect of site.
encouraging retailers to promote Nike products Phil Knight believes that there are 7-year brand
over other brands. Retailers also benefit from cycles in the industry and, in order to stay ahead,
Nike’s association with top athletes and the large Nike spends enormous sums on continuous
scale advertising campaigns, which promote their strategic knowledge development and innovation.
products. As a consequence ‘it is Nike’s designs that are the
Nike has also learned that it is critical to ensure most sought after by trainer connoisseurs’ (The
that its products are available to retailers according Independent newspaper, 25/06/1996).
to patterns of customer demand. As a consequence Nike’s swoosh logo is ranked alongside the red
in Europe the company reduced the number of can of Coca Cola and the twin arches of McDonald’s
distribution warehouses from 32 to 5, centred on its as the three most globally recognized logos. In fact,
European headquarters in the Netherlands and so well recognized was the logo that Nike some-
main distribution warehouse in Belgium. This times uses its logo without the name itself. Today it
ensured greatly enhanced knowledge of patterns is widely perceived as the most fashionable sports
of demand for its products and, at the same time, wear company in the world.
more efficient and effective supply of its products to The massive growth of the scale and scope of
retail outlets. Nike’s activities has been accompanied by signifi-
Supply chain activities are also regarded as of cant changes in the strategy and structure of the
importance in promoting the Nike brand. Nike has organization and in the way in which strategizing is
supported retailers who sell only its products, it has conducted within the business.
enabled some retailers to develop a Nike store Up until the early 1990s, the company was
within their store and more recently Nike has focused mainly on the domestic US market—with
launched its own Nike Town Stores. The extension Nike Owned Companies and Distributor Agree-
of Nike’s customer and product base has encour- ments giving them presence in the rest of major
aged Nike to deal as directly with customers as developed countries of the world. These entities
possible, both to protect the reputation of its brand, operated relatively autonomously with fairly basic
but, more importantly to allow it to learn from its reporting systems linking them through Regional
customers, creating the new strategic knowledge Headquarters to their World HQ in Portland,
which will serve as the basis of its future Oregon. Consistency in Brand Marketing and
competitive edge. Product development was heavily driven from
The next section of the paper examines the the centre but the choice of systems; reporting and
reflexive loop of strategic learning, creativity and strategic direction were generally left in the hands of
innovation as the co-ordinating and integrating local country and Regional management teams.
mechanisms, which transform Nike’s core compe- One of the key challenges facing the Company
tences into sustained and sustainable CA. was its ability to create; communicate and control
the Corporate Strategic Plan throughout the Global
organization—whilst at the same time allowing
STRATEGIC LEARNING AND entities to remain locally relevant to individual
KNOWLEDGE CREATION @ NIKE market conditions in an organization operating in
over 100 countries and administered through three
Innovation is viewed as being vital to Nike’s regional Headquarters plus the USA domestic and
continued success and this is reinforced by the Executive office. A further priority was to create an
rapid pace of change in the fashion and sports environment in which to release the power of

Strategic KM at Nike 27
DOI: 10.1002/kpm
RESEARCH ARTICLE Knowledge and Process Management

middle management to communicate ideas in Performance Management was the third—essential

a ‘bottom-up’ approach—ultimately providing element of the process and was supported by a com-
Executive Management with the ability to formulate prehensive range of tools to measure both Financial
a Strategic Plan, which effectively converted itself and non-financial performance against pre-defined
into a ‘top down’ directive. targets documented within the Business Plans. A
The solution was found in four core elements complex range of micro reporting systems culmi-
encapsulated within a fairly rigid Process. nated in a concise and heavily focused Quarterly
Scorecard review—which through its standardiz-
The Strategic Plan
ation and brevity allowed even the largest div-
The Business and Financial Plans
isional reviews to be completed in hours rather than
Performance Management
days. These Reviews—carried out by the Executive
Business Review and eight quarter vision
and Function Management teams—provided
middle Managers with the opportunity to be
The ‘Process’—which was administered by a exposed to the executive; as well as for Management
newly created Strategic Planning department was a to realign the business resulting from any slippage
key component to the success of the whole plan and in performance. The meetings were very structured
was driven through timelines; consistency of with keenly policed follow-up actions.
definition; standardization of reporting formats The Business Review was the final and vital part of
and accuracy of both internal and external infor- the process. Known as the ‘eight Quarter Forecast
mation. Review’ it was a rolling activity (three times per
The Strategic Plan itself is high level aspirational. year) which provided middle Management with the
The initial plan is created at Global Executive opportunity to project their vision of the business
level—and incorporates some feedback from over a 2-year horizon. Again, it was prepared at
the Business review Process (to be described later). The country and divisional level to a standard global
initial plan was confidential and fairly generalist— format. It was numerical—with a projection of sales
the key components of which would be converted and margins at a category level—but also allowed
into Regional Strategic Plans—which would be the opportunity for Managers to identify business
locally relevant but at the same time emphasize and opportunities as well as to give Consumer; Compe-
focus on priorities laid down in the Global Plan. The titor and Marketing insights. This process—which
Plan was rolling in nature providing a 2-year after a series of Management reviews at Country
vision—which was updated annually. The plan and Regional level, would communicate to the
would be as valuable for its guidance on ‘no go’ Executive a ‘bottom-up’ view of the business going
areas as much as for its focus on future vision. For forward. This in turn—complemented by an
example, the feedback from the Business Reviews Executive vision of the future—would act as both
plus the implementation of ‘Fields of Play’ meth- a source of information and influencer to the
odology contributed towards selecting those pro- Executive in amending and formulating the new
duct and market opportunities that were no longer a Global Strategic Plan for future years.
priority within the strategy as well as identifying The next section broadens and enhances our
initiatives which must be pursued. The conversion conceptualization of the relationship between
of the Global guidelines into Regional Plans was strategic learning, creativity and innovation as the
crucial in reflecting individual Market maturity and basis of knowledge-based CA (Minocha and Stone-
opportunities. These regionally generated plans house, 2006; Stonehouse et al., 2001) at Nike.
went through rigorous validation back to the global
directional plan.
Business and Financial plans were driven off the
Regional Strategic Plan and consist of detailed STRATEGIC KNOWLEDGE, LEARNING
Functional Business Plans. Containing functional AND CREATIVITY—THE INTERPLAY
objectives; quarterly timelines and key metrics,
these plans would be exchanged within the Having explored Nike’s configuration and
organization to ensure that all functions were aware co-ordination of its strategic processes above, it
of each others initiatives—allowing them to incorp- becomes necessary to reflect on the nature of
orate support—where necessary. This process was strategic knowledge, its treatment in the literature
invaluable in ensuring communication and connec- and more importantly our own understanding of it.
tivity between functions. The content of the plans Organizations learn in order to create organiz-
also formed the basis for creating staff workplans in ational knowledge. This organizational knowledge
support of the functional plan. can be regarded as ‘a shared collection of principles,

28 G. Stonehouse and S. Minocha

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Knowledge and Process Management RESEARCH ARTICLE

facts, skills and rules which inform organizational To put it another way, knowledge relating to one
decision-making, behaviour and actions’ (Stone- area of the value chain or one set of stakeholders is
house and Pemberton, 1999). Strategic knowledge, unlikely to be of sufficient strategic value to give an
however, is the basis of an organization’s core organization CA. It is the combination and integ-
competences and CA and arises not from organiz- ration of knowledge relating to customers and their
ational learning alone but from the creative use of wants, other stakeholders and several areas of the
that knowledge in developing and implementing value chain, which produces strategic knowledge
the strategy of the organization (Minocha and and CA. Such knowledge, and its application, will
Stonehouse, 2006). transform value chain activities and relationships
Strategic knowledge can be regarded as a unique with stakeholders.
combination of explicit and implicit knowledge. Thus, in our usage of the term strategic knowl-
Whereas explicit knowledge is knowledge which edge we refer to ‘knowledge which leads to the
has a clearly stated meaning and can be recorded, creation and development of knowledge-based core
stored and readily communicated from one person competences which distinguish organizations from
to another, tacit (or implicit) knowledge is inferred their competitors and allow them to outperform
or implied, often unstated, based upon individual them’ (Stonehouse and Pemberton, 1999 in Minocha
experience and is difficult to record, store and and Stonehouse, 2006). Such knowledge arises from
communicate (Demarest, 1997; Stonehouse and organizational learning and the closely related
Pemberton, 1999). Both forms of knowledge begin processes of knowledge creation and application.
as individual knowledge but, to substantially The social architecture of an organization, in terms
improve performance, they must be transformed of its leadership, culture structure and infrastruc-
into organizational knowledge. Nonaka et al. (2000) ture is critical to its ability to learn, create and apply
point out the importance of combining explicit and knowledge strategically (Nonaka et al., 2000; Senge,
tacit knowledge to create new strategic knowledge 1990; Stonehouse and Pemberton, 1999). Quinn
as a source of CA. (1992) emphasizes the importance of social archi-
Knowledge can also be regarded as specific or tecture in accelerating the processes of learning,
generic. Generic knowledge can be of value in a knowledge creation and application stating that
range of businesses and business activities while ‘another unique characteristic of knowledge is that
specific knowledge is particular to a particular it is one of the few assets that grows most—usually
area of business, market or industry sector. exponentially—when shared’. The production of
Whilst generic knowledge is necessary to successful strategic knowledge is thus dependent upon what
operation specific knowledge is more likely to form Argyris (1991, 1999) and Argyris and Schon (1978,
the basis of core competences and, hence, superior 1996) call ‘double loop learning’ and what Senge
performance. For example, Stonehouse and Pem- (1990) calls ‘generative learning’. Argyris and Schon
berton (1999) cite the example of Porsche’s specific argue that learning must be critical and reflective so
knowledge of automotive design and engineering that ‘new knowledge and principles are determined
technology as being at the heart of its core which improve both the rate learning and the
competences. performance of the organization’ (Minocha and
In short, CA arises from some unique combi- Stonehouse, 2006). It is the reflective element of
nation of tacit, explicit, specific and generic knowl- strategic learning which develops new knowledge
edge forged together into strategic knowledge and, potentially, CA. The increasingly competitive
and expressed through core competences. Such and rapidly changing business environment means
knowledge can relate to any or all of an organiz- that the only way to sustain exceptional perform-
ation’s value adding activities including research, ance is through continuous and reflective strategic
design and development, technology, logistics and learning (Minocha and Stonehouse, 2006).
supply chain, manufacturing and operations, sales Equally, the pace of change (Petersen et al., 2004)
and marketing and so on. It can, and usually does, in business requires a focus on improving the
also relate to an organization’s knowledge of, and learning and creative processes in an organization
relationships with, its stakeholders whether custo- by learning about learning itself (Argyris and
mers, suppliers, shareholders or employees. Prob- Schon, 1996; Bateson, 1972; Pemberton and Stone-
ably the most important strategic knowledge relates house, 2000). Through learning about an organiz-
to customers and their wants but it is the ability to ation can transform its social architecture into one,
translate this knowledge into new integrated which dramatically improves the rate at which it
knowledge which transforms sales, marketing, learns and creates new knowledge (Aksu and
supply chain management and operations that Bahattin, 2005; Bell and Bell, 2005; Bogenreider,
gives CA as illustrated by the Nike example above. 2002; Gigerenzer, 2006; Hampden-Turner and

Strategic KM at Nike 29
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RESEARCH ARTICLE Knowledge and Process Management

Trompenaars, 2006; Hines et al., 2004; Karkkainen 1999), which differentiate Nike from its competitors,
and Hallikas, 2006; Perrott, 2004). providing a source of sustainable CA. Also key to
It is also important to emphasize the importance Nike’s strategic knowledge is its understanding of
of creativity and innovation in the development of the tacit knowledge which influences the thinking
strategic knowledge. The creation of new knowl- and buyer behaviour of its main customer groups
edge does not necessarily result in innovation and, in turn, is exploited in design and product
according to the research literature (Quintas and development and in marketing strategies. This is
Brauner, 1999). It involves ‘the exploitation of new or further incorporated into its supply chain manage-
existing knowledge in new contexts’ (Quintas and ment where retailers benefit from Nike’s marketing,
Brauner, 1999: 16). Lundvall (1992) proposes that pricing strategy and highly efficient supply chain.
learning and innovation are linked and that Potential emulation by competitors of each of these
learning provides incremental additions to a store individual areas of strategic knowledge is rendered
of knowledge constructed through practice and difficult by the combination and integration of the
experience. Thus, innovation involves the creation knowledge areas throughout the company’s entire
of knowledge as well as the application of existing value system.
knowledge against social processes in evolving Organizational learning and knowledge creation
organizational cultures (Murray and Blackman, are just as important to Nike’s CA in that they
2006; Zairi and Al-Mashari, 2005). Organizational ensure its sustainability (Senge, 1990). There is
learning alone is a necessary but insufficient considerable evidence of Nike’s continuous learn-
condition for the production of strategic knowledge. ing in creativity from its rapidly changing product
A further dimension of creativity and innovation range, to its innovative advertising campaigns and
is required (Nonaka, 1991; Nonaka and Takeuchi, the improvements in its supply chain management.
1995; Prigogine, 1980) in addition to the This is double-loop or generative learning (Argyris,
perspective provided through the lens of organiz- 1977, 1991, 1999; Argyris and Schon, 1996; Senge,
ational learning. 1990). Nike’s social architecture is an indication of
This paper has thus far explored the sources of its ‘learning about learning’ (Argyris and Schon,
strategic knowledge and its creation through the 1996; Bateson, 1972; Pemberton and Stonehouse,
case study of Nike. Having critiqued the literature 2000). Leadership provides a clear vision, which
we reflect on the practices at Nike to derive lessons permeates the whole organization, it encourages
for future reflective practice in KM. and supports development of its employees and
promotes a culture within which creativity and
sharing of ideas are encouraged (Nonaka et al., 2000;
KNOWLEDGE PROCESSES@ NIKE— Senge, 1990; Stonehouse and Pemberton, 1999).
LESSONS FOR THE FUTURE

There are a number of lessons to be learned from the CONCLUSIONS

case study of Nike specifically in terms of the
strategic knowledge employed by Nike in building The Nike case study provides significant new
the core competences which allow the company to insight into the role of strategic learning and
outperform its competitors and the ways in which creativity in developing the strategic knowledge-
the knowledge is created and deployed within and based core competences, which produce sustained
outside the organization. The preceding discussion superior performance, which has only been covered
identifies the key areas of strategic knowledge, superficially in the literature to date. The integration
which deliver its exceptional performance. The of its customer, design, marketing and supply chain
knowledge areas relate to customers and their knowledge generate a strategy, which is effective,
buying behaviour, product design and develop- complex and difficult for competitors to emulate.
ment, marketing, supply chain management. Each This strategic knowledge is constantly replenished
of these knowledge areas is a highly complex through strategic learning and creativity, which is
combination of tacit and explicit knowledge relating facilitated by Nike’s social architecture, which
to customers, design, marketing and supply chain provides clarity of purpose and an environment,
management (Nonaka et al., 2000) which is extre- which promotes the development and sharing of
mely difficult for competitors to emulate. Even more innovative new ideas. Whilst CA can never be
important, however, is the way in which these completely assured Nike’s approach to knowledge,
knowledge areas are integrated together to form the its creation and incorporation into core competences
company’s core competences (Pemberton and most certainly increases the chances of sustaining
Stonehouse, 2000; Stonehouse and Pemberton, superior performance. This opens up avenues for

30 G. Stonehouse and S. Minocha

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Knowledge and Process Management RESEARCH ARTICLE

future research into the integration of strategic KM Lundvall BA. 1992. National Systems of Innovation: Towards
processes, which differentiate Nike from less a Theory of Innovation and Interactive Learning. Pinter
successful organizations within which knowledge Publishers: London.
Minocha S, Stonehouse G. 2006. The learning trap: a
management remains a set of fragmented systems bollywood frame for strategic learning. Management
and procedures. Decision 44(10): 1344–1362.
Murray P, Blackman D. 2006. Managing innovation
through social architecture, learning, and competen-
cies: a new conceptual approach. Knowledge and Process
Management 13(3): 132–143.
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DOI: 10.1002/kpm