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After Ford, Nike suffers from behavioral hiccups

(Image Courtesy: Pixabay)

Almost a month after Ford (F) saw the departure of a top executive with over 30 years of service on grounds of inappropriate behavior, Nike (NKE) witnesses a somewhat similar episode. Trevor Edwards, President of the Nike brand, who was considered a potential CEO candidate, will step down from his position and retire in August.

On the same day, Nike had issued an internal memo regarding complaints about behavior at the workplace to its employees, but the company said there were no direct allegations against Edwards. The company has promised to take appropriate measures to improve its work environment and culture.

Reports of inappropriate behavior on the part of key executives often lead to their departures. Most of the time, these are officials who have been instrumental in bringing innovative ideas and meaningful profits to the company and their abrupt exits do not bode well for the organization.

CEO Mark Parker will retain his current role beyond 2020 delaying any succession plans. Nike is more likely to choose a CEO from within the organization than outside. Other potential candidates for the post include COO Eric Sprunk and head of merchandising, Michael Spillane.

Nike is set to report its third quarter 2018 earnings next week and some expect the stock to climb higher while there are others who are pessimistic. It is not clear how the recent management events will affect the stock. Slight fluctuations could be expected.

Nike faces strong competition from Adidas with the latter expected to report better North American sales compared to the former. However, Nike appears to hold good potential over the long run and its performance is expected to be fuelled by innovation and even online distribution.

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