Bloomberg Case in the News 

Companies Have an Aha! Moment: Bullies Don’t Make the Best Managers
A
fter Nike Inc. ousted a handful of male executives for behavior issues over the past few months, some media reports tied the departures to the #MeToo movement and its revelations of sexual harassment and assault. Interviews with more than a dozen former Nike employees, including senior executives, however, paint a picture of a workplace contaminated by a different behavior: corporate bullying. The workers say the sneaker giant could be a bruising place for both men and women, and that females did bullying, too. On May 8, Nike signaled as much when it
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confirmed four more exits stemming from an internal misconduct inquiry, including the departure of a woman with more than 20 years at the company.
The surprise announcement in March that 55-year-old Nike brand president Trevor Edwards—who had a reputation for humiliating subordinates in meetings—would leave following an internal investigation about workplace behavior issues suggests the coddling of tough guys may have come to an end. “Some companies are realizing that a bullying boss isn’t the best way to manage a company,” says David Yamada, a professor at Suffolk University Law School in Boston who’s authored antibullying legislation. “Maybe we’re starting to see a tipping point.”
Gary Namie, co-founder of the Workplace Bullying Institute, who consults with businesses on workplace issues, says one reason some companies have long tolerated or even encouraged such behavior is that many American managers believe the workplace is by nature rough around the edges. “Bullying is inextricably interwoven with capitalism,” he says. “It creates a zero-sum, competitive work environment where people feel they need to obliterate their competitors.”
Some former employees say that was the case at Nike, particularly among managers who used abusive tactics to safeguard their own position or authority. “There are a lot of very talented people deeper in the organization who have been marginalized both by senior and middle management trying to protect their domain,” says Shaz Kahng, who was a senior executive at Nike for six years through 2010. “People are often promoted based on relationships, not on results.”
In response to complaints, including from departing female executives, Nike ousted Edwards, who’d been a favorite to become the company’s next chief executive officer. Edwards, according to some of the former employees, at times bullied workers through insults and disparaging comments. More important, once he set the tone, other people mirrored his behavior, they say. A handful of executives who worked for Edwards have since left Nike.
“I’ve been disturbed to hear from some employees of behavior inconsistent with our values,” CEO Mark Parker said in an emailed statement. “When we discover issues, we take action.”
Nike also provided Bloomberg with the transcript of a town hall Parker held on May 3, in which he vowed the environment will change. “We all have an obligation—and it’s non-negotiable—tocreateand cultivate an environment of respect and inclusion,” he told employees. “And that starts with me. I apologize to the people on our team who were excluded. . . . We’re going to move from a place where the loudest voices carry the conversation to [one where] every voice is heard.”
The company declined to make Edwards available for an interview. He’s acting as an adviser to Parker until he retires in August, when he’ll receive a $525,000 payout, according to public filings.
Nike says it’s reviewing how it deals with complaints, redesigning management training, and beginning unconscious bias awareness education for employees this year. It’s also vowed to promote more women and minorities into leadership roles. Currently, managers are 38% women and 23% nonwhite.
Workplace bullying is often defined as behavior—including verbal abuse, derogatory remarks, humiliation, and undermining work performance—that results in physical or mental harm. About 1 in 5 Americans say they’ve been the target of it, according to a 2017 survey by Zogby Analytics that was commissioned by the Workplace Bullying Institute. Men make up 70% of the perpetrators and 34% of the targets. “It’s a significant and still underreported problem,” Yamada says. Surveys have shown such behavior is four times more prevalent than legally actionable sexual harassment, he says. “Bullying looms large.”
Ironically, Nike is one of the minority of companies that has a formal antiharassment policy that calls out bullying behavior such as verbal abuse, intimidation, humiliation, and retaliation, according to a copy obtained by Bloomberg. It also notes that harassment not based on a legally protected characteristic, such as gender or race, can still violate company rules.
One reason few companies have specific antibullying policies is that there aren’t federal or state laws in the U.S. outlawing the behavior, which makes America a laggard when compared with Western Europe, Canada, and Australia.
A lack of legal protections greatly reduces the possibility of liability for employers. It’s difficult to bring a lawsuit based on bullying, and businesses have worked to keep it that way. Over the past decade, antibullying bills were introduced in about 30 states, but they’ve all been defeated after opposition from corporate lobbying groups, Yamada says. A workplace bullying bill is gaining sponsors in Massachusetts’ legislature, but its future is uncertain. If there were antibullying laws, companies would be liable and do more to deter the practice, according to Namie. “It’s the only form of abuse that hasn’t been addressed by law,” he says. “It goes beyond gender to ‘I’m powerful, I candoany damn thing I want.’”
When executives feel entitled or untouchable, that often leads to bullying and then to other inappropriate behavior, Yamada says. In many of the workplace environments that resulted in some of the high-profile #MeToo moments, such as that at Weinstein Co., an “undercurrent” of bullying created a belief that mistreatment would go unpunished, he says. “It’s that bullying atmosphere that helps to enable and empower sexual harassment.”
According to the former Nike employees, the lack of a fear of reprisal created an environment where male executives, many married, could pursue and have sexual relationships with subordinates and assistants—behavior Nike says it tries to prevent but doesn’t
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prohibit. Many times the careers of those involved were unaffected, which only normalized the behavior, they say. And when there were repercussions, the men received little if any punishment, while women often faced consequences. In one instance several years ago, they say, an executive was caught having sex with his assistant on a conference table. He wasn’t disciplined, some of the people say, but the woman was reassigned.
Several former female employees describe similar experiences of encountering several slights and offenses—not one egregious incident—that increased as they moved up the ladder. One woman says her boss, a senior director, had derogatory nicknames for female staffers and would overtly favor men on the team with better opportunities. A former female manager says a male colleague had multiple complaints of bullying made against him to human resources, but the only punishment meted out was a delayed promotion. Eventually, frustration with Nike’s handling of such incidents persuaded several women to leave the company, they say.
The situation was particularly galling to employees who’d been drawn to Nike because of its cool and progressive reputation, burnished by such advertising slogans as “If You Let Me Play” and its T-shirts adorned simply with the word “equality.” “We always wished the company would live up to its marketing,” says one former female executive. “But it didn’t.”
How the misbehavior on the part of managers is affected by organizational structure? Why or why not?
how the authority was misused on the part of bullying managers?what is the reasoning.
Going forward, how can Nike revise or re-invent its organizational culture to attract and retain top talent?

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