Kraft as an American Food Giant - Essay Example

Lecturer HR Case Study Cadbury was acquired by Kraft in during a hostile takeover worth 11.4 billion pounds. Kraft is an American food giant, which mainly engages in the production of Oreo biscuits and the Philadelphia cream cheese. The acquisition ended approximately 200 years independence period of the dairy milk producer. Kraft illustrated that the holders of 71.7% shares of Cadbury, had accepted the final offer. The offer enabled Kraft to have adequate control of the Dairy Milk producer, and hence develop a company that realizes international sales revenue worth 50 billion pounds in approximately 160 countries. The deal was realized immediately after Lord Mandelson had a meeting with the chief executive of Kraft, Irene Rosenfeld, to discuss job losses in the UK. The job loss discussion resulted due to the protest by Cadbury staffs, outside Parliament. Employment Values of Cadbury versus Kraft Cadbury employment values favored job security. The company had permanent and pensionable employment terms for their employees. Cadbury had a pension scheme that adequately remunerated employee on reaching retirement period or during voluntary retirement. The company invested a lot of resources towards a long term employment relationship with the employees. The human resource investment areas includes; succession planning, training, staff development, and staff motivation programs. Cadbury had adequate training programs to improve the competency of the employees, so as to effectively achieve both short term and long term goals. Training was provided in various areas of company operations. Marketing training entailed giving the marketing staffs adequate skills to determine the needs of customers. The production team was trained on innovation of more superior and efficient production processes. The management of the company favored employee motivation. This is through adopting processes that ensure competitive staff remuneration, and enhance employee retention. The management of Cadbury valued succession planning, so as to ensure competent replacement of management staffs. This ensured effective future management of the company (Sennette 2006). Kraft on the contrary does not take employment security, and employee motivation, seriously. During the takeover negotiations, Kraft illustrated the desire to declare redundant 200 jobs. In 2010, the company implemented the redundancy plans, immediately after the controversial bailout of Cadbury. The redundancy plans by Kraft shows that the management of the company does not favor employment security of the staffs. The concession encountered a lot of protests, due to the decision to close the Bristol factory. 400 employees lost their jobs, despite an agreement to maintain it open. The motivation of employees is usually very low, when the termination plans are being implemented by the management of a company (Hutton). The low motivation also negatively affected the senior managers of Cadbury; this is because majority of them resigned and left the company, during the takeover period. The job cut issue also generated a lot of criticism from the politicians. Katy Clark, a key member of the committee on Business Innovation and Skills. Katy explained that the job cut by Kraft is very disappointing, due to the worsening economic conditions in the entire country. Paul Bloomfield, another member of the committee, showed his disappointment by explaining that Kraft did not adhere to the spirit of the takeover. Effect of the Ownership Change on Employment Values and Employer-Employee Relationship The ownership changes, as a result of the takeover of Cadbury by Kraft, resulted in negative effects on the staff values, and the relationship between the employers and the employee. The employer and employee relationship was a case of poor industrial relations. The Labour chairperson in the Business Select Committee closely monitored how Kraft handled Cadbury staffs in the Bourneville plant, following complaints of non-adherence to the takeover conditions and promises especially on jobs. The staff, therefore, engaged in work protests after 400 job cuts in the factory near Bristol. The company further worsened industrial relations, by ignoring summons of the Business Select Committee. The trade union representatives accused Kraft of declining to engage with the employees and adopt consultative approach. The consultative framework is very important, because it enables Kraft and the unions to discuss employment issues such as redundancies, before giving the press announcements. To improve the relationship between Kraft and the employees, the management must identify the approaches of solving work conflicts such as labor protests (Womack et al 2007). Discussing with the employee representatives the most appropriate approach of achieving organization goals, is very effective in ensuring workplace harmony and hence employee and management satisfaction. The turnover negatively affected the employment values of both Kraft and employees. The employment valued focused on include; effective decision making process, career development of staffs, job security, and employee motivation. Proper decision making process of organizations involves employee contribution. In the case study, employee opinions were not considered by the company when implementing the redundancy decisions. This resulted in negative union actions such as protests and boycott. Job security is a very important aspect of employment values. Employees expect the employer to provide working environment that is predictable and long term. The bob cuts by Kraft ignored the job security worries of the employees (Buchannan & Huczynski 2009). The company went ahead to implement redundancy, despite the worsening economic and unemployment situation in the United Kingdom. Employee motivation should ideally be the top issue addressed by an employer, in terms of employment values. Staff protests explain disagreements at the workplace between Kraft and the employees. The protests are also as a result of poor employee motivation at the company. The staffs experience poor motivation because of the intended job cuts, and inadequate communication from the management of Kraft. Impact of the Cultural Change on the Employees The cultural change resulted in negative effects on the employees. The staffs of Cadbury attacked the political leadership of United Kingdom for declining to stop the Kraft takeover, due to worries about job security. The employees, therefore, did not adequately concentrate on their work, resulting to low employee and organizational productivity and sales revenue. The cultural change increased the rate of staff unrest or protests. The protests were partly aimed at encouraging the government to prevent further takeover of other significant British firms by foreign organizations (Watson 1997). The increased protests were also due to the worsening employment conditions after the takeover. The management of Kraft did not adequately communicate with the staffs through the unions, on job matters like redundancy. The cultural change resulted in reduced job satisfaction levels of the employees. The low job satisfaction is mainly due to increased uncertainties concerning their future with Kraft. Kraft has a history of high levels of job redundancies. The cultural change as a result of the takeover has greatly lowered the loyalty of the employees to Kraft. The loyalty declined due to the poor work environment as implemented by the management of Kraft. The company intends to further increase the job cut numbers through the installation of new technology that automates production, and hence requires minimal employee numbers (Burke & Cary 2008). The cultural change resulted in minimal involvement of the employees in the decision making process. Kraft management uses the top-down aspects of communicating. Instructions originate from the top management and flows down to the employees who are not supposed to question the decision. The employees protest due to non-involvement in decisions concerning redundancy. The cultural change resulted in increased trade union activities. Trade unions aim at ensuring the rights of employees the workplace (Salamon 2001). The union leaders engaged in several discussions with government representatives. The aim of the discussions was to convince government leadership to ensure that Kraft does not implement job loss policies. The cultural change led to poor work performance by the employees. This is because a lot of work time was lost during the protest activities. The moral of the staffs was reduced, due to the fear of the redundancy measures. How the Change Affects the Work Ethics and Character of the Employees The change in the work environment as a result of the takeover greatly influenced the staff ethics and character. The influence is mostly negative because it greatly illustrated low morale of the staffs. The characters of employees become disloyal, after the controversial takeover of Cadbury by Kraft. The staffs become disloyal, due to the increasing rate of redundancy by Kraft. Employees can never work for long periods, in a company that does not secure their employment contracts. Many employees will opt for the voluntary retirement scheme, because there stay at the Kraft firm is threatened. The employees embraced the protest approach of illustrating grievances at the workplace. The protest is a last resort, because the management of Kraft does not provide consultative negotiations to address work related problems such as redundancy. Addressing issues through protests is aimed at attracting the attention of the government on the plight of the Cadbury employees. The takeover change has enhanced the skeptic nature of employees concerning introduction of automated production technology. Automated technology minimizes the number of employees in the production process. Adopting the technology will, therefore, enhance the redundancy rate (Toynbee 2008). The takeover change led to poor work ethics of the staffs. The motivation levels of the employees reduced, because of unsecured future with Kraft. Kraft aims at introducing new technology that will ensure labor efficiency in the production process. This means that the company will further engage in redundancy activities. The staffs embraced inappropriate communication channels after the takeover. The channels comprise industrial action that lowers company operations; for instance, strikes. The turnover led to low productivity. Majority of productive time during the takeover period was utilized in negotiation and protests involving redundancy. The change led to poor relationship between employees and the management. The management did not want to consider the interest of employees in the takeover process. The main employee interest entails minimal or no redundancy, during the takeover of Cadbury. The management of Kraft ignored the plight of the employees the change destroyed the careers of many staffs. This is because redundant employees experience career disruption. Finding an alternative job in the worse economic situation during that period was very challenging (Bunting 2005). The takeover of Cadbury by Kraft was a very controversial exercise that involved unions, management and government. The trade union officials communicated displeasure in closures and mass redundancies. Hence, the British government should not tolerate the activities that threaten the employment security of workers, especially during economic stagnation and recession (Toynbee 2003). Kraft desired to cut many job, and this resulted in labor protests. Companies should always take interest in employee matters. Being insensitive to the needs of staffs have negative effects such as; reduced productivity, low staff loyalty, poor communication between the management and the employees. References Buchannan, D. & Huczynski, A. (2009). Organizational Behavior. NY: SAGE Publications. Bunting, M. (2005). Willing Slaves: How the Overwork Culture is Ruling Our Lives. TX: Harper Perennial. Burke, R. & Cary, L. (2008). The Long Work Hours Culture: Causes, Consequences and Choices. London: Emerald. Fincham, R. & Rhodes, P. (2005). Principles of Organizational Behavior. Oxford: Oxford University Press. Hutton, W. (2002). The World we are in. SF: Little Brown. Salamon, M. (2001). Industrial Relations Theory & practice. NY: Prentice Hall. Schlosser, E. (2002). Fast Food Nation. London: Penguin. Sennett, R. (2006). The New Capitalism. Yale University Press. Toynbee, B. (2003). Hard Work Life in low paid Britain. NY: Bloomsbury. Toynbee, P. (2008). Unjust rewards Exposing greed & inequality in Britain today. London: Granta. Watson, T. (1997). Sociology work and Industry. London: Routledge. Womack, J. et al. (2007). The Machine That Changed the World. SF: Schuster. http://europa.eu/agencies/community_agencies/eurofound/index_en.htm Read More