Organisation Behavior in Cadbury Chocolates and Kraft - Case Study Example

Introduction and Background: Cadbury chocolates ultimately started from humble roots as the joint venture of two Birmingham brothers that sought to create a local confectioner specifically targeting the wealthy due to the fact that cocoa was so expensive at that time and could only be afforded by the wealthy. Notoriety increased in and around Birmingham and the Cadbury brothers were soon selected to be the providers of chocolate for Queen Victoria herself. Subsequent expansions abroad and changes to the production lines as a result of the two world wars defined the first half of the 20th century for Cadbury; however, once this era was over, a merger with Schweppes boosted the scope of the firm (Cadbury, 2014). Business continued to grow and expand over the years as brands such as Snapple, RC Cola, Canada Dry, and other beverages were incorporated under the Cadbury umbrella. However, as with any corporation, a limited and finite life cycle was all but a foregone conclusion. Beginning in 2007 with the de-merger of Schweppes, Cadbury began to show clear signs of strain. Kraft soon approached the firm with a hostile takeover; something that employees within Cadbury, individuals within the British society, and stakeholders in government all seemed to wholeheartedly oppose (Scott, 2012). Prior to the financial hardships, Cadbury had been known as a firm that took extreme care of its employees; even dating as far back to the 1800s as it built living accommodations for the workers, swimming pools, bowling greens, and provided convalescence for its employees that were wounded during the World Wars. By means of comparison and contrast, Kraft can trace its historical roots to the 1800s as well; when Charles W. Post created and sought to market Grape Nuts Cereal. Growing from the cereal market, the Post brand began to engender further and further success throughout the United States; eventually merging with General Foods in the 1920s. This merger created a stable platform through which continued growth of the industry could take place. Eventually Kraft itself was born out of the Phillip Morris and Oscar Meyer merger of 1980 (References for Business, 2014). The key differential between Kraft and Cadbury however is with respect to the way in which employees of the respective firms were treated. Although Kraft has not suffered any negative press for any major cases of employee abuse, its focus on profit and expansion has meant that the types of philanthropic endeavors that Cadbury engaged in were not in any way a part of the Kraft culture. P1) As can be noted, a clear and distinct difference was exhibited between these two firms, and the cultures that they encouraged. Whereas Cadbury saw its human resources as an essential part of a larger family that it was entrusted to safeguard, as well as promote their interests and quality of life, Kraft placed the primary emphasis on profits and expansion; something that is evident even with regard to the way in which Kraft engaged the marketplace; making over 17 acquisitions and rapidly expanding into new markets since it was bought by Phillip Morris and Oscar Meyer (Michael, 1995). Whereas the Cadbury sought a slower more integrated strategy of growth that ensured its employees would stand to benefit the most and profits would remain strong; commensurate with demand. A noted similarity between the two firms has to do with the fact that they were both traditionally hierarchical with regard to their structure and the means by which the company was organized. Yet, even though this similarly was exhibited, a key differential existed with respect to how motivation was carried out when one compares Kraft to Cadbury; prior to the acquisition (Laurie, 2007). For instance, Kraft denotes on its own homepage that motivation is the result of integrating with the employees, effecting culture, and becoming involved in team-building. Although all of these corporate approaches were practiced by Cadbury as well, Cadbury’s culture was one that promoted an understanding that motivation could only be achieved if the employees were satisfied, well treated, and had the quality of their working life maximized. Ultimately, these are metrics that Kraft did not even measure in terms of outlining what their approach to employee motivation is; delineating the fact that the culture of the two firms was much more dissimilar than it was similar prior to the merger. Furthermore, the firms also exhibited a fundamental differential with respect to the way that they would go about winning their competitors. For instance, Cadbury approached this goal in terms of understanding that the firm that sought market dominance must ensure that it had its own internal affairs in order and that its employees were happy (Keith, 2003). By means of contrast, by the time Kraft was ready to submit an offer for a hostile takeover of Cadbury they had performed many of these hostile takeovers elsewhere; exhibiting a track record of simply buying out the competition and co-opting them into their brand. Naturally this approach could not have been more divergent as one sought to promote the internal cohesion of the corporate entity and the other sought to assimilate competitors that could be useful in engaging further profitability in the future. Additionally, it can clearly be understood that after the takeover took place, the possibility of all the managers to work well with their new employees was in question. The company culture of Kraft was distinct and focused on profit; as compared to the quality of life and best interests for the employees (Ann, 2010). As such, the internal tension and strife that was exhibited caused a situation in which even though the now joint firm provided profitable numbers within the first few quarters, it essentially struggled with the ability to engage work between many of the managers of Kraft and the former employees of Cadbury; due in no small part to the cultural difference in motivation that existed between the two and the norms of employee engagement (Kraft Foods, 2014). P2: As a direct result of the hardships and differences that have thus far been noted, it becomes patently obvious that Kraft will need to engage working strategies as a means of keeping the original customer of Cadbury. As a means of accomplishing this, Kraft must show that its commitment to quality and its commitment to ensuring that the employees of Cadbury are taken care of and provided for remains undiminished. Taking the case of the United Kingdom as an example, a place in which Cadbury had significant market presence, Kraft faces an uphill struggle to reassure the British consumer that they will indeed honor the legacy that esteemed Cadbury name has left behind (Geetanjali, 2012). Another approach that Kraft could employ as a means of improving the profit of Cadbury would be to provide assurances that the firm will not be sold off or cut to the bare minimum as a means of increasing profitability. By engaging in this assurance, the productivity and profitability of Cadbury will be commensurately increased as stakeholders within the firm will feel more confident that their jobs will be secure in the immediate future (Kraft Foods, 2012). Naturally, these assurances have to be heartfelt and not merely made as a means of engendering further commitment for something the firm does not truly intend on engaging upon. Furthermore, managing leadership, teambuilding, and communication is essential for the newly grafted firm to begin to identify with the broader corporate goals of craft and the way that further business will be carried out. For instance, leadership within Kraft would greatly benefit from extensive training that promotes the need for an appreciation for the extant vestiges of culture that continue to exist within Cadbury (Kraft, 2014). Moreover, rather than having an arrogant sense of how business decisions should be made, leadership could benefit from an understanding that teambuilding within Kraft will only be as successful as the process is able to promote joint and mutual goals between the two otherwise dissimilar entities of Kraft and Cadbury (Louise, 2011). P3: Apart from the discussion that has previously been specified, key recommendations for Kraft would include a thorough and complete level of mandatory training/reraining of all its mid and upper level management personell that regularly engage with Cadbury staff. The underlying reason and rationale for this of course has to do with the need to rerpesent an understanding approach to the cultural differences that set these two firms appart. Rather than merely insisting that business be performed according to Kraft metrics, managers should be encouraged to seek out a third path; one that prizes mediation and joint agreement on the way in which business is conducted. As such, overtaking competitors, such as Nestle, can only be peformed at such a juncture that Kraft and Cadbury begin operating as as single entity; and not two disjointed halves. Conclusion: The ultimate reason that Kraft took over Cadbury has to do with the fact that Kraft’s cut throat business acquisition strategy allowed for it to have the financial heft to approach Cadbury at its weakest moment. Likewise, by cutting costs on promoting employee satisfaction and focusing solely upon profitability, Kraft was a more lean firm that had a more clear and resolute business stance within the market. Yet, all of this is non important if Kraft cannot seek to make Cadbury a succesful component of its global enterprise. In order to accomplish this, Kraft must begin a careful but long term vision for how the culture of Cadbury can be co-opted into their own. This will involve sensitivity to the appreciation for the old Cadbury culture in tandem with slow and gradual shifts towards the dynamics of Kraft’s own culture that have made it so succesful over the past several decades. Bibliography Ann, W 2010, “The Great Leader Series No. 29 – Cadbury”. Available: http://www.motivationmatterslimited.co.uk/news/376.htm. Last accessed 5th May 2014. Cadbury 2014, “The Story”. Available: https://www.cadbury.co.uk/the-story. Last accessed 5 May 2014. Geetanjali, S Anusha, S 2014, “Change at the Chocolate Factory”. Available: http://www.businesstoday.intoday.in/story/kraft-takes-over-cadbury-india-changes/1/21920.html. Last accessed 5th May 2014 Keith, N 2013, “Kraft Foods Streaminlining Business Structure. Available: http://www.foodbusinessnews.net/articles/news_home/Business_news/201306/Kraft_Foods_streamlining_busin.aspx. Last Accessed 5th May 2014 Kraft Foods 2012, “Kraft Keeps Innovation Flowering with 40+ New Products”. Available: http://www.draftfoodsgroup.com/mediacenter/coutnry-press-release/us/us_pr_12282012.aspx. Last Accessed 5th May 2014 Kraft Foods 2014, “How to Keep Your Best Employees Working Hard- For You”. Available: http://www.kraftfoodservice.com/businesssolutions/kitchenmenusolutions/howtokeepyourbestemployeesworkinghard.aspx Kraft Foods 2014, “Company Profile”. Available: http://ir.kraftfoodsgroup.com/overview.cfm. Last accessed 5th May 2014. Lauri, J 20007, “Organization. In: Management and Organisational Behaviour. 8th ed. Essex: Pearson Education. P. 116-119. Louise, L 2011, “Cadbury People Still Chewing on Kraft Culture”. Avaiable: http://www.ft.com/intl/cms/s/0/71a34530-2019-11e0-a6fb-00144feab49a.html Accessed May 5 2014. Michael, R 1995, “Strategy, Structure and Culture; Cadbury, Divisionalization and Merger in the 1960s. Journal of Management Studies. 32 (2), p. 121-140. Reference for Business 2014, “Kraft Foods Inc – Company Profile Information in Business Description, History, Background Information on Kraft Foods Inc, Available: http://www.referenceforbusiness.com/history2/50/Kraft-foods-inc.html. Accessed 5th May 2014. Scott, M 2012, “Case Study: Kraft’s Takeover of Cadbury. Avaialbe: http://www.ft.com/intl/cms/s/0/1cb06d30-332f-11e1-a51e-00144feabdc0.html Reference DATAMONITOR: Cadbury Case Study 2011, Cadbury Case Study: Retaining Leadership Position In The Confectionery Market, pp. 1-15, Business Source Premier, EBSCOhost, viewed 2 July 2013. Read More