Comparing Organizational Culture: Nestle vs. Kraft - Coursework Example

? Comparing Organizational Culture – Nestle vs Kraft Organizational culture of Nestle and Kraft Analysis of key characteristics of organizational culture 1a. Honesty, trust, loyalty The development of trust within organization can be quite difficult. In accordance with Shockley et al. (2010) trust is based on either ‘direct knowledge or personal interactions’ (Shokley et al. 13). This means that trust cannot exist if cooperation and team work within the organization are at low levels. On the other hand, Ashkanasy et al. (2010) notes that the efforts for continuously increasing innovation can lead to the lowering of the level of trust within the organization involved. In other words, truest is positively related to team work and negatively related to innovation. As for loyalty, its value in modern organizations has been reduced. Indeed, as noted in the study of Godwyn et al. (2011), today employees are likely to urge their employees ‘to act as free agents’ (Godwyn et al. 304). Moreover, employees’ loyalty is not particularly promoted within modern organizations since it has been related to the lack of initiatives in regard to critical organizational decisions (Godwyn et al.). 1b. Team work and cooperation The promotion of team work within organizations is quite critical for the success of business initiatives. For this reason, managers are likely to use various methods for supporting team work. Rewarding is one of these methods, which can help to achieve two different targets: increasing competition among employees and improving cooperation for achieving the targets set by the organization (Schein 2010). In both the above cases, the organizational performance is benefited. On the other hand, teamwork is often difficult to be promoted since it requires the existence of similarities in the perceptions of the employees, especially in regard to the approaches used for the development of various organizational tasks (Stanford 2011). Moreover, the promotion of team work within a particular organization may require the change of existing organizational culture, since teamwork and innovation are ‘depended upon each other’ (Kandula 187). In accordance with Levi (2010) the priority of leaders that wish to promote team work within their organization should be to make clear to employees that their efforts for supporting team work will be adequately rewarded. 1c. Innovation (Curiosity & Openness) Innovation is a key element of organizational culture. In fact, through innovation the organization can achieve two different targets: ‘it can explore its existing knowledge and it can also exploit new capabilities’ (Salama 2). In both cases, the organizational performance will be increased, either in the short or the long term. However, innovative schemes cannot be developed unless the organization involved is open to such initiatives, meaning that the organizational culture allows changes at all levels of the organization’s operations. On the other hand, Schermerhorn (2011) notes that innovation can be achieved only by closely reviewing the organizational culture and by adopting an appropriately customized management philosophy which ‘links collaboration issues with important goals’ (Schermerhorn 365). From a similar point of view, Herzog (2010) notes that innovation is based on organizational culture but it should rather be developed independently; it is suggested that an innovation culture is developed as ‘subculture of the corporate culture’ (Herzog 58). The culture of this type is also know as ‘organizational culture of innovation’ which ‘supports and encourages the use of innovative intelligence by individuals and teams’ (Weiss et al. 201). In any case, innovation cannot be achieved unless the relevant initiatives are combined with effective leadership strategies (Grandstaff 2009) 2. Similarities in organizational culture of Nestle and Kraft 2a. Honesty, trust, loyalty The promotion of honesty, trust and loyalty seems to be of key importance for both organizations. Indeed, in accordance with the information provided in the firms’ websites, both organizations are values-led without rejecting the importance of their performance. In both organizations, the reference to the value of trust and honesty is clear, combined with the potential benefits of these qualities for the development of organizational performance. 2b. Team work and cooperation Employees in Kraft are urged to discuss every problem appearing in the workplace. In this way it is expected that they will promote team working and cooperation in regard to all their tasks. In both firms, the specific initiative is related to the organizational performance and the increase of the firms’ competitiveness towards their rivals. Also, in both firms, employees are given the discretion to decide on the measure they consider as most appropriate for the achievement of the above target. 2c. Innovation (Curiosity & Openness) As in the case of trust and team working, innovation is highly promoted in both organizations. Moreover, in both firms the benefits of innovation on the organizational performance are clearly presented, being related, in both cases, with the organizational profits. In both firms, innovation (curiosity and openness) is not considered as a tool for updating the organizational culture but rather as a means for increasing the competitiveness of the organizations towards their rivals. 3. Differences in organizational culture of Nestle and Kraft 3a. Honesty, trust, loyalty In Kraft foods, trust is highly promoted across the organization. In accordance with the firm’s factsheet, in Kraft trust is inspired, meaning that employees are urged to develop trust in their daily tasks (Kraft, Company factsheet 2011). However, no suggestions are made regarding the ways that trust would be incorporated within the organization. Towards the same direction, honesty and loyalty are also supported, as reflected in the suggestions made to the employees to use their head and heart (Kraft Company factsheet 2011). No reference is made to specific schemes for supporting honesty, trust and loyalty within the organization. Rather, suggestions in general are made to the employees who are free to adopt or not the guidelines included in their organization’s factsheet. Also, no punishment is threatened for the employees that would behave in opposition with the suggestions of the firm for honesty, trust and loyalty. On the contrary, in Nestle emphasis is given on the alignment of the organization’s activities with existing law, such as the Antitrust rules and the Fair Trade rules (Nestle, Code of Business Conduct). Also, particular reference is made to confidentiality, as guaranteed by the organization in regard to the management of the customers’ data. On the other hand, it is made clear that the violation of any of the firm’s rules in regard to honesty and trust, as for example when processing data of customers, would result even to the dismissal of the employee involved. In other words, honesty and trust are of high importance for the organization and they have been set as necessary requirements for the development and the continuation of employment contracts. No particular reference is made to the loyalty of the firm’s employees, meaning that there is no responsibility of employees to be loyal; however, the need for loyalty can be derived from the firm’s rules of behaving with integrity, of being honest and of avoiding violating any of the terms of its Code of Business Conduct. From this point of view, loyalty can be also considered as one of the core obligations of the firm’s employees. 3b. Team work and cooperation In Kraft Foods, team work and cooperation is supported but not highly emphasized. More specifically, discussion is promoted among employees but it seems to be part of the effort for keeping the performance of the organization at high levels, and not so much for improving organizational culture. In other words, in Kraft, team work and cooperation are considered as a means for keeping the profits of the firm high. The above view is verified through the following fact: in the company’s Factsheet, where its targets on corporate governance are presented, brief suggestions are included for the increase of team work and cooperation while the key part of the relevant report analyses the targets of the organization and its achievement as of its profits. In Nestle, a different approach is used for supporting the firm’s employees. A series of schemes has been developed for ensuring that employees in all organizational departments are adequately protected and supported: for example, the Nestle policy on health and safety at work and the Nestle Management and Leadership principles. Also, reference should be made in the efforts of the firm’s leaders to protect human rights across the organization. The plan of the firm to support the families of their employees by preferring them, under certain terms, when vacancies appear (Nestle, Code of Business Conduct), is another part of the firm’s plan to support team work and cooperation, by giving the example of such behaviour. In other words, in Nestle, employees are highly valued, a fact that clearly promotes employee satisfaction contributing in the increase of employee performance. 3c. Innovation (Curiosity & Openness) As already explained above, innovation in both organizations, is highly promoted. In Kraft Foods there is no reference to specific initiatives that can guarantee the continuous development of the firm in terms of innovation. Moreover, in Kraft Foods innovation is related not only to organizational performance but also to the organizational structure; reference is made to the fact that the firm controls a series of extremely popular brands. No explanations are given in regard to the contribution of these brands in the increase of innovation across the organization. As in the case of team work and trust, innovation in Kraft is not particularly analysed, as part of the firm’s governance (Kraft Foods, Corporate Governance). Rather, emphasis is given on the protection of the shareholders’ rights and interests, implying that these rights and interests are the priority for the organization; all initiatives developed for the improvement of organizational environment, as for example the suggestions for the promotion of innovation and for the support of team working, are considered as means for achieving the priority mentioned above, i.e. the promotion of the interests and rights of shareholders. The above fact is clear at the following point: in the firm’s report regarding its ‘Workplace and Culture’ rules, it is noted that the employees of the organization are provided with the necessary support as ‘is the right thing to do and essential for our long-term success’ (Kraft Foods, Workplace and Culture), i.e. the target set is not the personal development of employees, a fact that would also benefit the organization, but the protection of the interests of the organization, as related to the interests of its shareholders. On the other hand, in Nestle analysis is made of the methods through which the firm promotes innovation in all its activities; for instance, reference is made to the ‘product development, renewal and quality and the differentiation from competitors’ (Nestle, Strategy). Moreover, the firm’s strategy for ensuring the quality of its products are analytically presented, a fact that is considered as an advantage towards Kraft Foods where no analysis is made of the strategies employed in the promotion of innovation. Furthermore, the firm has developed a series of rules and principles on which its activities are based, for example, ‘the Nestle Quality Policy, the Nestle Consumer Communication Principles and the Nestle Nutritional Profiling System’ (Nestle, Corporate Business Principles). All these schemes can be characterized as competitive advantages of the organization in terms of innovation. Through these schemes the position of the firm towards its rivals, as for example the Kraft Foods, is secured. Works Cited Ashkanasy, N., Wilderom, C., Peterson, M. The Handbook of Organizational Culture and Climate. London: SAGE, 2010 Godwyn, M., Gittell, J. Sociology of Organizations: Structures and Relationships. London: Pine Forge Press, 2011. Grandstaff, M. Strategic Leadership: The General's Art. Vienna: Management Concepts, 2009. Herzog, P. Open and Closed Innovation: Different Cultures for Different Strategies. Heidelberg: Gabler Verlag, 2010. Kandula, S. Performance Management. Delhi: PHI Learning Pvt., 2006. Levi, D. Group Dynamics for Teams. London: SAGE, 2010. Salama, A. Creating and Re-Creating Corporate Entrepreneurial Culture. Surrey: Gower Publishing, 2011. Schein, E. Organizational Culture and Leadership. Hoboken: John Wiley and Sons, 2010. Schermerhorn, J. Organizational Behavior. Hoboken: John Wiley and Sons, 2011. Shockley, P., Morreale, S., Hackman, M. Building the High-Trust Organization: Strategies for Supporting Five Key Dimensions of Trust. Hoboken: John Wiley and Sons, 2010. Stanford, N. Corporate Culture: Getting It Right. Hoboken: John Wiley & Sons, 2011. Weiss, D., Legrand, C. Innovative Intelligence: The Art and Practice of Leading Sustainable Innovation in Your Organization. Hoboken: John Wiley & Sons, 2011. Online sources Kraft Foods (2011) Corporate website. Accessed at 25/11/2011. Available from Kraft Foods (2011) Strategies. Accessed at 25/11/2011. Available from < http://www.kraftfoodscompany.com/About/strategies/index.aspx> Kraft Foods (2011) Community involvement. Accessed at 25/11/2011. Available from < http://www.kraftfoodscompany.com/About/community-involvement/community-involvement.aspx> Kraft Foods (2011) Workplace and Culture. Accessed at 25/11/2011. Available from Kraft Foods (2011) Corporate governance. Accessed at 25/11/2011. Available from < http://www.kraftfoodscompany.com/Investor/corporate-governance/index.aspx> Kraft Foods (2011) Company factsheet. Accessed at 25/11/2011. Available from < http://www.kraftfoodscompany.com/assets/pdf/kraft_foods_fact_sheet.pdf> Nestle (2011) Corporate website. Accessed at 25/11/2011. Available from Nestle (2011) Strategy. Accessed at 25/11/2011. Available from < http://www.nestle.com/AboutUs/Strategy/Pages/Strategy.aspx> Nestle (2011) Business Principles. Accessed at 25/11/2011. Available from Nestle (2011) Code of Business Conduct. Accessed at 25/11/2011. Available from Read More