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Nestle - Research Paper Example

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Name: Subject: Management, Research Paper Topic: Nestle Date: 1. Discuss the organization change that Nestle has undergone.  Every organization in the world needs to bring about changes in its system in order to remain competitive in the long run. Being the biggest food company in the world it is extremely important for Nestle to introduce changes to maintain its commitment of long term outcomes…
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Download file to see previous pages In order to improve its performance, it also shifted its executive offices to the United States. Another major organizational change took place when Nestle took its first step towards diversification by becoming a major shareholder in L’Oreal, the largest company in the cosmetics industry. Instead of investing in developing markets like cosmetics, Nestle purchased Alcon laboratories and entered the pharmaceutical industry. The main focus of Nestle during this time was to restructure its organization by focusing on strategic acquisitions and improve its financial improvement through diversification. In the later period, however, the new CEO focused on slow and conscious organizational change. 2. Identify whether the changes were first-order and/or second-order changes and the rationale for your decision.  In simple words, first order change is when a company does something which is similar to that done before and is a reversible option. A second order change is an irreversible practice that an organization adopts which is fundamentally different from the practices adopted before (Leadership and institutional change, n.d.). According to the case studies, Nestle incurred both first order and second order changes. The first change of relocating its executive offices from Switzerland to the United States during the World War 2 is considered to be a first order change because the core identity of the company as well as its organizational values were maintained. During this change, the company underwent an organizational climatic change which is a king of a transactional change. The second order changes incurred by Nestle would be the decision of global expansion and diversification. By buying out shares in L’Oreal and Alcon Laboratories the company underwent transformational change as it had to face radical transformation as well as organizational development. This organizational change transformed the core organizational values and practices of Nestle. Together these changes made up the stream of organizational changes that Nestle went through. 3. Discuss whether or not the changes made were with an incremental approach as emphasized by Brabeck-Letmathe.  The CEO of Nestle, Brabeck-Letmathe, believed in sustaining and developing the strengths of the organization and introducing radical changes only if the company is facing a crisis. He believed in slow and conscious changes which are considered to be an incremental approach. He also believed that any change should only be adopted after conscious decision making which should be focused on long term rather than short term success of the organization. The first change made by the CEO was changing the entire executive board and replacing it with 10 new executive members. The CEO also focused on reinforcing and sustaining the strengths and relying on the commitment of the managers. But the overhaul of the executive board might demotivated these managers and instill in them a fear of losing their own jobs. Also, slow and conscious growth in today`s fast paced world hinders the growth of the organization and might affect Nestle negatively. 4. Identify three examples of lessons from the front line that were evident in the Nestle case and how these issues may be overcome. ...Download file to see next pagesRead More
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