Changes in Nestle Company - Case Study Example

Running header: Organizational Change Changes in Nestle Company Tutor: College: Course: Date Changes in Nestle Company There are several interpretations of what change really is because different people understand and manage change in several ways as long as they can effectively cope with it. At times, change can be unsettling and this is the reason why the manager needs to be very logical and sober to handle the influences Managers of these organizations should ensure that they use face to face form of communication in order to pass on the relevant information to the relevant parties since written information can be very difficult at conveying understanding of the changes needed in the organization and how the process will be done. Sometimes, change will involve some new actions, objectives or even new processes for a particular group or team. (Patrick 1994) The research that was carried out was aimed at determining how change was introduced into Nestle Company. External factors in any organization will affect the image of any organization and in the case of Nestle Company; the main factor was geopolitical pressure which was mainly the influence of the political bodies in the country and the world at large (James 2000). This mainly meant that due to microeconomic changes or crises, an organization is forced to change the way it operates. The company was forced to change its approach to global expansion and instead of having it s agent carry out the sales; it opted to purchase the local subseries from foreign markets and especially from the United States. Hyper-competition pressures were the effects that were caused by increased competition from other companies to try and win as many customers as possible. The company realized that there was an intensified rate of business in the United States market for dairy products. This forced the company to respond to the competition and demand by opening more factories in United States to be able to deliver well to the consumers (Ian et al 2009). This change had to start at the organizational level. The company also felt the pressure to maintain a good reputation and credibility in comparison to the other organizations in the market and this was why they had to implement change. On the other hand, there were some internal factors in Nestle Company were slowly growing and due to the exceeding pressures, there was great need to impose change in order to accommodate the new developments. The existing systems was faced within the challenge of the demand from United States to have more dairy products and this was why they ended up opening more branches in that country in order to cater for their needs .In order to be more efficient, there was need to be more specialized in performing the duties in the company (David 1992). When more branches were opened in these countries, the employees needed to be equipped with more specific knowledge on the tasks they we expected to perform, rather than perform general tasks. New broom pressure was an internal factor that was caused by the demand to bring in new management in a company in order to have better performance. In Nestle Company, there were some major changes at the senior management level particularly the CEO. These changes are always catalyzed by these individuals in the organizations and like in nestle company, restructuring was a continuing process (Patrick 1994). In the 1980’s the CEO who was in charge of Nestle Company focused on the financial improvement of the company. In Nestle Company, a number of these changes were implemented as an attempt to have great results. The company was mostly involved in making their products, then selling them internationally; using sales agents who were rather making them get profit margins that were not very pleasing (Ian et al 2009). The major key issues that were applied in this company included the re-organizational politics and lobbying, there was also the merging of various cultures as a form of change especially when the company sold its products to the foreign states. There are mainly two types of scales of change which are the first order changes and the second order changes. The first order changes are incremental which is involve making small changes in the structure of the organization in the company, In Nestle Company there were rules that were maintained and even when faced with the external influences, they are not willing to change then for anything (George 1993). They rejected the implementation of new technologies but instead the emphasized in developing the ones that already existed (David 1992).This happened under the leadership of Brabeck-Lethmathe who was the main interpreter and insisted that he only wanted to reinforce the strengths rather than change them. Considering the second order changes, there could be transformations and in other terms known as fundamental. In Nestle Company, the leaders were committed in changing the ways of the company in order to promote growth. Under the leadership of Brabeck-Lethmathe as the CEO, he replaced all the ten executive board officers in the attempt to bring change to the company (Ian et al 2000).In this case he was acting as the coach since he took the initiative to bring in the necessary adaptive changes in Nestle Company. The six box model was very applicable in Nestle Company and it was mainly comprised of at least five components. The manager and the stakeholders had to determine the clear purpose of the business which in this case was to diversify the business in all the countries. It was also important to determine how to create the structure of the company by dividing up the work according to various specializations of the workers. It was also necessary to establish a good way of dealing with the conflicts that came up once in a while among the people working in the company and the technologies being used. It was also necessary to reward the workers to serve as a motivation. (Patrick 1994).Good leadership like that of Brabeck-Lethmathe was necessary in order to strike a balance in all these components and implement helpful technologies in the company. This model helps to maintain recognition of all the components and how they are interrelated to each other. When applying these models, it is always important to recognize that neither the organization nor the environment around nestle company is really stable and they are mostly in motion and what is required is to understanding these elements and the interrelationships among them at any point. The following figure represents the interrelationship of the key elements in the Star model. (James 2000) The main purpose is to ensure that Nestlé’s mission and vision as well as the core values are achieved. The environment is the world in which the company was operating from. This was what influenced the company to open up more branches to be able to distribute their product worldwide. The people involved, were the ones who were employed in the company and were working as a team to help accomplish all their goals (Ian et al 2009). The culture was the norms and assumption that helped the people to work together to help the team accomplish its goals. The 7-S framework focused on seven components that mostly affected the organizational effectiveness. These were the structure which signified the company’s hierarchy and it added a contemporary perspective to the problem of organizational structure. Due the changing environment in the market, Nestle which was a company aiming to become very productive, had to adopt some structural changes so as to be able to cope with some specific strategies, without necessarily having to drop the basic structural divisions.. The system signified the daily processes and both the formal and informal procedures that were handled throughout the company (David 1992). There was also the core values of nestle company, that even the CEO was not willing to replace for anything. Style was the kind of leadership style that was used by the company’s managers and stakeholders. A Successful organization viewed people as valuable resources who should be carefully nurtured, developed, guarded, and allocated. Top managers of Nestle devoted their time and energy to planning the progress and participation of existing managers, and use job assignment policies to actively foster and develop their staff’s competence in the existing factories. Skills referred to those activities that an organization was known to be good at. Nestle was very popular for being one of the best food processing companies in the world, with over 500 factories operating (Ian et al 2000).. Strategic changes required the organization new skill to be able to cope with the increasing demand. The figure below represents the interrelationship of all these elements to bring change to the organization. (Patrick 1994) In conclusion, it is important to note that for any company to succeed, change should be applied where development is needed as well as great results. It is also important to maintain the company’s’ strength when necessary by resisting the changes. References David Bar-Gal, (1992) Organizational change and development in human service organizations, USA, Haworth Press Inc George P. Huber, William H. Glick, (1993) Organizational change and redesign: ideas and insights for improving performance, Oxford University Press Ian, P. Richard, D.Gig, A. (2009). Managing organizational change. The McGraw-Hill Companies Inc James A. (2000) Building the Innovative organization, United States, 2000, Palgrave Macmillan Joseph Tidd, J. R. Besant, Keith P.(2005) Managing innovation: integrating technological, market and organizational change, England., John Wiley’s &Sons Limited. Patrick. Linda K, (1994) Managing organizational change, United States, 1994.the University of California   Read More