Strategic Human Resource Management - Nestle - Case Study Example

Strategic Human Resource Management Name Professor Institution Course Date Strategic Human Resource Management Introduction Considerable changes in the markets and in the society in general are argued to be responsible for the increasing workforce diversity being witnessed in organizations. Workforce diversity recognizes the certainty that individuals are diverse in numerous ways, including age, marital status, gender, sex orientation, personality, culture, social status, ethnicity and religion (Barbosa & Cabral‐Cardoso, 2007, p.275). Globalization prompts firms across the globe to work with more global suppliers and customers. Developments in communication, transport and lifestyle changes have contributed to the emerging mobility of people. In this perspective, managing workforce diversity has grown to be a very strategic human resource policy which firms intend to realize and maintain so as to attract talents across the globe. Nestlé is one of the companies which has created and implemented comprehensive workforce diversity policy today (Nestlé, 2015). Its adoption of a diversity management policy has been triggered by criticisms of discrimination particularly women. Nestle never considered women in the executive board until 2012 when they employed Wan Ling Martello as the chief financial officer. Therefore, diversity management has been in place to mitigate such situations. Based on the information, this essay will review the purpose of managing workforce diversity, how it is being implemented at Nestlé and its effectiveness. Some of the implementation strategies that will be discussed include participative leadership, training and team formation while the effectiveness will comprise of new ideas, flexibility and effective decision making. Company Background Nestlé S.A is a multinational food and beverage corporation with headquarters in Vevey, Switzerland. The company was established in 1905 by Henry Nestlé and has since grown and now has 447 industrial plants within 194 countries across the globe. Nestlé now employs 333,000 people within its factories (Nestlé, 2015). Nestlé’s growth has made it to be regarded as the major food corporation in the globe based on its revenues. 29 of its brands including espresso, Nescafé, Smarties, Kit Kat, Nesquik, Vittel, Maggi and Stouffer’s contribute to company’s annual sales of around US$1.1 billion (Nestlé, 2015). Some of the most recognized Nestlé products consist include baby food, breakfast cereals, confectionery, bottled water, tea and coffee, ice cream, dairy products, frozen food, snacks and pet foods. Its operation in 194 countries means the company must employee people from other nationalities to help the management penetrate different target markets. The situation has made the Nestlé make diversity management one of its core agendas. The effectiveness of this human resource policy received a boost when it won company of the year award during the European Diversity Awards of 2013 (Nestlé 2015). Nestlé’s products include baby food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Overview of workforce diversity policy Workforce diversity is defined as the aspect of cultural difference among employees which can encompass marital status, gender, sex orientation, personality, culture, social status, ethnicity and religion (Day, 2007, p.215).  Job satisfaction and cultural diversity of the employees have been said to have some impacts of the performance of an organization. Ethnic diversity can frequently improve or reduce job satisfaction of the employee. Day (2007, p.216) contends that managers are required to have some key managerial skills to deal with workforce diversity to improve performance. Some of the “key management skills include communication skills, interpersonal or human skills and conceptual skills among others” (Day, 2007, p.217).       In the current business arena, Nestlé managers are expected to handle cultural diversity which includes behavior, values, norms and language (Nestlé, 2015). This is because the company operates in many countries with different cultural background and these managers are often sent to work in these countries. For instance, marketing manager heading marketing division at the headquarters Vevey, Switzerland can be sent to carry out research on the viability of the Chinese market and watch the progress of their expatriates. In that case, this manager will need to have good communication skills which will help him communicate ideas and appreciate the diversity. It is the communication skills that a manager can use to motivate employees who feel stressed in adapting in a different cultural setting (Schwabenland & Tomlinson, 2008, p.328). Purpose of managing workforce diversity at Nestlé Ivancevich and Gilbert (2000, p. 75) defines diversity management as “the planned and systematic commitment by business to recognize, respect, hire, promote and reward a heterogeneous mix of workforce”. Diversity is advantageous to both the employees and organization. Hicks-Clarke & Iles (2000, p.324) argues that Nestlé Manages diversity through creating and enhancing organizational climate that supports the act. The organizational climate is strongly impacted by the organizational culture and the insight of organizational processes by people in the organizations. The company has set up an organization climate which embraces diversity by hiring top managers even from other countries. For example, despite the fact that Nestlé is a Swish company; its CEO Paul Bulcke comes from Belgium while the board Chairman Peter Brabeck-Letmathe comes from Austria (Nestlé, 2015). Also, the vice president managing operations in North Africa, the Middle East and Europe is Spanish by origin. The company also balances gender diversity by including women in the management. For instance, the chief Financial Officer Wan Ling Martello is a woman from the U.S. According the company annual report of 2013, recruiting more females in the board has led to great diversity within Nestlé (Nestlé, 2015). Women bring new ideas into the organization. The company deals with baby products which in most cases are purchased by women. Employing women help the company markets its products among women customer segments. The diversity is stated on Nestlé in recognition to women in leadership and wide range of talent across the globe. Currently, Nestlé is a signatory to the UN Women’s Empowerment Principles; an agreement which promotes women empowerment in the labor force (Nestlé, 2015) Managing diversity based on recognizing gender, ethnicity and personality has proved to enhance human resource management issues. A study conducted by the Australian Centre for International Business shows that diversity enhances the management’s decision quality, and offers innovative concepts and better solutions to organization challenges (Agrawal & Agrawal, 2012, p.387). Observed evidence depicts that companies which have efficient diversity management stand to gain through returns. Productive task-based and information sharing conflict management has remained major issues in ‘value in diversity’ reasoning at Nestlé. Aycan et al. (2000, p.198) argue that managing diversity is founded on the recognition of differences and diversity as positive features of the company as opposed to challenges to be tackled. The importance of managing workforce diversity for today’s managers is crucial to Nestlé’s success (Nestlé, 2015). The role of organizational culture in developing an inclusive organization environment that embraces and takes advantage of the organization’s diversity cannot be underestimated. I would agree with the statement using the words of the former U.S president, John F. Kennedy. He once stated that “If we cannot end now our differences, at least we can assist make the world safe for diversity” (Schmidt, 2004, p.150). With the market for products and services becoming more and more globalized, businesses have to adopt the concept of diversity in their workforce to enable them serve customers from different cultural background. The framework formulated here contends that to ensure that managing diversity becomes fruitful; the business requires developing an encouraging climate for the diversity. Climate alone facilitates satisfaction, positive attitude and commitment among the employees (Hicks-Clarke & Iles, 2000, p.327). Nestlé management understands that they have to be decisive to efficiently manage an ever more diverse, global labor force so as to do well in its performance. In a nutshell, the better performance of any organizations depends on the capability of managing a diverse pool of talent which can provide innovative views, ideas and perspectives to their daily operations (Van Knippenberg & Schippers, 2007, p.527. Managing diversity at Nestlé implies facilitating the diverse labor force to carry out its potential in an impartial work setting in which one particular team has an advantage or disadvantage over the other. How Nestlé Implements Diversity management The implementation of diversity management is very important to the success of every organization. Leadership plays important roles in the implementation of diversity management. The leadership at Nestlé understands that diversity practices at the companies have made the land a job in the organization, hence have no doubt on talents from other countries. Nestlé (2015) contends that the CEO himself has worked for Nestlé in many countries including Czech Republic, Portugal, Canada and Ecuador among others. Hence, Paul Bulcke has cultural intelligence to handle diversity at his organization. Chang, Wilkinson & Mellahi (2007) pined that diversity training educates employees to embrace their differences, irrespective of the gender, race, sexual orientation, religion, social class or other associated dimensions. These trainings are provided in the on-the-job basis. Lai & Kleiner (2001, p.16) posit that diversity training objective is to support people to accept and appreciate the cultural differences between them”. Employees gain and improve their personal development and interpersonal communication a result of diversity training. Effective conflict resolution and fairness and equality promotion among the employees is normally resulting from thorough diversity training (Madera, 2013, p.127). In an organizational context, leaders shape the manner in which individuals think and conduct themselves—managers are perceived as role models and staff looks to observe if their conduct is in line with the espoused values and beliefs of the organization (Employment Practices Solutions, 2009). Manager set the organizational agenda. Manager’s influence the culture of the organization and in sequence the continuing organization’s effectiveness (Hoobler, Basadur & Lemmon, 2007). As an international manager, Nestlé CEO has been able to convince his employees to abandon their cultural background and social differences so to become global citizens (Nestlé, 2015). In this way, they drop their individual goals to focus on organization goals. Nestlé website claims that in a bid to manage diversity, the company builds and promotes culture of communication in which trust and inclusion are part of day to day activities – by incorporating different views to problem-solving and decision–making practices, by paying attention to and making an effort to understand different perspectives, by valuing divergent views and arguing fairly, and by analyzing better argument amongst the validation arguments (Nestlé, 2015). Nestle has created a team setting in which its employees can learn from each other and appreciate diversity (Agrawal & Agrawal, 2012, p.389). As the company expands, it hires new people to in various departments i.e. production, marketing, sales etc. These people come at the organization with little knowledge of the culture and human resource policy. For that reason, the management forms teams comprising of the experience employees and the new ones so that newbie can learn experience staff. CEO Paul Bulcke claims that has been one of reason for success in the global markets (Nestléb 2015). Effectiveness of diversity management Barbosa & Cabral-Cardoso (2007, p.279) claim that organizations which pursue this direction will likely to also cut costs related to turnover, stress, absenteeism, lawsuits associated with discrimination, and low output of minority employees. The framework created here hypothesizes that to ensure managing diversity become successful; the organization requires creating a positive environment for diversity (Hicks-Clarke & Iles 2000, p.331). To manage diversity effectively, Nestlé company managers often try to understand particular differences and be able to employ them to the company advantage rather than allowing the differences to results to problems (Rajput, Marwah, Balli & Gupta 2013, p.137). According to Durbin, Lovell & Winters (2008, p.398), diverse workforces make it easy to improve flexibility and quick reaction and adjustment to change. People are unique and have different personalities. In this way, there are people who are multi-talented and can also multitask. Wilson (2000, p.284) argues that the changing business atmosphere requires people who are flexible and can work in different departments of the organization. Business processes normally differ and sometimes considerably depending on the framework of the location and the business itself. All these facets contribute to the management and an ordeal of the manager. It is not common to find these types of people and human resource managers are now keen and thorough in their recruitment and selection to identify flexible candidates for the job (McGuire & Bagher, 2010, p.397). As such, they carry out recruit and selection for people different culture to get set of talents. Diversity has enabled Nestlé over the years to foster creativity and flexibility which is a critical key to satisfying customer demands. Managing the diversity portrays cultural intelligence that the manager and the employees have towards each other. Day (2007, p.215) contends cultural intelligence help people understand that must not behave and act in a similar way to make the company successful. Certainly, the most driving reason to recruit a diverse workforce is because of cultural intelligence. When colleagues, customers and employees are from different cultural background, the opportunities not only to understand, but also to appreciate the values of other people are embraced (Hoobler, Basadur & Lemmon 2007, p.1). Embracing these values and norms as part of the organization’s key message and product, promotes understanding between different cultures. When the business works with diversity in focus, opportunity for common value both in relation to society and profit is greatly increased. Summary of references Agrawal & Agrawal (2012) in his journal article also argue that diversity management helps the company to better manage teams. In Hrmagazine, Roberts (2014) reports that Nestlé S.A was feted as the most inclusive company in terms of employment in 2013. The company employs women and people from different countries particularly in the board of directors. The article topic differs with that of the magazine in that it assesses mainly how the formation of teams is important towards management of diversity while the magazine talks about the importance of hiring women towards achieving diversity status. Even though the topics differ, the key major topics which other articles and literatures recommend for the management of diversity. In fact, Nestle employs a woman in its executive board as a way of diversity management. Also the company has created team settings to help new employees to learn organizational cultures. The essay has established that Nestle S.A Company manages diversity for various purposes. In their article titled “Climate for diversity and its effects on career and organizational attitudes and perceptions”, Hicks-Clarke & Iles (2000) claim that companies manage diversity so as to integrate inclusion culture which positively impact employees careers. It also set up an environment for hiring talents from countries across the globe. An article Journal by Agrawal & Agrawal (2012) argues that diversity management in the organization help managers in forming and managing teams. However, implementation of diversity requires effective human resource policies entailing participative leadership, training and team formation. Employment Practices Solutions (2009) held that leaders create organizational climate and culture which promotes inclusion and acceptance of other cultures. The essay holds that diversity management has created organization effectiveness at Nestle by ensuring the company gets new ideas from its diverse workforce. When new ideas are contributed by of talents, creativity and efficient decision-making practices are entrenched into the organization. Conclusion     The current effort of practicing diversity management at Nestlé is just one case amongst many. The existence of such human resource practices is an indication that diversity management has increased prominence in the recent years due to globalization. Through this human resource policy Nestlé has improved a great deal in terms of human resource management and general performance. Hiring diverse talents from every country of the world has enabled Nestlé to boast of great ideas and diverse skills.  Hiring women into the workforce has improved the company’s marketing and sales amongst women customer segment. Recruiting board member from different countries has made the board of directors to remain independent as required hence increasing integrity. The argument within this essay is an indication that there a consistent need for effective diversity management in multinational companies. This is because effective diversity management combined with effective HR procedures and practices results to positive results as depicted by Nestlé’s European Diversity Awards of 2013. References Agrawal, V., & Agrawal, V. (2012). Managing the diversified team: challenges and strategies for improving performance. Team Performance Management: An International Journal, 18(7/8) 384-400 Aycan, Z., Kanungo, R.N., Mendonca, M., Yu, K., Deller, J., Stahl, G., & Kurshid, A. (2000). Impact of Culture on Human Resource Management Practices: A 10-Country Comparison. Applied Psychology: An International Review Vol 49 (1), 192-221. Chang, Y. Y., Wilkinson, A., & Mellahi, K. (2007). HRM strategies and MNCs from emerging economies in the UK. European Business Review, 19(5), 404-419. Barbosa, I., & Cabral‐Cardoso, C. (2007). Managing diversity in academic organizations: a challenge to organizational culture. Women in Management Review, 22(4), 274 – 288 Day, R. (2007). Developing the multi-cultural organization: managing diversity or understanding differences?Industrial and Commercial Training, 39 (4), 214-217. Durbin, S., Lovell, L., & Winters, J. (2008). Diversities in an organizational context. Equal Opportunities International, 27 (4), 396-400 Employment Practices Solutions. (2009). Managing Diversity from a Leadership Perspective. Retrieved 21st January 2015 from http://www.epspros.com/NewsResources/Newsletters?find=13302 Hoobler, J., Basadur, T., & Lemmon. (2007). Management of a Diverse Workforce: Meanings and Practices. Grace The Journal of Equipment Lease Financing, 25(1) Hicks-Clarke, D., & Iles, P. (2000). Climate for diversity and its effects on career and organizational attitudes and perceptions. Personnel Review 29 (3) 324-345. Ivancevich, J.M. and Gilbert, J.A. (2000). Diversity management: time for a new approach. Public Personnel Management, 29 (1), 75-92. Lai, Y., & Kleiner, B.H. (2001).How to conduct diversity training effectively. Equal Opportunities International, 20 (5/6/7) 14-18 McGuire, D., & Bagher, M. (2010). Diversity training in organisations: an introduction. Journal of European Industrial Training, 34 (6), 493-505 Nestlé. (2015). Nestlé Official Website. Retrieved 21st January 2015 from http://www.Nestlé.com/ Roberts, H. (2014). Nestlé named most inclusive employer at European Diversity Awards. Hrmagazine. Retrieved 21st January 2015 from http://www.hrmagazine.co.uk/hro/news/1147195/nestle-named-inclusive-employer-european-diversity-awards Schwabenland, C., & Tomlinson, F. (2008). Managing diversity or diversifying management? Critical perspectives on international business, 4 (2/3), 320 – 333 Schmidt, P. (2004). An approach to diversity training in Canada. Industrial and Commercial Training, 36 (4), 148 – 152 Van Knippenberg, D., & Schippers, M.C. (2007). Work group diversity. Annual Review of Psychology, 58, 515-41 Wilson, E. (2000). Inclusion, exclusion and ambiguity: The role of organizational culture, Personnel Review, 29(3), 274-303. Read More