Nestle

Assignment 2 go up Dr. Mary Tranquillo HRM 560 Managing organisational agitate October 28, 2010 Organization miscellanys that come on has undergone 1. Discuss the arrangement cast rank that come near has undergone. nestle is the largest and to a greater extent or less successful consumer packaged goods party in the terra firma, founded and headquartered in Vevey Switzerland. go up successfully introduced galore(postnominal) new reapings into more unlike parts of the food and potable patience. The cuddle club was established in 1867 by Henri Nestle.In the beginning, Nestle federation specialized in selling infant milk which provided alternative for mothers who could non breast feed their infant. The value of the product was soon recognized, as it deliver more childrens life. Today, Nestle is the worlds largest and well-nigh diversified food lodge, with roughly 500 factories around the world, producing healthy, enjoyable food products for every stage of life . Nestle underwent many organisational flip-flops. In 1905 Nestle Company merged with the Anglo Swiss Milk Company by the Page Brothers.The merger provided the company with a wide range of product railway system. According to Palmaer, I. , Dunford, R. , & Akin, G. , 2009, Nestle changed its approach to planetary expansion and began purchasing world-wide subsidiaries in foreign food commercializes. During the World state of war I Nestle purchased some(prenominal) factories in the get together States to keep up with the increasing demand for condensed milk and dairy products via government contracts. When fresh milk became available again after the war, Nestle financial status suffered which caused a tremendous amount of debt.The price of ingredients was increasing, the economy slowed down and exchange assemble deteriorated because of the war. During World struggle II many administrator offices offshore were transferred to the fall in States. These moves into the offsho re markets were part of Nestles commitment to changing the company in order to increase efficiency and productivity (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 2, pg. 109). aft(prenominal) the war ended, consumer started switching to the flake of favorite milk they liked with reference. Nestle was able to respond quickly to the change of demand thus great(p) them a very high advantage to stay competitive in the market. In 1920, the company decided to enter the chocolate market as their second most important production. Nestle as well as did am uncorrelated diversification through their shargonholding in LOreal in 1974. Later, Nestle reap a second diversification which was outside of the food patience, the purchase of a pharmaceutical and ophthalmic company issuen as Alcon Laboratories Inc.As the years establish Nestle continue to its diversified strategical in getting many acquisitions 1985 Carnation, 1988 Buitoni-Perugina, 1988 Rowntree, 1990 Cereal Partners Wo rldwide, 1991 Beverage Partners Worldwide (formerly CCNR), 1992 Perrier, 1998 San Pellegrino and Spillers Pet foods, and in 2000 the acquisition of military unit Bar (http//hubpages. com/hub/nestle). Whether changes were first-order and/or second-order changes 2. Identify whether the changes were first-order and/or second-order changes and the rationale for your end. It went through second-order change.Second- order, noncontinuous change is transformational, radical, and fundamentally alters the plaque at its join. Second- order change entails non developing but transforming the nature of the boldness (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 3, pg. 86). Nestle change its products through sales agents to countries outside of its home market. Its launch into the Ameri flowerpot market was initiated when the First World War increased demand for dairy products. Nestle took this opportunity to establish its presence in the United States by acquiring several existing fa ctories. In 1974 Nestle diversified for the first clock out-side the food industry in order to promote growth. It became a study shargonholder in the cosmetic giant LOreal. Nestle subsequent make a second foray outside the food industry with the purchase of Alcon Laboratories Inc. , (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 3, pg. 86). My rationale Nestle transformed the nature of its organization Nestle fine tuned its organization and transferred its decision maker offices from Switzerland to the United States which allowed an improved and deepen organizational stability. 3.Discuss whether or non the changes do were with an additive approach as emphasized by Brabeck-Letmathe. Brabeck-Letmathe stated why should we manufacture dramatic change? Just for changes sake? To follow some sort of fad with-out coherent thinking behind it? We be very skeptical of any merciful of fad (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 7, pg. 109). He initiated a complete overhaul of the executive board, replacing it with 10 new executives. He claims that change is incremental in metre he is devising a radical change. Three events of lessons from the front attract 4.Identify iii examples of lessons from the front line that were evident in the Nestle study and how these issues whitethorn be overcome. Three examples of lessons from the front line that were evident in the Nestle vitrine are thither is a dramatic thou of change in Nestle. This to be slowed down. There is a high attempt of exposure in its investments the crocked has to hedge its risks There is a wrong indemnity in technology. Care needs to be taken in presumptuous that types of organizational changes can be neatly categorized as small, adaptive, and incremental compared to those that are large and transformational.Mental frameworks, individual perspectives, the extent to which a change is flat relevant to a person and his or her activities, and the spot to which he or she accepts the need for change. References Bikashkumarsha. (2010). Nestles brand management strategies. Retrieved from http//hubpages. com/hub/nestle. Palmer, I. , Dunford, R. , & Akin, G. (2009). Managing organizational change A sextuple perspectives approach (2nd ed. ). New York McGraw- hummock.Nestle10-11 Your blotto organized its foreign trading functionings in an internationalistic cleavage. With foreign markets growing fast, the firm considers changing its organizational grammatical construction. What options does it have? What are the pros and cons of each option? visit 1 conception 1 illustrates the relationship between each elements of organizational architecture. Hill et. al (2012) identifies these elements one by one. Organization building means three points.First, the titular division of the organization into fractional monetary units, such as product divisions, national operations and functions second, the location of decision making responsibilities within tha t building third, the establishment of combine mechanism to coordinate the activities of subunits including cross utilitarian team and pan regional committees. Control system is the method to measure the performance of subunits and to judge the managers when speed those subunits. Incentives are used to reward appropriate managerial behavior. It is close attached with the performance.Processes refers to the manner in which decisions are made and work is performed within the organization. Organizational culture refers to the norms and value systems that the employees of an organization share. People here means some(prenominal) the employees of the organization and the dodging used to recruit, compensate and retain those individual and type of people with skills, values and orientations. Organizational social mental synthesis The organizational structure has three dimensions vertical differentiation, horizontal differentiation and the desegregation mechanisms.Each dimension will be explained below. Vertical differentiation The vertical differentiation indicated the location of decision making responsibilities within a structure. The vertical differentiation has devil types of arguments centralization and decentralization. There are four principal(prenominal) arguments for centralization. First, centralization can facilitate coordination. An example might be a company have several different components manufactured in different countries which need coordinated. It can be achieved by centralizing production scheduling by managers.Second, centralization can servicing ensure that decisions are consistent with organizational objectives. Third, concentrating power and authority in one individual or a management team can assist the top level managers to bring about needed study(ip) organizational changes. Fourth, centralization can avoid the duplication of activities by several subunits with similar activities, which can improve the efficiency. There are also volt arguments for decentralization. First, the top level manager whitethorn get overburdened, which may resolving poor decisions. Decentralization can solve this problem.Second, researches show that people are willing to give more to their jobs when they have a greater degree of individual freedom and control. Third, more rapid response to environmental change with greater flexibility is provided by decentralization. Fourth, decentralization can ensue in better decisions. This is because in a decentralization structure, the decisions can be made by person with better understanding and more information than managers. Fifth, decentralization can increase control by establish relatively autonomous, self-possessed subunits within an organization.The responsibility of subunit managers are closely attached with the subunit performance. Therefore, centralize some core decisions and decentralize some operating decisions may be worth trying. Horizontal differentiation The horizont al differentiation is interested with how the firm decides to divide itself into subunits. The decision is usually based on the firms function, type of business and geographical area. Domestic According to Hill et. al (2012), many firms begin with no formal structure and are run by a small assemblage of people.When the firms grow, the organization is disordered into functions reflecting the firms value creation activities because the demand of management is great. It type of structure is functional structure. Top managers coordinate and control functions, such as purchasing, manufacturing, marketing and finance. Centralized decision is usual in this structure. A natural example of functional structure is the British airways, as show in figure 2. encounter 2 With the developing of the firm product line, hike differentiation may be necessary. A product divisional structure can be used to solve the problem caused by coordination and control.In a product divisional structure, each division is responsible for a transparent product line, as show in figure 3 Figure 3 Each division is set up as a self-contained, largely autonomous entity with its own function. The responsibility for operating decisions is usually change to product divisions. The top manager is responsible for the overall strategic development of the firm and for financial control of the various divisions. International The above two structure is based on municipal firms. When the firms expand internationally, they often group all their international activities into an international division.Both functional and product divisions structure at home may be replicate to the ball-shaped. Regardless of a firms domestic structure, its international division tends to be organized on geography. Figure 4 is an example for a international division. Figure 4 In the figure, the products can be manufactured by divisions A, B and C, and so export to country1 and 2. However, the production line A, B and C may also build in country 1 and 2. For firm with a functional structure at home, the firm might replicate this structure in every countries it does business.Similar case might happen for the firms with divisional structure. Although this mixed bag of structure is quite popular, it may raise several problems. It may create skirmish and coordination problems between domestic and foreign operations. First, the top manager of this structure may not give as much voice in the organization as the top manager in domestic. Second, lack of coordination between domestic operations and foreign operations may cause isolation. In order to solve these problems, a worldwide product divisional structure and a worldwide area structure is raised and adopted by many firms.Figure 5 illustrates these two alternative paths of development. Figure 5 The worldwide product divisional structure is often adopted by firms which are pretty diversified and has domestic structures based on product divisions. Fig ure 6 is a typical worldwide product divisional structure. This structure helps to envision the location and experience curve economies. It also facilitates the transfer of core competencies. The main problem of this structure is the limitation of voice it gives to area country managers as it makes them subservient to product division managers. Figure 6The worldwide area structure is suitable for firms with a low degree of diversification and a domestic structure based on functional structure. This structure divided the world into geographic areas and each areas operations authority and strategic decisions are decentralized (figure 7). This structure facilitates local responsiveness. However, this structure can result in a fragmentation of the organization which makes it difficult to transfer core competencies and skills between areas. This structure is consistent with a localization strategy, but may also make it difficult to realize gains under a global standardization.Figure 7 H ill et. al (2012) indicates that a worldwide area structure is more appropriate for firm focus on localization strategy while a worldwide product divisional structure is more appropriate for firm focus on global standardization or international strategies. An attempted is made by some firms to use a matrix structure to cope with the conflicting demands of transnational strategy. The responsibility for operation decisions for a product should be shared by the product division and various area of the firm. The global matrix structure allows for differentiation on two dimensions the product division and geographic area.In a classic matrix structure, product divisions and geographical areas have equal status for operating decisions. In the reality, the global matrix structure may not work as well as the theory predicts. It may appeals as clumsy and bureaucratic. The decision making can be slow and the indomitable organization may not respond quickly to market change or to innovate. T he dual-hierarchy structure can also lead to conflict between the areas and the product divisions. To make the matters worse is that it is difficult to ascertain the responsibility in this structure. Integrating mechanismFor an international or a transnational firm, there is greater need for coordination rather than a firm which pursuing a localization strategy. However, the different orientation or opinion of subunits will raise different goals, which may constrain the impediments to coordination. In order to overcome this problem, both formal and informal integrating mechanisms can be used to achieve coordination. As show in figure 8, the formal mechanisms integrate subunits use methods from direct contact and connectedness roles to teams and a matrix structure. The complexity of the formal integrating mechanisms is positive correlated with the need of coordination.The problem of this solution is that the matrix structure tends to be bureaucratic, inflexible and characterized b y conflict. Therefore, flexibility and supporting by the informal integrating mechanisms is necessary. Figure 8 The informal integrating mechanism can be outlined as knowledge meshs which are supported by the organization culture. Cross-unit cooperation and teamwork are the important content for the culture. The advantage of the net profit is that it is used as a nonbureaucratic conduit for knowledge flows with in a multinational enterprise.An example to for the structure of the network is shown in figure 9, the manager A, B and E, F are connected in straight off through manager C, D. If one problem is raised by manager A, the manager F or E can know this situation indirectly and provide solution. In order to operate the network successfully, all the managers must share a strong commitment to the resembling goals and adhere to a common set of norms and values that override differing subunit orientations, which means strong organizational culture is necessary for teamwork and coop eration. Figure 9NestleAssignment 2 Nestle Dr. Mary Tranquillo HRM 560 Managing Organizational modify October 28, 2010 Organization changes that Nestle has undergone 1. Discuss the organization changes that Nestle has undergone. Nestle is the largest and most successful consumer packaged goods company in the world, founded and headquartered in Vevey Switzerland. Nestle successfully introduced many new products into many different parts of the food and beverage industry. The Nestle Company was established in 1867 by Henri Nestle.In the beginning, Nestle Company specialized in selling infant milk which provided alternative for mothers who could not breast feed their infant. The value of the product was soon recognized, as it saved many childrens life. Today, Nestle is the worlds largest and most diversified food company, with nearly 500 factories around the world, producing healthy, enjoyable food products for every stage of life. Nestle underwent many organizational changes. In 190 5 Nestle Company merged with the Anglo Swiss Milk Company by the Page Brothers.The merger provided the company with a wide range of product line. According to Palmaer, I. , Dunford, R. , & Akin, G. , 2009, Nestle changed its approach to global expansion and began purchasing global subsidiaries in foreign markets. During the World War I Nestle purchased several factories in the United States to keep up with the increasing demand for condensed milk and dairy products via government contracts. When fresh milk became available again after the war, Nestle financial status suffered which caused a tremendous amount of debt.The price of ingredients was increasing, the economy slowed down and exchange rates deteriorated because of the war. During World War II many executive offices offshore were transferred to the United States. These moves into the offshore markets were part of Nestles commitment to changing the company in order to increase efficiency and productivity (Palmaer, I. , Dunfor d, R. , & Akin, G. , 2009, para 2, pg. 109). afterward the war ended, consumer started switching to the type of favorite milk they liked with reference. Nestle was able to respond quickly to the change of demand thus self-aggrandizing them a very high advantage to stay competitive in the market. In 1920, the company decided to enter the chocolate market as their second most important production. Nestle also did am unrelated diversification through their shareholding in LOreal in 1974. Later, Nestle made a second diversification which was outside of the food industry, the purchase of a pharmaceutical and ophthalmic company known as Alcon Laboratories Inc.As the years come on Nestle continue to its diversified strategic in acquiring many acquisitions 1985 Carnation, 1988 Buitoni-Perugina, 1988 Rowntree, 1990 Cereal Partners Worldwide, 1991 Beverage Partners Worldwide (formerly CCNR), 1992 Perrier, 1998 San Pellegrino and Spillers Pet foods, and in 2000 the acquisition of precedent Bar (http//hubpages. com/hub/nestle). Whether changes were first-order and/or second-order changes 2. Identify whether the changes were first-order and/or second-order changes and the rationale for your decision. It went through second-order change.Second- order, noncontinuous change is transformational, radical, and fundamentally alters the organization at its core. Second- order change entails not developing but transforming the nature of the organization (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 3, pg. 86). Nestle interchange its products through sales agents to countries outside of its home market. Its launch into the American market was initiated when the First World War increased demand for dairy products. Nestle took this opportunity to establish its presence in the United States by acquiring several existing factories. In 1974 Nestle diversified for the first time out-side the food industry in order to promote growth. It became a major shareholder in the cosmeti c giant LOreal. Nestle afterward made a second foray outside the food industry with the purchase of Alcon Laboratories Inc. , (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 3, pg. 86). My rationale Nestle transformed the nature of its organization Nestle fine tuned its organization and transferred its executive offices from Switzerland to the United States which allowed an improved and deepen organizational stability. 3.Discuss whether or not the changes made were with an incremental approach as emphasized by Brabeck-Letmathe. Brabeck-Letmathe stated why should we manufacture dramatic change? Just for changes sake? To follow some sort of fad with-out arranged thinking behind it? We are very skeptical of any kind of fad (Palmaer, I. , Dunford, R. , & Akin, G. , 2009, para 7, pg. 109). He initiated a complete overhaul of the executive board, replacing it with 10 new executives. He claims that change is incremental save he is making a radical change. Three examples of lessons from the front line 4.Identify three examples of lessons from the front line that were evident in the Nestle case and how these issues may be overcome. Three examples of lessons from the front line that were evident in the Nestle case are There is a dramatic ill-treat of change in Nestle. This to be slowed down. There is a high risk in its investments the firm has to hedge its risks There is a wrong insurance policy in technology. Care needs to be taken in take for granted that types of organizational changes can be neatly categorized as small, adaptive, and incremental compared to those that are large and transformational.Mental frameworks, individual perspectives, the extent to which a change is directly relevant to a person and his or her activities, and the degree to which he or she accepts the need for change. References Bikashkumarsha. (2010). Nestles brand management strategies. Retrieved from http//hubpages. com/hub/nestle. Palmer, I. , Dunford, R. , & Akin, G. (2009). M anaging organizational change A triune perspectives approach (2nd ed. ). New York McGraw-Hill.