Nestle

1. Discuss the organization change that Nestle has undergone.

Like many old organizations, Nestle has been in constant organizational changes in order to cope with the changing market and society. Being over a century old, the company has seen a lot of generations and has been efficient at all times. By 2000, Nestle was considered the biggest company that dealt with food stuff (Anonymous, 2001a). Some of the organizational changes that Nestle has gone through include the diversification of their products from solely food products to cosmetics. At the same time, they have shifted their base from Switzerland to an overseas base - the United States of America. The company has also changed its marketing strategies by operating in other countries as independent branches, unlike the older times when the company only operated in foreign countries through their sales agents. It opened up its borders to purchase factories in different countries of the world. By 1990, the company structure was very flexible and today the company changes together with the market demands.

2. Identify whether the changes were first-order and/or second-order changes and the rationale for your decision.

Most of the changes that the company has gone through since its inception to date have rendered its competitive formidable in the food industry. Most of the changes that the company went through are second order changes. Second order changes refer to those that modify the existing schemata to a different one altogether (Bartunek & Moch, 1987). The old schemata are phased out as new ones are phased in. First, Nestle moved from a Swiss-based company to a US based organization from where it extended its wings to all over the world. This was a new approach since the old scheme of using sales agents in other countries had been replaced by moving into other countries. Later, the company diversified their products from merely food items to cosmetics. This was a new venture since the company started with an aim to help the mothers who could not breastfeed their newborns, and mainly dealt with milk products. As time passed, the company started to purchase many other companies and this was a new approach altogether from its Swiss-based factories.

3. Discuss whether or not the changes made were with an incremental approach as emphasized by Brabeck-Letmathe.

An incremental approach to change refers to the means by which an organization instills change into the system without causing a lot of unknown situations to the existing employees (Argyris, 1985). As opposed to radical change, where the introduced system is unfamiliar to the employees, incremental approach does not offer ‘surprises’ to the employees. In Nestle, there were so many radical changes that resulted in the hiring of external manpower. The personnel that were present from the beginning could not handle the new developments, such as operation of new product lines. In this case, the company had to hire new employees to handle these products. Furthermore, the employees were used to dealing with companies within Switzerland, but they were then forced to transfer to a new location, USA. This was a radical change. Brabeck-Letmathe did not therefore give the correct information by saying that the changes were incremental. When he became CEO, he made an overhaul of the executive board and brought in ten new people. This was a radical change, which he says is necessary during the times of crisis.

4. Identify three examples of lessons from the front line that were evident in the Nestle case and how these issues may be overcome.

Acquisition of other companies is a way to show the extent to which a company has expanded. However, the companies acquired should be well assessed to ensure that they would have a positive impact on the purchasing company. Nestle acquired L’Oreal which was debt ridden and had caused concern from investors to date (Anonymous, 2001a). During the Second World War, Switzerland was isolated and Nestle needed to open up to the rest of the world despite the war. This led to their movement of the offices to a more centralized location in the US. Business location is vital in any industry and when there are factors that could hinder the development of a business in one location, it should move to a better location. Together with the world and society changes, the business world should change too. Nestle introduced the use of technology and in the 1990s, they had set their system to become flexible in order to move with the society. They have embraces technology and are among the early companies that embraced globalization. Any company should have a flexible system in order that would allow to articulate the world with themselves.

Order now

Related essays