Nestle: Management Strategies for Success

This case study analyzes Nestle's management strategies for success, including their approach to ethics, CSR, organization structure, and leadership theory. The study recommends the use of diversity and training approaches to control retention rates and enhance employee knowledge. The study also highlights the importance of implementing transformational leadership theory and Maslow's hierarchy of needs to enhance employee motivation and achieve growth.

Introduction to management

Nestle
Table of Contents
Background of Nestle.................................................................................................................1
SWOT Analysis.........................................................................................................................1
One ethics approach...................................................................................................................2
CSR approach.............................................................................................................................2
Nestle four elements...................................................................................................................2
Company culture........................................................................................................................3
Nestle..........................................................................................................................................4
Unity of command..................................................................................................................4
Centralization vs. Decentralization........................................................................................4
Span of control.......................................................................................................................4
Formalization..........................................................................................................................4
Organization structure (Functional structure)........................................................................4
Contemporary leadership theory................................................................................................5
Motivational theory (Maslow hierarchy of needs).................................................................5
Recommendations......................................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................7
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Nestle
Background of Nestle
Nestle is known as the famous company in food and drink sector. In 1905, the company
started its operations and now Headquarter of the company is in Vevey, Vaud, Switzerland.
The production units of the company are more than 447 and in 194 countries the operations
are managed. The vision of the company is to provide good quality food and the emphasis is
given on meeting the physiological needs. The mission of the company is to “make the food
better so that people can live a better life”. Nestle has the main aim of boosting the quality of
life of individuals by emphasizing on the healthier future (Nestle, 2019a).
SWOT Analysis
1. Strength
Brand image is one of the strength of the company. Nestle has good brand image among
the customer and due to this the large market share has been attained on the global platform.
The products and services are offered in more than 185 countries such as America, Europe
and Africa. Also, the company has large research and development sector with 34 R&D
facilities.
2. Weakness
The practices considered by the company were criticized by the customers. The different
factors for which the company has been criticized are unethical marketing of the baby
formula and also misleading labelling. By emphasizing on the strict quality measures, the
company has to recall the products from different market. Nestle also destroyed more than
37,000 tons of the Maggi noodle which has impacted the goodwill of the company (Pai,
2018).
3. Threats
The major threat faced by the company is from the competitors who are offering similar
products and services in the market. The competitors are Heinz and Mars (Ramesh, 2018).
4. Opportunities
Nestle has the chance to emphasize on transparency in material sourcing as it can assist in
attaining growth among the customers who are more conscious about their health. Therefore,
the company should grab the chance to sustain in the market.
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One ethics approach
The effective approach can be “Fairness and justice approach” that states that people
should be given respect in every circumstance and there should be no biasness among the
individuals (Goldman & Cropanzano, 2015). It is essential for Nestle to emphasize on this
approach so that ethical decisions can be made. It is examined that if company considers this
approach then it will assist to consider the decisions which are beneficial for the workers and
management. If Fairness and justice is considered in the company, then engagement level of
employees will enhances in relation to the activities that are allocated to them (Colquitt &
Zipay, 2015).
CSR approach
The effective CSR approach can be “Community approach” that emphasizes on giving
assistance to the companies and programs in relation to the local communities. If this concept
is taken into consideration by organizations by emphasizing on the interest of the society then
it will positively affect the relations with the customers. Nestle company should consider this
approach by setting up various events in the society. After setting up the events, it would be
possible for the company to emphasize on fulfilling the basic requirements of the society and
also to enhance the customer awareness in relation to the overall operations.
Nestle four elements
It is examined that to instil the basic aspects to the plan, the emphasis should be on the
concept of planning. There are basically four factors in relation to planning such as
objectives, actions, resources and implementation. The first factor that should be used by the
company is objective through which it would be easy to make the statements for the
upcoming scenario on which the manager emphasizes. The main objective can be linked with
priority, timing and also measurement. The objective should be considered within the time
frame and also the factor related to time dimension should emphasize on operations that are
guided by the various objectives and also which relates with the time frame of the actions
(Lewis, Larson & Korcuska, 2017).
It is necessary for Nestle to focus on setting the objectives as it can assist in controlling the
basic operational functions. If objectives are set in a proper manner then it can help the
workers to be efficient towards the allocated work. For doing planning it is necessary to
emphasize on measuring the objectives. The variety of measurements can be linked with
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Nestle
quantifying the objectives in various different areas. Nestle focuses on market standing,
productivity and also on the profit margin. The next factor is “action” that relates with the
particular functions that are necessary to be achieved. Actions should be linked with the
specific activities that should be planned so that objectives can be achieved. In this, the
emphasis can also be on the terms related with the different strategies and tactics.
The third one is “resources” that should be used by Nestle for planning and it is also
related with budgeting and searching the sources. It is important for top management to select
the best budget that can be effective for planning the requirement of the organization. The
fourth factor is concerned with “implementation” that emphasizes on guiding the employees
to implement the plans. When implementation is done it is important to emphasize on giving
direction to the personnel to finish the plan. Apart from it, the company should also consider
the three approaches like authority, persuasion and policy. These all aspect can assist in
implementation of the plans and will assist to consider the set objectives. Hence, it can be
stated that these are the four elements that should be used by the company so that growth can
be attained in the highly competitive business world (Wolf & Floyd, 2017).
Company culture
One of the factors is “communication” which should be considered in relation to the
culture of the company. It is necessary to maintain the communication flow as it enhances the
productivity of workers by maintaining clarity towards work. Nestle should focus on
maintaining strong culture by emphasizing on the proper flow of communication among the
team members. It is necessary that in the organization, the workers should be provided a
chance to share their thoughts or views with higher authority. If the workers are set free then
engagement level of workers can be enhanced towards the work (Nestle, 2019b).
Nestle
Unity of command
The company can attain unity of command by promoting the employee as the team lead
but it is necessary to make the team leader of each department. For instance: In the
department of marketing and sales, it is necessary to have one leader as it can assist the
workers to follows the direction given by one leader. If every department has the leader the
workers issues can be resolved easily and also the command will be given by one leader to
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the employees. If the leader is appointed, then entire functions of the business can be
controlled as there will be the leader who will guide the workers in a right way (Delery &
Roumpi, 2017).
Centralization vs. Decentralization
Nestle can attain decentralization by focusing on the workers. The higher authority should
gather the data from the leaders and subordinates as it will assist to attain the specified goals.
If the data is gathered from the subordinates then correct information can be collected as
interaction will be done directly with the employees. It is examined that by focusing on the
approach concerned with decentralization, the workers who are interested towards the job can
give their best (Verčič & Vokić, 2017).
Span of control
It is necessary for the company, to emphasize on span of control where in 10 employees of
the team should be guided by one leader. For instance: In marketing department, there should
be two leaders and they should give guidance to the workers so that operations can be
finished in a right manner.
Formalization
The higher authority in Nestle should consider the process for the workers or for the
teams. The best example can be linked with giving a specified time to join the office. The
leaders should set the timings of the workers in the company so that positive impact can be
seen on productivity and performance. The rule should be set by the management and there
should be no biasness.
Organization structure (Functional structure)
Functional structure is the structure that should be used by the organization. In this the
workers should be divided into the groups and the job should be given as per their
qualifications. For instance: For sales team, there should be a specified group of employees
who are having good command over communication skill. If proper structure is followed then
it will assist the company in managing the routine operations. By considering the structure,
the communication flow can also be managed which will also lead to clarity towards the
assigned work (Servaas et al., 2015).
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Nestle
Contemporary leadership theory
Nestle should emphasize on using transformational leadership theory as it directly
enhances the motivational level of employees. In relation to this leadership style, the leaders
should coordinate their work with employees to search the changes that are needed and they
should also create the vision that can give guidance to workers towards accepting change. It
is a leadership style that directly inspires and also helps to execute the change in the
workplace. The transformational style of leadership is considered as the concept in which
leaders and also the followers coordinate with each other as it can lead to enhancement in the
motivational level (Banks, McCauley, Gardner & Guler, 2016).
Transformational style of leadership assist workers to resolve the queries and also
emphasizes on bring improvisation in the managerial decisions. This leadership style directly
enhances the involvement of employees towards the activities allocated to them. When the
manager give support the workers then they start performing at their best which directly assist
in attaining the set goals (Ghasabeh, Soosay & Reaiche, 2015). Hence, it can be said that
transformational leadership is the effective approach that should be used by the organization
as it can assist in managing the routine functions of the business.
Motivational theory (Maslow hierarchy of needs)
Nestle should consider “Maslow Hierarchy of needs” theory to enhance the motivation
level of the employees. This is the popular theory that relates with enhancing the motivation
among employees by fulfilling the basic needs. The company should focus on the five stages
in relation to this theory. The stages are physiological needs, safety needs, love and
belongingness needs, esteem and self-actualization needs. If management tries to fulfil these
needs then employees can be involved towards the assigned work.
The first stage which is physiological needs, the emphasis is on the basic needs related to
salary and working environment. In relation to safety needs the emphasis is given on safety
and freedom. In love and belongingness needs, trust and friendship is considered. In the next
stage, dignity and growth plays a major role and the last stage is self-actualization that relates
with experiences. So, it is said that this is the effective motivational theory that should be
used by the company as it can help to enhance the profit ratio with the productivity of
workers (Hale, Ricotta, Freed, Smith & Huang, 2019).
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Recommendations
It is recommended that Nestle should emphasize on considering the diversity approach as
it can control the retention rate. It is necessary for the companies to control the retention rate
as it helps to achieve growth among the competitors present in the market. If retention rate is
controlled then employees will be efficiency and growth can be attained in the coming next 5
years. Training is the other concept that should be used by Nestle as it enhances the
knowledge of workers towards work. It is recommended that the company should focus on
offering in-house training to enhance the workers knowledge towards the work performed in
company.
Conclusion
On the basis of the overall analysis, it can be examined that Nestle is one of the biggest
organizations and it is necessary to emphasize on the factors such as centralization, unity of
command and span of control. It is essential to consider transformational approach related to
leadership and in relation to motivational theory, the emphasis should be given on “Maslow
hierarchy of needs” as it enhances the motivational level of employees. Hence, it is important
for the company to implement these theories and also for the next 5 years, training and
diversity approach should be used to attain success in the highly competitive business world.
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References
Banks, G. C., McCauley, K. D., Gardner, W. L., & Guler, C. E. (2016). A meta-analytic
review of authentic and transformational leadership: A test for redundancy. The
Leadership Quarterly, 27(4), 634-652.
Colquitt, J. A., & Zipay, K. P. (2015). Justice, fairness, and employee reactions. Annu. Rev.
Organ. Psychol. Organ. Behav., 2(1), 75-99.
Delery, J. E., & Roumpi, D. (2017). Strategic human resource management, human capital
and competitive advantage: is the field going in circles?. Human Resource Management
Journal, 27(1), 1-21.
Ghasabeh, M. S., Soosay, C., & Reaiche, C. (2015). The emerging role of transformational
leadership. The Journal of Developing Areas, 49(6), 459-467.
Goldman, B., & Cropanzano, R. (2015). “Justice” and “fairness” are not the same
thing. Journal of Organizational Behavior, 36(2), 313-318.
Hale, A. J., Ricotta, D. N., Freed, J., Smith, C. C., & Huang, G. C. (2019). Adapting
Maslow's hierarchy of needs as a framework for resident wellness. Teaching and
learning in medicine, 31(1), 109-118.
Lewis, T. F., Larson, M. F., & Korcuska, J. S. (2017). Strengthening the planning process of
motivational interviewing using goal attainment scaling. Journal of Mental Health
Counseling, 39(3), 195-210.
Nestle. (2019a).HR Initiative.Retrieved from : https://www.nestle.com.au/creating-shared-
value/our-people/hr-initiatives-
Nestle. (2019b).Performance culture.Retrieved from : https://www.nestle.in/careers/your-
caree-at-nestl%C3%A9/performance-culture/home
Pai, V. S. (2018). Challenges MNCs face in emerging markets: The Nestlé
experience. Vision, 22(2), 222-231.
Ramesh, R. (2018). Case Analysis III: Challenges MNCs Face in Emerging Markets: The
Nestlé Experience. Vision, 22(2), 237-238.
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Servaas, M. N., Geerligs, L., Renken, R. J., Marsman, J. B. C., Ormel, J., Riese, H., &
Aleman, A. (2015). Connectomics and neuroticism: an altered functional network
organization. Neuropsychopharmacology, 40(2), 296.
Verčič, A. T., & Vokić, N. P. (2017). Engaging employees through internal
communication. Public Relations Review, 43(5), 885-893.
Wolf, C., & Floyd, S. W. (2017). Strategic planning research: Toward a theory-driven
agenda. Journal of Management, 43(6), 1754-1788.
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