Nestle S.A. Business Environment: Organizational Purposes, National Environment, and Market Forces

Nestle S.A. Business Environment
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NESTLE S.A. BUSINESS ENVIRONMENT
Introduction
With its headquarters in Vevey, Vaud, Switzerland, Nestle S.A is a food and drink company, and
it is said to be the largest food company in the world regarding revenue and other metrics. The
company’s roots can be traced back in 1867 when Henri Nestle had a breakthrough in infant food
development (Nestle, 2017a). The child food company later merged with another company
Anglo-Swiss in 1905 to form what is the now Nestle Group. Over the years, the company has
been growing slowly by slowly all over the globe, and today its products can be found in more
than 190 countries with more than 400 factories. Being a food and drink industry, the company
has more than 2000 brands worldwide (Nestle, 2017b).
LO1 Understanding the organizational purposes of business
Just like other companies whether large or small, Nestle also has organizational structures. The
main purpose of these structures is helping the company conduct its business smoothly. It is
through these structures that the relations between individuals within the organization are
demonstrated. Different companies have different types of organization charts or structures
depending on the nature business the company deals with. Nestle is organized according to a
matrix structure. In this, the low branches have a high level of independence where the day to
day activities and decisions are left to them. However, some major strategy decisions are made at
the headquarter level (Broeckx and Hooijberg, 2008).
To enable the company to perform its business, the management is divided into three types; the
top level management, middle-level management, and the low-level management. The top
management sets aside more of its time on planning and coordinating functions as well as laying

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down the company’s objectives and policies (Ketharan, 2011). However, these are not their only
duties, but they also have other functions and chores. Branch managers and departmental
managers constitute the middle-level management, and the operative of their departments is their
responsibility. More of their time is devoted to directional and organizational functions. Just like
the top level management, the middle-level management also has other duties and
responsibilities. The lower level management constitutes of supervisors, superintendent, and
other officers. Their job is mainly assigning jobs to other workers as well as instructing them
during their day to day activities. The worker's complaints are also solved by this level of
management among other responsibilities (Nestle, 2012).
A company that is successful is the one that meets all or most of its stakeholder’s objectives.
Stakeholders are all the groups that influence the company’s operations. These can be
shareholders, customers, employees among others. Different stakeholders have different
objectives. Their power towards the company’s decision in achieving the objectives is also
different. Any business has internal and external stakeholders. The internal stakeholders affect
the company directly while the external stakeholders affect the company indirectly. There is also
another category of stakeholders known as connected stakeholders and the also affect the
business directly and sometimes indirectly.
Over the years, nestle has been very because it has been able to meet most objectives of its
stakeholders. To understand the extent to which nestle has complied with the objectives of its
stakeholders, it useful to understand who the stakeholders are. The internal stakeholders are the
company’s managers and the employees. It's connected stakeholders are the customers,
shareholders, financiers and suppliers. The external stakeholders are the government and the

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community. To the internal stakeholders, nestle has been able to provide a conducive
environment which includes paying them well and giving them the relevant knowledge to enable
them to perform their duties (Halbert and Ingulli, 2012). The connected stakeholders have also
been taken care properly. For instance, the company has been trying to meet the customers
demand while maintaining the minimum cost as much as possible (Nestle, 2017b). The company
has also been paying reasonable dividends to its shareholders. To the external shareholders, the
company has been faithful to the host governments through payment of taxes. To the community,
the company has been in good terms to the communities surrounding it. This can be in terms of
providing employment to the locals who surround the company’s industries (Fernado, 2011).
While providing its services and products to the people, nestle just like other companies have
responsibilities that it has to comply with. For example, it has to take good care of the
environment among other responsibilities. Nestle has committed to responsibilities that aim to
donate charitable duty to the community. These responsibilities include environmental, social,
management, ethics, and business responsibilities (Fernando, 2011).
To protect the future of our globe, one of the things that governments are enforcing most is
environmental responsibility. Nestle as a company that emits gasses and other waste products to
the environment have to be responsible and try to minimize or manage their waste products. The
company also makes its products as much environmental in a friendly way as possible in a bid to
protect the environment (Fernando, 2011). In the area of social responsibility, the company has
not been left behind as it has been involved with projects that benefit the community. These
projects help the company get a good relationship with the people surround it or benefiting from
the projects.