Strategic Human Resource Management: Challenges and Strategies - Nestle Case Study

This report analyses the challenges faced by Nestle in strategic human resource management and identifies strategies to solve them. It provides an overview of Nestle, its products and services, current strategy, and level of organizational performance. The challenges include conflicts among departments, communication barriers, discrimination in compensation, lack of workforce training and development, and non-compliance with laws and regulations.

Running head: STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategic Human Resource Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in understanding the nature of the business of Nestle Company along
with analysis of the products and services offered to the customers. The different challenges
related to SHRM has been analysed effectively along with analysis of the current
organizational strategies of Nestle.
The main aim and purpose of the report is to understand and identify the different challenges
as this helped in analysing strategies to solve the issues effectively as well. The finding of
the report is that there are different challenges faced by the company wherein they do not
comply with different rules and regulations and they are weak in implementing strategies.

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Table of Contents
Introduction................................................................................................................................2
Overview of Nestle....................................................................................................................2
Nature of Industry......................................................................................................................2
Level of competitiveness in food and beverage industry...........................................................3
External Stakeholders and current trend of Nestle.....................................................................3
Description of organization and products and services..............................................................4
Current strategy and level of organizational performance.........................................................4
Key challenges facing practice of SHRM..................................................................................5
References..................................................................................................................................7

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Introduction
The report helps in analysis of the organization named Nestle that is under the food
and beverage industry. The level of the competitiveness within the respective industry has to
be analysed as well by analysing the external stakeholders and current trends in the industry.
The products and services of the respective company has to be analysed in an effectual
manner along with identification of current strategy that helped in improving current
performance of company.
The main aim and purpose of the report is to understand and identify the key
challenges faced by the organization related to strategic human resource management. Proper
analysis of the different strategies is required to be done that will help in understanding the
challenges and solve them effectually as well.
Overview of Nestle
Nestle is one of the world’s leading nutrition and wellness organization and it has
employed more than 280,000 employees in all over the world. The products of Nestle are
sold in different parts of the world and it was founded in the year 1866 and the CEO of the
company is Paul Bulcke who has gained proper competitive advantage for the company in an
effectual manner (Jackson, Schuler and Jiang 2014).
Nature of Industry
Nestle is one of the largest food and beverage companies that is based in food
processing sector. As per the statistics, it is seen that food and beverage industry comprises of
different kind of establishments that is primarily engaged in the preparing of the food items
along with beverages to satisfy the wants of the customers.

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Level of competitiveness in food and beverage industry
There are different competitors of Nestle in the entire industry wherein it is seen that
Nestle is one of the largest food processing companies in the entire industry (Cascio 2018).
The net market share of the company is US $250 billion till the year 2017 in the month of
March. The main competitors of Nestle are Heinz, Unilever and Parle Products Ltd. The
supply chain of Hershey’s and Heinz are simpler in nature in comparison to Nestle. However,
the brand loyalty of Nestle is different kind of brand loyalty programs as well (Reiche et al.
2016).
Figure 1: Market share of Nestle
(Source: Reiche et al. 2016)
External Stakeholders and current trend of Nestle
The global stakeholder market is vast in nature of Nestle and this engages with
different kind of operations as this helps them in influencing the different activities. The main
stakeholders of Nestle are as follows:
 Communities and consumers
 Governments
 Shareholders and financial community

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 Industry along with trade associations
 Reporting agencies
 Intergovernmental organizations (Cascio 2018)
The current trends of Nestle includes different kind of activities that will help them in
being the best in the entire competitive market that are as follows:
 Natural is king wherein they meet the consumers expectations by delivering multi-
dimensional and meeting the needs of the customers with natural ingredients
 High protein items are delivered by Nestle as this is one of the recent trends that is
followed as this will help them in gaining competitive advantage
 Reduced sugar category has been introduced that includes the stellar growth and this
will assist them in attracting more customers (Brewster, Mayrhofer and Morley 2016)
Description of organization and products and services
Nestle is one of the food processing companies that helps them in becoming the
largest food and beverage companies in the entire society. The products and services of
Nestle are baby products and tinned products along with cereal and healthcare products to the
customers. The biggest brands of Nestle are KitKat, Nespresso along with Maggi and they
help in supporting the families to make healthier along with tastier products and they sell to
gain competitive advantage.
Current strategy and level of organizational performance
The main strategy of Nestle is to create low cost along with highly efficient kind of
operations as this will help them in gaining customer advantage. The main current strategy of
Nestle is to deliver their customers with the efficient kind of products and services and
improve the communication with their customers as well.

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The level of the organizational performance of Nestle is highly efficient in nature that
has helped them in succeeding in comparison to the other competitors in the market. Nestle is
one of the human company wherein it involves high performance, high commitment and high
involvement.
Key challenges facing practice of SHRM
The five challenges faced by Nestle regarding strategic human resource management
are as follows:
 There have been huge conflicts among the different departments in the company
wherein there is huge disagreement among the employees and it is creating imbalance
of power in the organization as well
 Secondly, there is huge communication barrier in the organization that is affecting the
morale of the employees as the lower level employees are not in a position to
communicate with higher level employees and this is affecting the balance of Nestle
as well in the market. The change management is not up to the standard as this will
create huge issues in the organization that is affecting the morale of the employees
(Brewster 2017)
 Thirdly, there is discrimination relating to the compensation of the employees that is
affecting the morale of the employees. There is no equality among the employees
relating to the salary, bonus along with allowances of the company that is affecting
the company in an ineffective manner (Bratton and Gold 2017)
 The proper workforce training and development of the employees in the organization
that is affecting the motivational morale of employees and this is creating huge
conflicts among different departments as well. The training and development
strategies are not up to the mark and this has huge issues in managing the different
changes in the organization (Kramar 2014)

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 Lastly, the compliance with the different laws and regulations are not effectual in
nature in Nestle and this is creating huge imbalance in the organization. The
compliance of Nestle is not proper and the development of the leadership performed
by the higher officials are not up to the mark as well (Armstrong and Taylor 2014).

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References
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C., 2017. The integration of human resource management and corporate strategy.
In Policy and practice in European human resource management (pp. 22-35). Routledge.
Brewster, C., Mayrhofer, W. and Morley, M. eds., 2016. New challenges for European
resource management. Springer.
Cascio, W., 2018. Managing human resources. McGraw-Hill Education.
Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic
human resource management. The Academy of Management Annals, 8(1), pp.1-56.
Kramar, R., 2014. Beyond strategic human resource management: is sustainable human
resource management the next approach?. The International Journal of Human Resource
Management, 25(8), pp.1069-1089.
Reiche, B.S., Stahl, G.K., Mendenhall, M.E. and Oddou, G.R. eds., 2016. Readings and
cases in international human resource management. Taylor & Francis.