Fonterra Ventures and Change Management

This assignment examines Fonterra Ventures' effective application of change management principles. It analyzes their implementation within a co-operative structure, highlighting the influence of organizational theories and motivational factors. The text delves into specific examples and provides recommendations for successful transformation within organizations.

Running head: MANAGEMENT PRINCIPLES
Management principles
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The main topic of this text is to analyse the principle of management of the company
Fonterra Ventures of New Zealand, the change management aspects of this company. The
control and demand methods, which the company policies accepts to abide. In addition, the
motivation factor that works for this organisation of New Zealand. Moreover, there is also
discussion of change management theory and different motivational theories that applies for it.
The cultural and environmental influences and venturing, collaboration planning process that the
company goes and development of different change managerial theory (Tedeschi, 2013).
Arguments from the Harvard business review article are also there to evidence the side that other
arguments are also discussed.
Company background - Fonterra is multinational conglomerate of New Zealand. It
mainly operates in the dairy nutrient products. The 10,500 dairy farmers of New Zealand own
this co-operative. The organisation’s production itself is responsible for 30% of the dairy
products of worlds market of dairy. Fonterra was established with the merger of world’s Two
largest co-operative New Zealand Dairy group, Kiwi Co-operative of dairies and New Zealand
Dairy Boards ("Fonterra launches new platform to back innovative game-changers", 2017).
Managing change
First stage of change in Kotter’s model
Kotter’s model of change management theory is an 8-step model that is useful for organisation.
This 8 overlapping steps are discussed below. The first stage is creating the climate for change
and this stage consists of three different steps(Sharma & Jain, 2013). Increasing urgency,

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building team and formulating the right strategy are the first step to creating change (Baum,
2015).
As Fonterra ventures has changed their capital structure according the need. The first step
was to communicate the new vision of the company’s capital structure. In 2007, they have
announced the consultation program and restructuring the business operation program of the co-
operative. The capital structure change received lot of support from the farmers, because the new
structure provided the farmers greater incentives and increased their investment in Fonterra
shares (Pomerol, & Barba-Romero, 2012). The sufficiency of the capital programmed ensured
the higher payout of the farmers. This new process also ensured the trading among the farmers
have to be done and this would ensure the greater flexibility of the share price.
Second stage of change in Kotter’s model
Kotter’s second stage of change is all about engaging and enabling the whole
organisation in terms of change management. The first step he analyses is to communicate the
buy in. The crucial information about the new process and other additional info for change needs
to be made understand by the all stakeholders. The idea will be resisted if the beneficial side of
change is not communicated properly. Transformational change process will need over-
communicating, data or information transfer should be honest and in an ideal way and walking
the talk (Hatch & Cunliffe, 2013). The last will require consistency between the vision and
behaviour. Next step is empowering action. Then creating short-term wins among the employees
(Sharma & Jain, 2013).
Enabling trading among the farmers will ensure the incentive will rise and circulate
among the farmers. The additional setup of change will ensure the confidence among the farmers

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and independent valuation process with the shareholding of the company will ensure the increase
and decrease of production in the company (Northouse, 2015). The details of restructuring were
shared among the shareholding farmers (Pomerol, & Barba-Romero, 2012). This has given the
farmers support and confidence of the public and the favourable voting system has ensured the
participation of all the shareholders investment opportunities. There was also a special fund
accommodated for the farmers to help them in the change process of capitalisation system. This
dairy farm initiated methods for the environmental change in the water pollution system for the
sake of water pollution system. The effectiveness and credibility of this system ensured the
increase in sustainability factor in the dairying system (Sharma & Jain, 2013).
The last stage of change in Kotter’s Model
The last stage is implementing and sustaining change. This stage is to circulate the
change factor among the whole company. This is also helpful in freezing the change and builds
the whole organisation around that change factor. In this stage, the whole point is to stick to the
new change and building the guiding team for that matter. With change comes the culture factor,
which must be embedded if that needs to be stickled (Ulrich & Probst, 2012). Behaviour of the
people will ensure that the change continues to stick to people. The leaders must lead the staff to
new winning behaviour and continues despite the change. The farmers themselves own the co-
operation of the company. Therefore, the change will directly affect them. Fonterra was
repeatedly accused for deforestation and hence increasing the greenhouse gas emission (Hatch &
Cunliffe, 2013). There have been implementation of process in the company and they have
launched a new online platform to get new ideas from people to incorporating any kind of new
and innovative technologies in the company (Baum, 2015). This step suggests that they are open
to get new disruptive innovative ideas to model the process flow of the company. The venturing

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need of the company and value of milk to the farmers are more than the accelerating income of
the individuals. The open mindedness and increase in innovative ways is evidence to the
welcome change in the collaborative companies. The Fonterra Ventures Co-lab is innovation
oriented, believes in winning together, and believes they can do it by change.
Control management – there are many characteristics of business that integrates the
functions of management. The structure of organisation is dependent upon the kind and nature of
business management. There are two kinds of business based on legislative nature. One is, where
the owner of the business is the sole Proprietor. Another is the partnership (Northouse, 2015).
The discussion of the mentioned company is based on partnership model. The farmers are the
partners that thoroughly share the profits and dividend of Fonterra Ventures. This has some
characteristics, like agreement, number of partnership, conduct of business, entity, liability
matters, profit motive, investment decision, and transferability of shares, positional decision,
mutual confidence and free operational regulation (Pomerol, & Barba-Romero, 2012). Therefore,
there no control factors working in the company domain.
Fonterra Ventures goes by the principle of co-operatives. The main features are in the
following statements.
Voluntary membership – everyone is at liberty to leave and enter the co-operative society. This
also gives them freedom to take and share decision regarding the change matter.
Political and religious Neutrality – membership of co-operative society is favoured as
discrimination is out of question and no place for people’s cast and co-operatives (Geisler, &
Wickramasinghe, 2015).

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Democratic management – the farmers buy in and buy back facility among them ensures the
power of the company remains within themselves. The management is alleviated through the
one-man one vote system(Bratton & Gold, 2012).
Service motive - The initial objectives of the co-operative and their members earn profits and
gather expenses of management. Incorporating the innovative and management ideas of
disruption innovation is delivered to the management and producer co-operatives.
Producers co-operatives - These type of co-operative society are formed to assist the producers.
The setting up of milk producing units and members procuring the necessary materials and for
the production is a beneficial process in terms of production process.
There is certain advantage of having farming co-operatives in place. The open
membership facility is to ensure the reachability of every person. The supply of goods and at
cheaper rates is also an aim for the organisation (Simon, & Canacari, 2012). The low
management cost in this kind of engagement is beneficial for the company to extend the surplus
money for investment purpose. The transferability of shares is restricted to producers in Fonterra
Ventures. This organisation’s legal structure is combination of partners association and joint
stock association (Ifinedo, 2012).
Objective of this chapter is to realise the change and motivation factor of the company
named Fonterra Ventures. This is a collaborative co-operation of dairy producing farmers and
what is the change factors, that have made them successful. They are the major exporters in the
dairy producing farms and these company supplies 30% of the dairy product in other markets.
Further, another objective of the essay is to analyse the control method and other motivational
factors that works for this company (Tedeschi, 2013).

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The data management has always been needed for getting more perspective of market
orientation of any product. The more the usage of historical data more usage of effective
perspective of products (Bratton & Gold, 2012). Harvard business review article have gathered
some information regarding change and what motivation factor works for people in change
management that is also reviewed in this article (Simon, & Canacari,2012).
Discussion and judgements motivation theories and factors. - Abraham Maslow’s
hierarchy of needs theory, which depicts the motivation factor, comes from needs and they are
divided into certain factors. The security, social and psychological needs are divided into five
factors of human need (Tedeschi, 2013). According to Maslow, these basic needs are extremely
valuable and challenging for workplace behaviour. For example, the company should allow
bathroom breaks and refreshment breaks to avoid the conflict, that arises from exhaustion in
workplace. Herzberg’s two-factor theory predicts that there are two factors that is related to
workplace environment. They are Hygiene and satisfiers. The hygiene factors are related to job
security, salary, organisational policies, workplace conditions and other hygiene factors (Simon,
& Canacari, 2012). The satisfiers are improvement measurement of performance and factors
related to growth, opportunities recognition and responsibility the transparency of standard
procedures and development plans (Tedeschi, 2013). For example, the existence of non-smoking
area, employee development plans and transparency in decision and award related recognition
helps lift the satisfier’s factors in employee. McClelland’s Acquired needs theory is known as the
most effective motivational theory implemented in a workplace (Alexander, 2013). This explains
the each individual has different needs and they prioritize their needs differently. The needs of
human are not hereditary and can be based on the acquired need in life. The higher achiever has
more need for power and achievement in life (Shafritz, Ott & Jang, 2015). They are more driven

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by responsibility. His probable risk and feedback will differ. A team player in a group will need
affiliation and will avoid the social conflict in co-operative environment. The competitive work
environment is where they thrive for better achievement (Alexander, 2013). Alderfer’s ERG
theory is based on the existence, relatedness and growth perspective of Maslow’s theory. The
individual needs are material and is driven by physical and social needs that enhances the
interpersonal ability of people. The relationship and development of psychological factors in life
is dependent upon the growth in life. The existence and growth are proportional in relation with
each other. The employees must be able to perform the key operations (Ifinedo, 2012)..
The article in Harvard business review is based the data cravenness of organisation and
how this change and the influence of social media is changing the current scenario of business
among the world. The judgement based on human intuition is no longer the background of any
decision taken. The retailers combine the data, do predictive modelling for the company, and
develop merchandising plan. The investment decision is what is taken carefully in companies
like Fonterra Ventures. The change management is not a problem to solve, as change is a part of
process in an organisation (Bratton & Gold, 2012). The predictive analytics gives qualitative
information relevant to change. The intangible factor like leadership and motivation is
interventional change in an organisation. Most of the models of change must be favourable and
communicated thoroughly to the employees as discussed in the above change model (Hayes,
2014). The change practitioners struggle to justify and influence change in an organisation.
Converting change management practises is unlocking the solution to a problem.
Therefore, from the above text we can conclude that Fonterra Ventures is one of the
effective co-operations of New Zealand. The logical change management practises are efficiently
incorporated and implemented in the capital structure. The motivational theories are also

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discussed in the text and recommendations are given accordingly. The effective organisational
structure for joint stock or associative co-operating is the key to transformational effort applied
in an organisation.

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Retrieved 5 September 2017, from
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platform-to-back-innovative-game-changers.html