BUS 500: Evaluating Leadership Theories and Practices at Nestle

This report provides an analysis of leadership theories and practices at Nestle Australia, focusing on the company's adoption of democratic leadership. It outlines Nestle's organizational activities, leadership practices such as motivation and reward systems, and the strengths and weaknesses of their chosen leadership style. The report also addresses issues faced by Nestle, including managing less experienced employees and product-related challenges like the Maggi noodles ban. Recommendations are provided to optimize leadership practices for maximum organizational impact, such as avoiding delegation structures and improving performance measurement. The research utilizes secondary data to evaluate Nestle's leadership approach and suggest improvements.

Leadership theories
6/7/2019

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Contents
Introduction......................................................................................................................................2
Overview of organisation and activities..........................................................................................3
Activities of company..................................................................................................................3
Practices of Leadership....................................................................................................................3
Weakness and strength of the leadership style................................................................................5
Strengths of leadership style........................................................................................................5
Weakness of leadership style.......................................................................................................6
Issues tackle by Nestle Company................................................................................................7
Less experienced and smaller younger generations.................................................................7
Product related issues..............................................................................................................7
Recommendations............................................................................................................................8
Avoid delegation structure...........................................................................................................8
Measuring performance...............................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Leadership is terms as the action of leading a group of people or an organisation within the
dynamic environment. It is both a research area and a practical skill encompassing the ability of
an individual person or an organisation to guide or lead other individual teams or the entire
organisation. The aim of the paper is to conduct the research on the leadership theories, practices,
styles that is adopted by the companies in the market. The company that has been selected for
this report is Nestle Australia. The research has been conducted in order to evaluate the
leadership practices and associated issues within Nestle. In the end, it include the suggestion for
the company with the focus that how the practices of the leadership can be optimised for the
maximum impact on organisation. The method that has been conducted in order to gather the
information is secondary research method in which the data has been captured from books,
journals, newspaper and many others.

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Overview of organisation and activities
Nestle Australia Ltd manufactures and markets a wide range of the food and beverages products
present in Australia. The products that are majorly offered by the company include drinks,
coffees, recipe bases, snacks, breakfast and many others. The company came into existence in
the year 1908 with this it has headquarters in Rhodes, Australia (Nestle Australia, 2019). The
company is able to achieve the success in the market because of the effective leadership strategy.
The major motive of the company is that they contribute towards the nutrition, health, and
wellbeing of the people. Nutrition is core of the business in the environment due to which they
are bringing the good food, good life to the entire customers (Nestle Australia, 2019).
Activities of company
The major activity of the company includes manufacturing and selling the products in the
market. Company has wide range of brand through who produces and sells the products in the
market in order to meet the growing and changing demands of the customers. The aim due to
which the activity is performed by the company is to form the Nutrition, Health and Wellness
strategy. The activity of offering quality product and easy available make the company to offers
tastiest and healthiest choices for all the times of the day as well as for entire stages of life. The
company is focused to add the value to their brands and product through the innovation as well
as differentiation. The research and development is one of the activities that are performed by the
company in order to accomplish the success in the market.

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Practices of Leadership
Leadership practices define responsibilities of the leader towards its team. There are various
leadership practices that the leader should adopt in their personal life in order to motivate the
people. The five main practices of leadership are model the way, inspired a shared vision,
challenge the process, motivation, and encouragement. Different leadership style has the
different practices (Management centre, 2018). Nestle believes in democratic leadership style
which is flexibility in working and attaining the goal and objective. The manager of the company
applied the leadership practices in the different work units. The manager always thinks about the
phenomena from its different perspectives in a way from which the company lead the innovation.
The opportunity has been provided to the employees to implement the new ideas at the
workplace. It believes that the new experience causes the mistakes but they can learn from them
that help in the future to gain the success. The democratic leadership style encourages the
innovation at the workplace of Nestle. The practice of motivation is also followed by the leader
as the manager encourages the employee for the new and innovative ideas. The other practice
that the leader follows is to satisfy the employee’s needs and demands (Nestlé, 2011a). The
manager believes that the employees perform its responsibilities more appropriately as compare
to the others when it is satisfied with its job and the personal life. The company implement the
work life balance approach in the favour of employee so that they satisfied with their job and
perform their responsibilities effectively. Work life balance of the company helps the employee
to balance the personal life with its office work. This approach gives the high satisfaction with
their job due to which the chances of employees turnover is also reduces.
The manager of the company also implements the reward system at the workplace so that the
employees get motivated towards the work. The motivation practice of democratic leadership

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style is followed by the manager by implementing the reward system (Cherry, 2018). The reward
system is based on the various factors such as professional education, responsible behaviour and
the performances. The employees who fulfil all three criteria get the reward in front of others and
that is also considered as the motivational factor for the employee. The employee who receive
the reward is encouraged themselves to gain the reward again and again for their performances
(Nestlé, 2011b). The other employee who does not receives the reward are also encouraged and
putting their efforts to gain the rewards by performing their responsibilities appropriately.
The other practices of democratic leadership are honesty, intelligence, courage, competence and
fairness. The manager of the company also followed these practices with the motive to enhance
the efficiency and capability of the employees in their performances. The manager of nestle
always take the fair decision while distributing the rewards to employees. The reward
distribution and the other decision is taken by the company is fair and in the favour of employee.
The manager of Nestle performs its responsibility as per the practices of democratic leadership
style.
Weakness and strength of the leadership style
The above discussion reflects that Nestle Company implement the democratic leadership style
through which they can easily deal with the issues that appear within the organisation (Storey,
2016). The below given are some of the strengths and weaknesses of the leadership style.
Strengths of leadership style
 Democratic leadership style contributes effective in building the team-based relationship.
The employees who perform the work with the leaders who uses democratic theory tends
to form the strong relationship with those who leads them as they feel that together they

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can solve problems, deal any situation, and remain positive (Nawaz, & Khan_ PhD,
2016). Nestle leaders are able to manage the strong connection among their teams. This is
the reason due to which they can work effectively.
 Democratic leadership styles offer the advantage of solving the complex problems. In this
style of leaders, they tab into the creative resources across them. The complex solution
can be resolved with the help of the innovative new methods if they make their own
decisions. In Nestle, innovation leads to the rise in the new ways of thinking because the
diverse employees work together to accomplish the common goal. For everyone the
phenomenon appears in the various angle and different perspective and at the end,
everyone proposes his own solution related to the problem that leads to the results in the
innovation.
 The democratic leadership improves the relevant knowledge of the team by contributing
their knowledge as well as experience in the allocated situation (Khan, et al, 2015). The
team leaders of nestle company improves the overall capabilities of their team member
through the democratic leadership style due to the every single situation.
 Another strengths of the democratic leadership style is that they keep the honesty on the
top because they believe that employees should always speaks the truth and should not lie
because this can affect their working due to which they believe that honest is required at
the top most important. This helps Nestle company to take the decisions without any lie
within the organisation.
Weakness of leadership style
 The democratic leadership styles do not offer the positive outcome to the employees to be
working with the company. Some of the leaders allow their employees to take the

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decisions on their behalf but this can makes them to take the incorrect decisions (Gipson,
Pfaff, Mendelsohn, Catenacci & Burke, 2017). Nestle company sometimes makes the
employees to take the decisions which might get affected.
 The democratic leadership styles provide the platform to every employee to raise the
voice. In this, the leader choose for the opinion of one person over the remaining teams
and this makes the other member feel like that their opinion do not matter for the leader.
Nestle company leader sometimes find this issue as they need to select the opinion of that
employees whose idea is more impressive (Nestle Australia, 2019).
 It has been found that another major disadvantage of the democratic style include time
consuming process because the leaders takes the time while taking any steps related to
the organisation. The democratic leader usually takes the time while making the decision,
as they need to involve the team while making the final decisions. Thus, it has been found
that democratic leaders get deal in terms of the decision that is taken by them. Thus, this
affects when the leader is required to take the immediate decision related to the
organisation goals. This delay leads to the impact on working and their goals which are
required to attain by the company.
Issues tackle by Nestle Company
Less experienced and smaller younger generations
The leadership of the company deals with the numerous which is required to be tackle by them in
the competitive environment. The major issue that is faced by Nestle leadership include the less
experience as well as the smaller younger generations who are not able to manage the operations
effectively because of the lack of experience. The experienced employees are required at every
stage so that the company can work (Nestle Australia, 2019). This issue is resolved by the leader

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of the company by attracting the right talent by offering them effective package. Further, they
motive the HR team to conduct the hiring from the different sources. In addition to this, the
leadership practice includes the training to the employees that helps to attain the maximum
experience and skills that is further utilized by them at their workplace.
Product related issues
Nestle company is dealing with the issue of product which is effective manage by their
leadership who manage their operations (Nestle Australia, 2019). In the year 2015, one of the
major products of Nestle that is Maggi noodles banned in the Indian market. Further, the
ketchups and beverages also took the heat as the result approximately 80% of the Indian noddle’s
market of company went down to zero in a month. This ban not only created the impact on the
Indian market but the also the Australian market (Business today, 2015). It has been found that
the department of the Agriculture of the Australian government has issues a holding order in
against of the Maggi as precautionary measures. The import of the Maggi Noodles from the
Indian market has been suspended. The leader of the company has taken the steps to resolve the
issues in the market. The leader along with their team found the creative and new ways through
which they can rebuild their image in the market. The team of the company found the way
through which they decided to investigate their product and then to take the appropriate actions.
They conducted the investigation and research in order to find the loopholes in their product.
Then later on, the strategy of the company was to bring improvement in Maggie and re-
introduced it in the market (Chandran, 2015).

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Recommendations
Avoid delegation structure
It has been seen that the company implement the delegation structure as they give the rights to
employees to take the decision related to the business matters. The distribution of authorities
might be wrong step for the organisation because employees can take the decision in their own
favours which is not favourable for the organisation. It has been recommended that the top
management of the organisation should avoid the delegation structure of organisation and should
take the decision in the favour of organisation (Klenke, 2016).
Measuring performance
As discussed above, the manager of Nestle develop the reward approach in which they distribute
the rewards to the employees who perform their responsibilities on the basis of three criteria’s.
Sometimes, the employee who did not get the reward getting demotivated due to which the
company has to deal with the various challenges. The main challenge is that the demotivated
employee does not perform their duties effectively due to which the brand image is affected. It
has been recommended that the leader has to measure the performance of every employee and
appreciated them with the different rewards so; that they also encourage in performing their
responsibilities more appropriately at the workplace (Llopis, 2018).

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Conclusion
In the end of the research paper, this has been found that leadership style matters a lot for the
success of every company. This section includes the research about the Nestle company
leadership in Australian market for the success. The research shows the different activities that
are performed by the company with the leadership style that is considered by them. It has been
found that leadership style, which is followed by Nestle, is Democratic. Further, the different
advantages and disadvantages of the leadership style are discussed with the issues are tackle by
the Nestle company leaders for better performance. In the end, the research paper includes the
recommendation for optimised of maximum organisation impact.

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References
Business today. (2015). Australia suspends import of Maggi Noodles from India. Retrieved from:
https://www.businesstoday.in/current/corporate/australia-suspends-import-of-maggi-
noodles-from-india/story/220569.html
Chandran, A. (2015). After the ban, what can help Maggi regain its brand value. Retrieved from:
https://www.financialexpress.com/industry/maggi-noodles-caught-in-the-loop/85227/
Cherry, K. (2018). What Is Democratic Leadership?. Retrieved From:
https://www.verywellmind.com/what-is-democratic-leadership-2795315
Gipson, A. N., Pfaff, D. L., Mendelsohn, D. B., Catenacci, L. T., & Burke, W. W. (2017).
Women and leadership: Selection, development, leadership style, and performance. The
Journal of Applied Behavioral Science, 53(1), 32-65.
Khan, M. S., Khan, I., Qureshi, Q. A., Ismail, H. M., Rauf, H., Latif, A., & Tahir, M. (2015). The
styles of leadership: A critical review. Public Policy and Administration Research, 5(3),
87-92.
Klenke, K. (2016). Qualitative research in the study of leadership. Emerald Group Publishing
Limited.
Llopis, G. (2018). Leadership Is About Enabling The Full Potential In Others. Retrieved From:
https://www.forbes.com/sites/glennllopis/2014/07/29/leadership-is-about-enabling-the-
full-potential-in-others/#6a7d66e26698

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Management centre. (2018). Leadership: 5 practices of effective leaders. Retrieved From:
https://www.managementcentre.co.uk/leadership-5-practices-of-effective-leaders/
Nawaz, Z. A. K. D. A., & Khan_ PhD, I. (2016). Leadership theories and styles: A literature
review. Leadership, 16, 1-7.
Nestle Australia. (2019). History. Retrieved from: https://www.nestle.com.au/aboutus/history
Nestle Australia. (2019). Strategy. Retrieved from: https://www.nestle.com/aboutus/strategy
Nestle Australia. (2019). The world of Nestlé. Retrieved from: https://www.nestle.it/asset-
library/documents/pdf_nostri_report/12_theworldofnestle.pdf
Nestle Australia. (2019). Your life in food. Retrieved from:
https://www.nestle.com.au/aboutus/history/your-life-in-food
Nestlé. (2010a). The Nestlé Corporate Business Principles. Retrieved From:
http://www.nestle.com/assetlibrary/Documents/Library/Documents/Corporate_Governan
ce/Corporate-Business-Principles-EN.pdf
Nestlé. (2011b). The Nestlé Corporate Business Principles. Retrieved From:
https://www.academia.edu/33323339/The_Nestl
%C3%A9_Management_and_Leadership_Principles
Storey, J. (2016). Changing theories of leadership and leadership development. In Leadership in
Organizations (pp. 17-41). Routledge.

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