Danone: Relationship Between Structure, Culture & Performance

This report provides an analysis of Danone, a French international food products company, focusing on its organizational structure, culture, and their relationship to performance. It begins by examining the organizational structure, including academic theories like Fatehi's framework, and compares Danone's structure to that of Nestle, highlighting the differences between decentralized and function-based models. The report then delves into different organizational structure models such as matrix, functional, product, mixed, and geographic structures, alongside a discussion of span of control. A competitor analysis and SWOT analysis are also included. Furthermore, the report explores Danone's culture using Hofstede's cultural dimensions, explaining each dimension and providing examples from Hofstede Insights to understand how culture impacts business practices and consumer behavior. The report aims to understand the interplay between structure, culture, and people in driving organizational performance.

ANALYSE RELATIONSHIP BETWEEN
STRUCTURE AE CULTURE PEOPLE AND
ORGANIZATIONAL PERFORMAS

Table of Contents
INTRODUCTION...........................................................................................................................2
Organizational structure...................................................................................................................2
Academic theory or framework behind structure........................................................................2
Three basic models of organizational structure...........................................................................2
Classification of 5 OS models......................................................................................................3
Span of control.............................................................................................................................4
Competitor analysis......................................................................................................................4
SWOT analysis............................................................................................................................5
Culture.............................................................................................................................................6
Academic theory behind culture..................................................................................................6
Dimensions of Hofstede organizational culture theory................................................................6
Examples scores from Hofstede insights.....................................................................................7
CONCLUSION............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
The current report is based on Danone, is a French international food products company
based in Paris, founded Isaac Carasso in 1919. They offer Baby food product, Dairy free items,
coffee, bottled water, plant based goods and dietary supplements. This study explains forms of
organizational structure, appropriate framework behind structure, SWOT analysis in context of
company and competitors’ analysis as well. Furthermore, this assignment justified Hofstede
theory, discussion of each dimension and scores from Hofstede insights by using examples.
Organizational structure
Academic theory or framework behind structure
In order to organized a company management has to chose and set the best organizational
culture that enhance the productivity level of staff as well as increase their motivational degree
rather than past few years. It refer to ways companies is designed
The structure of Danone will be described based on theory concept of Fathei. It is
academic theory or concept that makes a distinction between internal need, types of activity
behind comprehend, specific strategy pursued and external environment such host government,
products market features, consumer demand and economic conditions (Xiao and et.al., 2016).
Behind every organizational structure there is specific and appropriate academic theory was
available that helps to build an effective OS. There are different variables accessible that
influence structure of firm and its business practices. According to Fatehi description, any
fundamental differences between international and domestic firm will not considered, apart from
fact that multinational need to take account of elements such as their mutual relations, physical
distance between management and workers and legislation of nations where subsidiaries run and
operate business. Organizational structure of global and local companies is quite different as they
set according to department and business functions. According to Fatehi organizational structure
theory, there are 3 common concepts OS defined such as functions, products and geographic
areas.

The organization structure of Danone is compared with one other firm that is Nestle. As
compared to Nestle, Danone organization structure is quite different. They manage decentralized
organization structure that aids clearer comprehend of staff accountabilities and roles. Its
structure is divided into three models such as functional, products and geographic areas that help
to increase profit margin by performing much better than other companies. On the other hand,
Nestle follow function based organizational structure in which tasks are divided into varied jobs
& then these roles are grouped together under several functions such as functional
departmentalization is found in firm.
Three basic models of organizational structure
Organizational structure is a classification that outlines how certain functions and
activities are directed in order to gain business aims and set objectives (Eva and et.al., 2018).
These activities can include roles, accountabilities and rules. It also determines how essential
information flows between levels within firms. There are varied kinds of models and concepts
available in context of organizational structure that can be beneficial for firms in term of
increasing productivity, profitability and motivational level. Geographic, functional, products,
mixed and matrix organizational structure are utilized by many companies according to their
performance and size.
Classification of 5 OS models
Matrix structure-
It is an attempt to combine better of both words. In addition to the normal functional
structure, in which staffs work in teams of related specialties, different workers may be assigned
to additional bosses for specific project work (Ebeling and et.al., 2018). It is highly flexible and
cross disciplinary groups support innovation, but issues can arise from unusual reporting
programme. Workers may feel burdened and overworked by having two roles to do, with two
main set of accountabilities for their job schedule.
Functional structure-
This organizational structure divide Danone vertically into functional team with staff of
similar specialties performing together to help overall business activities (Boton and et.al., 2016).
It could be distinguish into operational and functional areas that include marketing, production

and sales. Production may be subdivided into production, fulfillment, development etc. Workers
within these areas usually work with workers who have similar job descriptions and
backgrounds. Danone functional structure is divided into three layer, such as in first level Chair
man and CEO and Vice chair man & COO accountable for taking decision in context of business
practices. At second level General secretary, Executive VP, Finance, Exec VP, Fresh Dairy, and
Exec VIP water and at third level Exec VP biscuits & cereal snacks, Asia pacific and Exec VP
intl strategy.
Product structure-
It is a framework in which companies is organized and operated in separate division, each
concentrate on a varied service or product and functioning as an person unit within firms. It
focus on particular market segments, helps Danone to meet consumers needs more effectively &
efficiently, aid to extend expertise or knowledge within specialized divisions (Cendra and et.al.,
2019). Product divisional organizational structure of Danone can also aid firm to encourage and
boost up positive competition between each function. Products categories are divided into four
sections such as baby, health, beauty and food in which research and development department as
well as production work effectively.
Mixed structure-
A mixed model has different lines of authority with some workers reporting to at least
two managers. There are functional managers who accountable to oversee departments such as
marketing, production and selling and there are project managers who consider staff who
performs on specific tasks. It optimizes workers experience and assets and work well for firms
that are project based. Mixed model of organizational structure can enhance and improve line of
communication & cater flexibility for performing on multiple subjects.
Geographic form of organizational structure-
It is an organization structure where firm hierarchy is separated on basis of geographic
location in which enterprises operates which is headed by main head office. This type of OS
serves distinct needs of varied different teams within and outside nation.

Span of control
It is the term now utilize more usually in business management especially human
resource. It refers to number of supervisor or subordinates have. There are some factors available
affecting this term like geographical, abilities of staff, capability of manager, value add of senior,
similarity of task, required management tasks, volume of other work and business procedure
streamlining. It can be said that business or operational efficiency and effectiveness can reduce
span of control. Narrow and wider are the two types of span of control that can be used by many
companies in context of business. It identifies level of accountabilities and interactions
associated with manager and workers. Span of control is really very essential and its concepts are
relative to productivity in work are by identifying number of staff that fall under each individual
manager. Ideally in an company, accordant to modern organizational experts is approximately 15
to 20 subordinates per manager or supervisor.
Competitor analysis
It is procedure of determining competitors and examining their strategies to identify their
strengths & weaknesses relative to business, service or product.
Bargaining power of consumers-
The degree of this force is high because customers hold power to put pressure on Danone
management reading price changes. It affects pricing structure of company produced for
products and decreases their profit margin.
Bargaining power of suppliers-
Degree of this force is low because in market number of supplier available who are able
to provide better services and contribute to increase sales. Danone can make effective relation
with other suppliers as it posses threat for exiting one.
Threat of new entrance-
The threat of new entrance is low. It is very hard to enter into retail market for new
companies because in this industry high cost of entry as well as maintenance is required in
entering retail market.

Threat of substitute products or services-
Threat of substitute goods or services is high. Substitution would reduce consumers
demand for specific class of items because people capable to switch to alternatives. Number of
substitute products is available in market that can be used by consumers when Danone goods
prices are high.
Competition among exiting players-
Within retail sector due to intense competition Danone face difficult challenge which
impact on their business practices and performance. Companies give tough competition to each
other in order to gain competitive benefits.
SWOT analysis
Strengths-
Presence in multiple categories is the strength of DANONE Company, its goods has
operations in different domains like waters, medical nutrition, fresh dairy products, early life
nutrition and health & nutrition. They mainly focus on quality of products the main focus of this
firm is on nutrition and milk with market share of 50% followed by previous life nutrition with
share of 22 percent. Another Strength of this organization is quality of goods, they offer and
produce all the items according to the needs of consumers.
Weakness-
Low growth of Danone in Asia is the weakness of this firm that affects its productivity
and profitability. Most food manufacturing organizations are centering on Asian nations for their
revenues. But progress in China for organization are slowing down this may be impact overall
progress prospects of business that is not good for firm.
In comparison to other companies that are sole in many nations such as China, the
distribution network of Danone is not well enough and does not obtain to all parts of nation but
targets mainly metros and cities. Due to this company will not get enough volumes.
Opportunity-

By improving their poor distribution network Danone can gain the competitive
advantages that is relay very important for success & growth of its business more than
competitors.
Threat-
Intense competition is one of the biggest threat that impact Danone sales and production
activities as it put pressure on management to change or improve their business practices rather
than before. Organization faces competition from firm likes Nestle, Procter & gamble and
Unilever and also from domestic firms like Mother Dairy and Amul.
Culture
Academic theory behind culture
Hofstede culture dimensions theory is one of the most effective and useful concept that
help to comprehend knowledge about culture. It was developed by Greet Hofstede to understand
the different culture. In simple words, it is one of the best frameworks or model that can be
utilized to comprehend differences in culture across nations and to discern methods that
companies is done across varied cultures. It is used to distinguish between several national
cultures, dimension and their impact on business activities and establishment as well. The goal of
this theory is to identify dimensions in which cultures vary. There are six categories of culture in
different countries defined by Hofstede. As it also explain who companies such as Danone adopt
the culture of specific nation in order to sustain and retain consumers.
Dimensions of Hofstede organizational culture theory
Power distance index-
This dimension considers extent to which power and inequality are tolerated. In this
dimension, both factors are viewed from opinion of followers, high power distance index define
that a culture accepts power and inequity differences, boost bureaucracy and shows high respect
for authority (Purwanto, 2018).
Collectivism Vs individualism-

This dimension shows degree to which societies or communities integrated into groups
and their perceived obligation & dependence on them. Individualism indicates that there is
higher essential on attaining personal aims instead of professional. Along with it, collectivism
indicates that there is high essential on aims as well as well being of group.
Feminity Vs Masculinity-
This is the third dimension of Hofstede theory that refers to as tender Vs tough and
considers society preferences for achievement attitude towards behavior and other things.
Masculinity comes with varied characteristics such as assertive, gender roles and focused on
material achievement. Feminity comes with fluid gender, concerned with quality of life and
modest.
Short term Vs long term orientation-
It consider extent to which society views their time horizon, long term oriented indicates
focus on future and included delaying short term growth or success in order to gain long term
achievements. On the other hand, short term indicate on near future includes providing short
term gratification or success and places a powerful emphasis on current than future.
Examples scores from Hofstede insights
Power distance in US scores 40, Arab nations 80 and Germany is somewhat in middle. In
context of UK, power distance score is 35, individualism 89, Masculinity 66, Uncertainty
avoidance 35, Long term orientation 51 and indulgence 69.
CONCLUSION
From above analysis it has been concluded that organizational culture and structure
impact on business growth as well as long term success. It increases productivity level with
increasing sales of Danone rather than before. Furthermore, this study summarized that through
competitor analysis firm is able to determine their business rival and then make effective plan to
gain competitive advantages. The dimension of varied cultures has been identified by using
appropriate framework such as Hofstede.

REFERENCES
Book and Journals
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Egelhoff, W.G. and Wolf, J., 2017. Understanding the Causes of Conflict in Matrix Structure
Firms. In Understanding Matrix Structures and their Alternatives (pp. 109-130). Palgrave
Macmillan, London.
Eva, N and et.al., 2018. Creating strategic fit: Aligning servant leadership with organizational
structure and strategy. Personnel Review. 47(1). pp.166-186.
Purwanto, E., 2018. Moderation Effects of Power Distance on the Relationship Between Job
Characteristics, Leadership Empowerment, Employee Participation and Job Satisfaction:
A Conceptual Framework. Academy of Strategic Management Journal.
Xiao, J ., and et.al., 2016. Polygonal loop model for hysteretic behaviour of frame structures with
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