Report on Organizational Behavior Analysis: Kellogg's Company

This report provides a comprehensive analysis of Kellogg's organizational behavior, examining its strategies, goals, and effectiveness through the lens of Porter's Five Forces model. It delves into the company's structure, highlighting its vertical and multidivisional organizational design, and discusses its work environment and its adoption of both mechanistic and organic approaches. The report further explores Kellogg's interorganizational relationships, particularly focusing on resource dependence theory and its implications for the company's suppliers, partners, and customers. Additionally, it examines Kellogg's manufacturing and service technology, emphasizing its supply chain and global market reach. The report concludes by discussing Kellogg's approach to organizational size, life cycle, and control methods, emphasizing the company's emphasis on customer satisfaction, eco-friendly practices, and its long-term commitment to the food industry. The report also includes key components like branding, product positioning, and consumer confidence, crucial for the development of Kellogg's.

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Table of Contents
I. Introduction........................................................................................................................................2
II. Strategy, Goals and Effectiveness.....................................................................................................2
III. Structure..........................................................................................................................................4
IV. The Environment.............................................................................................................................4
V. Interorganizational relationship (Chapter 5).....................................................................................7
VI. Manufacturing and service technology (Chapter 7).........................................................................8
VII. Organizational size, life cycle and control methods (Chapter 9)....................................................9
VIII. Organizational culture and ethical values...................................................................................10
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11
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I. Introduction
The brand name Kellogg’s is enormously popular worldwide. The Kellogg’s Company was
established in 1906 in United States. Internationally the most noteworthy breakfast cereal producing
brand is Kellogg’s undoubtedly. It majorly promotes instant healthy and tasty breakfast cereals, for
instance-corn flakes, chocos cornflakes, and other food items as well. The Kellogg’s Company
operates in 180 countries and it has vast manufacturing units in 18 countries.
Kellogg’s emphasizes on customer satisfaction thus they always try to introduce wide range and
variety of cornflakes to satisfy customers’ urge of tasting unique breakfast cereals. In 2003 newly
launched brand by Kellogg’s – ‘Crunchy Nuts’ created an impactful brand value globally. Kellogg’s
has created a benchmark in food manufacturing industry, by perpetually producing new range of
products. It also embraces K-values which defines prior decision-making strategies and focuses on
organizational behaviour.
The major goal of the company is to serve healthy foods for the customers and enhance the entire
world with foods which strive to make life easier. The foremost priority of this brand is to enrich
customer’s requirements. It gives ample amount of priority on the eco-system and it strives for
decreasing adverse effects on environment which enables it to secure its future endeavours. These
values have been beneficial for Kellogg’s to sustain in the food industry for over 100years and it
continues its legacy by working tirelessly.
II. Strategy, Goals and Effectiveness
Goals:
The main mission of Kellogg’s is to create a long-term growth to fetch profit and it emphasizes on
improving its international leadership position by providing healthy yet finest quality of food
products. The official goal of Kellogg’s is to reinforce the priority of nutritious diet food, in order to
ensure customer’s need of adapting a healthy lifestyle. The operative goal of the Kellogg’s Company
is to provide superior quality of healthy breakfast cereals worldwide, effective management of supply-
chain and to motivate the employees for uplifting productivity (Kanfer & Chen, 2016). Work
efficiency, proper supply-chain management, following the mission and vision of organization,
enriching customer satisfaction and cultural diversity- all these aspects help Kellogg’s to measure its
outcomes positively.
Porter’s Five Force Model:
Porter’s generic strategy defines that by implementing suitable strategies a company can achieve
competitive advantage. This framework emphasizes on mainly three strategies- cost-leadership,
differentiation and focus. Michael Porter’s theory implies that there are five forces which influence an
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industry, which consist of supplier power, barriers to entry, buyer power, threat of substitutes and
degree of rivalry. Kellogg’s has medium supplier power, oats can be extensive due to extensive forces
and it eventually will increase the cost of the product which customers have to pay (Kanfer & Chen,
2016). Buyer power is high as it markets its products in stores and supermarkets globally and they
gain huge profit from breakfast cereals. There is a wide range of substitutes for Kellogg’s are
available, as it provides breakfast meals such as-cornflakes. Toast, fruits, oats, yoga bars can be
consumed as breakfast meal as well. In this competitive world two major companies can enter cereal
business PepsiCo and Kraft. The major rival of Kellogg’s is General Mills and the rivalry is extremely
high as both the companies are at the mature sate of life cycle.
Figure1: Porter’s Five Force Model
(Source: self-made)
Kellogg’s strategic constituents:
The six components which can measure the effectiveness of Kellogg’s are – Branding, Brand logo
design, product positioning, influencing customers’ viewpoint, consumer confidence and product
choice based upon perceptions. These aspects of strategic planning need to be included for the benefit
of the company. The stakeholders need to be the crucial priority for Kellogg’s and abiding
government guidelines is also essential (Gagné, 2018). Efficient branding and promotional strategies
can easily increase the sales rate of products; suitable logo design creates a massive impact on
consumers, providing immense focus on customer satisfaction is also important. Respecting
consumer’s financial situation and product positioning according to that can develop the revenue
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Customer
Power
Threats
of New
Entrants
Threats f
Substitute
Products
Rivarly
Within
Industry
Supplier
Power
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generation for Kellogg’s. Therefore, these six essential strategic constituents need to be included for
the development of Kellogg’s.
III. Structure
Horizontal Structural approach focuses on employee-oriented work approach which
encourages team work. On the other hand, vertical structural approach defines a top to down
structure; the higher authority directs instructions to the subordinates through a range of
manager step by step. Initially the top-level managers pass the directive to the mid-level
manager, then it involves low level managers and then to the employees (Gagné, 2018). The
Kellogg’s Company follows vertical structure. It allows Kellogg’s to function in a systematic
way.
The Kellogg’s Company has a multidivisional organizational structure. All the employees of
Kellogg’s try to work according to the instructions provided by departmental managers. The
company emphasize on sustainable growth and investments (Kellogg’s company, 2020).
Divisional organizational structure minutely segregates tasks to respective and efficient
departments, in this way the productivity and work efficiency can be increased.
Figure2: Organizational Structure
Source: (Kellogg’s company, 2020)
From the above figure it is clearly understood that from the collection of the raw materials to
the delivery of products to the warehouses or to the consumers, in each step the company
maintains a well-built organizational structure. President is at the top of the organizations and
all of the employees of Kellogg’s are bound to hear the advice of the President. President is
always aware to abide the Government as well as Legal affairs (Lee et al., 2019). All the
other ingredients of the organisational structure like corporate lab, strategic planning,
corporate human resources, corporate marketing and corporate finance work under these two
factors. All of these are bound to abide these rules and regulations. At the lower stage of the
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organizational structure there is product division which is considered as one of the most
important parts of marketing.
IV. The Environment
The work environment and infrastructure of Kellogg’s is highly functional and positive. It indirectly
motivates all the employees to work efficiently. As the organization embraces cultural diversity the
employees who work for it come from diverse cultural background but they work cordially (Kanfer
& Chen, 2016). The Kellogg’s Company acquires the skills of manufacturing eco-friendly packaging
and recyclable packaging to support waste management. Different nations have different laws and
regulations for the protection of environment. USA, specifically Florida and Texas have different
liability guidelines for environmental disaster management. The protection of natural resources relies
on the responsibility of people for being eco-friendly. The first and foremost criteria of an
organization for sustaining within a marketing industry need to be the urge of knowing required
environmental standards.
The Kellogg’s Company appreciates the motto of green environment; it supports recycling. It looks
after air as well as water pollution and also encourages waste management. All these aspects have
been beneficial for Kellogg’s to survive in the competitive food marketing industry.
The mechanistic approach emphasizes on achieving impressive productivity through vivid use of rules
and procedures, centralized authority and high specialization of labour (Lee et al., 2019). On the
other hand, organic approach focuses on enhancing productivity by limited use of rules and
procedures, decentralized authority and comparatively low degrees of specialization. The current
scenario of Kellogg’s is mechanistic approach and it follows hierarchy of authority. In Kellogg’s the
subordinates work under higher authority in a centralized way and top to down structure. It
encourages team work. Team work is essential for increasing organizational performance.
Organic design is more flexible where the employees do not need to work under managers, the
decision should be organic and individual. In order to sustain the fast pacing lifestyle responding to
unusual and instant changes is important. Every employee work in separate specialized projects and
tasks. The mechanistic approach allows segregating work load on separate teams and departments
peacefully (Gagné, 2018). It supports centralization which is helpful for decision making criteria.
V. Interorganizational relationship
9. The relationship that an organization maintains for a long-term commitment with its competitors,
customers, stakeholders, suppliers, public sector organizations and trade associations are known as
interorganizational relationships. Interorganizational relationship of a well-established organization
involves four vital factors like resource dependence, population ecology, collaborative network and
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institutionalism (Lee et al., 2019). In this report the resource dependence framework would be
discussed from the perspective of the chosen company Kellogg’s.
Figure 3: Resource of dependence
(Source: Lee et al., 2019)
According to the Resource dependence theory an organization is engaged in the transactions with the
other business firms or actors within the premise of its environment. The organization does such only
because of acquiring its necessary resources.
The key resources of Kellogg’s are all of its brands as well as its properties that are intellectual. Apart
from these the equipment and the raw materials that the company needs for its production, the chain
of its supply system, the facilities regarding its distribution and manufacturing, its marketing and sales
channels, its partnerships, etc. are the parts of its resources (Lee et al., 2019). There are a large
number of suppliers who regularly provide the necessary resources to Kellogg’s. from ingredients to
packaging at each step the company relies on its resources. However, in order to build up a healthy
relationship with all of its resources, partners and suppliers the company has launched a new program
that is related to the strategies that they follow to grow up a strong relationship with its suppliers
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(Gagné, 2018). The name of this program is K Partners Advantage. The five shared values are the
main principles of the company that are the key ingredients of its shared success.
The first of these shared values is innovation which helps the company to work closely for developing
its processes, services, products and technology. The company hugely depends on its partners to
achieve its goal of success and to move towards the modern and updated thinking.
In order to compete in the marketplace that is highly volatile Kellogg’s always looks for some
suppliers who are able to communicate the new market trends efficiently (Lee et al., 2019). In this
way the company maintain its financial excellence and can meet the demand of its customers.
Along with these the strong operational excellence, responsible sourcing and the supplier diversity of
Kellogg’s company are always help the company to build up a healthy and professional relationship
with its organizational. That is why the Kellogg’s company can maintain their interorganizational
relationships with its partners at high level even in these modern highly competitive markets.
VI. Manufacturing and service technology
10. A large number of customers in the world are hugely attracted by the tastes as well as the
flexibility of Kellogg’s products. Such popularity, loyalty and the shelf space of the super market help
the company to hinder its competitors in the new market (Gagné, 2018). As a result, the new entries
are also failed to compete with Kellogg’s and it can easily reduce its competitors in the marketplace.
Being one of the top leading food companies in the world Kellogg’s possesses a large number of
customers worldwide. Therefore, the company has to establish a worldwide network in order to reach
to their global customers. Right now, the products of the company are manufactured in almost 19
countries and the company sells its products in 160 countries of the world (Kanfer & Chen, 2016).
Kellogg’s mainly manufactures 40 types of snacks and cereals like Kellogg’s Corn Flakes, Special K,
Fruit n’ Fiber, Rice Krispies and likewise some Nutri grain cereal bars.
However, to reach to its worldwide customers the supply chain of this company is divided into three
sectors for building up a strong organizational structure and management system. They are primary,
secondary and tertiary. From the primary sector, the company collects the necessary raw materials for
its productions (Gagné, 2018). After the collection of the raw materials the products are
manufactured in the secondary sector and the manufactured products are shipped to all of the
wholesalers and the warehouses of Kellogg’s. finally, in the tertiary sector, the company uses to
optimize their benefit of the business processes.
Kellogg’s has a well-equipped and well-organized storage as well as transportation system in order to
ensure the fine quality of the products at the time of its reaching to the customers. In this regard,
Kellogg’s Planning System is a linear program in a large scale and it is used for production, operation,
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inventory and also for distribution system. This system of Kellogg’s helps the company to optimize its
costs of inventory and production. It also supports the company in optimizing its budgeting. Kellogg’s
is a business firm of the secondary sector and it collects raw materials from all over the world and
then makes 40 different types of food products using the tertiary sector (Kanfer & Chen, 2016).
Therefore, the company needs different aspects to operate such a large-scale business.
Nowadays, Kellogg’s has tied up with TDG. As a result, the company now meets a more smart and
efficient system of its distribution. Because of their updated computerized stock-holding system, the
company can easily always be aware of its stock and its delivery on time. As a result, the company is
able to illustrate its effectiveness of the supply chain management in a vast are of marketplace.
VII. Organizational size, life cycle and control methods
11. Kellogg’s business is now spread worldwide and therefore a numerous number of employees are
involved with it. Because of such a vast organizational size the company achieves a large scale of
benefits.
Being a large firm of food industry Kellogg’s enjoy a lot of benefits more than its competitors. Since
it is a well-established organization, therefore, it needs not to promote itself too much like the small
others. Apart from it, the industry can easily access to its funding (Gagné, 2018). They achieve a
huge opportunity for the repeated business as most of the people like their food items. For example,
almost each person in the world like Kellogg’s Corn Flex. If one customer buys it for the first time
there will be a huge possibility for him to buy the same product again when needed. As a result, the
company can easily grasp the market of repeated business which is really difficult for the small
organizations. Such opportunity of repeated business helps Kellogg’s a lot to generate larger profit as
well as higher sales that its competitors.
On the other hand, due to such a large organizational size, Kellogg’s has to face some challenges also.
It has to bear the pressure regarding the regulation of the Government (Lee et al., 2019). The more it
makes itself developed the more the regulatory requirements are being changed. Apart from it, the
company has to carry a larger revenue with its growth. Therefore, they have to face challenges for
securing their funding because of a larger rate of revenue.
12. Kellogg’s has been abiding the global ethical guidelines properly and it prefers sustainable
approach for business growth. Kellogg’s is able to maintain its position as one of the most popular
brands in this fast-changing marketplace for both the convenience foods as well as the healthy foods.
The products like Nutri Grain, Corn Flex and others are worth recuing and also well-fitted in their
aims in the market (Tasselli, Kilduff, & Landis, 2018). But if anytime any of the is going to fall the
company needs to extend its life cycle. Therefore, at such time, the company needs to develop a
strategy of extension for the products. In order to do this the company at first tries to identify the
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changing needs of the market and then according to the consumer’s demand the product is changed or
updated.
Kellogg’s strives for sustainability by ensuring better environment generally as well as for it work
environment. The Kellogg’s Company recently started focusing on reductions of water usage and
greenhouse gas emission and motivates eco-friendly approach. Kellogg’s aims to deduce the adverse
effects which has the potentiality to ruin for Nature. It has introduced a dedicated go green team to
embrace and nurture environment friendly products (Kanfer & Chen, 2016).
VIII. Organizational culture and ethical values
13. The organizational culture of Kellogg’s company is considered as positive enough by its
employees. The team leading, management and organizational structure is reviewed as positive by the
employees of this renowned organization (Gelfand, Aycan, Erez & Leung, 2017). However, for
motivating their employees Kellogg’s often arranges some events like Kellogg’s chill summer recipe
contest, nutrition month quiz and so on. Such events motivate their employees and their consumers as
well. The company does not support any type of discrimination. As a result, no one in the
organization has to face any type of humiliation regarding their race or skin color.
14. Being a well-reputed company Kellogg’s is always aware of some rules and regulations that are
followed by the company. Legal-compliance, anti-corruption, conflicts of interest, business gift etc.
are the factors that each and every one related to Kellogg’s are bound to follow. All of the partners of
Kellogg’s are bound to keep private privacy policy of the organization. Piracy is strictly considered as
an illegal act in this regard. Awareness for environment is considered as one of the vital matters by the
authority of Kellogg’s. For this reason, the authority has taken some ways to save the environment.
Kellogg’s concentrates on waste management and it abides by the guidelines of green environment
objectives. The organization focuses on growing their agricultural ingredients organically. In order to
maintain a balance with the eco-system Kellogg’s started encouraging local farmers to work with
them and to motivate sustainable agricultural processes. The leading breakfast cereal manufacturing
company lately started focusing on natural and organic food products to meet customer satisfaction.
15. In 2004 the Danes demanded that the products of Kellogg’s like Special K, Rice Krispies and
Corn Flakes include the “toxic” that may lead to the liver damage of the children if eaten on a regular
basis. They also added that these products re harmful also for the pregnant women. Therefore, the
company had to face a lot of hurdles at that time to prove themselves good and healthy.
Conclusion
Due to global warming the natural environment has been endangered severely for the past few years.
Hence, the protection of environment and an urge of reducing mis usage of natural resources need to
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be considered the major priority. In order to survive in the competitive yet food industry, where the
customers are gradually becoming health conscious and vegans, Kellogg’s has included organic
products on its selling list (Gagné, 2018). Organic and eco-friendly products easily attract customers
who are health conscious. Therefore, Kellogg’s has initiated the production of organic and vegan
products recently to support organic approach.
Mechanistic approach extensively focuses on standard operating procedures. These tactics of
mechanistic approaches are profitable for a sustainable growth of a company. Therefore, the usage of
mechanistic approach by the Kellogg’s Company is justified. Kellogg’s can survive in the food
industry for a long term by following mechanistic approach.
However, it can be concluded that the overall organizational behavior of Kellogg’s is found to be
positive and the company does not compromise their product quality forever. Though sometimes the
company had to face a few legal issues bur they also overcame that and till now keeps their position in
the market at the top rank of food manufacturers.
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