Contemporary Operations Management in Nestle Company - Case Study Example

Contemporary Operations Management: Nestle Company Department: Summary All triumphant businesses are in one means or another correlated to a strong organisation culture that has accredited to its accomplishment. This paper focuses on Nestle Organisation and its culture that has given it immense victory in its ventures. The paper identifies and analyses aspects of organisational culture that may either help or encumber future transformations in the company. Moreover, consequences of adaptive and non-adaptive organisational culture are discussed in the report, pointing out the expected results in each of them. Organisations tend to experience changes from time to time, either in their management or their culture. Consequently, it is necessary to identify features that might manipulate these changes. Introduction Nestle is the largest company in the world dealing with nutrition and foods. It has its headquarters in Vevey, Switzerland. Its origin can be traced to the ancient times of 1866. In the same year, the first condensed milk factory in Europe was launched in Cham, Switzerland (Nestle, 2014). The Anglo-Swiss milk Company launched the condensed milk factory. One year down the line a qualified pharmacist, Henri Nestle, launched the first infant cereals of their kind in the world. Nestle company is leading globally in the production of bottled water, chocolate, milk, confectionery and pet food. In addition, the company also produces dairy products, ice cream and baby foods. In the year 2011, the company generated total revenue of 83.64 billion and operating income of $12.53. In the same year, it reported a profit of 9.487 billion. In the year 2012, the company had a total number of employees amounting to approximately three million. The company has since then made various steps in the field of marketing. It has also employed the latest growth strategy of corporation acquisition. It has so far obtained Crosse and Blackwell Corporation in 1950, it acquired Findus Company in 1963, in 1971, it succeeded to purchase Libby’s, in1988 and 2007 it successfully obtained Row tree Mackintosh and Gerber respectively (Nestle, 2014). Nestle Organizational Culture Nestle holds a strong organisational culture that is reflected in the company logo statement which goes “Good Food Good Life." The logo is attached to all the company’s products and it is the principle guide in the company’s activities. The company logo is made of Nestlé’s family coat of arms, it show a nest with a mother bird protect her offspring. This symbol portrays the care and loving attitude of the company (Nestle, 2014). Nestlé’s culture is linked to the structure of its people. It instils a sense of team work, open door policy and focus to its responsibilities. The company’s culture is the corporate strength and basis of growth. The business is spread globally, being able to set up more than 500 factories in about 86 countries (Nestle, 2014). The company is involved in several human resource management, some of these are recruitment, performance appraisal and compensation benefit. In social recruitment, the company hires new employees when a vacancy arises, for example, when an old employee resigns or there is an urgent need for new employees. Because the business is greatly interested in the employee’s performance, it accords them the necessary respect and a feeling of importance and value. In order to encourage the workers to keep up their good job the company pays them incentives (Nestle, 2014). Nestle company practices reward package by recognising the best performers and compensating them accordingly. To make the compensation principle work efficiently the company has set up a disciplined and performance compensation program that maintains elongated relationship among the employees to the time of judging their performances. The company has also put into place short term and long term rewards. The Company has different leadership policies that makes it competitive in the market and compete confidently in the business with other similar companies. The company has leads to winning a strategy. This enhances and builds credibility, better achievements, logical actions and outstanding leadership. The company has trust in the management and alignment of goals and expectations. With the lead to win policy, the company enjoy manageable lifestyle, good education to workers and responsible behaviour (Nestle, 2014). The company similarly has managed for results policy. This ensures proactive cooperation and creates synergism at global, regional and local regions. The approach believes in fulfilling business goals and sustainable activities. The main objective of the company’s human resource management is protection of its workers. The organisation strongly believes that the employees are the biggest asset of the organisation. The company, therefore, focuses on safeguarding the employees working environment (Nestle, 2014). The company aims at providing a safe environment to contractors and visitors too. It is currently interested in implementing health and safety measures and programs in all the company’s working condition and places. The organisation has different objectives regarding the workers working conditions. The company aims at providing a safe environment for employees to work and interact safely. The company takes responsibility of the work related injuries to employees, visitors or contractors by paying for their medical bills and appropriate compensations. The company has developed efficient system that responds and manages any accidents in the work area. The company also walks an extra mile to offering training programs to employees and contractors about their role in avoiding and decreasing injuries at the workplace. They also taught about what to do in case of an accident, these include basic life support training and first aid techniques. Various meeting is always held within the organisations premises incorporating management, stakeholders and employees. Nestle company strongly advocates and pushes for excellent interpersonal relationships at the workplace. It promotes a good relationship between the management and the employees. The company employs democratic leadership style, in this sense the company can attract and maintain the best skilled and experienced employees. Consolidation of long course relationship with employees is the primary goal of the Nestle business. The management focuses to hiring staff with talents, professional skill and good personal attitude. Managers believe that a professional advancement can be achieved only if the company has learnt the art of attracting and maintaining the best workers within their organisation. The nestle company culture did not develop that easily, the culture development and maintenance takes time, effort, energy and sacrifices. Since it early time the company has been handling people with great respect and faith. There has never been reported any incidence of intolerance, discrimination or harassment in the management and work area stages. The business practices honesty, sincerity and transparency. On additional to the qualities, there is excellent information channels through respectful dialogues in case of any event or unexpected scenes. The approach shown to employees converts them to resourceful employees and increases their productivity of through motivation, leadership, communication and loyalty. The approach afforded by Nestle Company is termed as soft design and greatly contrast with hard design where the control is excessively strict and aggressive towards the employees. Nestle has many other business operation principles that cover a wide range of fields and aspects in life. The company observes health, nutrition and wellness. The company ensures better and healthier life’s of its customers everywhere and every day. It provides healthy and tasty products such as beverages and encourages living a healthy life. This clear portrayed in their company’s logo “Good Food, Good Life." The company facilitates quality assurance as well as offering safe products to the customers. Through the organisations culture, their products carry with them the promise of high standards and safe products. The company values customer’s feedback, therefore, it promotes adequate communication with the consumer. The reliable communication means with the consumer assures the consumer that the company is committed to its services and gives the user power to make an informed decision regarding many products in the market. The information is confidential as the company respects the user’s privacy (Nestle, 2014). Nestle company does not only strong and support human rights in the field of business but also behaves as an example to the rest through its practices and its continued support to the United Nations Global Compact’s. The fifth principle business operation policy is personal responsibility and leadership training. The success of the business rely on the people and there is a need to lead with dignity and aware of one’s responsibilities. The people led try to reciprocate what you give and illustrate to them. In regard to people relationship, the company creates and maintains customer and supplier relationship at stable state all the times. The company promotes to developments in the agricultural sector and rural infrastructure upgrading (Bellingham, 2001: 136). Environment is a valuable asset to the business and their methods and activities are limited to those that have no adverse effects to the environment. One cannot claim to protect the environment without conserving and promoting water management and sustainability, in this notion the company is in the front line in ensuring enhanced and progressive water sustainability (Bellingham, 2001: 138). Notably, the culture values of the business are the particular behaviour patterns and characteristics that are associated with that particular organisation or business. They are easily identified by interacting with the company’s employees for some time and learning how they relate with one another and the public as a whole. These values are well known to the public if the organisation has been running for a long period (Brun & Cooper, 2009: 77). Apart from the company’s dedication to assuring quality, respect for diversity and employee perfect relationship, Nestle is devoted to several cultural values. The social values have been developed over time since it was started. These values are attributed to the company’s principles discussed above and were in line with its objectives and strategies for development and growth (Brun & Cooper, 2009: 75). These cultures are still evolving and are aimed to assist in the reshaping of the business in the future. Dedication to sturdy work ethic, honesty, integrity and quality are the major social principles of the business. The observation of ethical issues at work place is a critical aspect in the modern world (Fullan, 2001: 25). A business that is lenient in observing ethical issues is weak and suffers from a poor reputation and less penetration in the business. To giant business especially in the field related to food and healthy drinks it is mandatory to observe ethical issues. The company culture promotes integrity throughout its operations. Its principle is non-negotiable and cannot be overlooked in any situation or event. The company has transformed to be the leading company in the world producing beverages, water and foods due to these social values. Honesty remains to be company’s core principal (Fullan, 2001: 26-31). The management is always reliable for the workers and to each other. In return, the workers are expected to be honest to the management and among them. The company would be wasting time if it never paid special attention to the quality of the products and ensuring customers are always satisfied and their desires are fulfilled. In this connection, it is the role of the business to strictly promote the production of quality drinks and foods that will be received with applause in the business and close the gap that existed between competitor’s products and customer’s desires. Quality goods stay in the business for long and have more rewards due to high sales and large market penetration (Kummerow and Kirby, 2013: 97-122). Nestle has been dealing with infant feeding and processing of food for them, this portrays a caring attitude of the business not only to the children but also to the entire community as a whole. The company can cater for the less disadvantaged and vulnerable individuals in the community. The caring approach has helped the company to build its reputation and win customer loyalty and trust. Trust and personal relationships are other culture values of the Nestle Company (Gupta, Lee, & Wang, 2010: 49). All the company’s employees socialise freely with other team members and the public in general. This value is closely connected with the ability to talk frankly, openly and freely with the others. The business team has a unique way of interacting with one another, tolerating diverse opinions and ideas from each other and work in harmony (Oliver, 2011: 20). It is a culture of the Nestle organisation to pay realistic and practical approach to business idea, based on facts dependent decisions. Curiosity for future technological advancements, changes in user’s practice and new ideas for new products while keeping the respect for human values constant is another culture for Nestle Company. The company has developed the habit of focusing on long term gains at the expense of short term benefits. These values and principles have greatly helped it meet its aims of fairness, concern for customers and honesty (Gupta, Lee, & Wang, 2010: 51). The culture of an organisation will change over time depending on external and internal factors. There are so many transitions in the modern world that can force an organisation to change its culture so as to compete competitively in the market. For example, adoption and implementation of e-business or e-commerce can alter a company’s cultures and principles. Internal factors leading to a culture shift are changes in the management and structure of leadership. Internal treaties can also force the company to adopt new culture values (Raynard, 2002: 111). At present world, a company like Nestle has launched new systems regarding environment management and conservation. These add to the culture values and are represented to the public as social responsibility qualities. Aspects of organisational culture which might help or hinder future changes in the organisation Contemporary organisations have integrated culture values to their managements. Effective culture control can be achieved by presence of strong structural stability and existence of superior and performance organisation values and cultures. At different stages of organisation cultural values, ethics, social responsibility and racial differences lead to changes in the performance of an organisation (Scott, 2003: 118). The social values of an organisation may change anytime in the future of the business, these changes will depend on various aspects of an organisation. Some features may promote the changes while other features can prevent the future changes to take place efficiently. While there are good cultures there are poor cultures too. Health cultures will tend to enhance future changes of an organisation. Referring to Nestle Company, it is rich of good cultural practices, and this can facilitate any future changes for the better. The company can decide to transform its services and products to online marketing, in such a case an existing excellent cultural values will be supporting the move and encourage more customer oriented changes than just seek to market the product and stop there. Other features are counter culture. The values and practices of an organisation culture that were shared amid dissimilar managers and management sectors were required to get the help from them come under countercultures. The other aspect of organisational culture is the state of sub culture, subculture is said to be segments of the main group with a different set of standards, beliefs and values based on geographical areas, job requirements and departmental goals (Raynard, 2002: 115). These subcultures are applicable to some companies and not others. There exist strong organisational cultures too. These exist when an employee plays the major role in the upholding and maintaining the culture. The limiting factor in this culture is that the manager must power the behaviour of the employees since they are the major controllers of how the public view the company (Scott, 2003: 121). These strong cultures are the key players in obtaining of competitive advantage in the business. An aspect of a weak culture can influence how the organisation makes changes in the future management and approaches to business ideas. Weak cultures help to push for thoughts, beliefs and attitudes of an individual to make them more inventive. Weak culture that is based on beliefs and values has the perfect set of association (Kummerow et al., 2014: 30-33).Organisational cultures can be constructive or defensive. These are other features that can help or hinder organisation changes respectively. A constructive culture has the greatest benefit as it is the key target for most of the development management programmes. Constructive culture pays equal attention to getting work done and fulfilling needs of the people (Elsmore, 2001: 30-38). The benefits of a constructive culture are fast achievements and attainment of accountability, at the same time it emphasis on the need for effective leadership and teamwork. Defensive culture is divided into passive and aggressive defensive culture. Passive defensive culture tries to maintain status quo. In this culture the rules are taken to be more important than thoughts and ideas, in this case creativity and innovation are paralysed. These forms of cultures tend to hinder positive future changes since the organisations always avoid risk taking. On the other end, aggressive defensive cultures pay importance to forceful behaviours and less value placed to human beings. These forms of culture may achieve success in the short term, but it has severely damaging consequences on the long term performance. There are many signs of defensive cultures in an organisation, the most common include; inadequate customer service, poor performance, poor leadership, incompetent staff, lack initiative, hard to adapt to changes, loss of market share, unethical behaviour and bad reputation (Vadi et al., 2003: 29-36). Further, organisational cultures are referred to as adaptive organisation cultures. This facilitates innovation, straightforward discussion and moderate risk taking. They provide equal attention to employees, shareholders and customers. Nestle company has this form of cultures and thus the reason it continues to be successful over the years (mitroussi, 2003: 15-39). This aspect of the adaptive culture will greatly help future changes of an organisation. These organisations can freely venture and adopt different business ideas. A case study on 207 large companies demonstrated the affirmative outcome of the adaptive culture on performance. The study revealed that only companies with cultures that can adapt to changes will be successful in the long-term (Sinangil, 2004: 17). Key: Category 1 -increase in revenue Category 2 -stock price growth Category 3 -net income growth Category 4 -workforce growth Series 1 -adaptive culture Series 2 -non- adaptive culture There is much business oriented reasons to build organizational culture that is valuable and performance. A strong culture is an excellent talent attractor. The best employees currently are not only looking for a good paying business, but also those that provide a suitable environment they can enjoy working in and succeed in their career. In the old days the companies were chosen depending on salary and fame, those days are long gone. A strong culture can retain talents for a long time (Sinangil, 2004: 21). A poor culture will make most employees uncomfortable and they will leave the company anytime to go find better places. These will hinder an organization from making major changes. The company may lose all its workers leading to its dissolution. People are more engaged in strong cultures. Every employee wants to feel part and parcel of his or her work, this is possible only if the employee is actively involved in the operations of the business. The more the workers are involved in the organisation the high the productivity and this maximises the profit. Energy and momentum are enhanced through a strong culture. This comes about by valuing people and allowing everyone to express their views. The fact that energy is contagious it builds on itself and promotes success in the long run. The perspective along which people view the work is changed in a strong and adaptive culture. Following this worker report to work early and the rate of absenteeism is highly reduced, it is obvious that this approach will raise productivity and increase profit. A strong culture will boost performance and win the trust and loyalty of both employees and consumers (Oliver, 2011: 22). Conclusion Nestle Organisational has been in the market for a long period and it has attained great success with high market shares and penetration. The most outstanding character of Nestle is its excellent human respect and value of life. The company has developed and maintained high organisational culture over time. These cultures are many, but its caring, respectful, honest and sincere traits are the outstanding attributes of its value and principals. Within these organisational cultures, there are aspects that help future changes in the organisation and there are those that hinder future changes. References Bellingham, R. (2001). The managers pocket guide to corporate culture change. Amherst, Mass: HRD Press. Brun, J. P., & Cooper, C. (2009). Missing Pieces: 7 Ways to Improve Employee Well-Being and Organizational Effectiveness. Basingstoke: Palgrave Macmillan. 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