Progression of Nestle, Companys Objective and Strategy - Case Study Example

Managing Organisational Change: Name: Institution: Introduction To start with, we look into the progression of Nestle since its incorporation and the steps it has been taken for its development into a global food company. The company’s history dates back into the year 1866 a period within which there was the opening of the first condensed milk factory in Europe. This factory was situated Switzerland’s Cham by the company Anglo-Swiss Condensed Milk (Parsons, 1996). In the year 1867, in a place known as Vevey a Germany pharmacist Henri Nestle, who is the founder of the Nestle Company, came up with what he called Farine lactee which was a combination of sugar, wheat floor as well as cow’s milk with the prospect of saving a child from the neighbourhood, this lead to the idea of nutrition serving as the company’s cornerstone as from that time (Nation's Restaurant News, July 1, 2002). Henri Nestlé’s aim was turning the company into expanding globally. Due to his mission and commitment into the company’s progression, the company’s logo and name have been attributed to the growth and development of the company as he has been held highly by the company’s personnel. Later on in the year 1905, the Anglo-Swiss Condensed Milk company which was brought up by George and Charles who Americans formed a partnership with Nestle. This happened after long periods of fierce competition between these companies. They formed the Nestle and Anglo-Swiss Milk Company. Company’s Objective and Strategy Among its strategies, Nestle want to stamp their authority as the global leader in health, nutrition as well as wellness that should be trusted by all the involved stakeholders. The company will also want to act as the reference within the industry for financial performances and accountability. The company believes that leadership should be about behaviour and not size. They go ahead to acknowledge that trust is also about behaviour and that it should only be gained within a long period of time through sticking to their promises which they could be working upon delivering. All their promises, objectives and behaviours have been encapsulated within their phrase of “Good Food, Good Life” which has acted as a summary to the company’s general ambition (Gumbel, January 27, 2003). The company has come up with the Nestle Roadmap that has been formulated to align for its people as it moves forward to inform its clients about what they should expect of the company and how to get all the guidelines to the company’s products. Good management is all about capturing the consumers via innovative and creative strategies, as well as through its objectives which the company has worked upon stabilizing to ensure there is a perfect working climate among them (Baker, 1998). Case Study Nestle To our case study, we can run that by the year two thousand, there was a consideration that the company was the world’s biggest food company by consisting of five hundred factories that operated in eighty countries. The company gave employment to two hundred and twenty four thousand people. The company’s annual sales were ranging at about $47 billion. Turning out to be a global leader known for its manufacture of consumer products such as cosmetics as well as chocolates, there has been a big contrast in terms of progression from a company that was step up to virtually comes for the aid of the poor mothers that could not afford to breastfeed their young and newly born infants. The company has for all this time undergone a magnitude of changes along the years. Changes within the Company It could be justifiable to infer that Nestle company has undergone second order change why by the company always decides or at times being forced by competition as well as consumer demand to change its strategies and innovative viewpoints on its mode of operation. This means the company will get to carry activities fundamentally in a different manner from the how it had been doing earlier on. This process of second order change will always be seen as irreversible and once it gets underway it will be a difficult task to move back to the previous way of running (Denny, 20 December 2002). Looking back to its operational changes, we learn from the case study that Nestle carried out its sales majorly through agents only. The agents were tasked with the duty of marketing the company’s products abroad. That changed in the period of the 19090s whereby the company employed the approach of purchasing other local subsidiaries within the foreign markets aiming at expanding globally. The company was boosted into getting more into the American consumer markets and this was during the First World War whereby there was high demand for dairy products from Nestle (Fouts, Stuen, Anderson & Parnell, 2000). As an opportunity due to that demand, the company established a great presence within the U.S as it moved on to acquiring a good number of exiting factories in America. A feeling of being isolated in Switzerland was developed during the world war and that prompted the company into transferring many of its offices that were in the offshore to the U.S. this was a strategy that was being used by the company to increase its level of efficiency and productivity. The company was then to move out of the food industry in 1974 as a way of diversifying its production processes and for promoting growth. This is the time that the company became a leading stakeholder in L’Oreal a cosmetic giant company. The diversification came with a cost though as people complained that Nestle was going overboard by acquiring the debt ridden L’Oreal company. Wanting to restore the people’s trust, Nestle later on engaged in another company purchase by acquiring Alco Laboratories and going further outside the food production industry. Alco Laboratories was an American pharmaceutical manufacturer besides producing ophtainic products. Through the above progress as per the case study, we can simply say that the company has been undergoing second order change as the company simply moved from its ancient way of learning to develop and be among the best food production companies worldwide. The change has been characterized by the way the company used to see things whereby there is a difference in many positions such as management and sales. There is also the shifting of gears as the company keeps on moving forward, new learning within the company and generally change in administration. Nestle at Present Still in the changes within the company, we get to read the CEO’S mind from the case study and what he holds for the progression of the company. As per his views, Brabeck Letmathe holds out that incremental change is the best way of carrying forward. He is an advocate for slow change which to the CEO could turn out being steady at the end. The CEO has tried to run the company through these ideas though he was in charge of radical changes within the management which saw him replacing some personnel with others within a period that could be considered as being short. As per the study, it has been established that Nestle Company has a continual restructuring process that carries charges up to $300 million in every year. In the first restructuring the CEO Brabeck Letmathe came up with overhauls that were to shake the entire Nestle Company. The overhaul included the replacement of ten executives with new ones. Despite that feat, the CEO still believes that holding out that the development of a company’s strength is much better and that in case of crisis, that is when radical changes should be undertaken as an option to countering the situation. If at all a company shows signs of running out smoothly, the unnecessary changes should be kept at bay (Denny, 20 December 2002). To my side, though sometime it could look like time consuming incremental change should be taken as the basis of development within any company. Growth is dynamic and there are major steps and levels that should be undertaken for development to be valid and justified. If a company could be omitting some of the stages of growth, then it will be evident that later on at some step, the company will need to look back to try and pick up the omitted experience. This could be coming as a compensation process whereby there seems to be need for fixing a past mistake. That leads to mismanagement which could cost the company dearly. Only during crisis should rush of decisions be taken as an option. In short i could like to rhyme with CEO Brabeck Letmathe’s views to a higher percentage (BusinessWeek, June 11, 2001). Since Nestle Company has a high reliance on the managers’ commitment to their course, I could also say that to some point there could be differences within the CEO’s mode of running the company (Amis, Slack, & Hinings, 2004). There will be those who will want to live into the previous corporate culture and could want to overlook the short term working profit that the CEO Brabeck Letmathe advocates for in maintaining the longevity of Nestle as a company. The CEO should ensure that rather than making up decisions by himself, he should also include other executives and seek their advice if in case they see some other way of running the company. Another point that could make my views differ from that of CEO Brabeck Letmathe is the improvement of technology and the way of working in companies within the present global world. With technology there has been reduction of heavy workloads as companies have engaged themselves into more sophisticated ways of production. For example I have not heard the CEO discussing the issues of virtue organization. Being a globally recognized company, the company can much easier reach its consumers/targets much easily online than the use of employees and marketing agents. This could speed up work and hence decrease the option of slow incremental growth changes. As a virtual organization, Nestlé could sour up the market and increase its revenues within a shorter period of time. References Amis, J., Slack, T., & Hinings, C. (2004). The pace, sequence, and linearity of radical Change. Academy journal. Baker, D. (1998). The implementation of alternative assessment procedures and Washington State reform. Seattle, WA: Washington School Research Centre, Seattle Pacific University. BusinessWeek, (June 11, 2001). "Peter Brabeck-Letmathe," Denny, C. (20 December 2002). "Retreat by Nestle on Ethiopia's $6m debt". The Guardian (UK). Retrieved 29 April 2011. Fouts, J.T., Stuen, C., Anderson, M.A., & Parnell, T. (2000). The reality of reform: Factors Limiting the reform. Seattle, WA: Washington School Research Centre. Seattle Pacific University. Gumbel, P. (January 27, 2003). "Nestlé's Quick," Time. http://www.who.int/nutrition/publications/code_english.pdf. Retrieved 09 November 2012. Mudd, T. ( August 13, 2001) "Nestlé Plays to Global Audience," Industry Week , Nation's Restaurant News. (July 1, 2002). "Nestlé S.A. Buys Large Stake of Ice-Cream Maker Dreyer's". Parsons, J. (1996). "Nestlé: The Visions of Local Managers," McKinsey Quarterly 5, No. 2 p. 5. Read More