Managing Organisational Change in Nestle - Case Study Example

Running head: MANAGING ORGANIZATIONAL CHANGE Managing Organizational Change: A change Diagnostic essay Name Course Instructor Institution Date Managing Organizational Change Introduction Nestle is one of the international companies that has undergone organizational change transforming form a traditional organization. Most of the changes that has been affected by the management had an impact to both the public and the employees. Nestle realized that, ensure that the employees are well informed, there is a need to sustain them so as they can acquire more knowledge about their products. The pyramid model seemed to have numerous limitations that had to be nailed out (Bar- Gal, 1993). The limitations that had to be changed were such as the career path that never promoted productivity. The development in an organization and more especially its change always has a big impact on the organizational success. The development of an organization has a wider intervention on how the people relate to one another. This will include the communication that takes place in the company both formal and informal. It is vital to recognize change as a process and not as an event. This is because; change must go through various channels for it to be accepted in an organization. In most cases, employees are already used to the initial process and most of them always tend to resist the new system. The management needs to be patient and take all the employees through this process at his or her own pace. This will make them accept the new system and try to use it. In today’s market, most organizations are experiencing rapid change compared to the previous times. Impacts of change in an organization Nestle projects of price winning has allowed the small-scale farmers to cope with the continuous climate change. Climate has become so unpredictable and this always leads to much harm that is never expected. In today’s climate, there may be prolonged dry spell or unpredicted rains thus leading to massive destructions. Nestle has come up with Farm Business Advisors to help farmers reduce on the risks and increase on their productivity. This program also allow farmer to learn the new technologies and put them into practice (Glinow, & Mcshane, 2003). This program has enabled most farmers to be in a position to manage the climate change thus securing their produce. The farmers have also managed to learn on how they can plant when there is little rain and sell their produce when the prices are still high using the new equipments. The company also aims at replacing their packages with much friendly package. Their plastic packages will be replaced with a paperboard package. This will make them to have a competitive advantage over the other competitors in the market who have not yet gone ‘green’. This has made the company to stand out over all their rivals and attain a competitive edge in the entire industry. Due to the increased demand in the market for the palm oil products, Nestle have decided to venture in this field so as to satisfy their customers needs. Nestle has changed its policy towards the palm oil and they are providing the required product to the customers. Downsizing that was done in the company led to stress among the employees both those who left and those who survived in the company. This led to the remaining employees to feel shocked and angry for the step taken by the management. It is important for the company to explain to the remaining employees the reasons why they had to really suck the employees and this will help them gain back the confidence of their employees. It will also assist in putting back the aspect of belongingness among the employees (Phansalkar, 2005). It is also important to discuss with the employees the security of their job and the nature of downsizing and if some of them do not feel content, then a career counselor can be brought into context. In assisting the management in retrenching, it shows clearly, why the process is important to the company. Nestle need to monitor the repercussions of retrenchment. This can be proved when some employees absent work and others simply work without an aspect of passion in them. This will definitely interfere with the quality of work. Causes of the current situation There were various environmental pressures that led to change in the company. There was a geopolitical pressure while in the war. This led to requirement in the long-term geographical realignment. There has also been financial loss due to the increased prices in the raw materials. Europe having separated itself from Switzerland, profits were highly affected and thus the main offices were transferred to the offshore (Pasmore, 2010). There was also a paradigm shift in the preference of customers in the market. Most of the customers now shifted from powdered milk to fresh milk thus reducing the demand of the product in the market. Experience is always viewed as promotion and not the aspect of new ideas in the firm. This has made most of the employees to be loyal to their bosses so that they can be promoted. This has made the employee s to work just towards the expectation of their boss and not for the entire organization (Bar- Gal, 1993). Nestle realized the need to develop loyalty in the entire organization and not just for the boss. The management therefore introduced a plan that that was called, ‘Nestle on the move’. They had to find other better ways of improving their organizational structure. There was also a need to change the management style that ensured development of leadership programs. This program emphasized on developing the initiative of people in the entire organization to make them understand the importance of the organizational structure. Types of changes that have occurred Nestle company has undergone the first and the second change. Changes in the first order were more concerned with the climate change and the transactional change. The company was also able to undergo the second change that focused mainly on the transformational change. Here are the snippets that show how the changes occurred in the Nestle Company. In the first order, Nestle was much more interested in the expanding globally and purchasing of the local subsidiaries in the local markets (Mcshane, Olekalns, & Travaglione, 2010). There was also an offshore transfer from Switzerland to United States focusing the executive levels. The IT department was strengthened and was centralized. In the second order, there was diversification of the entire market when it entered the pharmaceutical and the cosmetic markets. The executive level underwent a complete overhaul replacing more than 10 executives. Mergers were acquired and promoted in the company. Operating in more than 80 countries worldwide, Nestle had a need to develop a well versed organizational structure (Hamlin, 2001). This was the only way that made it to be globally accepted. It is evident that the theory of the CEO really worked when he said that, a company could have a slow and a steady change and there is nothing for the company to be ashamed of. When Brabeck Letmathe started the company, he viewed the weaknesses of other companies in the same industry and capitalized on their weaknesses. Changing behaviors while retaining the attitude The most challenging part is how to change the behaviors of the stakeholders while retaining their attitude. Marketing an eco friendly product has never been an easy task to marketers. It is not easy to influence the consumers buying behaviors without affecting his attitudes and values. The values take some time to change and there is a need to allow time for these changes to occur and not rushing through the process. When one rushes through the changing process, one may have profits but this will take a short term and later experience long term losses. Following the entire process of change accordingly will take time but this has a great impact in the long run (Crane, & Meyer, 2010). Targeting consumers who already have information on the food processing companies reduces the efforts of training a new customer who has no idea. From previous research, it has been confirmed that, values tend to drive behaviors. This means that, to influence an environmental friendly character, there is a need to address the values of the product first. Unlike in the past era, where business was all about buying and selling of a product, consumers are becoming more sophisticated as times goes by. It is important for the company to consider the attitude of the company to ensure that they are all positive about the changes that takes place in the company (Margerison, 1978). Change is very important and every company must undergo change. This is because of the ever-changing technology which Nestle need to embrace. For instance, when Nestle opted to change their package to be environmental friendly, they were on the front line in doing this in the industry and thus they have a competitive advantage over the other companies. Most customers in today’s world prefer eco friendly products and they will tend to purchase more products that are eco friendly. From the analysis, it is evident that Nestle applied a mid management change theory in a much better way without really interfering with the attitude of the employees. The acquisition of merger was quiet a big change that Nestle adopted. This ensured an accelerated growth in the entire company while maintaining the reputation of the organization. Peter Brabeck- Letmathe had a line of thought and was determined that as much as the change seems to be slow, the most important aspect is that the organization is undergoing change. Peter took the conservative approach in ensuring the improvement on the performance of the company. He slashed most costs through ensuring efficiency in the daily operations of the company. This led to acquisition of more markets and thus the company profits increased tremendously. The move led to a reduction in cost by approximately $ 1.6 billion and this led to the increased productivity and thus company reputation. References: Bar- Gal, D. 1993. Organizational change and development in human service organizations. Harvard: Routledge. Crane, F. & Meyer, M. 2010. 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