HR management assignment help: Changes in organization-Nestle

Q?? Write on the change management of Nestle??Solution:

Introduction

Changes are a part of every Organization. Whenever we move towards the desired goals; various transformations take place within the structure of organization.  Organizational change is defined as the movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness. Every organization is affected by both: the internal & its external environment. However; the major impact is of the environment inside it. This internal environment can be anything ranging from strategy to people; from structure to process.It is very clear that the survival of organizations is dependent on their matching the level of complexity in their environment (Pearce & Ravlin, 1987).
Similar was in the case of Nestle. With a motive to be a leader in its field Nestle adopted some changes as a result of the internal & external factors. These changes were the result of the following: Nestlé’s need to increase efficiency & productivity:  To achieve this Nestle opted for global expansion and started buying local subsidiaries from outside market. Nestlé’s need for business expansion: Nestle decided pick up other markets other than food industry whereby the first pick was L Oreal; the cosmetic brand. Later on it took over pharmaceutical & ophthalmic products.  Nestlé’s need for financial enhancement: the CEO decided to get rid of non-profitable business & purchasing the profitable ones. Restructuring within the Nestle:  They focused to work on the above changes and the result is in front of all of us

This is what CEO at the Company did. He opted for the first order changes that were continuous so that the organization can thrive in the aggressive market.  Let us see what the changes which took place in the Company were:  Personnel Change whereby the executive board was an outcome of it. This executive board was the result of overhauling the current executives (Robbins, 1996).Incremental Change whereby they focused on changes step by step. Changing these small steps lead to the higher changes with the Company. Planned Change whereby the Company never opted for anything unplanned within the organization. The focus was always long term rather than short term. The CEO never believed in dramatic changes.  Continuous Change: Nestle would of course stop existing if the changes stopped. To adjust to existing scenarios, continuous change was necessary.  The reinforcement & sustenance both required continuous change. Transactional Change was again a part of Nestle as the fundamental nature of Nestle was always the same. Proactive Change whereby the alterations were always a part of Nestle in its practices.  Being slow & steady was never a problem at Nestle.  But when organization comes at a point where there is no option but to change ; the change becomes inevitable. These changes were the result of the need to grow by Nestle.  It is very clear that the “management’s ability is to achieve maximum benefits from change depends in part on how effectively they create and maintain a climate that minimizes resistant behavior and encourages acceptance and support”

As per the Organization change model proposed by many researchers; 7s model goes in line with the changes that occurred (Sparrow &Cooper, 1998). This model was developed by Mc Kinsey focusing how 7 major factors when organized in a holistic manner affect the overall working of the organization. Let’s us relate thus 7s model to what happened at Nestle: Strategy: Nestle had some initial strategies which it restructured as per the need of the hour. It gave away the non-profitable business & become interested in the profitable ones ( Mind Tools, 2011).Structure: Nestle had a structure of personnel & process which is required for smooth working of every organization. Nestle moved out from being only into milk products to cosmetics &pharmaceuticals.  Systems: The way the processes & information flowed within Nestle was transparent. Style: Nestle had a set of committed managers who were the major strength of the organization. Staff: Nestle had a set pattern for the corporate growth of its employees. The growth needed to be handled in the particular manner. Super ordinate Goals: Nestlé’s focus had always been on Long term goals rather than short term goals .Skills: Skills were always reinforced & sustained rather than changing them totally

This essay also includes answers of case study:

As per the CEO of Nestle; the company was undergoing Incremental Changes. The changes happened in what the organization was already doing. The adjustments were made within the existing structure keeping in mind the long term goals. The focus was on reinforcement & sustenance rather focusing on new things. As a result of focusing on this; Nestle landed up undergoing First Order Changes. Nestle experienced incremental, transactional, evolutionary & continuous change.  Nestle focused to increase its efficiency & productivity using the same features of the organization. Restructuring happening at Nestle was a continual process. CEO Brabeck was never in favor of unnecessary changes and he believed in slow & steady change taking care of long term goals rather than the short term ones. He always wanted to reinforce & sustain strengths rather than changing them.   Brabeck emphasizes on Incremental approach for Nestle & has come up to what is present day Nestle. He always worked on a controlled, proactive approach to change which made the organization moved up on the ladder. This incremental approach is always a continuous one. Let us see what happened in the case of Nestle in past as well as present. Nestle opted for global expansion taking care of its existing strategies. It opted to buy the already existing local subsidiaries in foreign markets (Anonymous, 2003). Nestle decided to buy already existing factories in US thus trying to increase efficiency & productivity of the company. In the process of moving out of the food industry; Nestle again decided to acquire the already existing cosmetic & pharmaceutical companies. Thus these changes were a incremental changes where the acquisitions were made on already existing ones. According to Brabeck; radical changes are only for time of crisis. His focus was always on a slow & steady change which worked towards the long term goals rather than the short term ones (Anderson,  2011). Most important as a part of Brabeck’s incremental approach; he never wanted to change the strengths; his focus was always to reinforce & sustain the older ones.

Certain implications do come for change managers. According to me following must have happened in the case of Nestle: Categorizing of Organization Change: It becomes difficult to categorize small, incremental & adaptive changes from the transformational changes. Restructuring in the case of Nestle was continuous however it may be affecting one section and indifferent to the other section in organization (Anderson, 2011). Combined effect of changes: It is important to understand the mutual impact of all the changes along with the individual impact.  Nurturer Image: As per the nurturer image the change managers can nurture personnel’s perception. Feasibility with conflicting strategies: Moving to different sectors when Nestle was buying the existing factories in US. It must have help to increase the productivity however; it must have been a big challenge for the Nestle management to balance between the existing Nestle strategies & the strategies existing within the new acquired organizations. Sequence of Execution: This must have been another challenge for the Management at Nestle. Taking into consideration when Nestle acquired other bands out of the food market which were altogether different segments; it must have been difficult to decide what sequence to follow first so that there is no compromise on the company’s success. It is always important to take care of where to start change from. Locations: Nestle took advantage of the first & the second world war when it decided to acquire some US factories. The decision was in favor of Nestle; but from managements perspective there must have been huge pressure on them. Pace of Change: Brabeck at Nestle focused on slow & steady change which might not be a choice of the managers in the organization. Dramatic changes are always preferred as they are easy to work on.  And Nature of Change: Brabeck’s focus was long term rather than the short term ones. For Managers; it might have been difficult to work on these lines of changes.

The three examples of lessons from the front line which are clear in Nestle are Downsizing, Implementation of New technology and Mergers & Acquisitions. Downsizing: This comes under that category of organization restructuring. Downsizing specifically leads to reduction in the number of employees in an organization. Thus this downsizing was a result of restructuring that was a continuous process in Nestle. Downsizing helps in cost cutting but at the same time raises the issue of employee retention. To overcome this; once can opt for other cost cutting method rather than affecting employees. If there is proper communication of future vision & strategy within the organization; it helps a lot. Further one can look for option in the restructuring technique (Anonymous, 2002). Implementation of New Technology: In case of Nestle; it knew that introducing IT tool was important but it did not take up that tool. However adding an IT tool would have made things at Nestle easy, fast & better and Mergers & Acquisitions: Nestle has earned a lot from Acquisitions & Mergers. It had a great increase in its productivity & had some really profitable deals in hand. However in such cases cost savings are affected a lot. A great deal of cultural adjustment has to be taken care of. When two organizations get together in any form, employee retention pops up as a great issue.

Conclusion

On whole Nestle never believed in unrealistic goals that demanded dramatic change. Being focus & conscious was important for Brabeck.  For any organization to work well these 7 elements have to operate in an integrated manner. Their alignment & mutual reinforcement is most important. The same was found in Nestle. This helped the organization to understand what needs to be realigned or reinforced for further improvement. It is the effective alignment of these 7 processes which helps to identify the gaps within the organization. Once the gaps are recognized it becomes easy to work in upward movement for the growth of the organization, changing any organization is not as simple as it seems to be. Knowledge, skills & expertise are the key areas for any organization undergoing change.  There has been much research on the fitness of organizations focuses on the maintenance of structures and stability. The Nestle falls under the category of fit organizations.

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