HR assignment help on: Organization change – globalization
Understanding organisational change, and inevitably the management of that change, has been an issue at the forefront of many businesses in recent years. Increasingly, the traditional notions of incremental problem solving and planning of organisational change are no longer applicable. In modern times, both external and internal forces are pushing companies to consistently and rapidly adapt to change. In regards to external forces, advances in technology, globalisation, changes in legislature, and both economic and socio-political forces are all powerful drivers of organisational change. (McGuire & Hutchings, 2006). Furthermore, internal forces, such as human resource issues and process techniques, are also cause for frequent refinement. More recently, the public itself has become an influential driver for change. With the power of social media at its disposal, the public has come to use this new platform as an effective means for evoking change. Since many of these forces are outside the control of the companies, management must now learn how to respond quickly and efficiently to the demand for change to maintain the viability of the company. Subsequently, businesses that fail to adequately respond to change, or that resist it all together, have increasingly come under scrutiny.
The brand Nestle, renowned for chocolate confectionary, cereals, ice creams and other consumable foods, has been continuously scrutinized for their unethical practices and resistance to change. After being targeted by Greenpeace, a global social change organisation, as well as the public in early 2010, Nestle was forced to make massive alterations in the ways in which it conducted its business. As such, Nestle can be viewed as a case study that expertly exemplifies organisational change. Their initial resistance to change eventually transformed into enlightenment as the company began to take a closer look at the changes needed within its operations. This paper will be part one of a three part essay, and will begin by introducing and defining organizational change. Next, it will explore the company Nestle, and analyse and relate the context of change they are currently undertaking to theories of organisational change. Further, it will explain the importance of change agents in facilitating and implementing lasting change within Nestle. Finally, this paper will conclude with an introduction of the following two parts of the essay; the content and process of change.
Change is a necessary component of all successful companies. According to Pardodel Val & Fuentes (2003, p 143), “the general aim of organisational change is an adaptation to the environment or an improvement in performance.” These adaptations or improvements can occur either incrementally or radically. Incremental change relies on slightly altering or developing existing processes, policies or structures, without changing their original function or purpose (Tidd et al., 1998 in McAdam, 2003). This technique generally allows for gradual development of strategies and plans, problem solving, and effective communication before implementation (Rees & Porter, 2006). However, external drivers often force the need for radical change within organisations. According to Scalzo (2006, p 62), radical change, “attempts to redefine the organisations structure, functions, values, culture, strategy, power distribution, and control systems”. These significant changes to behaviours and values can often be challenging for established companies to implement.
The global brand Nestle was founded in 1866 by Henri Nestle, a German pharmacist, when he opened his first condensed milk factory in Switzerland (“History,” n.d). In the century and a half since Nestle was established, it has achieved an impressive list of accomplishments including; the expansion from Europe to America and then globally, sustainment throughout World War I, II and the Great Depression, becoming a recognized market leader, and the development and acquisition of such products as Nesquik, Milo, Nespresso, Movenpick, Gerber, Friskies, as well as becoming a major shareholder in the internationally sold cosmetics brand L’Oreal (“About Us,” n.d.). However, throughout the years there has been a great deal of controversy surrounding the ethics of Nestle’spractices. From 1977 onwards, Nestle has been under attack from the public for countless global injustices. Specific to 1977, Nestle received worldwide backlash for their irresponsible marketing of breast milk substitutes. Despite knowing that an estimated 1.5 million children die annually from consuming artificial breast milk (Saunders, 2010), the company continued to manufacture and promote such substitutes. Consequently, countries have internationally boycotted Nestle for over 40 years, with the exception of a break between 1984-1988. In 2001, Nestle was highly criticized yet again, for purchasing cocoa from regions in Ghana and the Ivory Coast that are known to employ child slaves (“Corporate Crimes,” n.d.). Moreover, in the last decade Nestle has been scrutinized for its public stance and promotion toward using genetically modified crops for food productions, and for over-pumping water in Brazil for their Pure Life water brand, thus causing depletion of the amazon rivers (“Corporate Crimes,” n.d.).
Nestles most recent scandal in March of 2010 stemmed from a targeted ad created by the non-profit environmental organization, Greenpeace. Recognized for being a global social change organisation (GSCO), Greenpeace works to address important issues such as environmental matters and sustainable development. Using YouTube as a platform, Greenpeace released a video based on Nestle’s ‘Need a Break? Have a KitKat’ campaign. However, instead of breaking off a piece of the KitKat chocolate bar, the ad graphically depicted bloody pieces of orang-utan fingers being broken off. The intent of the ad was to address the issue of Nestle’suse of palm oil in their products, which was supplied by companies that were destroying the Indonesian rainforests and ecosystems, and thus pushing orang-utans towards extinction (“Ask Nestle to give Rainforests a Break,” n.d.). Immediately after the video was uploaded, Nestle representatives claimed copyright infringements and demanded to have it removed. However, the video went viral, with hundreds of different versions uploaded and shared globally. The public responded with outrage, which spurred the creation of various Facebook pages that protested and attacked Nestle’spractices. The public demanded that the organisation change their practices by halting their acquisition of palm oil from companies involved in deforestation. Since Nestle manufactures millions of products, this change would require switching suppliers, altering production methods, and spending a great deal of money.
Clearly, Nestle was unprepared for this radical organisational change as it was driven by unexpected external forces: GSCO’s and the public. Any resistance within the change process which slows down, hinders, or delays its beginning, or obstructs its implementation, is referred to as resistance to change (Ansoff, 19990, in Pardodel Val et al., 2003). Nestle’s initial resistance to change was clearly demonstrated when administrators of Nestle responded to Facebook comments about their contributions to the extinction of orang-utans by writing, “Get it off your chest – we’ll pass it on” (Fox, 2010). This showed top-level management’s blatant disregard for the important environmental issues at hand. According to Rumelt, there are several reasons for resistance to change, which can be categorized into distinct categories. The first category involves inaccurate initial perceptions or interpretations, and includes refusal or denial to accept any unexpected information (Barr et al., 1992 in Pardo del Val et al., 2003). Specific to Nestle, management were unprepared for the public backlash, and thus refused to accept that environmental sustainability issues could force such a change. The second category relates resistance with a low motivation for change, and includes costs associated with change, conflicting interests among management and staff, and pessimistic views for future changes. Nestle was concerned about financial costs involved with implementing drastic change, and thus resisted due to a lack of motivation. The third category discussed is sourced from a lack of creative responses, and include rapid environmental changes which leave little time for problem solving, and a lack of commitment from management to embrace the changes (Rumelt, 1995, in Pardo del Val et al., 2003). Due to the unexpected forces for change, Nestle had limited time to brainstorm creative responses, therefore adding to their trepidation of change. However, after months of persistent campaigning, Nestle resented and set about to change its companys’ behaviour and its negative public perception.
It is clear that a big change was needed from Nestle if they had any hope of restoring their tarnished image. It would require the role of a change agent, defined as, “a manager who seeks to reconfigure an organisations roles, responsibilities, structures, outputs, processes, systems, technology, or other resources in light of improving organizational effectiveness”, to rapidly change policies and opinions, and combat internal resistance to change (Buchannan &Badham, 1999, in Saka, 2003, p 483). Change agents can be hired externally, or can exist internally in the form of management. Internal change agents tend to focus more on organisational imperatives such as profit maximisation, efficiency, and goal achievement than do external agents (Case, Vandernberg& Meredith, 1990). Consequently, organisations are often unable to clearly identify areas which need improvement without the help of an external change agent. However, because Greenpeace was a GSCO, their mission was to act as a bridge for Nestle. Bridging involves GSCO’s connecting with internal or external change agents to guide them towards sustainable change and provide them with needed resources and tools (Waddel, Cummings & Worley, 2011). Although Nestle was unprepared for these radical changes, with Greenpeaces’ assistance and expertise, Nestle management embraced their roles as internal change agents. In 2010, Jose Lopez, a senior operations manager, began the difficult challenge of changing the organisations processes, values and beliefs (Ionescu-Somers & Enders, 2012). Using an action-research model for change, Nestle developed plans to halt their acquisition of harmful palm oil, implement environmentally conscious behaviour and alter the negative perceptions by the public. Moreover, as Nestle became enlightened throughout the process, it further improved its operations to achieve greater sustainability. This change process will be discussed further in the part two of this three part essay.
After analysing Nestle, it is clear that external driving forces were the catalyst for the company’s change. As Greenpeace campaigns and public reactions demanded that the company halt sourcing its palm oil from companies involved in deforestation, radical action was necessary if Nestle was to be successful in implementing organisational change. Due to the unanticipated nature of the external driving forces, the company was unprepared and originally resistant to the demand for change. In part, this was due to the large financial cost required in solving the issue, hostility and denial within the company, and a lack of creative problem solving responses. However, after relentless campaigning through online social media sites, Nestle recognized its need to update its practices and rid itself of its negative public image. By addressing what needed to be modified and why, and using change models for implementation, Nestle was able to achieve the positive transformation they sought. Part two and three of this three part essay will further analyse and explore Nestles organisational change in relation to the content and process of change, and use relevant theory to demonstrate their success.
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