This is a case study on Nestle, a Swiss national organization. Nestle was considered the world’s largest company in 2000 with over 500 factories in various countries. Today they have scaled further with 339,000 employees compared to the 224,000 employees back then. They make annual sales of $91.6 billion (Hatløy, Torheim, & Oshaug, 1998).
Brabeck-Letmathe is the CEO of the company. When he came in as CEO, he replaced the whole board of executives. This was the first change he made and has continued in the same spirit while observing the culture and preserving the core values of the company. He focuses on the strengths and core principles. The company focuses on keeping the strengths other than replacing them. It also wishes to keep its longevity rather than working on short-term working profitability. The real focus is on how to reinforce and sustain strengths rather than changing them (Palmer, Dunford & Akin, 2009).
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1. Did Nestlé undergo either first-order and/or second-order change according to the case? Answer listing examples of types of change from the above story.
From the excerpt given, it’s evident that both first-order and second-order changes were witnessed in nestle. First order changes include changes system, structures and maybe processes adjustments whereas second-order change ‘is much more of transformational, and changes the central organization process; the core. It fully transforms the structure of the company.
One example of the first-order change I can quote is the attainment of L’Oreal and Camation plus a fine-tuning to maintain competitiveness and profitability in the market. A good example of second order change was the replacement of the whole executive board by Brabeck-Letmathe on his arrival.
2. Brabeck-Letmathe emphasizes the need for an incremental approach to change. Do you agree that this is what he has done? Discuss the differences and similarities between his view and your view of what has occurred at Nestlé, both historically and in recent times.
On his arrival, Brabeck-Letmathe replaces the whole executive board. At first, for me, it looks like a bad move and completely wrong about the right change for the organization. It looks more like an incremental change approach. However, since then, he has focused on the development of the company’s strengths and to maintain the longevity of the company rather the short term achievements and operations. They are focusing on enhancing the strengths rather than changing them (Palmer, Dunford & Akin, 2009). I am in for the idea that Brabeck-Letmathe the changes that Brabeck-Letmathe has made are enough to allow nestle grow and succeed business wise.
Previously, Nestle tried anything they thought was good to keep them in business. My opinion would be to focus on companies that were performing well by then. I would also have considered expanding beyond the war zone. I am for the idea of acquiring new companies, a move that has led to nestle remaining a household name for over 140 years.
3. What implications for change managers would apply specifically to Nestlé? Outline how the Nestlé management team may have reacted to each implication.
Nestles has a list of “untouchables” which gives them the idea of what works best for them. The change manager knows that a single change is bound to have an impact elsewhere; therefore, the company has to be very careful and choosy with the changes they implement. The list of “untouchables” includes strengths of the company such as corporate growth and how to handle that as well as the part played by technology. The directing change manager gives a company a steady outlook for the coming years. For all change managers, change requires good assessment of its scale between incremental and radial, plus the view of risks expected.
4. Find three examples of the lessons from the front line that are evident in the Nestlé case. How could these issues be overcome?
One lesson we learn from the front line is downsizing. Downsizing in the European markets started when nestle first launched out into America. After the world war, the scaled further into new market overseas. They had to restart in a new country. When Brabeck-Letmathe arrived and completely replaced the executive board with new members, that was restructuring and a form of downsizing. Technology plays a sensitive role in Nestle. Although they do not allow implementation of new technology as a central strategic direction, it also doesn’t deny its importance (Shi, Chertow, & Song, 2010).
Debriefing
In conclusion, Nestle continues to expand and reconstruct; they started with a goal in mind, a goal to help mothers who could not breastfeed their newborns (Palmer, Dunford & Akin, 2009). The company is committed to enhancing the more lives by offering healthier food and better beverages (Strange, Capon, Spencer, Knight, Weale, Allen, & Blackwell, 2010). Nestle works on its strengths that have enabled them to become a giant in their own market worldwide. They have a goal to remain the leader in nutrition, health as well as wellness. They have some operational pillars such as operational efficiency, renovation, consumer engagement, and innovation. They have a strategy of being everywhere whenever necessity arises (Barker, & Frolick, 2003). They are also determined to succeed by upholding their culture, core values, and creation of shared values.
References
Barker, T., & Frolick, M. N. (2003). ERP implementation failure: A case study. Information Systems Management , 20 (4), 43-49.
Hatløy, A., Torheim, L. E., & Oshaug, A. (1998). Food variety—a good indicator of nutritional adequacy of the diet? A case study from an urban area in Mali, West Africa. European Journal of Clinical Nutrition , 52 (12), 891.
Nestle, M. (2006). Food marketing and childhood obesity—a matter of policy. New England Journal of Medicine , 354 (24), 2527-2529.
Strange, A., Capon, F., Spencer, C. C., Knight, J., Weale, M. E., Allen, M. H., ... & Blackwell, J. M. (2010). Association study identifies new psoriasis susceptibility loci and an interaction between HLA-C and ERAP1. Nature Genetics , 42 (11), 985.
Shi, H., Chertow, M., & Song, Y. (2010). Developing country experience with eco-industrial parks: a case study of the Tianjin Economic-Technological Development Area in China. Journal of Cleaner Production , 18 (3), 191-199.
