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Nestle Corporate Business Principles

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Nestle, founded in 1867 by Henri Nestle, took its beginning from nutrition as its cornerstone. Peter Brabeck-Letmathe, Nestlé Chairman described Henri Nestle on an account as “Instrument in turning his Company towards international expansion from the very start”, and that he “…embodied many of the key attitudes and values that form part and parcel of our corporate culture: pragmatism, flexibility, the willingness to learn, an open mind and respect for other people and cultures.” For more than 100 years, The Nestlé Corporate Business Principles are at the basis of the company’s culture- the conviction that in order to attain long-term success for our shareholders, they do not only comply with all applicable legal requirements and assure sustainable activities, but also create considerable value for society which they dub as Creating Shared Value.

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Having gone through massive changes that began in First World War due to the increase in demand for dairy, Nestle Company started acquiring local subsidiaries in foreign markets and altered its approach to global expansion in the 1900’s.

By definition, first-order incremental change involves adjustments in systems, processes or structures; sustain the organization and order. From observation, it can be analyzed that Nestle went through both first and second orders change. By examples, the following steps Nestle did fall under the first-order change: Relocation of executive offices from Switzerland to the United States Diversification to advance growth for the company by acquiring shares from the cosmetic company L’Oreal Purchase of a US pharmaceutical manufaturer, Alcon Laboratories Inc. Second-order change leads to transform the organization’s nature and not develop it. Nestle Company acquired local subsidiaries from foreign markets and expanded globally. I personally agree to Brabeck-Letmathe’s incremental approach to change by restructure. Nestle had to expand its reach to the US, and one possible way to do so is by restructuring. This method generated more authority and responsibility for new market. He has realized that there is always a high resistance to change and a lot of first-order changes mostly generates turmoil and perplexity.

Change causes continual anxiety. Brabeck-Letmathe has historically developed a style of accountability and nurturing approach to alleviate major disruptions and concerns for job security. He carefully calculated his steps so as to attain a direct goal. JM Thompson (2010), stated on his case study that, “Managing organizational change has become a significant responsibility of managers. change is difficult and the change process poses formidable challenges for managers. Managers themselves face increased pressure to respond to environmental influences and provide the necessary leadership to their organizations in the change process.” Nestle’s restructuring began when Brabeck-Letmathe reconstructed the executive board by putting new executives. This spurred questions as to why there was a need or such and this specific action was said to be ideal for crisis if only for change’s sake. In the long run, the said action developed a list of what were later considered as company’s strength in relation with technological advancement.

Palmer (2009), stated in his book that, “The change manager as interpreter image reminds us that whether change is adaptive, creative, or transforming is not necessarily an object given but will depend upon the perspective of the person doing the considering.” Implementation of technological change became an issue in the company in the process of restructuring. Though it is practically acceptable that IT can be used as a tool of great importance, its implementation as the central strategic direction was rejected. On this notion, I think that this issue can be resolved by proper briefing and orientation as of the significance of technological change it can do to the company. According to Marc Schabracq (2007), in order to change an organization’s culture, the agents should first be able to understand the organization’s attitudes, beliefs and assumptions. However, if the employees are still resistant to it, strict implementation must be done which people cannot simply ignore as it will become part of the company’s culture. When Nestle Company expanded globally, it became the beginning of restructuring that took place in the company. It was an issue simply because the company that focused on food industry forayed on a non-food industry that was a clear mismatch. However, this step became the gateway to further expanion of the company and a restructuring was implemented which bore a more flexible company.

Cite this Nestle Corporate Business Principles

Nestle Corporate Business Principles. (2016, Sep 24). Retrieved from https://graduateway.com/nestle-case-study-3/

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