NESTLE

Members of the Nestl Management at all levels are more concerned with continuously
adding value to the Company than exercising formal authority. This can only materialise with a
high involvement of each employee and a common mindset geared to results. Contributing to
results through project work and special assignments becomes more frequent, reaching beyond
conventional boundaries in order to contribute to wider group performance.

ORGANIZATIONAL STRUCTURE OF NESTLE:

Basic Elements of Organization Structure
Managing
Director

Finance

Supply Chain

Human
Resource

Technical
Production
Sales

Legal

Corporate
Affairs

Communication

Business
Functions

Dubai
Infant Nutrition

Professionals

Singapore

This is the chart of the nestle Pakistan. The organizational chart of Nestle outlines organizations structure.
It shows that the organization has a Flatter Structure. This gives some view but not the entire picture.
There is a managing director to which all the following departments report: finance, supply chain, human
resource, technical production, sales, legal, corporate affairs, communication, business functions. there
are two other departments which operate here but report to offices outside Pakistan. Infant Nutrition
reports to Dubai while professional which is a department of water reports to Singapore.

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Organizational Climate:
Employees have specific tasks to perform on their job at Nestle. Boredom is not allowed at Nestle and
employee here does not have time to feel bored. It depends on the individual because the environment at
Nestle is work intensive. The reasons of boredom could be that the work isnt challenging enough, too
much routine, reluctance to work, and also because there is too little communication in the team. People
find work for themselves. It an employee is bored then he must be fired or his position or department
should be changed. There might be chances at the secretarial level job that one could feel bored but still
they too have specific tasks to perform. It might be the organizations mistake sometimes if they did not
appoint the right person at the right place.
Organizational Culture :
There are basic rights which are granted. At nestle there is work, role functionality or rank related or both
importance given to people. Apart from that there is a professional significance apart from general one.
For example the managing director is given a personal home a guard and when he comes to the
organization then a specific parking lot area. On the general level each person that is slightly related to the
organization is very important. Important safety precautions are taken at factory levels. Washrooms, clean
water, safety and other minor things are cared for without any distinctions. Their psychological and safety
needs are fulfilled. They are given acceptable and good pays also the environment in the work is hazard
free.

LEVELS OF MANAGEMENT IN NESTLE:

Nestl has developed a unique global programme to ensure compliance with the WHO Code
across all Nestls operations.
GES Investment Services, Northern Europes leading analysis firm for socially responsible
investments, published a report on The Infant Food Industry and the WHO Code. This report is
the first of its kind assessing and comparing infant food companies compliance procedures with
respect to the WHO Code. It concluded: Nestl has the most elaborated policies and
mechanisms to address the Code, distinctly ahead of its peers.
Nestl's implementation of the WHO Code includes the following:

Nestl Policy and Instructions

Training, testing and compensation on WHO Code knowledge
Nestl WHO Code Management System
Internal Ombudsman System
Internal and External Audits

Nestl Policy and Instructions

first published in 1982, these were developed to ensure complete and correct implementation of
the WHO Code by Nestl. This became necessary because the WHO Code, as a recommendation
to governments, does not supply implementation instructions. This is left to national regulation,
which may be absent or weaker than the WHO requirements.

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Training, testing and compensation on WHO Code knowledge
Nestl trains personnel involved in marketing of breast-milk substitutes on the WHO Code,
monitors its own practices, identifies contraventions and takes corrective action. Personnel are
tested regularly on their knowledge of the WHO Code, and their performance on the tests is a
criterion upon which salary increases and promotions are based. Code violations are also taken
into account regarding decisions on salary increases, promotions, and if serious enough, lead to
termination of employment.
Nestl WHO Code Management System
In all developing countries, Nestl has implemented an extensive WHO Code Management
System, built along the lines of ISO quality assurance systems. The manual, outlining Nestl
policies and procedures, gives detailed operational guidelines to all Nestl employees in their
daily conduct of business related to Infant Food to ensure compliance at all levels with both the
WHO Code of Marketing of Breast-milk Substitutes and local regulations. The procedures
include built-in checks to ensure that potential code violations are avoided.
Internal Ombudsman System
Each Nestl Market has a designated Ombudsman, outside of line management, to whom
suspicions of WHO Code violations can be reported in a confidential manner.
There is also a Corporate Ombudsman, who is a member of the Executive Board of the Nestl
Group, to whom employees can report allegations if they are uncomfortable with reporting them
to their markets ombudsman.
Internal and External Audits
Internal audits are carried out in 9 to 22 countries each year. Nestl employees are aware that
their actions are subject to audits and that Code violations result in punitive measures. Audit
results are communicated to top management, and where violations occur, these are reported to
the Nestl CEO.
Nestl produces annual summary reports to the Audit Committee of the Board of Directors on
internal monitoring, external reporting and corrective actions taken regarding non compliance.
One person at Corporate Executive Board or Management level has the ultimate responsibility
for the implementation and monitoring of the policy
Nestl has in place systems for taking corrective action on all allegations of non compliance,
provided that there is information with sufficient detail to permit this.
In addition, Nestl commissions external audits on code compliance on an ongoing basis. Since
2004, Bureau VERITAS, a major global auditing company, has been commissioned to review
Nestl infant food marketing in several countries in Africa, Asia and Latin America.

Leadership at Nestle:
Adding Value: Members of the Nestl Management at all levels are more concerned with
continuously adding value to the Company than exercising formal authority. This can only
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materialize with a high involvement of each employee and a common mindset geared to results.
Contributing to results through project work and special assignments becomes more frequent,
reaching beyond conventional boundaries in order to contribute to wider group performance. The
broader the responsibility of a Nestl Manager, the more the following specific criteria should be
considered, in addition to Professional skills, practical experience and result focus.

MOTIVATION:
Members of Nestl Management at all levels are strongly committed to the Company, its
development and its culture as expressed in The Nestl Management and Leadership Principles.
They practice what they preach and show the example in their daily work. Apart from
professional skills and insight, the capacity and willingness to apply these principles are the main
criteria for progressing in the organization, regardless of origin, nationality, religion, race, gender
or age.

MISSION STATEMENT OF NESTLE:

At Nestl, we believe that research can help us make better food so that people live a better
life. Good Food is the primary source of Good Health throughout life. We strive to bring
consumers foods that are safe, of high quality and provide optimal nutrition to meet
physiological needs. In addition to nutrition, health and wellness, Nestl products bring
consumers the vital ingredients of taste and pleasure. As consumers continue to make choices
regarding foods and beverages they consume, Nestl helps provide selections for all individual
taste and lifestyle preferences. Research is a key part of our heritage at Nestl and an essential
element our future. We know there is still much to discover about health, wellness and the role of
food in our lives, and we continue to search for answers to bring consumers Good Food for Good
Life.

GOALS AND PLANS FOR AN ORGANIZATION:

For earning profits and increasing revenue, goals and plans play an important role in
any organization. They lay down foundation for further process, same is the case with
nestle, right now company is very successful with diverse range of products

Soluble Coffee

Infant Nutrition

Confectionery

Dairy

Chocolate Milk Beverages

Bottled Water

Pet Care

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Ice Cream

Nestl market their products under six strategic global brands:

NESTL

NESCAF

NESTEA

MAGGI

PURINA

BUITONI.
All this is possible because of their good strategic, tactical and operational goals and S

STRATEGIC GOALS AND PLANS:

Strategic goals are laid by higher management of an organization. In success of all
its products they play an important role. These are the long terms goals which company
want to achieve in future. Nestls long term goals are:

Meet the nutritional needs of consumers of all age groups from infancy to old age,
from nutrition to pleasure, through an innovative portfolio of branded food and
beverage products of the highest quality.
Deliver shareholder value through profitable long-term growth, while continuing to
play a significant and responsible role in the social, economic and environmental
sectors of the country.

Nestl believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form
of voluntary business principles is beneficial in order to ensure that the highest
standards are met throughout the organization.
Nestl is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.
Nestl continues to maintain its commitment to follow and respect all applicable local
laws in each of its markets.

TACTICAL GOALS AND PLANS:

Goals that define the outcomes that major divisions and departments must
achieve for organization to reach its overall goals. Middle management of nestle sets
this for specific departments and units. For example everyday, which is Nestls tea
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whitener, has received great competition from Haleebs tea max so now people from
middle management are developing tactical goals to reduce competition. Normally
companies start formulating tactical goals along with strategic goals.

OPERATIONAL GOALS AND PLANS:

These are the targets or future results set by lower management addressing specific
measurable outcomes required from lower levels. Operational plan are also laid by people from
lower management. These involve Nestls day to day tasks like hiring new people, motivating
employees, managing human resource, research and development and implementing strategies
laid down by higher authorities. It also involves training and development. HR at Nestle has a
full fledge department for training and Development.These have mandate of policy level
decision and guide lines.

LIFE CYCLE:
Study of professional services firms clearly revealed that firms change over the course of
their life cycles. During the first three stages, diversification in sales, the differentiation in labor
force, and the level of labor productivity increase. In the last stage, diversification in sales, the
differentiation in labor force, and the level of labor productivity decrease. Development effects
can be treated as interdependent. Our findings show that the effects of growth can be predicted to
a certain extent. In efforts towards development, these predictions are important to business
strategy, as well as to consultation with and education of SME entrepreneur. Therefore every
organization faces following stages: entrepreneurial, collectivity formalization or
revitalization/decline.

Entrepreneurial stage -> Crisis: Need for leadership

Collectivity stage -> Crisis: Need for delegation
Formalization stage -> Crisis: Too much red tape
Elaboration stage -> Crisis: Need for revitalization

NESTLES STAGE:
According to our groups observation right now nestle is going through, formalization stage: too
much red tapism. Most of the power belongs to higher authorities, although they delegated some
of the power to middle management but still most of the decisions requires lots of paper work.
Moreover signs from various officials create unnecessary delay in important decisions.

SWOT ANALYSIS:
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying

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the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieving that objective.

Strengths: attributes of the person or company those are helpful to achieving

the objective.
Weaknesses: attributes of the person or company those are harmful to
achieving the objective.
Opportunities: external conditions those are helpful to achieving the objective.
Threats: external conditions which could do damage to the objective.

Strengths:

In mine view these are the strengths of Nestle. The first and the most

important strength of Nestle is the name of company itself. They never

compromise on quality. They produce quality products according to the
specification of customer. Their system of sale & sale promotion is also one of
the strength of Nestle. In the area in which they want to sell the product they
hold seminars and shows. In this area they monitor the sale and increase the
production. They try to convince ultimate consumer.

The milk collection procedure of Nestle is also one of its strength. They
collect milk from selected people and check its purity at the location. Then
special trucks take it to factory. Where they boil milk at 140 degree centigrade
and then cool it. This process is repeated for 3 to 4 times. There milk contains
3.5% fat, which is recommended internationally.

Weaknesses:

One of the weakness of nestle is the product range of Nestle. As there product
line is very vast, so they cannot give equal attention toward the promotion of
each product. We can take the example of candies produced by Nestle, they
give absolutely no attention toward promoting them despite the fact that if we
consider the trust people have on nestle brand there is a large market for
candies, While they are promoting their milk products effectively. The reason
behind this discrepancy is that they have limited budget to promote their
products.

The other weakness of Nestle is that the company has a very limited number
of sales staff in the southern Punjab due to which they are losing some market.

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Opportunities:

Nestle can increase their share if they focus on lower middle class. We can
take the example of small pack of Every Day tea whitener whose introduction
increases the sales of nestle tremendously. The reason for this was that the
price of Every Day tea whitener was with in the range of lower middle class.
So, Nestle can increase its share by focusing on lower middle class.

The other opportunity for Nestle is that if they introduced milk bottle like
Candia and sell them directly to the customers they can increase their share.
By selling directly to customers means that they provide milk to the people at
their doorsteps.

Threats:

In Pakistan Nestle face threats from lower companies. We can take the
example Haleeb and Dairy Queen. The sales of these products have badly
affected the sale of Nestle Milk Pack. Haleeb is well promoted than the Nestle

Milk Pak.
Nestle also face threat from Cadbury, which is multinational company.
Cadbury sell candies and chocolates and it affect the sale of Nestle products in
the field of candies.

INNOVATION:
Considering all the things that affects external and internal environment of nestle
and according to our groups observation now nestle should introduce its own bread,
which can include white bread, brown bread, whole grain bread and flavoured bread, to
cater various age groups. This will play an important role in increasing their revenue as
bread is important part of every breakfast table. Moreover their competitors in most of
the countries have not introduced bread yet.

STRATEGIC MANAGEMENT PROCESS:

The 8 steps of strategic management are:
1) Agreement on the process.
2) Identification and clarification of the organization's mission, objectives and current
strategies.
3) Identification of the organization's internal strengths and weaknesses.
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4) Assessment of treats and opportunities in the internal environment.
5) Identification of key constituents and stakeholders, their expectations and resources.
6) Identification of key strategic issues.
7) Design, analysis, and selection of strategy alternatives and options to manage issues
identified in step 6.
8) Implementation of the strategy.

IN RELATION WITH OUR INNOVATION:

1) First of all people from higher management should agree on production of new
product and support its production. People from higher management like CEO and
chief executive should do all the paper work.
2) Before introduction of new product we should know the mission of company, what
company intended to in future, current market conditions and current marketing
and management strategies of nestle.
3) We should analyze the organization thoroughly, in what things it is leading and in
what sense it is facing losses. In short before the introduction of our bread we
should do swot analysis of nestle as company. This will cover 3rd and 4th steps in
strategic management process.
4) Then we should observe and study who are people interested in our product, what
our stakeholders and shareholders think of our product. We should consider our
overall resources that whether they are enough for the production of new product,
what may be the problems or hurdles we will face, or can we do proper resource
allocation.
5) After following all these steps nestle should observe key strategic issues of
company that is what are the problems that company might incur while
introduction of its bread.
6) This step involves evaluating and choosing alternatives for problems in 6th step so
nestle should consider various alternatives for problems in production of its bread.
7) Last and most important step is implementing that innovation or change for
increasing profits
8) After implementing process nestle should review the after effects of its products as
aim of nestle is to create value for customers.

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Conclusion:
The basic idea that we can generate after all the critical work that we have done is that Nestle
working experience is of 140 years and they have wide range of products which is helping them
to generate more marketing shares and sustaining the competitive advantage. They hire qualified
and experience staffs which further help the company to achieve its goals.
We have done interviews of employees working in Nestle and conclude that they all are enjoying
this work field. And satisfied with it. The company is giving high benefits to its employees as we
have mentioned some of them in our report to motivate them.
We also enjoyed a lot in gathering this all data from different sources including News papers,
Internet and especially from the employees who are working with Nestle for years.

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References:
Wikipedia.com
Official website of nestle (www.nestle.com.pk)

google.com

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