1.

INTRODUCTION
Nestle India Ltd. is a part of the Nestle SA group which is one of the largest
manufacturing companies in the world. Henri Nestle founded the company
(with its headquarters in Vevey, Switzerland) in 1867. Nestle has two major
divisions - Le Societe des Products which looks after the production and
marketing and Nestec Ltd. which provides the technical assistance to the
group companies.
Since its inception in 1867, the company has diversified it product range from
the infant weaning formula (which was its first product) to beverages,
confectionery, ice creams and pet foods among others. In a span of 130 years
the company has ranked 26th among the worlds largest corporations and
boasts of a turnover of $48932.5 million and employee strength of 221,144
people spread over 75 countries worldwide (Annexure A).Nestle has long
been viewed as one of the most multinational of the multinationals. This is
because today only 2% of its turnover comes from Switzerland. Out of the
remaining 98%, Europe contributes 43.5%, North and South America
contribute 36.5% and Africa and the Asia Pacific Regions contribute 18%.
Through its effective marketing and a vast sales and distribution network
throughout the country, it ensures that its products are made available to
consumers throughout the country. Nestl has large operations with multidimension areas but people, quality products and brands are the main flag
bearers of the companys image.
Nestl believes in creating shared value and is committed to the communities
it works and lives with. The company is working closely with communities in
areas related to Nutrition, Water and Rural Development, and continues to
enhance the quality of life of people throughout its value chain.

The companys strategy is guided by Nestls Corporate Business Principles

which are in line with internationally accepted best practices and ethical
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performance culture. The Companys priority is to bring the best and most
relevant products to people, wherever they are, whatever their needs are, and
for all age groups.
Nestl is not a faceless corporation catering to faceless consumers, but is a
human company providing a response to individual human needs. It respects
the cultures of the countries and is committed to make a contribution to the
quality of life of people.
In line with Nestls global philosophy, its commitment to excellence in
product safety and quality and to providing value and services to its
consumers. As a socially responsible corporate, we always focus on
environment friendly operations, ethical business practices and our
responsibility towards the communities.

2. COMPANY PROFILE
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Although Nestle has been associated with India since the beginning of the
century through the importing and trading of infant food and condensed milk,
manufacturing in India only began with the setting up of the factory in Moga
in 1962. The first product to be manufactured was Milkmaid.
In the last 35 years the company has shown rapid progress and has increased
its product range to 80 products as of October 1997. Nestle India Ltd. now
ranks 22nd amongst India are most valuable companies (Annexure B). Its gross
revenue has increased from Rs 1001.1 crores to Rs. 1213.8 crores in1996.
This remarkable growth has been achieved through Rapidly creating greater manufacturing capacity, both at factories as well as
with co-packers.
Taking measures to ensure availability and improved quality of key raw
materials - fresh milk in particular.
Strengthening of the sales and distribution network (particularly in smaller
towns)
Ambitious and cohesive manpower training and development programs for
the personnel of the company across all disciplines.
The companys exports also resulted in a very successful year in this area as
exports grew by 27% to Rs. 250.8 crores in 2003. Themain contributors to this
increase were the export of tea and coffee to USA, Japan, Russia, Hungary
and Taiwan. Nestle India Ltd. wants to further increase its operations in India
and has started construction of its sixth Factory at Bicholim, Goa for the
manufacture of culinary products (a key thrust area) for this purpose.

3. PRODUCTS & SERVICES

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Milk, Dairy & Chilled Dairy:

Nestle Milk Pak

Nesvita

Nido

Everyday

Nestle Dahi

Nestle Fruit Yogurt

Nestle Raita

MILKPAK Cream

Nestle Creations

Nestle Diet Yogurt

Beverages:

Nescafe

Nestle Milo

Nestle Fruita Vitals

Bottled Water:

Nestle Pure Life Available in 0.5, 1.5,12, 19 liters.

Baby Food:

Nestle Cerelac

Prepared Meals:

MAGGI 2-minute Noodles

MAGGI 2-minute taste maker

Breakfast Cereals:

Nestle Corn Flakes

Nestle Koko Krunch

Chocolate & Confectionary:

KITKAT

KIKAT Chunky

POLO

4. MISSION & VISION STATEMENT

Our Vision
Nestls global vision is to be the recognized leading Nutrition, Health and
Wellness Company. Nestl subscribes fully to this vision of being the number
one Nutrition, Health, and Wellness Company.

In particular, we envision to;

Lead a dynamic, motivated and professional workforce proud of our

heritage and positive about the future.

Meet the nutrition needs of consumers of all ages 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.

Our Mission
"To be in every way the leading company in the Indian food industry and a
good corporate citizen by providing our consumers with superior quality
products, our shareholders with rapid growth and fair returns and our
employees with a challenging and satisfying work environment."

5. ORGANIZATION STRUCTURE
Nestl follows a flat, matrix organizational structure. The departments are
divided function-wise and product-wise. All the products use different
functional departments, and all the functional departments have specific
product departments within them.
The span of control is wide, as each department head has many direct and
indirect reporting relations with his subordinates. Also, as in a pure matrix
form, nearly all employees have two or more departments to report to, directly
or indirectly. The Managing Director of Nestl reports directly to the Head
Office in Switzerland, and gets guidance and objectives from them.
Directly under the Managing Director are different functional departments:
Business Executive Managers
Head of Human Resource Department
Head of Sales Department
Head of Supply Chain4
Head of Food Services Department
Head of Technical Department
Head of Finance Department
Head of Corporate and Legal Department

6. ORGANIZATIONAL BEHAVIOR
Organizational behavior is a field of study that investigates the impact that
individuals, groups and structures have on behavior within an organization for
the purpose of applying such knowledge towards improving an organization's
effectiveness. It is an interdisciplinary field that includes sociology,
psychology, communication, and management; and it complements the
academic studies of organizational theory (which is focused on organizational
and intra-organizational topics) and human resource studies (which is more
applied and business-oriented). It may also be referred to as organizational
studies or organizational science. The field has its roots in industrial and
organizational psychology.
Organizational behavior studies the impact individuals, groups, and structures
have on human behavior within organizations. It is an interdisciplinary field
that includes sociology, psychology, communication, and management.
Organizational behavior complements organizational theory, which focuses on
organizational and intra-organizational topics, and complements human
resource studies, which is more focused on everyday business practices.
Organizational studies encompass the study of organizations from multiple
perspectives, methods, and levels of analysis. "Micro" organizational behavior
refers to individual and group dynamics in organizations. "Macro" strategic
management and organizational theory studies whole organizations and
industries, especially how they adapt, and the strategies, structures, and
contingencies that guide them. Along with those two levels of analysis, some
scholars add categories of "Meso" scale structures, involving power, culture,
and the networks of individuals in organizations, and "Field" level analysis
which studies how entire populations of organizations interact.

7. NESTLS CORPORATE CULTURE

As we had discussed before, Nestle is one of the most multinational of
multinationals and is spread over 75 countries worldwide. This implies that it
has employees from diverse cultural backgrounds. Nestle respects the
distinctive culture, mentality and traditions of every employee in every
country. What Nestle aims at is to incorporate its own culture into its
employees without stifling the individual employees culture and identity.
When we went to Nestle we could feel the existence of a distinctive work
culture amongst the management - the staff seemed highly motivated &
cheerful and everybody had pin up boards in front of their tables with
reminders, motivational messages and even time logs (the Nestle people
seemed as if they availed of the benefits of time management) .
Apart from this, Nestle has a vast distribution network. In order Nestle has a
diverse product range and so it also has diversified risks Thus Management on
Information systems plays a vital role in Nestle to provide information to the
Sales and Marketing as well a the finance department .The Electronic Data
Processing Department looks after Management Information Systems.

8. ORGANIZATIONAL BEHAVIOR PRACTICES IN

NESTLE

Communication:

Communication Strategies followed by Nestle:

At Nestle the working environment was very formal.

People were encouraged to participate and they could easily communicate

with their co-workers. Few of the things that we noticed about their
communication flow were Mostly downward communication occurs.
However employee suggestions were also welcomed. They can talk to their
superiors easily.

Employees and workers are encouraged to participate in decision making to

some extent. They are asked their opinions in any new package that the
company is offering.

But mostly at higher level, GM of all the departments interacts with each other
for major decisions. And the lower level is informed about the decision.

No trend of memos, unless there is a major event or an unexpected holiday

announcement. There is not much written communication.

They mostly contact through a phone call or email. In a way we see that there
is an open communication channel within the company.
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There is the network of communication links within organization, to achieve

the goals as well as institutional objectives.

Internal Communication:

Nestle has maintained open communication channels both downward and

upward in the companys hierarchy. This is quite effective in creating a good
working environment for the employees.
Mostly all the conversation that is being carried on is through e-mails within
departments and employees. All sorts of announcements are made through emails most of the time no such memos are used.

Downward Communication:

In Nestle message which is sent to workers by top authority is called

downward communication.

It is the is deliberate creation of communication channels by the top

authorities on formal lines to inform, instruct, direct, suggest and evaluate
employees in the process of coordinating individuals efforts towards
organization goal.

Downward communication takes place when managers like to inform or

educate the employees.

Downward communication is also utilized by the managers to send feedback

to the subordinates as a response to the upward communication.

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Upward Communication:

The message or any other data which is sent to authorities by the employees is
called upward communication.

Through this, top management can maintain continuous touch with the low
levels.

In absence of this communication top level will be isolated and in the long run
managers will be totally fail to manage people and work

Examples include, Complaints about working conditions or about any other

negligent employee. The medium used include letters and emails.

External Communication:

In Nestle the external communication means sending messages to persons

outside the company. The sources used by Nestle for its external
communication are as follows

By Annual Report

Media Advertisement

Print media advertisement

By giving packages

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Through services

Through Presidents message

9. BARRIERS TO COMMUNICATION IN NESTLE

The problems those are faced by Nestle are as follows

Cultural Difference:
Since Nestle is a multinational company having thousands of employees from
different areas and having entirely different culture, it faces a great problem in
its day to day business activities.

Emotional Interference:
Nestle has a huge area all over the world. And operate this huge mob
employees is not an easy task. There are many reasons in which the
employees become anger and which may cause of barriers.

Information overload and message competition:

There are millions of messages which come from customer and they have not
enough time to read and reply, thus barrier in communication.

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10. ORGANIZATIONAL BEHAVIOR OF NESTLE

Individuals are the bricks of an organization and Individuals create groups

and groups create organization

Nestle organizational behavior focuses primarily on two major areas.

Organization behavior looks at individual behavior based mainly on
contributions from psychologist; this area includes such topics as personality,
perception, learning and motivations. Nestle knows the importance of
individuals (MAN) who are the main bricks for organization behavior. Nestle
has been placing greater focus on employee empowerment and participation,
which are essential for long-term growth and success of the company, and
therefore employees have been encouraged to put forward their issues,
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concerns and suggestions. Nestle trust its employees focus on integrity,

competence, consistency, loyalty and openness. Manager stops at people desks
during the day to chat with them about their work, keeping up to date also
earns the trust of employees.
Secondly their organizational behavior is concerned with group behaviors,
which influence roles, team building and conflict. The organization group
behavior is good. Once the individuals are skillful, energetic, responsible,
agreeable etc, then it is easy to make form successful groups.
All these things make the organization behavior successful.
In order to make all business affairs transparent, smooth and effective,
following committees and teams have been formed which work cohesively
and independently.

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11.ORGANIZATIONAL CULTURE OF NESTLE

Organization culture is a system of shared meaning within an organization that

determines in large degree how employees act.
After Nestles inception, the corporate culture underwent a comprehensive
renewal program which was fully implemented in 2004. This program over
the years included the revamping of the organizational architecture,
rationalization of staff, employee empowerment and transparency in decision
making through cross functional teams. This new corporate renewal program
has divided the companys major operations into independent activities
supported by legal, financial, informative and other services. In order to
reinforce and monitor this structural change, related check and balances have
been established by incorporating monitoring and control systems.

Importance Of Culture In Nestle

According to the opinion of the Nestls sales officer Nestl is a sales oriented
company. Strong culture is a symbol of more profit more earning and sense of
responsibility. It is also a monument of well-disciplined enterprises in which
every organ of that organization is well concerned with the ultimate objective
of the organization. As its a fundamental truth that every individual from
worker to Top manager is aware of his rights privileges responsibilities and
outcome of efforts being invested.

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Special efforts for continuously enriching our business systems and

implementing relative strategies have always been fruitful which are aimed at
augmenting a work culture that enhances employee motivation as well as
gaining a better understanding of forces that shapes motivation, attitude,
behavior

patterns

and

expectations.

Six Dimensions Of Culture

1. Innovation and risk taking: According to our survey what we have found
is that employees are not much encouraged to be innovative and take risks.

2. Attention to detail: According to our survey employees has given

importance.

3. Outcome Orientation: The managers focuses on both results or outcomes

and the techniques needed to achieve those outcomes.

4. People Orientation: Management decisions do not take into consideration

the effect of outcomes on people within the organization. They have made
their employees a central part of their culture.

5. Team orientation: They emphasize on team orientation i.e. work activities

are organized around them. Stability Nestle is maintaining the status in
contrast to growth.

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6. Zero Tolerance Nestle have high ethical standards and a Business

Principles and Ethics Policy in place. They value, encourage and inculcate
corporate reforms, good governance, best business practices and an
environment of continued adherence to Zero Tolerance, resulting in the
development of our human capital and meeting all business challenges.

Hiring & Recruitment

Hiring and requirement is the most important task performed by Centre of

Expertise. It is the process on which the entire companys future and
performance relies upon. The Business Partners are supposed to communicate
the staff requirements of different departments, and set the job description and
requirements. Contacts with universities and recruitment events are
maintained to have good visibility of the Company and recruitment sources.
The recruitment office looks for three key characteristics: knowledge,
personality and motivation. For managerial positions, specific leadership
qualities and business acumen is required. Even when promoting employees
from within the organization, it is their role to keep an eye on valuable
candidates. Those who meet the essential requirements are then evaluated
through a series of screening tests, interviews and group discussion sessions to
gauge their suitability for the job.
It is extremely important to hire the right person, not just for Companys
objectives, but to help integrate newcomers in the organization so that their
skills and behavior can merge smoothly with the company culture. At Nestl
the recruitment is done keeping the objective of diversification in mind. The
organization has a global mindset which involves diversity to encourage and
foster creativity and new ideas, which forms the unique selling proposition of
a business.

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Training Programs:

Training is seen as an ongoing process. It doesnt only involve training

sessions and lectures, but day-to-day interactions with the superiors and
fellow employees, absorbing their knowledge and ideas: guidance and
coaching by managers is a given. Knowledge also comes through the tasks
assigned: simple learning-by-doing and on-the-job training.
Apart from that, Nestl is committed to enhancing employee skills and
competencies through formal training programs. These are selected according
to individual requirements and the job they are working for. The candidates
are selected based on their performance, potential and personal development
goals and recommendations come from the Head of Human Resource
Department and the Business Partners of respective departments. The Centre
of Expertise is responsible for designing.

Power And Politics:

Power is a potential ability and influence for a people which direct other
people in desired direction to do something. In an organization managers use
normally two types of power interpersonal and formal. Formal power is based
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on an individual position in the organization and personal power comes from

an individual unique characteristics.

Legitimate Power:

Legitimate power is used in Nestle as it is based on the power a person

receives as a result of his or her position in the formal hierarchy of an
organization. The employee has the authority to control and use the
organizational resources.

Expert Power:

Expert power is the influence based on special skills, knowledge or expertise.

Expertise has become one of the most powerful sources. As jobs have become
more specialized the organizations have become increasingly dependent on
experts to achieve goals.

Learning

In Nestle learning is done to make the employees skilled at creating,

acquiring, transferring knowledge, and to enhance their skills. In an
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Organization learning is a long-term activity that builds competitive advantage

over time and requires sustained management attention, commitment, and
effort. In Nestle collaboration with team members give the employees
opportunity for learning social, technical and creative skills. When learning is
effective the organization is highly aware of how to motivate its employees in
the best ways. Rewards, such as education, bonuses are given to motivate
employees.
There are different kinds of rewards NESTLE gives to their employees which
are as follows:

Cash bonuses

Promotions

Make team leader

Increments in salaries

Allowances like (fuel allowance, mobile allowance)

Teams And Groups:

A group whose individual efforts result in performing that is greater than the
sum of the individuals input. At Nestle, employees work in team and they
have a team of over 4,500 unique individuals who make it Pakistans largest
company. Being exposed to best practices and an enabling environment, they
are the best minds in the industry today. By working in teams, employees
bring their collective skills and knowledge to bear on problems and to develop

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innovative ideas for the organization. To be effective, teams should be formed

with employees from a variety of functional areas.
Work satisfaction relates to personal satisfaction of team members for the
work they have done. In Nestle their team consists of individuals who have
technical expertise, problem solving, decision making and interpersonal skills.
And the work team members do provide them freedom, the opportunity to use
different skills, the ability to complete it and that work has a substantial
impact on others.
Conflict Management:

Nestle compromised self managed work teams according to employees

response they feel greater level of responsibility on their shoulders and they
measure the things like planning ,scheduling of work, and assigning tasks to
the members of team, control the place of the work, make decisions through
discussion between the team members, take actions to solve the problems and
also interact with their customers and we found that the employees called their
colleagues relationship officer rather than sales officer.

Code of Conduct

In line with Nestle managements effort to maintain the decorum and ensure
an environment that is cohesive to the development and success of the people,
a Code of Conduct has been put in place where the following activities can
result in disciplinary action:
1. Unsatisfactory and negligent job performance.
2. Excessive and unauthorized absence from duty.
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3. Unsatisfactory safety performance.

4. Reporting on duty under the influence of drug or intoxicants.
5. Absence from duty without notice or permission from the supervisor unless
the

cause of absence prevents giving notice.

6. Using influence for promotion, transfer or posting.

7. Conduct that violates common decency and morality.
8. Engaging in a fight or in activity that could provoke fighting on site
property.
9. Insubordination or deliberate refusal to comply with reasonable requests or
instructions.
10. Use or possession of weapons, ammunitions, explosives, intoxicants, illicit
drugs or narcotics on site.
11. Acts of horse play on site property.
12. Gambling on site property or bringing illegal gambling paraphernalia on to
the site.
13. Theft or unauthorized removal of site property or property belonging to
site employee, contractor and vendor.
14. Intentional damage to site, employee, contractor or vendor property.
15. Dishonest act or fortification of records, including the giving of false
information when required.
16. Bringing combustible material on site or having any type of match sticks,
cigarette lighter or flame producing device in restricted areas.
17. Smoking except in designated areas.

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18. Using or divulging without permission, any confidential information

gained through employment at the site.
19. Physical, mental or sexual harassment of fellow employee including threat
to do bodily harm.
20. Crime involving fraud, indecency, breach of dignity or public morals and
other serious offences.
21. Any other commission or omission which, in the opinion of the company,
requires/justifies dismissal/termination of employment.

12. ANALYSIS

After studying various issues related to the organizational behavior within the
organization we analyzed that

The organization behavior regarding goal setting for employees I have

analyzed that the management of Nestle is effective in setting goals according
to the competition in the private sector.

The management style in Nestle is kind of participative management in which

employees are given chance to share their ideas for decision making.

There are different kinds of rewards NESTLE gives to their employees which
are as follows:

Cash bonuses

Promotions Make team leader

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Increments in salaries

Allowances like ( fuel allowance, mobile allowance)

We found very different kind of reward in Nestle that they motivate their
employees whose performance is not up to the mark by giving them the
salaries equivalent to the market value of the any other employee of same rank
so as to motivate their employees.
Many of the employees are being rewarded after accomplishment of their
sales target in such a way that their management take them to the picnic or
invite them for dinner frequently. And another very interesting fact which I
found in Nestle is that their management does not fire their employees even
their performance level is not up to the mark. Overall employees are satisfied
with their company and jobs.

To some extent they are given empowerment to do their work. Most of them
agree that their jobs are not creating any physical or mental problems for
them.

But according to my opinion employees are facing job stress. It is a fact that
cannot be denied. Because we know that stress is inevitable. It can only end
up with the end of life But the company deals with this problem and provides
them proper counseling.

Most of the employees have positive attitude toward their jobs.

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If we see an overall picture, then it is clear that they are somewhat satisfied
with their jobs and they dont have a lot of stress on them. But still there is a
need of improvement in strategies of NESTLE to make workforce more
productive.

NESTLE asses the employees performance on:

Leadership.

Communication skills.

Team work and Co-operation.

Problem solving & decision making.

Flexibility.

Customer focus.

In NESTLE training to the employees is given for the current improvement in

the job while developmental program is for improving the skill which will be
used in the future. Both managers and non-managers receive help from
training and developmental program but mostly non-managers are concerned
with training while the managers are concerned with developmental programs.

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Nestle has got the combination of leaders that are both task oriented and
leadership oriented. This shows that Nestle have the leaders that perform
better in all situations and can manage their teams more effective and
efficiently.

The organization properly communicates its strategies to its employees to

carry good results efficiently and effectively. The communication between the
employees is good and that drives them to do outstanding achievement in
work. In Nestle the employees are listened, respected, trusted, and valued that
gives them a sense of self worth and belonging.
Nestle is providing clear path for career advancement to its employees,
Company gives full support to its employees in this context. At Nestle,
employees work in team and they have a team of over 4,500 unique
individuals who make it Pakistans largest company.
Being exposed to best practices and an enabling environment, they are the
best minds in the industry today. By working in teams, employees bring their
collective skills and knowledge to bear on problems and to develop innovative
ideas for the organization.

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CONCLUSION

To increase goodwill and positive impression of Nestle among employees and

customers Company should adopt the following things:

Enhance more promotion opportunities for their employees.

Encourage employees to participate in decision making.

We would suggest that specific job related training should be imparted to

employees this would give an additional benefit to employees for improving
their skills.

Professional counseling program should also be started to provide employees

with the information, regarding future prospects at Nestle and in the mobile
industry

They should be establishing and maintaining effective communication with

each employee, sharing of ideas and employee involvement in decision
making process.
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The employer should show a greater trust to employees and employees should
feel good about their employer.

There should be no artificial barriers between employees and management.

BIBLIOGRAPHY
www.nestle.com
www.managementparadise.com
http://www.nestle.in/

http://economictimes.indiatimes.com/nestle-india-

ltd/infocompanyhistory/companyid-13330.cms
http://en.wikipedia.org/wiki/Organizational_behavior

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