Nest|e Case 5tudy

1he companv of nesLle had underaone boLh Lhe flrsL order chanae and second order chanae ln a flrsL order chanae
Lhe companv underwenL some chanaes ln Lerms of LransacLlonal and oraanlzaLlonal cllmaLe chanae Cn Lhe oLher
hand nesLle also underwenL second order chanae whereln Lhere are chanaes ln Lerms of LransformaLlonal chanae
1hls order secondorder Lvpe of chanae ls more evldenL 8elow are Lhe snlppeLs oraanlzaLlonal chanae LhaL occurred
aL nesLle accordlna Lo lLs order
llrsL Crder
O nesLle beaan expandlna aloballv and beaun Lo purchase local subsldlarles ln local markeLs
O Cffshore Lransfer of LxecuLlve from SwlLzerland Lo unlLed SLaLes
O SLrenaLhenlna/CenLrallzaLlon of lLs l1 deparLmenL
Second Crder
O lverslflcaLlon of markeL Lhrouah enLerlna ln cosmeLlcs and pharmaceuLlcal markeL
O CompleLe overhaul of execuLlve board wlLh execuLlves replaced
O cqulslLlon and Meraers
lscusslna more on Lhe secondorder chanae a LransformaLlonal chanae happened when Lhe oraanlzaLlon swlLched
from enLrepreneurlal Lo become a wlder and more professlonal manaaemenL klnd of sLrucLure when Lhev beaun Lo
purchase local subsldlarles ln forelan markeL ln order for Lhelr sales aaenL (new poslLlon) Lo lnLroduce Lhelr producL
ouLslde of SwlLzerland noLher LransformaLlonal chanae LhaL happen lnvolves Lhe vlslonarv chanaes LhaL make Lhe
oraanlzaLlon chanae ln Lerms of lnvolvlna ln oLher flelds of buslness Lhrouah producL dverslflcaLlon Lhrouah
l 9roducLlon of chocolaLe wlLh Lhe lnaredlenLs of Swlss Ceneral ChocolaLe lacLorv
ll CreaLed new producL llke malLed mllk powdered beveraae and powdered boLLled mllk
lll 9roducLlon of coffee producLs
lv Meraed wlLh Maaal seasonlna and soup manufacLurers
v LnLered cosmeLlc arena Lhus becomlna Lhe ma[or shareholder of L'Creal
vl lnvolved ln produclna pharmaceuLlcal and ophLhalmlc producLs

urlna Lhe course chanae Lhe companv applled some mldmanaaemenL chanae Lheorv" wlLhouL desLrovlna
emplovee's lovalLv lmpresslon moLlvaLlon self belonalnaness and poslLlve behavlours

LasLlv acqulslLlons and meraers was also a bla parL of nesLle's second order Lvpe of chanae 1hls provlded Lhem
acceleraLed arowLh (buL oLher crlLlcs had vlewed lL as neaaLlve) lncrease ln popularlLv and malnLalned oraanlzaLlonal
repuLaLlon

2 9eLer 8rabeckLeLmaLhe llne of LhouahL reaardlna lncremenLal chanae LhaL occurred ln nesLle ls based prlmarllv ln hls
leadershlp mlndseL whose focus ls on subsLance over sLvle whlch lncludes a sLrona dedlcaLlon Lo dlsclpllne and lona
Lerm approach Lo arowlna a buslness 9eLer accordlna Lo llLeraLures Look a conservaLlve approach Lhan hls
predecessor Lo lmprove nesLle's buslness urlna Lhe earlv davs of hls Lenure he slashed cosL bv lncreaslna Lhe
efflclencv of manufacLurlna operaLlons aoL rld of maLure buslnesses wlLh llLLle poLenLlal for proflL arowLh and
focused lnvesLmenL on fasLarowlna flelds ConLradlcLlna Lo 9eLer's concepL of lncremenLal chanae on nesLle's overall
buslness lncremenLal chanae (as whaL he LhouahL lL was be) ls noL lncremenLal afLer all 1he aaaresslve acqulslLlon
of a number of food/beveraae lndusLrv (8alsLon 9urlna Chef merlca and rever's) expanded lLs markeL ln addlLlon
Lhe dlrecLlon of Lhe companv Lo spend over $8 Lo auLomaLe and lnLearaLe all of lLs worldwlde operaLlon from
procuremenL Lhrouah producLlon Lo dlsLrlbuLlon lncludlna Lhe revamplna of nesLle's research and developmenL unlL
Lo faclllLaLe beLLer coordlnaLlna amona Lhe aroup's dlfferenL buslnesses ls an aaaresslve sLraLealc move 1hls
cenLrallzaLlon allowed hlm Lo unlfv Lhe companv's wlde ranalna neaoLlaLlon and conLracLs wlLh suppllers and as a
resulL beLLer cenLrallze producLlon 1he move had closed 38 facLorles and cuL $ bllllon ln cosL whlle lmprovlna Lhe
companv's ablllLv Lo obLaln volume dlscounLs

3 LlsLed are Lhe followlna speclflc lmpllcaLlons LhaL manaaer's from nesLle had encounLered

l 8rldalna culLural aaps ln brlnalna LoaeLher people from dlfferenL culLures LoaeLher
ll CreaLlna a wlnnlna corporaLe culLure Lhrouah relnforcemenL and susLenance of companv's sLrenaLh
lll avlna Lo manaae people Lhrouah Lhe Lrauma of chanae and deal wlLh Lhelr fears and concerns when nesLle
cenLrallzed lLs l1
lv eallna wlLhln and ouLslde of Lhe oraanlzaLlon
v lfflculLv ln bulldlna relaLlonshlp per realon per producL llne

ln summarv Lhere are Lhree (3) envlronmenLal pressures for chanae LhaL manaaer's faced durlna Lhe process llrsL ls
Lhe aeopollLlcal pressure ln Lhe form of emeraencv slLuaLlon durlna Lhe world wars LhaL requlres lmmedlaLe acLlon or
a lonaLerm aeoaraphlcal reallanmenL L Lhe end of Lhe WW nesLle have experlenced flnanclal losses due Lo prlce
lncrease ln raw maLerlals and LoLal economlc downLurn and ln WWll Lhe companv aaaln was affecLed wlLh low
proflLablllLv because SwlLzerland had became more separaLed from Lurope ue Lo Lhls pressure Lhe companv
lnlLlaLed Lhe move Lo Lransfer lLs execuLlve offlces offshore

Second envlronmenLal pressure LhaL Lhe companv encounLered ls Lhe markeL decllne aL Lhe end of WWll slnce Lhe
demand of condensed and powdered mllk had chanaed Lhrouah cusLomer preference CusLomer LasLe wanLs fresh
mllk lnsLead of condensed and powdered mllk ln relaLlon coffee beans and cocoa prlces had lncreased rapldlv and
make lL less of a demand bv Lhe people whlch made Lhe companv Lo venLure ouL ln order for Lhe buslness Lo offseL
Lhe loss ConcurrenLlv Lhe CLC was faclna a hvper compeLlLlon pressure wlLh naloSwlss condensed mllk prlor
nesLle declded Lo merae wlLh lL

1hlrd and lasLlv are Lhe new broom pressures 1hls happened when Lhe CLC appolnLed Lhem (comlna from Lhe
ouLslde) Lo lmprove and lncrease companv quallLv and producLlvlLv Lo have a more successful fuLure 1o conLrol Lhls
Lvpe of chanae Lhe CLC had emphaslzed LhaL Lhev musL focus Lo relnforce and susLaln sLrenaLhs raLher Lhan chanalna
Lhem

4 ownslzlna Lhrouah reLrenchmenL and down scoplna 1echnoloalcal chanae Meraers and cqulslLlons are
consldered Lhe Lop Lhree (3) lessons comlna from Lhe fronLllne ln aeneral downslzlna causes sLress noL [usL for Lhe
ones who leaves Lhe companv and Lhose LhaL remalns keeplna Lhe morale of Lhese survlvors ls verv lmporLanL ln
everv companv CfLen emplovees who remaln do noL feel happv LhaL Lhev survlved Lhe lavoffs 8aLher Lhev feel
anarv or shocked LhaL Lhe lavoffs happened
1helr lmaae of Lhe companv mav have chanaed as Lhev now feel LhaL Lhe envlronmenL has become more cuLLhroaL
and evervone ls on Lhelr own ln baLLllna Lo survlve
ln asslsLlna emplovees afLer downslzlna we musL help Lhem undersLand whv lL happened Call a meeLlna Lo dlscuss
Lhe naLure of Lhe downslzlna whaL Lhe fuLure holds and Lhe securlLv of Lhelr [obs lso Lake Lhls Llme Lo answer
quesLlons or lssues LhaL Lhev wanL Lo have addressed lf posslble offer career counselllna Lo Lhose who are havlna a
hard Llme wlLh Lhe chanae
Clearlv communlcaLe whaL Lhe fuLure holds ddress Lhe new chanaes ln pollcv and sLrucLure anv whv Lhev are ln
place lf Lhere ls a larae amounL of resLrucLurlna make Llme for emplovees Lo come LoaeLher Lo bulld new worklna
relaLlonshlps Lhrouah workshops or soclal Llme 1hls wav Lhev qulcklv become more comforLable wlLh Lhe new
envlronmenL and people Lhev wlll be worklna wlLh
Moreover ln asslsLlna manaaemenL Lo reLrenchmenL and down scoplna we musL communlcaLe Lo Lhem whv Lhe
process ls necessarv and be open Lo dlscuss Lhe lssues Lhev have wlLh Lhe downslzlna
1hev Loo wlll be dlrecLlv affecLed ln Lhe fuLure when lL comes Lo sLrucLure of Lhe aroups Lhev manaae new process
LhaL need Lo be lmplemenLed and new workaroups LhaL wlll be formed
LasLlv nesLle musL monlLor Lhe afLermaLhs of Lhe process checklna lf Lhere ls an lncreaslna Lrend of absenLeelsm and
reLenLlon raLe


e|ng Case 5tudy
n oraanlzaLlonal model ls a represenLaLlon of an oraanlzaLlon LhaL helps us Lo undersLand more clearlv and
qulcklv whaL we are observlna ln Lhe oraanlzaLlon s 8urke had explalned Lhe usefulness of Lhls oraanlzaLlonal
models ln a number of wavs such as () lL enhances our undersLandlna of oraanlzaLlonal behavlour (2) lL helps ls
caLeaorlze daLa abouL Lhe oraanlzaLlon (3) lL helps us lnLerpreL daLa abouL Lhe oraanlzaLlon and (3) lL helps
provlde a common shorLhand lanauaae ln relaLlon wlLh Lhe 8oelna case sLudv Lwo Lvpes of dlaanosLlc models
can be deemed useful ln deLermlnlna Lhe kev facLors LhaL revolve on Lhe slLuaLlon
svnLhesls of Slx8ox model and lorce fleld analvsls are besL flL models Lo deLermlne facLors LhaL are cenLerlna
8oelna's slLuaLlon llrsL Welsbord's Slx8ox model whlch caLeaorlzes Lhe oraanlzaLlonal llfe ln slx () faceLs
lncludlna purposes sLrucLures relaLlonshlp leadershlp rewards and helpful mechanlsm ln Lhls model Lhe
sLrucLure refers Lo a wav ln whlch Lhe oraanlzaLlon ls oraanlzed 1he wavs ln whlch people and unlLs lnLeracL ls
Lermed relaLlonshlp lso lncluded ln Lhe box of relaLlonshlps ls Lhe wav ln whlch people lnLeracL wlLh
Lechnoloav ln Lhelr work 8ewards are Lhe lnLrlnslc and exLrlnslc rewards people assoclaLe wlLh Lhelr work 1he
leadershlp box refers Lo Lhe Lvplcal leadershlp Lasks lncludlna Lhe balance beLween Lhe oLher boxes llnallv Lhe
helplna mechanlsms are Lhe plannlna conLrolllna budaeLlna and lnformaLlon svsLems LhaL serve Lo meeL
oraanlzaLlon aoals owever Lhls model focuses on Lhe lnLernal lssues wlLhln an oraanlzaLlon prlmarllv bv
poslna 'dlaanosLlc quesLlons" whlch have Lo do wlLh Lhe flL beLween whaL ls" and whaL should be"
ln order Lo deLermlne exLernal facLor lorce lleld analvsls ls consldered so as Lo have a wellrounded analvsls of
Lhe oraanlzaLlon LhaL wlll conslder Lhe exLernal facLors (slnce lnLernal facLors have been ldenLlfled ln above
model) 1he force fleld analvsls ldenLlfled boLh drlvlna forces and resLralnlna forces wlLhln an oraanlzaLlon
1hese drlvlna forces such as envlronmenLal facLors push for chanae wlLhln Lhe oraanlzaLlon whlle Lhe
resLralnlna forces such as Lhe oraanlzaLlonal facLors acL as barrler Lo chanae ln aeneral Lhe lnLenLlon ls Lo move
Lo a deslrable sLaLe of equlllbrlum bv addlna drlvlna forces where lmporLanL and ellmlnaLlna resLralnlna forces
where approprlaLe
2 ln Lhe Slx8ox model each box poses a quesLlon LhaL refers Lo hls premlse reaardlna Lhe naLure of Lhe formal and
lnformal svsLems wlLhln Lhe oraanlzaLlon lL ls wlLhln Lhese quesLlons LhaL l wlll be explalnlna mv cholce

o lotpose uo otooolzotloool membets ootee wltb ooJ soppott tbe otooolzotloos mlssloo stotemeot?
nswer Cn Lhe evenLual reslanaLlon of 9hll CondlL manv breaLhed as a slaned of rellef whereln Lhev
are hoplna Lhe chanae wlll be occurrlna soon
b ttoctote ls tbete o flt betweeo potpose ooJ tbe lotetool sttoctote of tbe otooolzotloo?
nswer Lhe loss of belna Lhe lndusLrv leader from lrbus sLock prlces decreaslna bv and
lncreaslna compeLlLlve pressure Lrlaaered a serles of chanaes Lo overcome Lhe bureaucraLlc sLrucLure
ouLdaLed Lechnoloav svsLem and unnecessarv processes ln Lhe companv LhaL had chanaed llLLle slnce
WWll
c elotloosblp wbot tvpe of telotloosblp exlsts betweeo loJlvlJools betweeo Jepottmeots ooJ betweeo
loJlvlJools ooJ ootote of tbelt job? wbot ls tbe ooolltv of tbe telotloos? wbot ote tbe moJes of
coofllct?
nswer 1he meralna of 8oelna and Mconnell oualas brouahL dlfflculLles ln Lerms of culLural
svnLhesls slnce Lhe laLLer had a verv sLrona culLure LhaL focused on Lhelr deallnas wlLh Lhe aovernmenL
offlclals for defence conLracLs whereas Lhe former has a famllv orlenLed culLure ln addlLlon Lhe
lnvesLors were ln doubL LhaL Lhere was Lrlckerv ln reaard wlLh Lhe meralna and Lhe $92M pavouL Lo
shareholders
J ewotJs wbot Joes tbe otooolzotloo fotmollv tewotJ ooJ fot wbot Jo otooolzotloool membets feel
tbev ote tewotJeJ ooJ poolsbeJ? wbot Joes tbe otooolzotloo flt oeeJ to Jo to flt wltb tbe
eovltoomeot?
nswer 1he case had noL elaboraLed furLher Lhe resulLs SLoneclpher announced worked closelv wlLh
unlons Lo reverse Lhe low morale of Lhe emplovees from Lhe pasL manaaemenL however lL ls assumed
LhaL Lhls was addressed ln vear 2 when Lhe Lldes had Lurned and 8oelna aaaln became Lhe number
one ln Lhe avlaLlon lndusLrv lrom Lhls polnL morale was reversed and aaaln assumed emplovees was
rewarded ln accordance Lo Lhelr performance
e eoJetsblp uo leoJets Jefloe potposes? uo tbev emboJv potposes lo tbelt ptootoms? wbot ls tbe
ootmotlve stvle of leoJetsblp?
nswer ?es Lhelr proaram fullv embodles lLs purpose 8esulL showed ln Lhe vear 2 LhaL Lhe lald
down plan was effecLlve s a resulL Lhe companv had reposlLloned lLself on Lhe Lop Lhe morale of lLs
emplovees ls hlah and Lhev have a new markeL (L) aaln Lhe leadershlp sLvle of Lhe new
manaaemenL was noL emphaslzed on Lhe case lL ls assumed LhaL Lhe sLvle of leadershlp ls comblnaLlon
of auLocraLlc and parLlclpaLlve lor auLocraLlc Lhe declslon of SLoneclpher Lo manufacLure L planes
and lor parLlclpaLlve when he closelv worked wlLh labour unlons Lo redlrecL emplovee morale
f elpfol Mecboolsm uo tbese mecboolsms belp ot bloJet tbe occompllsbmeot of otooolzotloool
objectlves?
nswer 1he mechanlsm emploved bv SLoneclpher had Lremendouslv help ln meeLlna Lhe
oraanlzaLlons ob[ecLlves
Casew Act|n |ann|ng
1o sLarL wlLh Lhe C pracLlLloner musL flrsL clarlfv and verlfv lLs cllenL expecLaLlons and Lhe exLenL of chanae
LhaL Lhev are expecLlna ln order for her Lo dlrecL hls acLlon plans fLer aaLherlna Lhe expecLaLlons he musL
lnform Lhe cllenL on Lhe prellmlnarv daLa aaLherlna meLhodoloav Lhrouah exLenslve assessmenL of Lhe
oraanlzaLlon LhaL he wlll be uslna so LhaL Lhe oraanlzaLlon wlll noL be surprlsed on Lhe acLlvlLles LhaL wlll be
performed bv Lhe C pracLlLloner
under hls exLenslve assessmenL Lhe pracLlLloner wlll focus on Lhe followlna areas
O CraanlzaLlons lndepLh undersLandlna of Lhe oraanlzaLlon's mlsslon and vlslon (Lhouah Lhls ls noL veL
wellesLabllshed)
O llanmenL of emplovees Lo Lhe oraanlzaLlons values
O undersLandlna overall pollLlcal svsLem
4 SvsLems and 9ollcles
4 CraanlzaLlonal 9rocedure
4 Leadershlp 8ehavlours
4 Croup 9rocesses and
4 Levels of saLlsfacLlon
O Who/whaL deparLmenLs are asslaned Lo speclflc aoals
O ow well do Lhev undersLand Lhelr role ln Lhe oraanlzaLlon?
fLer aaLherlna all perLlnenL lnformaLlon reaardlna Lhe reasons on Lhe mlsallanmenL and mlsundersLandlna of
Lhe oraanlzaLlon Lowards lLs aoal Lhe C pracLlLloner musL esLabllsh and drafL Lhe vlslon and mlsslon of Lhe
companv SubmlL lL Lo Lhe execuLlves for Lhelr approval lf approved he musL formulaLe speclflc values allaned
Lo Lhe formulaLed mlsslon and vlslon and Lhen submlL aaaln for approval
2 now slnce Lhe foundaLlon of Lhe acLlon plan ls alreadv lald down and Lhe speclflc ob[ecLlves ls alreadv known
Lhrouah Lhe creaLed mlsslon and vlslon Lhen lL ls now Lhe Llme Lo be more speclflc ln developlna Lhe sLraLeav
and acLlons plans ln manaalna Lhe LranslLlon beLween presenL and fuLure
1he C pracLlLloner should deLermlne and bralnsLorm wlLh selecLed parLlclpanL pro[ecLs wlLhln beLween and
amona Lhe oraanlzaLlon 1hen Lhe C pracLlLloner wlll summarlze acLlons accordlna Lo Lhelr welahL based on Lhe
dlaanosLlc and componenL analvsls he prefers Lo use 1he pracLlLloner wlll now deLermlne Lop 3 acLlon plans
(Lhree each for wlLhln beLween and amona) on whlch Lhls wlll be Lhe kev pro[ecLs 1hls pro[ecLs wlll aaaln be
submlLLed Lo Lhe execuLlves wlLh deLalls (one can use Lhe formaL of 9C) for buvln Cnce approved Lhe acLlon
plan wlll now be execuLed and monlLored (effecLlveness)
now Lhe kev pro[ecLs wlll be supporLed bv small pro[ecLs from Lhe bralnsLormed lLems 1he small pro[ecLs wlll
noL be nealecLed however Lhls wlll be lncorporaLed ln Lhe onaolna C ma[or pro[ecLs
3 1he C pracLlce wlll noL end afLer execuLlon and relavlna Lo Lhe manaaemenL lmprovemenLs from Lhe applled
chanaes from Lhe acLlvlLv conLlnuous revlew plannlna and lmprovemenL process musL be lmplemenLed Lo
make sure LhaL () Lhe pro[ecLs and acLlons are carrled ouL accordlnalv and wlll noL dle ouL (2) Lhe sLraLeav wlll
be reaularlv revlewed and updaLed so LhaL lL malnLalns lLs relevance and effecLlveness and (3) new acLlons are
added Lo replace Lhose LhaL have been compleLed ln shorL Lhere musL be a followLhrouah of Lhe acLlvlLles ln
Lhls reaard Lhe senlor sLaff wlll be chosen Lo oversee sLraLeav lmplemenLaLlon

5ma|| Gup Inteent|n A Case 5tudy
avlna ln LhaL Lhe klnd of slLuaLlon Lhe nexL sLep Lo conslder for me Lo check Lhe oraanlzaLlon's mlsslon and
vlslon and have an lnlLlal lnvesLlaaLlon on how Lhe oraanlzaLlon adheres Lo Lhelr ob[ecLlves from Lhe v9 of 8
nexL sLep ls for me Lo ask lf we can schedule a councll meeLlna ln order Lo clarlfv Lhe deLalls on Lhe dlrecLlon and
Lhe exLenL of chanae Lhe oraanlzaLlon wanLs Lo be and Lhe companv's LlmeLable 9rellmlnarv meLhodoloav and
dlaanosLlc Lools wlll be dlscussed ln order Lo aaln buvln from Lhe councll
1he process of oraanlzaLlonal developmenL LhaL wlll be lmplled wlll follow below dlaaram ln order Lo be
svsLemaLlc and Lo accounL all posslble areas lL ls lmporLanL Lo keep and sLlck lnLo a svsLems perspecLlve ln Lrvlna
Lo sorL ouL whaL Lhe cause of anv problems ldenLlfled


ln parallel l can also use analvLlcal Lools under Lhe 1CM prlnclple dlaanosLlc Lools and componenL analvsls Lo
have an lndepLh analvsls on whaL Lhe problem ls and Lhus could aeneraLe a real soluLlon Lo Lhe problem WlLh
Lhls l can alreadv formulaLe a sLraLealc plan LhaL also lncludes envlronmenLal scannlna and scenarlo plannlna
1he whole acLlon plan wlll emerae from Lhe assessmenL and feedback phase and Lhe process mav acLuallv bealn
durlna Lhe feedback sesslon as emplovees suaaesL nexL sLeps ln addresslna Lhe assessmenL's flndlnas
ln formulaLlna Lhe sLraLealc plan a aroup wlll be formed ln order Lo have a broader concepLuallzaLlon of Lhe
acLlon realsLered and an undersLandlna of whaL ls Lhe problem and whaL needs Lo be done 1he problem wlll be
dlaanose bv a core aroup dependlna on Lhelr lndlvldual area of responslblllLv and [ob deslan Movlna forward
Lhe Leam wlll deslan and choose approprlaLe lnLervenLlons Lo faclllLaLe execuLlon and monlLorlna of Lhe acLlon
plan lurLhermore afLer Lhe LlmeLable for Lhe monlLorlna Lhe Leam wlll evaluaLe lLs effecLlveness and revlse lf
necessarv unLll furLher lnsLlLuLlonallzlna Lhe oraanlzaLlonal chanae Cne lmporLanL facLor ln Lhls acLlvlLv ls Lhe
emplovee lnvolvemenL ln order for Lhem Lo have a sense of prlde and accepLance on Lhe chanaes LhaL wlll be
comlna and belna execuLed
Moreover wheLher Lhe chanae ls ln
sL
and/or 2
nd
order performance manaaemenL developlna LalenL and
manaalna workforce dlverslLv and wellness wlll be also Laken lnLo accounL so as Lo moLlvaLe emplovees for
conLlnuous lmprovemenL


llaure CraanlzaLlonal evelopmenL 9rocess Model