Nestle Organizational Behavior Project Report (2024)

INTRODUCTION

Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and is today the world’s leading nutrition, health and wellnesscompany. Sales for 2009 were CHF 108 bn. We employ around 280000 people and have factories or operations in almost every country in the world.

Since its founding, Nestlé’s business practices have been governed by integrity, honesty, fair dealing and full compliance with all applicable laws. Nestlé employees worldwide have upheld and lived this commitment in their every day responsibilities ever since, and Nestlé’s reputation remains one of the Company’s most important assets today.

Employees should always be guided by the Since its founding, Nestlé’s business practices have been governed by integrity, honesty, fair dealing and full compliance with all applicable laws. Nestlé employees worldwide have upheld and lived this commitment in their every day responsibilities ever since, and Nestlé’s reputation remains one of the Company’s most important assets today.

following basic principles:

• avoid any conduct that could damage or risk Nestlé or its reputation;
• act legally and honestly;
• put the Company’s interests ahead of personal or other interests.

For the purposes of this Code, references to “employees” include employees, associates, officers and directors of Nestlé S.A. and its subsidiaries.

The Nestlé Corporate Business Principles prescribe certain values and principles which Nestlé has committed to worldwide. This Code of Business Conduct specifies and helps the continued implementation of the Corporate Business Principles by establishing certain non-negotiable minimum standards of behavior in key areas. The nature of this Code is not meant to cover all possible situations that may occur. It is designed to provide a frame of reference against which to measure any activities. Employees should seek guidance when they are in doubt about the proper course of action in a given situation, as it is the ultimate responsibility of each employee to “do the right thing”, a responsibility that cannot be delegated.

History of Nestle

• 1866-1905

In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother’s milk or any of the usual substitutes. People quickly recognized the value of the new product, after Nestlé’s new formula saved the child’s life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe.

• 1905-1918

In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain. World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestlé’s production had more than doubled.

• 1918-1938

After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestlé’s management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé’s first expansion into new products, with chocolate the Company’s second most important activity

• 1938-1944

Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company’s newest product, Nescafé, which was a staple drink of the US military. Nestlé’s production and sales rose in the wartime economy.

• 1944-1975

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby’s (1971) and Stouffer’s (1973). Diversification came with a shareholding in L’Oréal in 1974.

• 1975-1981

Nestlé’s growth in the developing world partially offset a slowdown in the Company’s traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc..

• 1981-1995

Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé’s improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation.

• 1996-2002

The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer’s, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.

• 2003+

The year 2003 started well with the acquisition ofMövenpick Ice Cream, enhancingNestlé’s position as one of the world market leaders in this product category. In 2006, Jenny Craig and Uncle Toby’s were added to the Nestlé portfolio and 2007 sawNovartis Medical Nutrition, Gerber and Henniez join the Company

Main Brands of Nestle

The Company’s strategy is guided by several fundamental principles. Nestlé’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.

Today Nestlé is present in different markets with the following main brands:

MISSION STATEMENT OF NESTLE

we believe that research can help us makebetter foodso that people live a better life.

Vision Statement of Nestle

The Nestlé global vision is to be the leading health, wellness, and nutrition company in the world. Nestlé Pakistan subscribes fully to this vision. In particular, we envision to:

Slogan

Good food. Good life

Organizational Behavior Practices in Nestle:

COMMUNICATION:

Communication Strategies followed by Nestle:

• At Nestle the working environment was very informal.
• 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 are 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 with in the company.

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 company’s 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 e-mails 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

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.

Horizontal/ lateral communication:

Horizontal communication is a process of interaction between two or more individuals positioned at the same hierarchical levels of the same franchise

Crosswise or diagonal communication:

• Flow of communication does not follow a particular direction. Example: A manager of some franchise may discuss the matters might discuss for any matters with each other.

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 Advertisem*nt
• Print media advertisem*nt
• By giving packages
• Through services
• Through Presidents message
• Commercials breaks

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:

Nestle in Lahore is the land office in Pakistan which deals to the whole Pakistan. There are million of message which come from customer and they have not enough time to read and reply, thus barrier in communication.

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, concerns and suggestions. Nestle trust its employee’s 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:

ORGANIZATION BEHAVIOR OF Nestle AT INDIVIDUAL LEVEL:

Biographical Characteristics

To observe the application of dependent variables (productivity, job satisfaction, absence, turnover & OCB) at individual level at Nestle, we have prepared some tables;

AGE:

GENDER:

Tenure

ORGANIZATIONAL CULTURE OF NESTLE

ORGANIZATION CULTURE

Organization culture is a system of shared meaning with in 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 company’s 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 Nestle’s sales officer Nestle 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 it’s a fundamental truth that every individual from worker to Top manager is aware of his rights privileges responsibilities and outcome of efforts being invested.

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 manager’s 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.

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.

LEADERSHIP:

Leadership is the manner and approach of providing direction, implementing plans, and motivating employees in the organization. A Manager’s leadership style contributes, to the subordinates’ incentive, work fulfillment, and the work growth in the organization. Leadership plays a vital role for the success of organization. Lack of leadership leads to increased employee turnover, absenteeism, dissatisfied customers from poor customer service.

In Nestle 53% of the employees feel that their managers are employee oriented leaders and remaining 47% feels that their managers are task orientated leaders. So this shows that the Nestle has got the combination of leaders that are 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.

• Task-Oriented:

A manager with a task-oriented style will have work results as his major concerns and therefore, he will enlarge rigid policy that would lead the subordinates to reach the preferred results.

• Employee-oriented:

A manager with an employee-oriented behavior objective is to improve the employee’s confidence and influence them to work jointly and to resolve the problems.

• Participative:

In Nestle the leadership style is participative in which the leader involves one or more employees in the decision making process (determining what to do and how to do it). The leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that are made. This is used when employees are able to analyze the situation and determine what needs to be done and how to do it. Positive leaders use rewards, such as education, independence, etc. to motivate employees.

While negative employers emphasize penalties such as loss of job, days off without pay.

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 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 on of the most powerful sources. As jobs have become more specialized the organizations have become increasingly dependant 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 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)

ATTITUDE AND JOB SATISFACTION A NESTLE:

Overall employees are somewhat satisfied with their jobs but not completely. There is need of improvement to make employees more satisfied so that they can perform well.

Training:

Nestle is providing to its employees. The employees have access to company sponsored training programs and seminars.

• The purpose of training is to upgrade the capabilities and efficiency of all the employees and prepare them for more responsible positions in future.
• Provide employees with greater opportunity to grow and succeed within the company.

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.

Career Advancement:

Nestle is providing clear path for career advancement to its employees. Company gives full support to its employees in this context.

Discrimination:

According to employees, they face or experiences not any form of discrimination in Nestle. They are fairly treated by their boss

Working environment:

Almost all the employees are satisfied with their physical working of employees. Nestle aim’s to ensure a workplace that necessitates open and respectful communication between the employees’ abilities.

Relationship with supervisors:

Mostly employees somewhat agree that their supervisors communicates with them properly and also provides counseling. They believe that their managers effectively lead the department.

Supportive colleagues and coworkers:

The morale of the employees at Nestle is satisfactory and the have teen spirit in their work environment. They are satisfied with their professionalism of their coworkers.

Recognition:

According to employees their performance is individually recognized and they are appreciated according to the performance.

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 Pakistan’s 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. 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.

PERSONALITY:

The people working at Nestle have Type A personality they are strong leaders and can work well under pressure. They are independent and are excellent problem solvers. They ensure that all work is accomplished in a timely manner. Type A’s are very decisive and once a decision is made they are quick to work towards its implementation. Gaining insights into your personality is an important key in understanding your employees what motivates them and where they do their best work. The leader should maximize its employee’s strengths and enhance their effectiveness as individuals. Type A’s enjoy receiving recognition for their work and they desire to advance in all areas, especially those related to their work. In general, Type A’s are able to work quickly and are often seen as high-achievers holding increasingly high-powered positions In Nestle employees having Type A behavior often includes:

• Competitiveness
• Strong Achievement-Orientation
• Multi-tasking
• Aggressiveness
• Strive to think or to do more things at once.
• A commitment to achieve goals and an intense desire to compete.
• Always in a hurry

Code of Conduct

In line with Nestle management’s 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.
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 ornarcotics 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.
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.

ANALYSIS:

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

• Nestle is working globally and is also operating in Pakistan. 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 privator sector of Pakistan.
• 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
• 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.

If we see an overall picture, then it is clear that they are somewhat satisfied with their jobs and they don’t 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 employee’s performance on:

• Leadership
• Communication skills.
• Team work and Co-operation.
• Problem solving & decision making.
• 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.

Nestle aim’s to ensure a workplace that necessitates open and respectful

Communication between the employee’s abilities. Almost all the employees are satisfied with their physical working of employees.

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 Pakistan’s 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.

RECOMMENDATIONS:

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 programmes should also be started to provide employees with the information, regarding future prospects at Nestle and in the mobile industry
• Although Nestle is covering whole Pakistan but is rates are high they can lower its rates, with low charges in order to capture a larger market and this way they can capture the customers of low income group.
• They should be establishing and maintaining effective communication with each employee, sharing of ideas and employee involvement in decision making process
• The employer should show a greater trust to employees and employees should feel good about their employer.
• Their should be no artificial barriers between employees and management.

Also Study:

Operations Management at Nestle

Nestle Company Profile