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CONTENTS......................................................................................................................................................1
CONTROLLING........................................................................................................................26
Financial performance................................................................................................................................26 Human resources performance:.................................................................................................................27 Management by objects (MBO):.................................................................................................................28
ORGANIZING............................................................................................................................29
Organizational chart:..................................................................................................................................29 Span of Control:..........................................................................................................................................30 TYPE OF STRUCTURE:............................................................................................................................31 DELEGATION OF EMPOWERMENT:......................................................................................................31 HR PLANNING PROCESS:.......................................................................................................................31
GOAL SETTING:..............................................................................................................32
LEADING...................................................................................................................................33
LEADERSHIP STYLES:.............................................................................................................................33 Suggesstions:.............................................................................................................................................33 References:................................................................................................................................................34
VISION:
The strategic priorities of Nestle Pak Ltd are focused on delivering shareholder value through the achievement of sustainable, capital efficient and profitable long term growth. Improvements in profitability will be achieved while respecting quality and safety standards at all times. In line with this objective, Nestle Pak Ltd envisions to grow in the shortest possible time into the number one food company in Pakistan with the unique ability to meet the needs of consumers of every age group - from infancy to old age, for nutrition and pleasure, through development of a large variety of food categories of the highest quality. Nestle Pak Ltd envisions the company to develop an extremely 3
motivated and professionally trained work force, which would drive growth through innovation and renovation. It aspires, as a respected corporate citizen, to continue playing a significant role in the social and environmental sectors of the country.
MISSION STATEMENT:
We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient to meet physiological needs. Nestle helps provide selections for all individual taste and lifestyle preferences.
OBJECTIVE:
Nestls business objective is to manufacture and market the Companys products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestl does not favor short-term profit at the expense of successful long-term business development Nestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist.
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.
CORE VALUES:
A prerequisite for dealing with people is respect and trust.
Transparency and honesty in dealing with people are a sine qua non for efficient communication. This is complemented by open dialogue with the purpose of sharing competencies and boosting creativity.
The willingness to cooperate, to help others and to learn is a required basis for advancement and promotion within our company.
HISTORY OF NESTLE:
Nestl was the result of a series of mergers of many small companies. In the mid-1860s, Henri Nestle, merchant, chemist and innovator, experimented with various combinations of cows milk, wheat flour and sugar. The resulting product was meant to be a source of nutrition for infants, who could not be breast-fed by their mothers. In 1867, his formula saved the life of a prematurely born infant. Later that year, production of the formula, named Farine Lactee Nestl, began in Vevey and the Nestle Company was formed. Henri Nestle wanted to develop his own brands and decided to avoid the easier route of becoming a private label. Henri also wanted to make his company global. Within a few months of the launch, Henri began to sell his products in many European countries. In the companys initial years, Henri took various steps to facilitate research, improve product quality and develop new products. Meanwhile in 1866, two Americans, Charles and George Page had founded the Anglo-Swiss Condensed Milk Company. The company launched a milk based infant food, which competed with Nestls products. In 1875, Daniel Peter, a friend and neighbor of Henri developed milk chocolate. Peter became the worlds leading chocolate maker, and later merged his company with Nestl. The rivalry between Nestl and the Anglo-Swiss Condensed Milk Company intensified but ended in 1905, when the two companies merged under the Nestl banner. World War I created a new demand for dairy products. Nestle grew mainly by executing government contracts. The end of the war created a crisis for the company as people started using fresh milk again, instead of condensed and powdered milk. In 1921, Nestl recorded its 5
first loss, which was partly due to the worldwide postwar economic slowdown. Louis Dapples, a Swiss banking expert restructured the company, streamling its operations and reducing the debt burden. In 1930, the Brazilian Coffee Institute approached Dapples, seeking new products. After eight years of research Nestl developed a soluble powder that revolutionized coffee drinking around the world. The product was launched under the brand name Nescafe and became an instant success. The onset of World War II speeded up the introduction of Nescafe. The beverage also became a popular drink among American servicemen in Europe and Asia. The end of World War II triggered off a new phase of growth for Nestl. Many new products were added as the company grew through acquisitions. After 1974, Nestls financial position deteriorated. Oil prices rose and growth in industrialized nations slowed down. The Swiss franc appreciated and the price of coffee beans and cocoa shot up. This situation was partially offset by Nestls rapid growth in emerging markets. In 1981, Helmut Maucher took over as CEO. His policies had a significant impact on Nestls style of functioning. Maucher pursued a two-pronged strategy to improve the companys financial situation: First he embarked on internal restructuring and divestments; second he decided to continue with strategic acquisitions. Between 1980 and 1984, he divested a number of non-strategic or unprofitable businesses, amounting to nearly SFr8 bn. The divestments included certain food products that were not consistent with Nestls emphasis on high value added segments. To improve the companys financial situation, he embarked on a cost-cutting exercise. While the employee strength was reduced significantly, the inventory and outstanding debt were brought down. In 1990, Nestl formed a joint venture with General Mills called Cereal Partners Worldwide to promote Nestl breakfast cereals. It covered 70 countries accounting for about 75 per cent of the breakfast cereal consumption outside the US and Canada. Nestl also formed a joint venture with Coca-Cola, called the Coca-Cola Nestl Refreshment Company, to market tea and coffee-based ready-to-drink beverages under the Nestea and Nescafe brands. In 1996, Nestl decided to end its 50-50 Clinic Nutrition joint venture with Baxter Healthcare and established Nestl Clinical Nutrition to provide orally consumed nutrition products to hospitals and nursing homes. Nestl opened the 20th century by merging with the Anglo-Swiss Condensed Milk Company to broaden its product range and widen its
geographical scope. In the new millennium, Nestl is the undisputed leader in the food industry, with more than 470 factories around the world. Nestl launched a Group-wide initiative called GLOBE (Global Business Excellence), aimed at harmonizing and simplifying business process architecture; enabling Nestl to realize the advantages of a global leader while minimizing the drawbacks of size. The Companys strategy will continue to be guided by several fundamental principles. Nestls existing products will grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential will never be sacrificed for short-term performance. The Companys priority will be to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.
This was followed by LACTOGEN 1 & 2 in 1991. The year 1992 saw the introduction of tea whitener EVERYDAY and milk powder in bulk packing named GLORIA. MILO and NESLAC came under production in 1994 and MILO RTD in 1995. Local packing of imported coffee under the name of NESCAFE 3 in 1 commenced the same year. In 1996, Nestle Pak Ltd first confectionery plant of POLO Mint was installed and the production of NESTLE PURE ORANGE JUICE commenced. Packaging of coffee under the brand name of NESCAFE CLASSIC was undertaken the same year. In 1997 NESTLE WHEAT and two variants of POLO viz. Strawberry and Orange was introduced. In 1998 a substantial capital investment was made to launch several products and install two new state-of-the-art technologies. SWEET TREETS were launched in early 1998. The addition of two flavors of POLO: Blackcurrant and Strong Mint increased the number of POLO variants to five. A new variant Lemony was added to the range of popular FROST fruit drink flavors and a new 1-liter packing of FROST was introduced. Flavored milks under the brand FRESH & FRUITY came under production on the new Tetra Filling Machine equipped with the modern "slim" format. MILO RTD and UHT Cream were also shifted over to this new format. A new flexible confectionery line enabled the manufacture of a wide range of high and low boiled sweets and toffees, including TOFFO and two variants of SOOTHERS' Menthol Eucalyptus and Honey Lemon. Nestle Milkpak also contracted to supply dairy mixes to McDonald's, for its popular soft serves and milk shakes. And to top it all, the most prestigious project, NESTLE PURE LIFE was also commissioned in December. Based on the latest water treatment and bottling technology, this marked the entry of Nestle Milkpak in the Pakistan water market and that of Nestle in the world water market. The expansion of high boiled sweet line continued in 1999 with the introduction of Fruit Drops and BUTTERSCOTCH.
The year 2000 saw the production of some exciting products. First came NESCAFE Frothe Original, followed by its two other flavors: Mocha and French Vanilla. NESCAFE Frappe RTD was to come next. The fruit juice range was expanded by the production of Mango and Orange-Mango Mix. On the confectionery side, Tutti Fruiti was added under the umbrella of POLO and Wild Cherry was added to the SOOTHERS range. The success of NESTLE PURE LIFE in PET bottles encouraged the commissioning of 5-gallon bottles production line for home and office in June. And the last product line of the year to be commissioned in November was that of NESTLE Plain Yogurt, a high quality product with special Stay-Fresh Seal. To meet the needs of safe and quality storage for the ever expanding product range and their volumes, a National Distribution Center (NDC) was completed and became functional in June, 2000.Spread over 6614 square meters; it has the capacity to store up to 8300 pallets (approximately 8000 tons).
SWOT Analysis
STRENGTHS:
Parent support - Nestle India has a strong support from its parent company, which is the worlds largest processed food and beverage company, with a presence in almost every country. The company has access to the parents hugely successful global folio of products and brands. Brand strength - In India, Nestle has some very strong brands like Nescafe, Maggi and Cerelac. These brands are almost generic to their product categories. Product innovation - The Company has been continuously introducing new products for its Indian patrons on a frequent basis, thus expanding its product offerings. Operated factories in 77 countries (all six continents), a truly global company. Considered the innovation leader in the global food and nutrition sector(3500 scientist in company R&D network) Low cost operators (beat the competition by producing low cost products, edging ahead with low operating costs) Offering thousands of local products. Have a great CEO, Peter Brabeck, and a very strong workforce.
WEAKNESSES:
Exports The companys exports stood at Rs 2,571 m at the end of 2003 (11% of revenues) and continue to grow at a decent pace. But a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia). This constitutes a big chunk of the total exports to a single location. Historically, Russia has been a very volatile market for Nestle, and its overall performance takes a hit often due to this factor.
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Supply chain - The Company has a complex supply chain management and the main issue for Nestle India is traceability. The food industry requires high standards of hygiene, quality of edible inputs and personnel. The fragmented nature of the Indian market place complicates things more. Some of their product were positioned as too scientific, and consumers didnt quite understand (i.e. LC-1 was a food and not a drug)
OPPORTUNITIES:
Expansion - The Company has the potential to expand to smaller towns and other geographies. Existing markets are not fully tapped and the company can increase presence by penetrating further. With India's demographic profile changing in favor of the consuming class, the per capita consumption of most FMCG products is likely to grow. Nestle will have the inherent advantage of this trend. Product offerings - The Company has the option to expand its product folio by introducing more brands which its parents are famed for like breakfast cereals, Smarties Chocolates, Carnation, etc. Global hub - Since manufacturing of some products is cheaper in India than in other South East Asian countries, Nestle India could become an export hub for the parent in certain product categories. Health-based products are becoming more popular in the world, including in the United States Unaffected by current economic conditions (its share of the UK confectionery market rise to 15.6 per cent with a 0.5 per cent growth this year)
THREATS:
Competition - The Company faces immense competition from the organized as well as the unorganized sectors. Off late, to liberalize its trade and investment policies to enable the country to better function in the globalised economy, the Indian Government has reduced the import duty of food segments thus intensifying the battle. 11
Changing consumer trends - Trend of increased consumer spends on consumer durables resulting in lower spending on FMCG products. In the past 2-3 years, the performance of the FMCG sector has been lackluster, despite the economy growing at a decent pace. Although, off late the situation has been improving, the dependence on monsoon is very high. Sectoral woes - Rising prices of raw materials and fuels, and inturn, increasing packaging and manufacturing costs. But the companies may not be able to pass on the full burden of these onto the customers. Some markets they are entering are already mature Global competitors. There are intense competitions in the United States, especially yogurt market (General Mills)
PLANNING PROCESS
Strategic Plan:
Company Strategy:
The best strategy at the company level is horizontal diversification, taking into account the different dairy brands offered by Nestle, namely Nido, Sveltesse, La Laitire, LC1 and Ski. This is possible due to their strong brand, but most importantly due to the possibility to use the same technology to produce all these. Also, we have taken into account that the main raw material for the products is milk; therefore the company might use the same suppliers. Moreover, Nestle will choose the same distribution channel for all the products, selling them mainly in supermarkets as it targets the same consumers. Another advantage from using this strategy is that the company will be able to diminish the risk by diversifying their offer. In this way if one of the products is not successful on the Pakistan market the subsidiary will not be endangered, as it still has other products which might bring good profits for the company.
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the consumer. The strategy builds the edifice of Nestle' on 4 strategic pillars. It remains the inspiration for day-to-day management within Nestl as it continues to seek improving profitability and increasing sales. The four-pillar strategy is outlined below: 1-Operational Efficiency 2-Innovation and Renovation 3-Consumer Communication 4-Whenever, Wherever, However
COMPETITIVE ADVANTAGE:
Research and development (R&D), Its product range Global reach and 280,000-strong workforce
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thinking and strategies can best be expressed through local action and commitment. Diversity From creating hundreds of the worlds leading brands to offering an amazing variety of career options to our employees, its clear that Nestls businesses are exceptionally diverse. So it should come as no surprise that Nestle values diversity in the people working them just as much as they have diversity in their products. Its Nestls policy to provide an environment where respect is shown to all individual employees and where employees are valued, recognised and rewarded on the basis of their talent and their contribution rather than any consideration of age, gender, race, sexuality, religion or disability. As an organisation, Nestl is opposed to any form of unfair discrimination and believe that an inclusive approach will be of maximum benefit to all our employees as well as our wider business goals and the society in which we live.
Product strategy
Concerning the classification put forward by Michael Porter, the strategy adopted by Nestle in Pakistan will be that of overall cost leadership, as it is one of the companys goals to be efficient form an operational point of view. By lowering manufacturing and distribution costs the company will be able to offer better products as the qualityprice ratio will be superior to its main competitors. The company has already implemented in other countries a costcutting program, Nestle Continuous Excellence which covers the entire value chain from raw material, manufacturing, packaging, distribution and customer to the consumer. The company will generate economies of scale, be producing at a large scale all the products, using the same employees; the same offices and the same factory; which will inevitably lead to diminishing costs and increased competitiveness on the Pakistan market. Next, according to the classification suggested by Miles and Snow, the appropriate strategy would be a prospective one, considering the fact the Nestle tries to enter the Pakistan market. The company, as a prospector organization will take some risks while entering a new market, by not knowing if it will be successful while handling the competition, finding the appropriate suppliers or the appropriate distribution channel. Most importantly, the company will use this strategy as it will bring innovative products on the Pakistan market, containing a new culture:
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LA1 and a relatively new concept for the consumers, that of health products.
Operational Planning: Operational Planning Product Design and Production Department Manufacturing Office
The first operational goal is to establish the equipment and the ingredients that are needed to produce the items containing La-1 probiotic genome, included in the chilled dairy products section The operational plan consists of the following: Actions Conduct, together with the Research and Development and the Production department from the mother company, the adequate research program for the identification of the appropriate equipment and ingredients to produce the brands containing La-1 probiotic genome Resources A team of 5 to 7 members from the Production Department Time This is an unique operational plan, of a medium length, therefore we consider it should be completed until the 1st of July 2010 Responsibility The one responsible with this program is the Head of the Manufacturing Office, supervised by the Head of the Products Design and Production Department The second operational goal is the research for new equipment that would bring about cost reduction for the production process The operational plan consists of the following: Actions Conduct, together with the Research and Development and the Production department from the mother company, the adequate research program for the identification of new equipment existing on the market
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If the solutions the market is offering are not sufficiently efficient, undertake, together with the R&D department, the research to develop in-house new means of production, in accordance with the cost efficiency principles Resources A team of 5 members from the Production Department Time This is an permanent operational plan, that should be undertaken for the whole period, because cost reduction is always a matter to be kept under the spotlight
Responsibility The one responsible with this program is the Head of the Manufacturing Office, supervised by the Head of the Products Design and Production Department The third operational goal is to appoint the supervising team over the whole production cycle The operational plan consists of the following: Actions First of all, one of the members of this team should be chosen among the staff of the Product Design and Production department, in order to be aware of all the standards and regulations that are into force The other 2 members are recruited from the employees involved directly into the production process, in order for them to be aware of the technical aspects of the matter Resources A new team of 3 members within the Production Department Time The supervision of the production process is an permanent operational plan, of unlimited extent; however, the appointment of the commission is due until the 1st of October 2010 Responsibility
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The one responsible with the recruitment and appointing is the Head of the Manufacturing Office, in collaboration with the Head of the Human Resources department
Resources: These activities should be accomplished by a team from the Supply Chain Management Office from the subsidiary in Pakistan. Time: The research for suppliers should begin as soon as possible and the data base should be completed until the 1st of June 2010. Responsibility: The person at the helm of this plan is the Head of Supply Chain Management Office Manager
Actions Set meetings with the heads of the main Pakistan publications and network channels and get initial offers for advertisements of our products in their magazines/channels on which to negotiate further according to the number of readers, exposure etc; Resources A team of 2 to 4 members from the Marketing Department; Time This is an unique operational plan, of a medium length, therefore we consider it should be completed until the 1st of July 2010 Responsibility The one responsible with this action is the Head of the Marketing Department, in collaboration with the Head of the Sales Department The second operational goal is the research for new collaborators that would bring about cost reduction for the marketing process; The operational plan consists of the following: Actions Conduct, together with the Research and Development and the Production department from the mother company, the adequate research program for the identification of new potential collaborators existing on the market; If the solutions the market is offering are not sufficiently efficient, undertake, together with the R&D department, the research to develop in-house new means of advertising, in accordance with the cost efficiency principles Resources A team of 5 members from the Marketing Department Time This is an permanent operational plan, that should be undertaken for the whole period, because cost reduction is always a matter to be kept under the spotlight Responsibility
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The one responsible with this program is the Head of the Marketing Department, supervised by the Head of the Research and Development Department
Resources: financial resources budget for the recruitment process, money for advertising the hiring announcement, the fee of the recruiters; human resources recruitment officers, the employees of the Staffing & Recruitment office Time: 3 months Responsibility: the plan will be coordinated by the head of the Staffing & Recruitment operational office.
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In order to fulfill this goal, the operational plan supposes the following: Actions: Find the main areas of activity of the Tax Office like keeping track of the different changes in the legislation, filling in the monthly (for example VAT and salary taxes) or semi-annually declarations ( for example the income tax) and of course submitting them. Appoint the responsible persons for different activities.
Make sure that the deadlines for submitting the declarations are respected Continuously change the structure of the office in case one person fails to do his job properly or if there is another person more fitted for that position. Resources: Human resources, namely the employees in the Tax Office Time: The first two actions should be completed within 2 weeks, whereas the following two should be done on a regular basis, monthly. Responsibility: The Head of the Tax Office is responsible with overlooking the plan. This operational plan is a standing one, as the activities occur regularly over the entire staying of Nestle in Pakistan. Moreover, due to the fact that this operation plan underlines the way in which certain activities should be performed, we can classify it as being part of the rules and regulations category.
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Hiring a Pakistan law firm in order to collaborate during the process of setting up the subsidiary; Present the procedures necessary for establishing a subsidiary to the general management; Resources: Financial resources: paying Pakistan law firm; Human recourses: two staff members from the commercial department in order to coordinate this process;
Time: 2 weeks for choosing the Pakistan law firm to collaborate with 2 days to present the information to the general management Responsibility: The head of the Commercial Office has to choose the Pakistan law firm to collaborate; Taking into account the fact that this goal once attained there is no need to further continue the actions, the operation plan is a singleuse one. It actually represents a program, due to its small scale and lack of complexity. Therefore, once subsidiary is set up there is no need to perform the action again. The second operational goal is to research about the legal restrictions and procedures regarding the commercialization of dairy products in Pakistan. In order to fulfill this goal, the operational plan supposes the following: Actions: Selecting 2 lawyers from the department to make the research regarding the legislation about dairy products in Pakistan; Communicating the restrictions and regulations to the other departments and to the general management;
Resources: Human resources, namely the employees in the Office Time: The actions should be completed within 2 weeks Responsibility: The Head of the Commercial Office is responsible with overlooking the plan. 23
This operational plan is a single use one, as the legal department communicates the legislation regarding the products at the beginning when the products are adapted to the market and only updates if modifications should appear in the legislation.
Consumer communication:
We are committed to responsible, reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. We respect consumer privacy.
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We are committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain.
Environmental sustainability:
We commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle we strive to use natural resources efficiently, favour the use of sustainably-managed renewable resources, and target zero waste.
Water:
We are committed to the sustainable use of water and continuous improvement in water management. We recognize that the world faces a growing water challenge and that responsible management of the worlds resources by all water users is an absolute necessity.
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CONTROLLING
By managerial control the parent company ensures that the actual performance of the subsidiary is equal to its planned performance. The purpose of control is to facilitate the implementation of plans by continuously monitoring the performance of the people responsible for carrying them out. The process of control and the problems associated with it are more complex in a multinational company than in its domestic counterpart, due to the diverse cultural, economic, political and legal environments in which the subsidiaries operate. The General Manager of the Pakistan subsidiary of Nestle will report its activity to the zone director of Europe, as it can be seen from the organizational chart. Consequently, when using the term home company, we will refer to the headquarters of Nestle Europe. The control process will begin by setting the adequate standards and objectives of the financial, quality and human resources performance. The next step is to develop instruments and techniques to monitor the performance of these key areas. The third step is to compare the performance measures obtained from the monitoring activity with the plans of the company. Finally, the employment of effectuating or action devices should be employed in order to correct any deviations that occur from the company standards. The managerial control process will supervise the following key areas:
Financial performance
The financial performance of a company is used as a general measure of the overall financial health and of how well the company can use its assets and generate revenue, over a given period of time. Therefore, it is very important for the home-company executives to have a frequent and detailed view over these issues. The assessment of financial performance will be done first of all through means of indirect control. This will consist of written reports, concluded by the financial department, which will present these reports to the General Manager of the subsidiary. This is a form of verification control. We have chosen this method, as it cheaper in terms of costs and it also provides a clear and objective picture of the activity of the subsidiary. The written financial reports will comprise of the following information: facts concerning the performance of the subsidiary financial analyses of sales, profits, return on investment. In addition, there will be required financial statements, the balance sheet, the profit and loss statement and details about cash budget, financial ratios. The financial statements should be done in three ways one to meet the Pakistan accounting standards and procedures, one to comply with the accounting principles and standards used by the home country and a third one denominated in the home countrys currency.
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These statements should be done and handed in to the General Manager on a monthly basis. There will be also a general financial review at the end of every quarter and at the end of the financial year. A form of direct control should also be used, for a better coordination and communication with Nestle Europe headquarters. Therefore, every six months, the General Manager of Nestle Pakistan will have a meeting with the Director of Nestle Europe, where he will present the financial reports and a description of potential problems affecting the operation.
Quality performance:
Maintaining a high quality of its products is one of Nestls key values, therefore it is extremely important for the managers of the subsidiary to make sure that the products manufactured in Pakistan respect international quality standards, in terms of composition, taste, visual attributes and so on. The method used will be the one of direct, current control, as this is the most efficient way to check the quality of the products. This form of control will consist of regular inspections performed by a team of supervisors, who will thoroughly observe the production process and will ensure that the rules and procedure are respected. There are three main points that will be checked and reviewed: raw materials used in production, the production process and the final products prior to the dispatch to final consumers. Nestle is proud of having a state-of-the-art milk production and processing sector, therefore the Pakistani subsidiary should maintain this standard. The quality control will also be exerted on the distributors and retailers of Nestle, who also must comply with certain standard, in order for the products to reach the customer in the best conditions possible.
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Health and Safety KPI (Percentage of staff with adequate occupational health and safety training, Health and safety prevention costs within the month); Performance KPI (% of high/low performing employees, % of employee with their performance increased/decreased compared to last month); Employee loyalty KPI (he rate of life cycles of employees = total time served in enterprises of all staff / total staff recruited); Working time KPI (% of total hours lost to absenteeism, average overtime hours per person, total time lost by work late); Compensation (salary rate/sales turnover, cost rate of social insurance, medical insurance, average income per employee per hour); Employee satisfaction (% Average satisfaction by each department, average satisfaction by field - attitude about compensation and benefits, about coworkers, about supervisors / managers, about promotions, training, work tasks); Job leaving (Job leaving ratio per year, job leaving ratio per department, average age of employees that retire, percentage of early retirements, attitude of employee who leave the job).
In addition, each employee should fill a monthly report, in which they will write their monthly objectives regarding sales, product development, team development and so on, with comments related to the status of achieving these objectives, the actions through they plan to achieve them and the problems they had to overcome or may appear at a certain point. Comments and suggestions are also to be mentioned. Each report should be handed in to the department manager, who in turn will submit it to the HR department for processing. The manager of the human resources department will then present the compiled form of these reports, along with recommendations.
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(The Nestle Company did not tell us about the following information as they considered it confidentional to them.)
ORGANIZING
Organizational chart:
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Management
Territory In Charge
Sales Associates
Sales Associates
Span of Control:
B.O.D.s
Managing Director
Head Of Marketing
Head of Sales
Head of Technical
Head of H.R.
Q. Assurance Officer
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Span of control or span of management is a dimension of organizational design measured by the number of subordinates that report directly to a given manager. This concept affects organization design in a variety of ways, including speed of communication flow, employee motivation, reporting relationships, and administrative overhead. Span of management has been part of the historical discussion regarding the most appropriate design and structure of organizations.
TYPE OF STRUCTURE:
Its a vertical structure.vertical organizations have a top-down structure in which directives are passed from top-level managers to mid-level managers, then to low-level managers and finally to associates or entry-level employees. This structure calls for distance between regular employees and the managers who make decisions about the company, working conditions, pay rates and other important factors. Vertical structures are particularly useful in organizations such as factories or other production facilities where efficiency and standardized processes are of the utmost importance. In contrast, a horizontal or decentralized structure implies that each department or manager can make important business decisions in a different manner than the next group or supervisor. Companies such as large accounting firms and certain nonprofits, which have strict guidelines, are not well suited for non-vertical structures. Maintaining order is easier in a company with a set chain of command.
DELEGATION OF EMPOWERMENT:
At Nestle' Milkpak, jobs have been effectively engineered to ensure that employees are not over loaded with work. The jobs in their nature are enriched i.e. a job is vertically loaded to provide more responsibility and accountability of the various employees. As they say A Managers efficiency is best judged by the working of his Department in his absence. True to this statement, the employees at Nestle' Milkpak are empowered and authorized to perform their tasks independently unless the situation proves otherwise. However reporting and verification of the work of subordinates is also done on a consistent basis, which is a need for such a complex company.
HR PLANNING PROCESS:
Nestl Pakistan believes that its management culture, which contributes to a stimulating working environment, is a catalyst for strong individual performance. This capacity to enhance human energy is an essential component to ensure the long-term competitiveness 31
of the Company. The leadership style and the dynamic approach to their objectives ensure that there is no room at Nestl for complacency whilst employee commitment is kept to the maximum.
GOAL SETTING:
The goal setting process is delegated to the HR management team at nestle who are then responsible for its implementation in the various departments. Goal setting aids the management in controlling the activities of the subordinates on the whole while at the base level authority is delegated to them thus creating a decentralized unit. Also the managers make sure that these goals are maximally challenging but attainable.
IMPRESSION MANAGEMENT:
In an organization as complex as Nestle Pakistan, impression management plays a large role. Since the Managers do not have much coercive power over their subordinates and their reward power is limited with the policies of the Organization, the major form of power they exert is expert power. Thus the impressions and attitudes that these Managers carry with them are an important indicator of whether these managers will be successful as Managers or not.
OPEN-DOOR POLICY:
An "open-door policy" is observed and implement by the HR department at Nestle Pakistan. In fact open, two-way communication is the only way that Nestle Pakistan could have survived with the diverse culture it possesses. The employees at the Organization know that their opinions and inputs are valued and welcomed at all times. This creates a greater sense of ownership of their respective department's mission and the organizational mission as a whole.
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ORGANIZATIONAL CLIMATE:
The quality of work life is exceptionally good at Nestle'. The teams formed, both formal and informal are productive and this promotes a good organizational climate. The HR department interconnects the various departments to depict a very friendly atmosphere where people and Managers are interlinked in ways that add to this favorable environment.
LEADING
LEADERSHIP STYLES:
DEMOCRATIC LEADERSHIP
A "democratic style" of leadership is observed at the organization. This style indicates a management that tends to involve subordinates in decision making, delegates authority, encourages participation in deciding work methods and goals, and uses feedback as an opportunity for coaching.
Suggesstions:
Nestle' Milkpak Limited is a well-established firm, with its management concentrated in foreign expertise. Human Resource policies are designed to manage the major and the minor issues. Relationships with the employees are maintained at a cordial level. Employees work with commitment and dedication to achieve the best for the organization. Job satisfaction soars at a high level. Although, it is a relatively new Multinational on the Pakistani front, but it has established a strong footing for itself in the food industry. Apparently, there are no loopholes in the working of the organizations Human Resource Department, but still some areas require more 33
Employee satisfaction was observed to be at a higher level in the Marketing and Sales Division as compared to the Finance Sector. Opportunities for the employees to flourish, are more at the marketing side for the reason that the organization is a manufacturing concern. The employee benefits and the career ladder at the Finance Division should be enhanced, so that employees work with further dedication and no gap between the two divisions is felt.
The Human Resource Department should be more communicative with the employees. Questionnaires regarding the attitude of mangers, work conditions, and job satisfaction should be distributed periodically amongst the employees where they do not have to mention their names. Before making any policy decisions, these answers should be thoroughly analyzed to gain added benefit for the organization. This would also create a sense of affiliation for the employees with the organization
Sales Teams can be made more productive by giving them targets with deadlines and offering incentives at good performance.
References:
To collection information we have considered following source in order to gather authentic data: www.nestle.pk www.nestle.com www.wekipdia.com
Personnel concerned
SHAUKAT HUSSAIN [shift leader(NPL) ]
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