The organizational structure and strategy of Nestle
About the Organisation
Nestle is worlds largest corporation of food and beverage. They are the leader in nutrition, health and wellness. This company has recognised brand name and very significant influence on customers, business and government bodies as well. Their products ranges from drinks like tea, coffee, water, ice-cream to baby food , pet care, phamaceutical and confectionary .
Nestlea operates in 130 countries. They manufactue arounf 10,000 different products and they have manpower of near 250,000 around the globe.
They sell more then one billion products in one day.
Mission : “Good Food, Good Life.”
The comapanies main brands are
It was founded in 1866, by a pharmacist, Henri Nestle. Initially the business was making milk for infants who cannot digest mother’s milk. This product was successful and gained a demand very fast. After that Nestle had many merger and acquisitions and it grew in developing countries.
Organisational Structure of Nestle
Governing body: AGM: - Annual General Meeting of Shareholders.
Executive Body: Board of Directors
There are four committees in Corporate Governance.
In Nestle they have Executive Board which mainly consist company executives and department heads. They are responsible for managing the all operations of the company and they are the executives who implement the policies and strategies designed or we can say defined by Board of Directors.
Organisation Structure of Nestle:
Nestle Information Policy:
Nestle rank first among the ten companies who were assessed for transparency of the information with their stakeholders. Nestle provide transparent information about their Corporate Affairs Department, Board of Directors responsibility for Corporate Affairs. All this information is provided in their annual report which is available on their website.
Nestle Vision Statement
“Nestle’s aim is to meet the various needs of the consumer everyday by marketing and selling foods of a consistently high quality.”
Nestle’s Mission Statement
“We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient to meet physiological need. Nestle helps provide selections for all individual taste and lifestyle preferences.”
They Believe in:
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.
To communicate is not only to inform; it is also to listen and to engage in dialogue.
The willingness to cooperate, to help others and to learn is a required basis for advancement and promotion within our company
Designing and producing the products of such quality so that they can create value for shareholders and consumers, employees and business partners, and the local communities and national economies in which Nestlé operates.
Not to focus on short term profits, but to develop business for long term.
Top priority is consumer. They believe that they cannot exist without their customers. So while designing their products they first think about the need of customer.
Generally there are no specific laws and legislation set, rather than the general laws of the company, but still as operation through the globe, that is operating in a lot of different countries, there are rules and guidelines which might vary according to the country and the environment they are operating in so sometime there are specific laws and rules set for those sort of environmental conditions which might vary to each and every country of the members of the staff.
They are very conscious on the professionalism that they have as they believe that if the company are professional and that means that follow certain law and ethics and they abide to it, or stick to it no matter what the situation is so that this will help the company to gain good reputation within the employees of the company, they will not hesitate if something is going wrong within the company. Corporate Level Strategy
Merger and Acquisition
Drerer’s Ice-Cream company
North America’s largest pet Food company-Rlaston Purina: 11 billion USD
Gerber, a brand of Novarits corporation in baby food : 5.5 Billion USD
Reason to follow A&M strategy are:
Expansion of size of company
Selling:They sold their milk manufacturing industry BAVI to Anco.
Reasons: They can use this money to focus in any other business which is more profitable.
Business level Strategy
Their main business level strategy is the integrated cost leadership/ differentiation, by producing 10,000 of different products with low cost as compared to others.
Recruitment process and Pay Structure at Nestle
The recruitment process at Nestle is clearly defined. People with qualities like dynamism, realism, pragmatism, hard work, honesty and trustworthiness.
Match between candidate’s values & company’s culture.
Recruitment for management levels takes place in the head office and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies.
Pay structure at Nestle
Nestle strives to offer fair remuneration. Remuneration level is above the average in industry.
The variable component of the salary is comparatively big to reward individual performance.
In case of higher management level, the variable part is linked to individual & team target achievements
People management policies, basic values & principles elaborated in Nestle
Nestle management & leadership principles- The Nestlé Management and Leadership Principles describe the management style and the corporate values of the Nestlé Group, specifically in the area of interpersonal relations.
Nestle human resources policy- the policies designed for the Nestlé’s human resources are well defined to the employees with proper guidance’s and guidelines given to them so that they can operate in the right manner and be more effective and efficient.
Nestle people development review-this policy throws light on Nestle’s culture and core values, different training programs and life of employees after work
Nestle: Job Design
Selection-Combination of written test, GD & interview (Interviews for top management posts).
The company incorporates practices like Job Enrichment and Job Enlargement, to motivate employees and to break the monotony of their job tasks. The correspondent herself works in both sales and brand management departments, which is an example of job enlargement
Training Programme in Nestle
From the factory floor to the top management, training at Nestlé is continuous. And because it is mainly given by Nestlé people, it is always relevant to the professional life.
Throughout the world, each country runs its own training programmes (e-Learning, classroom courses, external courses), and it has five training centers in France, UK, Spain, Mexico and Brazil.
Nestle runs following training programmes-
Literacy training Programme: this is run by nestle to improve skills in employees who are given new machines or equipment to work. The objective is to prepare workers to operate new equipment and production methods. This requires the ability to read, write and do basic calculations. This process is part of what is called the Mission-directed Work Team Approach. In addition to increasing productivity, the process helps to empower the teams to take responsibility for their performance and maintain a positive attitude to their work.
Nestle Apprenticeship Programmes: It is an intensive four-year programme. Technical classes are given. Apprentices take a series of exams leading to a Technician Diploma or an Advanced Technician Diploma.
Local Training Programmes - The local training programme means a lot of employees work in the Nestlé’s, in other words the Nestlé’s 2/3 of the employees who work for the Nestlé’s arrange and organise the training programme to share the experience of whatever the problems being faced by each employees and that they are trying to train them in such a manner that when any problem occurs they can themselves be aware of it and can take the right decision when need, these are sort of being run in every different countries where Nestlé’s operate and it is a unique programme, in other word it is termed as Nestlé’s people development activities and continuously been followed throughout
Rive-Reine International Training programmes: They have allocated different programmes for training different people, they have a specially designed training programmes in which thy run more than 70 courses. Which are around the word and something like 1700 to 1800 manager and senior manager attend this sort of courses this includes from around the world and over 70 to 80 countries are participating in this sort of courses. The staff that is training them is a highly qualified and with a lot of them being those from the Nestles senior managers who have tones of experience and have a lot of expertise in the field and can take care of the precise things that need to be handled, they put their experience into play and train the staff, so that not only the company benefit but also the staff benefit from the training. The sometimes have the top management participating in the programme it might sometimes even include the CEO if the Nestlé’s who is interested in the
‘Passion to Win’ awards: These quarterly awards have been institutionalized to reward those who over-achieve their targets.
Long-service Awards- To recognize employees who have been with the company for more than 30 years.
‘Nestle Idea Award’- It was found from the correspondent that the company institutes Nestle Idea Award every quarter to recognize and award employees who come up with relevant and innovative ideas which have the potential of being implemented at Nestle.
For all aspects of Reward Nestle apply the fundamental principles outlined below.
There rewards are based on following principles
Performance Driven – The hard work each employees put in the more are the chances of their getting the reward, reward is strictly based on the way each employee perform. The more the hard work put in by the employees more will be reward, in some sort performance is directly linked to the rewards they are going to earn. In this way they motivate the employees, to get the better out of them, and in way both the company as well as the employees are benefited. The reward they each employees are offered is quite attractive so that the employees get attracted to it and try and perform to the best of their calibre.
Inclusive – The reward system is unique and it is included for each of the employees and not only the junior manager, it includes all the employees and in that way all are employees are included.
Flexible – They are more of a sort of flexible on the reward system if the employees are performing and if they want their reward in some other form if it is possible then they might give the reward that the employee asks for and not what they have already decided.
Benefits given to employees in Nestle
The following benefits are provided to all employees, with no discrimination
Leave-Personal & Medical (fixed no. per year)
Children Education Assistance Scheme
Retirement Gratuity Scheme
Group Insurance & Accidental Insurance Scheme
Nestle provides a very healthy working environment which is one of the reasons why Nestlé’s employees state their commitment level to be very high.
Employee turnover is less than 5%., which is considered to be very low for a multinational corporation.
Nestle has an open culture & upward communication especially in case of grievance redressal is encouraged.
Work/Life balance is given importance, as illustrated in the Nestle Human Resource Policy document.
‘Nestle Family’ annual events are organized by their HR department whereby employees along with their families are invited.
Emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work)
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