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Comparing Organization and Behavior between Nestle and HSBC

Info: 3930 words (16 pages) Essay
Published: 1st Jan 2015 in Business

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Nestle was found in 1866 by Hentri Nestle.Sales for 2009 were CHF 108 bn.Number of employees around 280000 people and have factories almost every country in the world.The company’s priority is to bring the best and most relevant products to people, wherever they are,whatever their needs throughout their lives.The company’s strategy is guided by several fundamental principles.

Today Nestle present different markets in different main brands.

-coffee,ice-cream,other beverages like ‘Milo’,diary-shelf stable nestle,dairy-chilled nestle, infant nutrition,performance nutrition, healthcare-nutrition, soups,sause(pasta,seasoning), frozen foods, refrigerated products, chocolate,confectionary and biscuits.

Introduction to the HSBC-

Hong-kong and Shanghal Banking Corporation (HSBC) is a public limited company that is headquarted in London, England.The HSBC was founded in Hong-kong,china but was force to move to London in 1992.It is the largest banking group in the world. It has many locations world-wide.

Chester Barnard(1938) defined an organization as ‘a system of co-operative human activities’.Organizational behaviour is the study and application of knowledge about how people, individuals and groups act in organizations.The organizations base rests on management’s philosophy,Values,vision and goals.The culture determines the types of leadership, communication and group dynamics within the organization.The workers perceive this as the quality of work life which directs their degree of motivation.The final outcome are performance,individual satisfaction and personal growth and development. All these elements combine to build the model or frame work that the organization operates from.


Organizational structure

According Stoner et al., (1995; 315) organization structure refers to “The way in which an organization’s activities are divided, organized and co-ordinated”. Therefore the structure of an organization establishes how work is allocated and controlled;how people and activities are grouped together;and the channels through which authority and communication are distributed within the organization

Both HSBC and Nestle organizations have formal organizational structures.the objective is to survive,maximize their profits and to expand their business.The strategic management enables to achieve competitive advantage and competitive position in global market.The formal organization structure helps to achieve many objectives.

To link individuals in an established network of relationships

To group together the task required to fulfill the objectives of the organization as a whole, and to allocated them to suitable individuals for groups

To allocated individuals or groups the authority they required to perform their functions as well as the responsibility to account for their supervisors

This creates a hierarchy of command,whereby authority flows downward from senior to each level of the organization

To enable the flow of work,information and other resources through the organization via clear lines of co-operation and communication.

There are many factors which in influences the structure of organization.

1. Organization’s size- as an organization gets larger its structure gets more complex.Therefore specification and subdivision are required.Both HSBC and Nestle are global organizations.They are very large in size.

2. Organizations’ task- the nature of its work.Nestle is a nutrition,helth and wellness company and HSBC is one of the largest financial and banking services industries in the global environment.

3. Organization’s staff – the skills and abilities of staff will determine how the work is structured and the degree of supervision required.The staff of the Nestle is much larger than HSBC because in HSBC most of the things are automated.but in Nestle most of the work has to be done by human.

4. Legal, commercial, technical and social environment of organization- both are legal and technology is very high.And both companies related to people in two ways.

In an organizational structure span of control is another important thing.That means the number of subordinate immediately reporting to a superior official.Nestle have narrow span of control because it has a large number of levels of management hierarchy and HSBC have a wide span of control because it has a small number of hierarchical levels.Other important thing is decision making.If the decisions making doing by the top levels of the organization it is called centralization and if it is doing throughout all levels of the organization then it is called decentralization.Nestle company believes strongly in decentralization.In the case of HSBC,also decentralized and all branches of it controlled by a central committee.But it also subdivided on national and domestic market.

Both companies are departmentalized on functional basis.There are six functional departmentaion within Nestle;





Research and development


Organizational culture

Organizational culture varies from organization to organization.It is difficult to define organizational culture. Deal & Kennedy., (1982;4) defined organizational culture as ” The way things get done around here” and J.A Stoner,R.E Freeman & D.R Gilbrert defined it as “Organizational culture is the set of important understanding such as norms , values, attitudes and beliefs shared by organizational members”.

Culture of an organization depends on the management style and organizational structures that are used.It could be;

1. Role culture-This tells how rules and regulations associated with employees and it is best suited for hierarchy organizational structure.

2. Task culture-This encourage the people to work as a team.

3. Power culture-This is in matrix structure and it is based on one dominant.

4. Person culture-This s based on person in the organization to help and support in their work

HSBC have an effective strong organizational culture.As a part of this the management has initiated localization policies which are opened for most higher levels within operating to nationals that enables the company to top high-quality employee from different part of world.Within the organization culture of HSBC it is highly regarded for work-ethic endorsement.This involves the careful screening of employee with the necessary skills and high potential for improvement.

Nestle have a organizational culture which vary from country to country because it is a food related organization.Nestle has good values;

It also commitment to a strong work,ethics,integrity,honesty and quality.

The personal relationships are based specialy on trust and mutual repect.This implies sociable attitude towards others.

Pride in contributing to the performance of the company.

Effect of structure and culture on business performance

The relationship between organizational culture and structure is an important.But it is difficult to distinguish from one another.They are very much intertwined.Peter F Druker, a prominent writer of management,politics,economy and society(1995;190) highlighted “organization structure is an indispensable means and the wrong structure will seriously impair business performance and may even destroy it” Thus success or failure of out come of the organization depends on organizational structure.

How management works,which specific responsibilities supervisors have,How a complaint is passed through the ranks all these issues within the organizational culture that are directly tied to how an organizational structure works.

The degree to which tasks in the organization are subdivided into separate jobs( work specialization ) help to makes efficient use of employee skills and it will increases employee skills through repetition.Also wider spans of management increases organizational efficiency. Departmentalization of organization also helps to give efficient work and facilitates group work.

The effect of the organizational culture are depending on whether the company has a strong culture or a weak culture.Therefore a strong organization culture will help take everyone more efficient and successful.If the members in the organization accept the core values and commit to those values, then the culture in that organization is strong when the culture is strong it will then influence on the behaviour of its members as a whole.This influence the behaviour of everyone within the organization.

Strong cultures not only have a great impact on the behaviour of employees but also have a positive effect on the performance of the organization.Therefore strong culture lead organizations towards high performance and success.

Approaches to management

Organizations are comprised of managers and operatives.Operatives work directly on the work they have been assigned and are not responsible to oversee the work of others.But managers are responsible for the activities of others to ensure that things are going on as planned.The functions of management traditionally include;planning,organizing, commanding,co-ordinatng and control.But Managers’ job can not defined exactly.

The structure of HSBC provide more efficient management over the whole organization.The management decisions within the organization are more flexible.Also as a part of strategic management HSBC has also been able to constantly stock of its workforce and assess their performance in exciting job.The managers of HSBC also given extensive development and training.

In Nestle the members at management level are more concerned with continuously adding value to the company than exercising formal authority.The managers of Nestle should be able to motivate and develop people using their own techniques and openminded as well as a high level of interest in other cultures and life styles.

Effectiveness of Leadership

Leadership is an important factor to a group or an organization to make it effective.’Management’ and ‘Leadership’ are interchangeable.Leadership can be identified as the process of attempt to direct and fore others to achieve objective or objectives of the groups or organizations.

Leadership styles are illustrates by theories of leadership.Leadership styles can be defined as the way in which the functions of leadership are carried out the way in which the leader typically behaves towards members of the group or the organization.In other words leader styles are the patterns of behaviours which a leader adopts in influencing behaviour of his/ her followers.The different styles of leadership are;

Autocratic leadership style

Democratic leadership style

Laissez fair leadership style

Autocratic or authoritarian style

Under this leadership styles all decision making powers are centralized in the leader.They do not entertain any suggestions or initiatives from subordinates.It provide strong motivation to the manager.It permits quick decision making as only one person decides for the whole group and keeps each decision to himself until he feels it is needed to be shared with the rest of the group.

Participative or democratic style

This can be seen as the opposite of the autocratic leadership style.In this style group functions as a whole and there are number of interoperations.That means the functions of leadership are divided among members of the group or the members of the organization.They win the co0operation of their group and can motivate them effectively and positively.

Laissez-fair or free rein style

In this the leader assumes that all members of the group or the organization will perform well.Such leader allows maximum freedom to subordinates. Therefore the leader dose not interfere to the works of the members.But if the members need any help, the leader provides the necessary assistance.This is different from a situation where the leader is not considering about his functions and trying to avoid problem situations.

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The effectiveness of the above leadership styles may different from one situation to another situation.The success of a leader is measured by output or productivity of the group they lead but success is not effectiveness.If the subordinate follows the leader because of his position power,the leader is successful but not effective.The leader leads to a successful response and subordinate does the job because it is personally rewarding, it can be seen that the leader has not only positional power but also personal power.Then subordinates respect the leader and they are willing to compare realizing that the leader’s request is consistent with some personal goal.Then it can be identified that the leader is effective.

The factors affecting leadership effectiveness.

The characteristics of leader

Personality,attitudes,value system of the leader

The relationship between leader and the group

Characteristics of subordinates/group members

The nature of the work organization

Relationship among subordinates/group members

Motivation and Motivational Theories

A work place has members of group and the group has to achieve an objective or objectives.Thus the objectives or objectives can be achieved by the combined effort of its group members.For this effort to achieve objective or objectives efficiently and effectively,motivation of the group members should be there.Therefore it is necessary to know how to motivate group members of workplace.There are different theories of motivation attempted to explain the nature of motivation.These theories show that there are many motives that influence people’s behaviour.

There are four theories of motivation;

Maslow’s Hierachy of Needs Theory

Herzberg’s Two Factor Theory

Alderfer’s Modified Needs Theory

McClelland’s Achievement Motivation Theory

1. Maslow’s Hierachy of Needs Theory

This motivation theory developed by Abraham Maslow and according to him people is being with needs and what they want depends on what they already have.He suggests that human needs are arranged in a series of levels depicting a hierarchy of importance.That is why theory is called as hierarchy of needs’ theory.


Actualization Need

Esteem Need

Love Need

Safety Needs

Physiological Needs

Pyramidal diagram for Maslow’s Hierarchy of Needs

Physiological Needs- In this need people try to satisfy their basic need for food, shelter and clothing.In work place if a person is paid enough salary to maintain above needs then employee engage with work willingly.

Safety Needs-When physiological needs satisfied to reasonable level next important level is safety need.If they satisfied with safety needs people can be motivated by introducing pension schemes and by introducing projects for labour safety.

Love Needs-Then they expect love and affection.When a leader know that such need to be prevailing within members of his/her workplace,the leader can be used following strategies.

Providing opportunities for group entertainment

Put them to work in groups

Let them to more with groups in which they have affection

Esteem Needs-At this level employee are concern with self respect,self confidence,a feeling of personal worth feelings of being unique and recognition.Here motivation can be exercised by providing positional status,appreciating,giving awards etc.

Self-Actualization Needs-This is the highest need and it is the need to minimize one’s potential,whatever it may be.Here the individual can be motivated by maximizing the benefits provided to the person earlier in line with personal goals.

2. Herzberg’s Two Factor Theory

Herzberg identified that there were two sets of factors affecting motivation and work.He introduced these factors as ‘ hygiene factor’ and ‘motivators’.

Hygiene/Maintenance factor- Herzberg identified pay,job security,status, work environment,rules and regulations,nature of interpersonal relations and personal esteems as hygiene factors.By this factor dissatisfaction will be able to eliminate because this factor is related job context and they concerned with job environment and extrinsic to the job itself.

Motivators/Growth factor- Herzberg identified recognition,responsibility,room for development and work place as motivator factors.It will lead to motivate employees.That means motivators are serve to motivation individual to superior effort and high level of performance.These are related to job content of the work itself.

In a work place according to this theory by providing hygiene factors dissatisfaction of the employees can be removed and by providing motivators,employees can be kept satisfied.

3. Alderfer’s Modified Needs Theory

This theory was introduced by Alderferand by this theory he condensed five levels of needs as Maslow’s Hierarchy of Needs Theory into three levels of core needs.They are;




Maslow’s Hierachy of Needs Theory

Alderfer’s Modified Needs Hierachy Teory

Physiological Needs

Esistence Needs

Safety needs

Relatedness Needs

Love Needs

Esteem Needs

Growth Needs

Self-Actualization Needs

Relationship between Maslow’s hierarchy of needs theory and Alderfer’s modified needs hierarchy theory

According to the Alderfer’s modified needs hierarchy theory an individual is motivated to safety,one or more basic sets of needs.Therefore if a person’s needs at a particular level are blocked then attention should be focused on the satisfaction of needs at the other levels

4.McClelland’s Achievement Motivation Theory

This theory was presented by McClelland’s and colleagues and they identified three main arousal based and socially developed motives.They are;

Needs for Affiliation

Needs for Power

Needs for Achievement

In this theory they identified the desire for friendly and close interpersonal relationship as needs for affiliation.The need to make others behave in a way that they would not behave otherwise was identified the derive to excel to achieve in relation to set of standards and to strive to succeed as needs for achievement.

Ho Individual behaviour at work

H However relative intensity of afflation; power and achievement motives varies among individuals Mc Celland and his colleagues identified 3 common characteristics among people with high achievement needs.These characteristics were ;

1. The preferences for personal responsibility

2. The setting of moderate goals

3. The desire for concrete feedback

In a work place to achieve goal efficiently the setting of moderate gal is important because the task should be easy to achieve with a little challenge and feed back is necessary for self evaluation.Feedback enables to determine success or failure in the accomplishment of their goals and to derive satisfaction from their activities.

In an organizations individuals/members are another important element.Within an organization the social system includes all the people in it and their relationship to each other and to the outside world.The behaviour of an individual can have an impact either directly or indirectly on the behaviour of others.The major factors which influence individual behaviour at work is as follows;

Demographicfactors-Those are socio-economic background, education, nationality,age,sex etc..Normally organization prefer persons that belong to good socio-economic background,well educated and young person than others because they believe that they high work performances.

Ability and skills-Ability can be defined as the individual can do and skill can be defined as the ability to act in a way to perform well.Therefore individual behaviour is highly influence by the abilities and skills to give a good performance.

Personality-This can be defined as the characteristics of an individual’s thoughts,feelings and behaviours.Heredity,family,society,culture and situation are factors which influence personality.It helps individuals in directing their effort and motivating them for achieving of the organizational goal.

Attitude-The other most important factor is attitude of an individual.It can be defined as a tendency to respond favorably or unfavorably to certain states.

Three basic components are containing in attitudes. They are;

– Knowledge and beliefs

-Feelings and desire

– Volition and will

Perception-This can be defined as the psychological process by which incoming data are selected and organized into patterns which are meaningful to the individual.

Group behaviour within an organization

A group can be defined as a collection of individuals to achieve a common goal/task.The members of the group are depending on each other Groups have become the core unit in many organizations.The group can be small or large to form a group there must be more than two individuals but there is no specific limit for the maximum number.It depend on the objective of the group.In an organization there are rules an regulations which control the activities of group.Also group influence their member’s attitudes and behaviour.Therefore groups are inseparable from organization.Group help to increase organization stability and it facilitate changes in organization procedures and policies.Therefore there is important impact of groups on organizational effectiveness.

Group dynamics describe about group formation,norms, decision making,contributing. Therefore it shows how a group should be organized,operated and conducted.It is a set of techniques.

Teamwork is very important in an organization to achieve it’s goals.An effective team always have clear team goals that encourage team members to replace priority of individual goals with that of team one Also there should be effective team leader who can motivate team members even in difficult situation.

Effective teamwork can be archived through effective team building and teamwork is always beneficial for organizations.Teamwork increases flexibility and speed of the work because one task s is done by more than one individual with deferent skills.

Stephen R. Covey define teams in organizations as “An empowered organizations is one in which individuals have the knowledge, skill, desire and opportunity to personally succeed in a way that leads to collective organizational success”.



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