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Contents
CONTENTS......................................................................................................................................................1
INTRODUCTION OF THE COMPANY ...................................................................................3
VISION:.........................................................................................................................................................3
MISSION STATEMENT:...............................................................................................................................4
OBJECTIVE:.................................................................................................................................................4
CORE VALUES:...........................................................................................................................................4
HISTORY OF NESTLE:................................................................................................................................5
History Nestle Pakistan Ltd..........................................................................................................................7
SWOT ANALYSIS .....................................................................................................................10
PLANNING PROCESS ..............................................................................................................12
Strategic Plan:............................................................................................................................................12
Operational Planning:.................................................................................................................................16
Operational Planning Product Design and Production Department Manufacturing Office..............16Operational Planning Sales Department Supply Chain Management Office..................................18
Operational Planning - Marketing Department - Advertising Office......................................................18Operational Planning Human Resources Department Staffing & Recruitment Office......................20Operational planning Finance Department - Tax Office.....................................................................21Operational planning Commercial Office............................................................................................22
Policies:......................................................................................................................................................24
Standard Operating Procedures:................................................................................................................25
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
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GOAL SETTING:..............................................................................................................32
LEADING ...................................................................................................................................33
LEADERSHIP STYLES:.............................................................................................................................33
Suggesstions:.............................................................................................................................................33
References:................................................................................................................................................34
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Introduction of the company
Nestl is the worlds leading nutrition, health and wellness company.The company employs more than 280,000 people and has 456
factories in 84 countries. Nestl products are sold in almost every
country in the world.
Founded in 1866 in Vevey, Switzerland, where it is still based, Nestl
has often been called the multinational among multinationals. Only
about 1.5 percent of its sales are generated in its home country, and
all but 12 of its factories are situated abroad. The CEO is Paul Bulcke,
and the General Management includes a Belgian, two Canadians, one
Dutch, a Frenchman, a German, a South African/British, three
Spaniards, one Swiss, one American and a Swiss-American.
Nestl is a truly public company with over 250,000 shareholders of
which around one third are Swiss. No single shareholder owns more
than 3% of the stock. US investors, who, together, hold over 30% of
the capital, can purchase ADRs through a sponsored program. As the
worlds leading nutrition, health and wellness company, Nestl is the
worldwide leader in product categories such as soluble coffee, infant
nutrition, bottled water, condensed and evaporated milk, ice cream, as
well as chocolate and malt drinks, and culinary. The Group is also a co-
leader in pet care.
The Company is committed to delivering shareholder value through
sustainable, capital efficient and profitable long-term growth. Over the
past years it has concentrated on furthering organic growth and
performance improvement.
VISION:
The strategic priorities of Nestle Pak Ltd are focused on delivering
shareholder value through the achievement of sustainable, capitalefficient 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
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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 andprovide optimal nutrient to meet physiological needs. Nestle helpsprovide 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.
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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.
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 andsugar. The resulting product was meant to be a source of nutrition forinfants, who could not be breast-fed by their mothers. In 1867, hisformula saved the life of a prematurely born infant. Later that year,production of the formula, named Farine Lactee Nestl, began in Veveyand the Nestle Company was formed.
Henri Nestle wanted to develop his own brands and decided to avoidthe easier route of becoming a private label. Henri also wanted tomake his company global. Within a few months of the launch, Henribegan to sell his products in many European countries. In thecompanys 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 companylaunched a milk based infant food, which competed with Nestlsproducts. In 1875, Daniel Peter, a friend and neighbor of Henrideveloped milk chocolate. Peter became the worlds leading chocolatemaker, and later merged his company with Nestl. The rivalry betweenNestl and the Anglo-Swiss Condensed Milk Company intensified butended in 1905, when the two companies merged under the Nestlbanner.
World War I created a new demand for dairy products. Nestle grewmainly 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
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first loss, which was partly due to the worldwide postwareconomic slowdown. Louis Dapples, a Swiss banking expertrestructured the company, streamling its operations and reducing thedebt burden.
In 1930, the Brazilian Coffee Institute approached Dapples, seekingnew products. After eight years of research Nestl developed a solublepowder that revolutionized coffee drinking around the world. Theproduct was launched under the brand name Nescafe and became aninstant success. The onset of World War II speeded up the introductionof Nescafe. The beverage also became a popular drink amongAmerican servicemen in Europe and Asia. The end of World War IItriggered off a new phase of growth for Nestl. Many new productswere added as the company grew through acquisitions.
After 1974, Nestls financial position deteriorated. Oil prices rose andgrowth in industrialized nations slowed down. The Swiss francappreciated and the price of coffee beans and cocoa shot up. Thissituation was partially offset by Nestls rapid growth in emergingmarkets.
In 1981, Helmut Maucher took over as CEO. His policies had asignificant impact on Nestls style of functioning. Maucher pursued atwo-pronged strategy to improve the companys financial situation:First he embarked on internal restructuring and divestments; secondhe decided to continue with strategic acquisitions. Between 1980 and
1984, he divested a number of non-strategic or unprofitablebusinesses, amounting to nearly SFr8 bn. The divestments includedcertain food products that were not consistent with Nestls emphasison high value added segments. To improve the companys financialsituation, he embarked on a cost-cutting exercise. While the employeestrength was reduced significantly, the inventory and outstanding debtwere brought down.
In 1990, Nestl formed a joint venture with General Mills called CerealPartners Worldwide to promote Nestl breakfast cereals. It covered 70countries accounting for about 75 per cent of the breakfast cereal
consumption outside the US and Canada. Nestl also formed a jointventure with Coca-Cola, called the Coca-Cola Nestl RefreshmentCompany, to market tea and coffee-based ready-to-drink beveragesunder the Nestea and Nescafe brands.
In 1996, Nestl decided to end its 50-50 Clinic Nutrition joint venturewith Baxter Healthcare and established Nestl Clinical Nutrition toprovide orally consumed nutrition products to hospitals and nursinghomes.
Nestl opened the 20
th
century by merging with the Anglo-SwissCondensed Milk Company to broaden its product range and widen its
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geographical scope. In the new millennium, Nestl is theundisputed leader in the food industry, with more than 470factories around the world. Nestl launched a Group-wide initiativecalled GLOBE (Global Business Excellence), aimed at harmonizing andsimplifying business process architecture; enabling Nestl to realize
the advantages of a global leader while minimizing the drawbacks ofsize.
The Companys strategy will continue to be guided by severalfundamental principles. Nestls existing products will grow throughinnovation and renovation while maintaining a balance in geographicactivities and product lines. Long-term potential will never be sacrificedfor short-term performance. The Companys priority will be to bring thebest and most relevant products to people, wherever they are,whatever their needs, throughout their lives.
History Nestle Pakistan Ltd.
As a consequence of joint venture arrangement between Nestle S.A. ofSwitzerland and Milkpak Ltd. in 1988, the existing production facility ofMilkpak in Sheikhupura became a part of Nestle Milkpak.
The Milkpak Sheikhupura factory commenced operations in 1981 as aproducer of UHT milk. By 1988, it had expanded its operation and was
also producing butter, cream, desighee - all under the brand name ofMILKPAK and juice drinks under the brand name FROST.
To meet the demands of the large food market that Pakistan offered,Nestle Milkpak reorganized and reinforced the production of existingbrands and gave shape to new production lines. The first to come wasa milk powder plant, which not only began producing NIDO in 1990 butwas also critical to the production of several milk-based products in thefuture.
With the installation of the roller dryer in 1990, the first such product
to come was CERELAC - an internationally recognized brand of infantcereal.
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This was followed by LACTOGEN 1 & 2 in 1991.
The year 1992 saw the introduction of tea whitener EVERYDAY andmilk powder in bulk packing named GLORIA. MILO and NESLAC cameunder production in 1994 and MILO RTD in 1995. Local packing of
imported coffee under the name of NESCAFE 3 in 1 commenced thesame year.
In 1996, Nestle Pak Ltd first confectionery plant of POLO Mint wasinstalled and the production of NESTLE PURE ORANGE JUICEcommenced.Packaging of coffee under the brand name of NESCAFE CLASSIC wasundertaken the same year.
In 1997 NESTLE WHEAT and two variants of POLO viz. Strawberry andOrange was introduced.
In 1998 a substantial capital investment was made to launch severalproducts and install two new state-of-the-art technologies.
SWEET TREETS were launched in early 1998. The addition of twoflavors of POLO: Blackcurrant and Strong Mint increased the number ofPOLO variants to five.
A new variant Lemony was added to the range of popular FROST fruitdrink flavors and a new 1-liter packing of FROST was introduced.
Flavored milks under the brand FRESH & FRUITY came underproduction 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 flexibleconfectionery line enabled the manufacture of a wide range of highand low boiled sweets and toffees, including TOFFO and two variants ofSOOTHERS' Menthol Eucalyptus and Honey Lemon.
Nestle Milkpak also contracted to supply dairy mixes to McDonald's, forits popular soft serves and milk shakes.
And to top it all, the most prestigious project, NESTLE PURE LIFE wasalso commissioned in December. Based on the latest water treatmentand bottling technology, this marked the entry of Nestle Milkpak in thePakistan water market and that of Nestle in the world water market.
The expansion of high boiled sweet line continued in 1999 with theintroduction of Fruit Drops and BUTTERSCOTCH.
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The year 2000 saw the production of some excitingproducts. First came NESCAFE Frothe Original, followed byits two other flavors: Mocha and French Vanilla. NESCAFE Frappe RTDwas to come next.
The fruit juice range was expanded by the production of Mango andOrange-Mango Mix. On the confectionery side, Tutti Fruiti was addedunder the umbrella of POLO and Wild Cherry was added to theSOOTHERS range.
The success of NESTLE PURE LIFE in PET bottles encouraged thecommissioning of 5-gallon bottles production line for home and officein June.
And the last product line of the year to be commissioned in Novemberwas that of NESTLE Plain Yogurt, a high quality product with specialStay-Fresh Seal.
To meet the needs of safe and quality storage for the ever expandingproduct range and their volumes, a National Distribution Center (NDC)was completed and became functional in June, 2000.Spread over 6614square meters; it has the capacity to store up to 8300 pallets(approximately 8000 tons).
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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 brandslike Nescafe, Maggi and Cerelac. These brands are almost
generic to their product categories.
Product innovation - The Company has been continuouslyintroducing 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 theend 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 supplychain 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 tosmaller 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 itsproduct 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 cheaperin 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 (itsshare of the UK
confectionery market rise to 15.6 per cent with a 0.5 per centgrowth this year)
THREATS:
Competition - The Company faces immense competition fromthe 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 thusintensifying the battle.
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Changing consumer trends - Trend of increasedconsumer 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 thesituation has been improving, the dependence on monsoon is
very high.
Sectoral woes - Rising prices of raw materials and fuels, andinturn, 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, especiallyyogurt 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 totheir strong brand, but most importantly due to the possibility to usethe same technology to produce all these.Also, we have taken into account that the main raw material for theproducts 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 sameconsumers.Another advantage from using this strategy is that the company will beable to diminish the risk by diversifying their offer. In this way if one ofthe products is not successful on the Pakistan market the subsidiarywill not be endangered, as it still has other products which might bringgood profits for the company.
NESTLS FOUR PILLAR STRATEGY:
The four-pillar strategy was established in 1997 to take Nestl to newperformance levels in all areas of its business: from the supply chain to
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the consumer. The strategy builds the edifice of Nestle' on 4strategic pillars. It remains the inspiration for day-to-daymanagement within Nestl as it continues to seek improvingprofitability and increasing sales. The four-pillar strategy is outlinedbelow:
1-Operational Efficiency
2-Innovation and Renovation
3-Consumer Communication
4-Whenever, Wherever, However
NESTLES CORPORATE LEVEL STRATEGIES:
Products growth through innovation and renovation (whilemaintaining a balance in geographic activities and product lines).
Long-term potential
Build business based on sound human values and principles.
Long-term commitment to the health and well being of people in
every country in the scope of their operations.
Business should be conducted by adhering to the values andmanagement principles of the organization.
BUSINESS LEVEL STRATEGIES:
Low cost - less price transparency is followed.
Differentiation - to reduce the risk of complexity of supply chain
and lower attractiveness for discounters.
COMPETITIVE ADVANTAGE:
Research and development (R&D),
Its product range
Global reach and
280,000-strong workforce
FOUR GROWTH PLATFORMS:
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Nutrition
Emerging consumers
Premium goods and
Out-of-home goods.
ALIGNMENT OF BUSINESS STRATEGIES AND HRPRACTICES:
Nestle is a company whose HR strategies or practices are developed
by keeping in mind the Business objectives of the company and the
strategies devised to run the business. The HR strategies are always in
alignment with the business goals. Nestle is unique in the sense that it
has been able to successfully inculcate its business objective as well as
its core values, consistently in its employees day-to-day activities
starting from recruitment till continuous performance appraisals.
Products Growth through innovation and renovation:To increase the product growth i.e. productivity human resource
strategies are adopted such as flexible, dynamic employees are
attracted, selected and then trained and motivated to be more
productive than the competition. One case in point is the Kit Kat
manufacturing plant in York England, under the managership of Ian
Jobson and, ultimately, Nestle CEO Peter Brabeck. In 1998, Time
magazine reports, it took 38 man-hours to produce a ton of chocolate.
This year, using a combination of robotics, automated packaging, and
production-line improvements, the forecast production time is 23
hours. This decrease in production time was feasible because of
process innovation.Adherence to the values and management principles of theorganization
Respect for other cultures and traditions
Nestl embraces cultural and social diversity and does not
discriminate on the basis of origin, nationality, religion, race,
gender or age. Furthermore, Nestl believes that its activities
can only be of long-term benefit to the Company if they are atthe same time beneficial to the local community. In short, global
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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, thestrategy adopted by Nestle in Pakistan will be that ofoverall costleadership, as it is one of the companys goals to be efficient form anoperational point of view. By lowering manufacturing and distributioncosts the company will be able to offer better products as the quality-price ratio will be superior to its main competitors.The company has already implemented in other countries a cost-cutting program, Nestle Continuous Excellence which covers the entirevalue chain from raw material, manufacturing, packaging, distributionand customer to the consumer.The company will generate economies of scale, be producing at a largescale all the products, using the same employees; the same offices andthe same factory; which will inevitably lead to diminishing costs andincreased competitiveness on the Pakistan market.Next, according to the classification suggested by Miles and Snow, theappropriate strategy would be a prospective one, considering the factthe Nestle tries to enter the Pakistan market. The company, as aprospector organization will take some risks while entering a newmarket, by not knowing if it will be successful while handling thecompetition, finding the appropriate suppliers or the appropriatedistribution channel.
Most importantly, the company will use this strategy as it will bringinnovative products on the Pakistan market, containing a new culture:
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LA1 and a relatively new concept for the consumers, that ofhealth products.
Operational Planning:
Operational Planning Product Design and ProductionDepartment Manufacturing Office
The first operational goal is to establish the equipment and theingredients 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 equipmentthat 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 teamover 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
Operational Planning Sales Department SupplyChain Management Office
The opening of a subsidiary in Pakistan is a premise for the SalesDepartment to create a supply chain by adding together local suppliersand foreigners. This will establish the base for future investments inPakistan.
The operational goal reffers to creating a system of localsuppliers for the Pakistan subsidiary.
The resulting operational plan, which is a standing one, beingput into practice all long the activity of the subsidiary, will
comprise of:
Actions: Conduct a research program for identification of possible
local suppliers
Construction of a supplier data base
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 SupplyChain Management Office Manager
Operational Planning - Marketing Department -Advertising Office
The first operational goal is to establish contacts with the mainPakistan publications and network channels and acquire
information about the fees charged according to the visibility of
the product;
The operational plan consists of the following:
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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 newcollaborators that would bring about cost reduction for the
marketing process;
The operational plan consists of the following:
ActionsConduct, 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
ResourcesA team of 5 members from the Marketing Department
TimeThis 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
Operational Planning Human Resources DepartmentStaffing & Recruitment OfficeIn order to fulfill the goal of the Human Resources Department, theStaffing & Recruitment Office has the following goal.Operational goal: Recruit a number of 200 workers in order tooperate the production facilities at the required Nestle standards.This operational plan is a single-use one, consisting in a recruitmentprogram on a short time span. After the necessary personnel is foundand employed, the goal will be achieved
The operational plan consists of the following:
Actions: Design a recruitment program
Establish the employee profile and selection criteria
Establish the recruitment methods formally, through
recommendations from friends or colleagues and informally,
from inside of the company or from outside
Compose an advertisement and a press release announcing the
call for employees
Distribute the press release and advertisements in the national
Paksitan media channels
Collect and organize the applications (The applicants will be able
to submit their CVs and intention letters by sending an e-mail to
the companys address).
Plan the interviews and run the interviewing process
Select the appropriate candidates according to the compatibility
with the job description and selection criteria
Resources: financial resources budget for the recruitment process,money for advertising the hiring announcement, the fee of therecruiters; human resources recruitment officers, the employees ofthe Staffing & Recruitment officeTime: 3 monthsResponsibility: the plan will be coordinated by the head of theStaffing & Recruitment operational office.
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Operational planning Finance Department -Tax Office
The Tax Operational Office is responsible with the billing, recordkeeping and administration of all taxes levied; therefore it is a very
important part of the Finance Department as it ensures the goodrelationship with the Government.The first operational goal is to find the necessary information aboutthe taxes levied and accounting procedures in pakistan.
In order to fulfill this goal the operational plan supposes thefollowing:
Actions:Send 2 staff members to intensive training courses regarding the
Pakistan procedures
Present these fiscal procedures to the entire finance department,
namely all the information concerning the VAT (Value-Added-Tax),
profit tax and other taxes relevant to the company; mainly to the
employees that are from outside Pakistan
Resources:Financial resources: paying the courses for the two employees
Human recourses: the two representatives and the entire office
should take part in this plan in order to achieve the goal
Time:2 weeks for the training courses
2 more weeks to present the information to the colleagues
Responsibility:The head of the Tax Office has to appoint the two
representatives
The two representatives should attend the courses and explaineverything to the entire office afterwards
Taking into account the fact that this goal once attained there is noneed to further continue the actions, the operation plan is a single-use one. It actually represents a program, due to its small scale andlack of complexity. Therefore, once the employees in the FinanceDepartment are accustomed with the fiscal policies applied in Pakistan,at the end of these 4 weeks there will be no need to achieve this goalagain.The second operational goal is to develop a responsible allocation ofthe human resources inside the office.
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In order to fulfill this goal, the operational plansupposes 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 oneperson 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 occurregularly over the entire staying of Nestle in Pakistan. Moreover, due tothe fact that this operation plan underlines the way in which certainactivities should be performed, we can classify it as being part of therules and regulations category.
Operational planning Commercial OfficeThe Commercial Office is responsible with the legal aspects of settingup the subsidiary in Pakistan and with the legal aspects when closingthe contracts with dairy vendors.The first operational goal is to find the necessary information abouthow to set up a subsidiary in pakistan.In order to fulfill this goal the operational plan supposes thefollowing:
Actions:
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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 noneed to further continue the actions, the operation plan is a single-use one. It actually represents a program, due to its small scale andlack of complexity. Therefore, once subsidiary is set up there is noneed to perform the action again.
The second operational goal is to research about the legalrestrictions and procedures regarding the commercialization of dairyproducts in Pakistan.In order to fulfill this goal, the operational plan supposes thefollowing: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 theother 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.
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This operational plan is a single use one, as the legaldepartment communicates the legislation regarding theproducts at the beginning when the products are adapted to themarket and only updates if modifications should appear in thelegislation.
Policies:
Nutrition, Health and Wellness:
Our core aim is to enhance the quality of consumers lives every day,everywhere by offering tastier and healthier food and beveragechoices and encouraging a healthy lifestyle. We express this via our
corporate proposition Good Food, Good Life.
Quality assurance and product safety:
Everywhere in the world, the Nestl name represents a promise to theconsumerthat the product is safe and of high standard.
Consumer communication:
We are committed to responsible, reliable consumer communicationthat empowers consumers to exercise their right to informed choiceand promotes healthier diets. We respect consumer privacy.
Human rights in our business activities:
We fully support the United Nations Global Compacts (UNGC) guidingprincipleson human rights and labour and aim to provide an example of goodhuman rights and labour practices throughout our business activities.
Leadership and personal responsibility:
Our success is based on our people. We treat each other with respectand dignity and expect everyone to promote a sense of personalresponsibility. We recruit competent and motivated people whorespect our values, provide equal opportunities for their developmentand advancement, protect their privacy and do not tolerate any formof harassment or discrimination.
Safety and health at work:
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We are committed to preventing accidents, injuries andillness related to work,and to protect employees, contractors and others involved along thevalue chain.
Supplier and customer relations:
We require our suppliers, agents, subcontractors and their employeestodemonstrate honesty, integrity and fairness, and to adhere to our non-negotiablestandards. In the same way, we are committed to our own customers.
Agriculture and rural development:
We contribute to improvements in agricultural production, the socialand economic status of farmers, rural communities and in productionsystems to make them more environmentally sustainable.
Environmental sustainability:We commit ourselves to environmentally sustainable businesspractices. At allstages of the product life cycle we strive to use natural resourcesefficiently, favour the use of sustainably-managed renewableresources, and target zero waste.
Water:We are committed to the sustainable use of water and continuousimprovementin water management. We recognize that the world faces a growingwater challenge and that responsible management of the worldsresources by all water users is an absolute necessity.
Standard Operating Procedures:
"A Standard Operating Procedure is a document which describes theregularly recurring operations relevant to the quality of theinvestigation. The purpose of a SOP is to carry out the operationscorrectly and always in the same manner. A SOP should be available atthe place where the work is done".
(The Nestle Company did not tell us about the following
information as they considered it confidentional to them.)
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CONTROLLING
By managerial control the parent company ensures that the actualperformance of the subsidiary is equal to its planned performance. The
purpose of control is to facilitate the implementation of plans bycontinuously monitoring the performance of the people responsible forcarrying them out.The process of control and the problems associated with it are morecomplex in a multinational company than in its domestic counterpart,due to the diverse cultural, economic, political and legal environmentsin which the subsidiaries operate.The General Manager of the Pakistan subsidiary of Nestle will report itsactivity to the zone director of Europe, as it can be seen from theorganizational chart. Consequently, when using the term homecompany, we will refer to the headquarters of Nestle Europe.
The control process will begin by setting the adequate standards andobjectives of the financial, quality and human resources performance.The next step is to develop instruments and techniques to monitor theperformance of these key areas. The third step is to compare theperformance measures obtained from the monitoring activity with theplans of the company. Finally, the employment of effectuating oraction devices should be employed in order to correct any deviationsthat occur from the company standards.The managerial control process will supervise the following key areas:
Financial performanceThe financial performance of a company is used as a general measureof the overall financial health and of how well the company can use itsassets and generate revenue, over a given period of time. Therefore, itis very important for the home-company executives to have a frequentand detailed view over these issues.The assessment of financial performance will be done first of allthrough means ofindirect control. This will consist of written reports,concluded by the financial department, which will present thesereports to the General Manager of the subsidiary. This is a form ofverification control. We have chosen this method, as it cheaper interms of costs and it also provides a clear and objective picture of theactivity of the subsidiary.The written financial reports will comprise of the following information:facts concerning the performance of the subsidiary financial analysesof sales, profits, return on investment. In addition, there will berequired financial statements, the balance sheet, the profit and lossstatement and details about cash budget, financial ratios.The financial statements should be done in three ways one to meetthe Pakistan accounting standards and procedures, one to comply withthe 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 theGeneral Manager on a monthly basis. There will be also ageneral financial review at the end of every quarter and at the end ofthe financial year.A form ofdirect control should also be used, for a better coordination
and communication with Nestle Europe headquarters. Therefore, everysix months, the General Manager of Nestle Pakistan will have ameeting with the Director of Nestle Europe, where he will present thefinancial reports and a description of potential problems affecting theoperation.
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 subsidiaryto make sure that the products manufactured in Pakistan respect
international quality standards, in terms of composition, taste, visualattributes and so on.The method used will be the one ofdirect, current control, as this isthe most efficient way to check the quality of the products. This formof control will consist of regular inspections performed by a team ofsupervisors, who will thoroughly observe the production process andwill ensure that the rules and procedure are respected. There are threemain points that will be checked and reviewed: raw materials used inproduction, the production process and the final products prior to thedispatch to final consumers.Nestle is proud of having a state-of-the-art milk production and
processing sector, therefore the Pakistani subsidiary should maintainthis standard.The quality control will also be exerted on the distributors and retailersof Nestle, who also must comply with certain standard, in order for theproducts to reach the customer in the best conditions possible.
Human resources performance:
In assessing the performance of the human resources of thesubsidiary, specific HR Key performance indicators (KPIs) will be used.
This is a form of indirect control, through verification, as it is costeffective and provides a clear view of whether the objectives were metor not and whether the standards are respected.The following key performance indicators will be measured:
Recruitment KPI (recruitment costing per person, average time to
recruit, average numbers of interviews, % recruitment
achievement meet hiring plan);
Training KPI (company training expenditure, average number of
training hours per employee, employee satisfaction with training,
the percentage of employees gone through training);
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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 theywill write their monthly objectives regarding sales, productdevelopment, team development and so on, with comments related tothe status of achieving these objectives, the actions through they planto achieve them and the problems they had to overcome or mayappear at a certain point. Comments and suggestions are also to bementioned. Each report should be handed in to the departmentmanager, who in turn will submit it to the HR department for
processing. The manager of the human resources department will thenpresent the compiled form of these reports, along withrecommendations.
Management by objects (MBO):
Management by objectives is a dynamic system which seeks tointegrate the company's need to clarify and achieve its profit andgrowth goals with the manager's need to contribute and develophimself. It is a demanding and rewarding style of managing a business.
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(The Nestle Company did not tell us about thefollowing information as they considered itconfidentional to them.)
ORGANIZING
Organizational chart:
National Sales Manager
Zonal Sales Manager
Regional Sales Manager
29
Customer
Service
Manager
Customer
Service
Officers
Area Managers System Support Event
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Management
Span of Control:
30
B.O.D.s
Head OfMarketing
Head ofSales
Head of
Technical
Head of
supply
chain
Head ofH.R.
Head of
Legal
affairs
Managing
Director
.Manager
Plant
Manager Q.C
Q. Assurance
Officer
Manager
Procurement
Manager
Purchase
Logistics
Officer
Territory In
ChargeSystem Support
Officer
Sales Associates Sales Associates
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Span of control or span of management is a dimension of organizational designmeasured 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, andadministrative overhead. Span of management has been part of the historicaldiscussion regarding the most appropriate design and structure of organizations.
TYPE OF STRUCTURE:
Its a vertical structure.vertical organizations have a top-down structurein which directives are passed from top-level managers to mid-levelmanagers, then to low-level managers and finally to associates orentry-level employees. This structure calls for distance betweenregular employees and the managers who make decisions about thecompany, working conditions, pay rates and other important factors.
Vertical structures are particularly useful in organizations such asfactories or other production facilities where efficiency andstandardized processes are of the utmost importance. In contrast, a
horizontal or decentralized structure implies that each department ormanager can make important business decisions in a different mannerthan the next group or supervisor. Companies such as large accountingfirms and certain nonprofits, which have strict guidelines, are not wellsuited for non-vertical structures. Maintaining order is easier in acompany with a set chain of command.
DELEGATION OF EMPOWERMENT:
At Nestle' Milkpak, jobs have been effectively engineered to ensure that employees arenot 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
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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.
MANAGING THE DIVERSE WORKFORCE:
Managing people is one of the most difficult responsibilities that anymanager assumes. For Nestle Pakistan, this responsibility is magnifiedwith the number and diversity of the people forming the organizationand the different work groups within it. Nestle' Pakistan is made up ofa heterogeneous population with diverse cultural backgrounds,genders, ages, beliefs and physical& mental capabilities. Anothersetback for the Organization is that the original culture of PakistanLimited still prevails and the HR managers face a tough task ofmanaging the people and making them adapt to the culture the Nestle'team wants to incorporate in the company.
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 HRdepartment at Nestle Pakistan. In fact open, two-way communication isthe only way that Nestle Pakistan could have survived with the diverseculture it possesses. The employees at the Organization know thattheir opinions and inputs are valued and welcomed at all times. Thiscreates 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 teamsformed, both formal and informal are productive and this promotes agood organizational climate. The HR department interconnects the
various departments to depict a very friendly atmosphere wherepeople and Managers are interlinked in ways that add to this favorableenvironment.
LEADING
LEADERSHIP STYLES:
DEMOCRATIC LEADERSHIP
A "democratic style"of leadership is observed at the organization. This style indicates amanagement 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 organizationsHuman Resource Department, but still some areas require more
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attention to maintain long-term competitiveness of the
company.
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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http://www.nestle.pk/http://www.nestle.com/http://www.wekipdia.com/http://www.nestle.pk/http://www.nestle.com/http://www.wekipdia.com/8/3/2019 Nestle Hassam
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29th kilometer,Lahore-Sheikhupura Road,Sheikhupura-39320,PAKISTAN
TEL SKP:92-42-6369321-26
:92-42-7228300
FAX :92-42-6368710
E-mail:[email protected]