Nestle Company’s International Management

Abstract

Nestle, as an international company, develops and adopts strategies that help it to meet the needs and challenges of the multicultural environment. It is no coincidence that many features of HRM can be likened to employment relations’ practices where respect for workers is crucial. Changes have added to the demand to use employees more flexibly than hitherto. A manager’s personal strategies and techniques influence the successful performance and internal culture of any international organisation. The difficulties posed on managers and employees are language barriers and unique cultural values, traditions and religious beliefs, ‘culture shock’, unfamiliar work environment and uncertainty.

In order to respond to a new cultural environment, a manager should be a mediator between two cultures. They should reconcile responsibilities and power; they have to be flexible and see the situations from different angles. Many companies have employed foreign models in order to meet the needs of a particular culture and country. The workplace factors involve the structure of organisation and delegation of authority, internal culture and composition of employees. This is both a total management issue and of importance to management itself in the design of international HR processes and procedures.

Introduction

The total global environment suggests that that big international marketing companies can accelerate their growth and performance by adopting and introducing effective management practices and techniques. Nestle is one of the leading international companies in the packaged food industry, established in 1905. The international environment affects all operations and performance of the company, its organisational culture and climate. International staffing and development help Nestle to organise human resources (HR) in accordance with the needs of the company and its strategic goals (Nestle Home Page 2008).

Cross-cultural management may be explained as that part of business activity that is social as opposed to genetically transmitted. For Nestle, it comprises ideas through which managers perceive and interpret the world, symbols they use to communicate these ideas, and institutions that enable individuals to become socialised and satisfy their needs.

Difficulties and Challenges of Multicultural Working Environment

The difficulties posed on managers and employees are language barriers and unique cultural values, traditions and religious beliefs, ‘culture shock’, unfamiliar work environment and uncertainty. In general, cultural factors exert a major influence on employees behaviour as it is the fundamental determinant of a person’s wants and prejudices. At Nestle, international managers take into account that culture has long stood for the way of life of a people, for the sum of their learned behaviour patterns, attitudes, and material thins.

In a real sense, culture is human-made (Bartlett & Ghoshal 1999). It is learned and, as such, is communicated from one generation to another. The main problem in a foreign country is that culture is shared by members of society, and the behavioural traits of which it is comprised are manifested in a society’s institutions and artefacts. The task of an international manager is to adapt to these values and respond effectively to cultural traditions (Davis, 1989). Nestle identifies its culture as a “culture of excellence” (see Appendix 1).

Language is the important issue of cultural diversity as most multinational organisations choose an official language, often English, local affairs are usually in the language of the country, and not all employees speak the official language. At­tention to language skills in recruitment and opportunities for employees to learn another language is commonplace solutions that need no discussion. The understanding of social behaviours and good manners in each coun­try is also a very important sphere of cultural practices (Davis, 1989).

The previous area is closely connected with the national differences in culture, which cause people to look at the same issue in different ways. The solution is to ensure that there is a shared understanding of these differences and deliberate action to make choices in a way that enables all cultures to work in the most effective manner (Bartlett & Ghoshal 1999). In light of the facts mentioned above, there is a great importance of managing cultural diversity for international organisations as it has a direct influence on the successful international activity and image of a firm (Sorensen, 2002; Nestle Home Page 2008).).

According to organisational analysis, the remarkable feature of Nestle is ‘monoculture,’ which affects all spheres of organisational performance and human relations. Nestle is often criticised for this strategy that threatens individual differences. On the other hand, there is a positive impact of this culture on the organisation expressed in low diversity levels and homogeneous culture shared by all employees.

In spite of great criticism, Nestle gives some thought to how intercultural differences impede or enhance business success (Sorensen, 2002). Diversity has a great impact on the decisions of managers and is based on the removal of prejudice from the organisation and the individuals it employs. Nestle establishes professional standards for the work done inside the organisation. Nestle values religious and racial diversity, age differences and unique personal values of all employees (Bartlett & Ghoshal 1999).

Nestle can only perform effectively through interactions with the broader external environment of which it is part. The structure and function­ing of the international organisation reflect the nature of the environment in which it is operating. Factors such as uncertain economic conditions, fierce world competition, the level of government intervention, scarcity of natural resources and rapid developments in new technology create an increasingly volatile environment. In order to help ensure its survival and future success, the international organisation must be readily adaptable to the external demands placed upon it using the appropriate structure and support of its HR management team (Davis, 1989; Nestle Home Page 2008).).

Personal and Professional Factors

An international manager should possess and develop unique skills in order to operate in a multicultural environment. An international manager should be a mediator between two cultures. They should reconcile responsibilities and power; they have to be flexible and see the situations from different angles (Sorensen, 2002). Espoused values include ethical principles and high quality of the products delivered, social responsibilities and innovations. Timeliness, responsiveness and flexibility, courtesy and friendliness, availability and access, sympathy and support, understanding and guidance; all these, and others such as respect and confidentiality, have to be considered as elements in the design of human services where the felt experience of the client is at least as important as, if not more so than, procedural or technical precision (Davis, 1989).

The main competencies important for international managers are interpersonal skills and excellent communication skills, language skills and motivation to live and work abroad, cultural empathy and the ability to tolerate and cope with uncertainty. In a foreign country, a manager should be able to form relations with diverse employees belonging to different cultural and social groups. In order to make the correct choices, Nestle introduces a strict code of responsibilities and duties for international managers. It has also been acknowl­edged that the managers of Nestle have important obligations to a variety of stakeholders and not just the shareholders, and this should be reflected in the organisation’s statements of purpose, such as mission statements (Bartlett & Ghoshal 1999).

The workplace factors involve the structure of organisation and delegation of authority, internal culture and composition of employees. While cultural differences may be regarded as a barrier to the achievement of a truly harmonised single market, they do not act as a barrier to doing business abroad (Dowling & Welch 1999). By adapting to local cultural conditions, Nestle can operate successfully across the nations. Indeed, it is possible to argue that the divergence of cultures actually offers international firms an advantage over their international competitors as it permits the scope to identify national strengths and weaknesses and develop strategies that tap into these critical resources. A small number of foreign workers will help a manager to create a homogeneous culture based on unified cultural values and traditions (Davis, 1989; Nestle Home Page, 2008).

Equally, exposure to different cultures provides opportunities for learning new ways of doing business and improving company performance. Another important dimension that should be taken into account is international corporate culture which is influenced greatly by national culture (Nestle Home Page 2008).

International corporate culture is the product of the firm’s history and development which may, for multinational organisations, be an effective practice in a number of national marketplaces (Dowling & Welch 1999). It is, therefore, unique to the individual organisation and carves out a path for behaviour and practices which may be distinct from other firms operating within the same locale cultures and management styles are highly simplified for the purpose of analysis, it is possible to project different corporate and business cultures for firms operating out of countries on the basis of this thinking (Bartlett & Ghoshal 1999).

Personal Strategies of the International Manager

In a general sense, the task of international managers in Nestle is to remove prejudice from the organisation and the individuals it employs, to ensure that all employees, regardless of gender, ethnic origin, re­ligion and lifestyle, receive equal treatment in the organisation. The main personal strategies adopted by international managers are cultural briefing, language training and assimilation, Nestle which has a multi-country operation or business, should give some thought to how intercultural differences impede or enhance business success (Dowling & Welch 1999).

This becomes of even greater importance when entering into strategic alliances with organisations in other countries; in acquisition situations; when departments in different countries (such as research and development) have to work closely together; when individuals of one country are sent to work in another; and when there is a need to have subsidiaries of various countries commit to a common vision, and common methods and processes. A manager should introduce their party negotiations and create a cultural profile for the entire organisation, focus on organisational dimensions and stereotypes shared by employees, encourage recognition of personal uniqueness and individual culture. International staffing and development help to organise employees in accordance with the needs of the company (Barham & Conway 1998).

Nestle follows a conservative strategy characterised by slow growth and a stable environment. Innovations as a part of organisation culture require participative processes and result in the sharing of information across departments, functions, and organisational levels. Some organisations consider their workforce purely as an economic asset, expendable at any time (Barham & Conway 1998; Nestle Home Page 2008). Differences of this kind obviously have a bearing on the way in which managers co-operate with staff lower down the organisation, training and individual development. Implicitly, differences of this kind impact motivation and loyalty. For an international manager, it is crucial to define what is perceived as good and bad in a new cultural environment, business norms and traditions (Barham & Conway 1998).

At the international level, the main stages of training need, however, to be related to the context of the external environment in which the organisation is operating. Different stages of training will be most appropriate at different times. There is a wide range of forces acting upon international organisations and which make the need for change inevitable. Training for change is vital for the long-term survival of an organisation.

Increasing emphasis is being placed on both the need for cont­inuous training to support change and on training as a vital investment for the future. Awareness that HRM needs to be able to operate across cultures is leading to a new agenda for the establishment of career paths and new demands for skills and learning. Sending successful domestic managers abroad to conduct the activities of the firm in foreign markets has, for a long time, been considered less than ideal. Attention to social issues can make a significant contribu­tion to international business (Dowling & Welch 1999).

This may become even more important when the organisation’s strategy is taking it into new countries or different forms of alliance and collaborative ventures. International organisations can contribute to the success of such plans by ensuring that social differences are considered when common policies are defined, that announcements are made in a way that is most effective for each culture, and that managers who have to operate across country borders understand the nature of the cultural differences involved, and adjust their own behaviour to obtain the best result. Management has to balance the need for adaptability in meeting the challenges and opportunities presented by change with, at the same time, preserving an atmosphere of stability and continuity in the interests of members of the organisation (Erickson 2000).

Conclusion

Successful cultural management practices play a major and continuing role in the international arena, especially with the growth of large-scale international business organisations and the divorce of own­ership from management. The decisions and actions of management have an increasing impact on individuals, other organisations and the community. It involves set­ting policies, formulating plans, and trying to make the best deci­sions possible. All this is done in the context of how the international organisation as a whole, and the HR manager, in particular, the environment of the business and the situation in which it operates.

Bibliography

1. Bartlett, C. and Ghoshal, S. 1999. Managing Across Borders: The Transnational Solution. 2^nd edition, London: Ramsden House.
2. Barham K., Conway C. 1998. Developing business and people internationally: A mentoring approach. Ashridge Research.
3. Davis, S.M. 1989. Future Perfect. In Evans, P., Doz, Y. and Laurent, A. (eds) Human Resource Management in International Firms. London: Macmillan.
4. Dowling, P. J., Welch, D. E. and Schuler, R.S. 1999. International Human Resource Management, 3^d edn, South West Publishing.
5. Erickson, J.A. April 2000. Corporate Culture: The Key to Safety Performance. Occupational Hazards, Vol. 62 (4), p. 45.
6. Nestle Home Page. 2008. Available at: www.nestle.com
7. Sorensen, J.B. 2002, The Strength of Corporate Culture and the Reliability of Firm Performance. Administrative Science Quarterly, Vol. 47 (1) p. 70.

Appendixes

Nestle’s Culture of Excellence