Organizational Structure Of A Multinational Company Case Study

Length: 3 pages Sources: 2 Subject: Business Type: Case Study Paper: #63108310 Related Topics: Organizational Structure, Nestle, Organizational Analysis, Organizational Design
Excerpt from Case Study :

Organizational Design and Structure of Nestle

Nestle S.A., a Swiss multinational company based in Vevey, is the world's largest beverage and food company. It is renowned for its attempts at leading the world market in Nutrition, Wellness and Health. The company owns numerous brands, manufacturing diverse products, including beverages like bottled water, coffee, and milkshakes, infant formula, breakfast cereals, seasonings, healthcare and performance nutrition, sauces and soups, refrigerated and frozen food items and pet foods, in several world markets (Lee, 2014).

Organizational effectiveness represents a sum total of company goodness and factors like production, turnover, output quality, cost performance, efficiency, and profitability (Katz & Kahn, 1966). Effectiveness denotes the organization's ability to accomplish its aims and fulfill needs of different stakeholder's (Khandwalla, 1995). Nestle's official website claims that stakeholders of the company include company employees, suppliers, distributors, investors, partners, shareholders, customers, regulatory authorities, etc. (Lee, 2014).

Organizational Structure

In the contemporary global business scenario, several international companies employ a mixed or hybrid structure, where two, or multiple, structures are used, or different structures' elements are combined (Daft, 2012, p180). Nestle generally displays distinct traits of an international matrix structure. It owns local firms in a majority of


Nestle Group divides its companies by geographical zones (America, Europe, Asia, Africa, and Oceania) for the major part of its business in foods and beverages, with the exception of globally managed divisions, including Nestle Waters, Nespresso, Nestle Professional, Nestle Health Science and Nestle Nutrition. Nestle, being the world's largest food brand, discards the notion of one single, global market, making use of geographic structure for focusing on each country's local requirements and competition present. Nestle lays particular emphasis on regional manager's autonomy, as they are familiar with local cultures. Local managers are authorized to determine the portion size, flavoring, packaging, and other elements of a given product. Several of Nestle's 8000 brands have single-country registration (i.e. are not made and marketed elsewhere) (Lee, 2014).

Because of its advanced technologies and firmly entrenched product lines, Nestle can make the most of an international geographic structure, dividing its global marker based on geography, and aiming for lower manufacturing costs in different countries, while meeting diverse sales and marketing needs across different regions. With total control over functional activities, all regional divisions have to report to the chief executive officer (Lee, 2014). The Swiss headquarters, typically, work in unison with each geographic unit, establishing an overall company strategy that guides the SBUs (Strategic Business Units) and Zone Management. The three business zones of Nestle geographically work in collaboration with SBUs and local markets. They play the basic role of business enablers, linking business centers with the market. A common vision enables the global employees of Nestle to comprehend company direction, as well as how to accomplish the collaboration through common values, tools, and strategies. Additionally, SBUs specializing in a certain category, for instance, Chocolate, Beverages and Coffee, or Pet Care, work in collaboration with the Research and Development department (R&D) in order to ensure that all foods and beverages the company produces are new and innovative, and satisfy customer expectations. They also assist markets in accomplishing brand and business goals (Lee, 2014).

Nestle has also instituted Beverage Partners Worldwide, Cereal Partners Worldwide and other joint ventures, while…

Sources Used in Documents:


Daft, R.L (2012). Organization Theory and Design (11th ed.), Mason, Ohio: South-Western

Dartey-Baah, K. (2013). The Cultural Approach to the Management of the International Human Resource: An Analysis of Hofstede's Cultural Dimensions. International Journal of Business Administration.

Katz D, Kahn RL (1966). The social psychology of organizations. New York: Wiley. P. 168

Khandwalla, P.N. (1995). "Management Style." New Delhi: Mc-Graw Hill. P. 387.
Luthans, F., DH Welsh, Rosenkrantz, S.A. (1993). What do Russian Managers Really Do? An Observational Study with Comparison to U.S. Managers. Journal of International Business Studies, 24(4), 741-762.
Schneider, S.C., DeMeyer, A. (1991). Interpreting and Responding to Strategic Issues: The Impact of National Culture. Strategic Management Journal, 12, 307-320.

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