Diagram of the Nestlé Organisational Structure References

Diagram of the Nestlé Organisational Structure

References :
HYPERLINK "https://www.nestle.com/asset-library/Documents/Library/Documents/Corporate_Governance/corp-governance-report-2017-en.pdf" https://www.nestle.com/asset-library/Documents/Library/Documents/Corporate_Governance/corp-governance-report-2017-en.pdf
2A)Effectiveness of its structure
Based on the diagram of Nestle company structure, it has a high work specialization due to the activities that are organized by Nestlé company such as Milo Champions Clinic, MAGGI Secondary School Cooking Competition and so on are clearly subdivided into separate jobs and work like they have human resource manager, financial manager. Due to nestle company has high work specialization and it completely utilize the employee skills and their knowledge, it can increase productivity of the work through repetition of work. Consequently, the work can be done efficiently in the short time. It is clearly shows who report to whom and who is the boss and subordinates. For example, Mark Schneider, Chief Executive Officer will manage and control a lot of department such as Nestle Health Science department, Nestle Business Excellence department and so forth. Besides, it has high chain of command in the structure because the Nestle’s structure has clearly shows that every job is clearly subdivided to each department and each department has their own direct superior whom the employees will report to them. In addition, its structure are characterized by extensive departmentalization as it is using hybrid form departmentalization. For examples, it use functional, geographical and product departmentalization to operate the business. However, it can reduce cost of training because it use and group specialist together in a project such as product development and inter-department meeting. Furthermore, it used wide span of control and low formalisation in the structure so that it can increase efficiency job and accelerate the speed of performing tasks of organization. Besides, the organization allow employee to make their own decision while performing their daily operation. These empowerment that given by the employer will allow the employee to solve their own daily operational difficulty meanwhile learn from the mistake. In addition, employees will be more concentrate on the job to done and they will feel more freedom while they are working. This is because low formalization allowed employee to exercise their own judgement and less rules ; procedures to follow. Lastly, Nestle company are more based on participative decision-making. The actions can be taken more quickly as the information can be conveyed among the team and analyzed with their knowledge and skill so that the decision can satisfy and fulfill the needs of their customers. As a result, their customer rather to buy their product than buy their competitors’ product.

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References :
HYPERLINK "https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php" https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php
HYPERLINK "https://www.nestle.com.my/asset-library/documents/pdf/nestle_in_society_report_2016.pdf" https://www.nestle.com.my/asset-library/documents/pdf/nestle_in_society_report_2016.pdf
HYPERLINK "https://www.ukessays.com/essays/commerce/organizational-structure-and-the-workplace-specialisation-commerce-essay.php" https://www.ukessays.com/essays/commerce/organizational-structure-and-the-workplace-specialisation-commerce-essay.php
https://www.nestle.com/asset-library/documents/library/documents/people/management-leadership-principles-en.pdf

2B) Hierarchy of authority
From the structure of Nestlé company, we know that it is divided into 3 level of management, which is top-level management, middle level management and low-level management. Top-level management is the highest level of management in a company which is focus on the long range direction of the company. Firstly, top manager is responsible to set up the policy and goals of company. For examples, Paul Bulcke, Chairman of Nestle company have concerned the leader understand some principles which is lead to win, manage for result, grow talents and team and compete and connect externally that are stated on page 7 in the nestle management and leadership principles. Besides, top managers are also responsible for strategic policies and plan for initiatives. For instance, nestle company strive to pioneer the use of probiotics in their products to reduce gastrointestinal diseases and address the obesity and diabetes through their scientific innovatives. Furthermore, middle manager sacrifice more their time on direction and organisation functions. For examples, they are responsible for execute the plans of top manager to run the business. From the chart , each of the director of each department will execute the operation of business to meet the objectives set by the top management. Lastly, operation management of nestle company is directly supervise and evaluate the daily performance of non – supervisory worker.
References:
HYPERLINK "https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php" https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php
HYPERLINK "https://www.nestle.com/asset-library/documents/library/documents/people/management-leadership-principles-en.pdf" https://www.nestle.com/asset-library/documents/library/documents/people/management-leadership-principles-en.pdf
HYPERLINK "https://www.nestle.it/asset-library/documents/pdf_nostri_report/12_theworldofnestle.pdf" https://www.nestle.it/asset-library/documents/pdf_nostri_report/12_theworldofnestle.pdf

3A)Span of control
Span of control can be known as management ratio, refers to the number of subordinates controlled under directly by a superior in a company. If the organizational structure is a pyramid, then the higher level of pyramid have control the lower level of pyramid. Based on the diagram of Nestlé company structure, Nestlé company used a wide span of control. Wide span of control can be defined as a single mangers or supervisor direct many subordinates or worker. First, it can help to simple the work. Thus, the manager can control and supervise many employee in one time. In other word, managers can give the tasks clearly to the subordinates. From the structure, Mark Schneider, Chief Executive Officer control and direct a large number of department in Nestlé company. However, the first benefit of its structure is reducing the cost of company. This is in light of fact that Nestlé company are recruited less middle managers who are responsible for tactical planning and controlling. Moreover, Nestle company can save a lot of moneyfor these employees by giving them training. Besides, another effective of this structure is faster the process of making decision which means that improve communication speed. By using wide span of control, they are given an opportunity to speak up their opinion and perception about the action and problem related to the Nestle’s product. They can directly contact with their superior and give all the information easily to the superior because there are no barrier between the superior and employees. So, superior can take the action quickly because they needs less time in making decisions. They will be motivated if they are participate in the decision making. Furthermore, workers are more freedom from supervision. This is because they have fewer levels of management and superiors will weak to control over each subordinates. When employee is not controlled and supervised tightly, they will shows their high responsibility and have a higher morale in their own jobs. Conclusion, the wide span of control being a lot of easy and benefit to Nestlé company.

References :
HYPERLINK ;https://www.orgchartpro.com/span-of-control-and-organizational-structure/; https://www.orgchartpro.com/span-of-control-and-organizational-structure/
HYPERLINK ;https://www.researchgate.net/figure/Companies-with-Wide-Span-of-Control_fig2_280932756; https://www.researchgate.net/figure/Companies-with-Wide-Span-of-Control_fig2_280932756
HYPERLINK ;https://www.eformations.co.uk/2014/04/the-benefits-of-a-narrow-span-of-control-in-a-company/; https://www.eformations.co.uk/2014/04/the-benefits-of-a-narrow-span-of-control-in-a-company/
HYPERLINK ;https://www.inc.com/encyclopedia/span-of-control.html; https://www.inc.com/encyclopedia/span-of-control.html

3B)How effectively members of the organization communicate with each other.

Nestlé company are very effective and efficiency in communicate with each other in the company. Based on the organizational structure of the company, we know that Nestlé company is a flat organization. From the Nestle Employee Relations Policy, regular dialogue between employees or between management and employees are encouraged because it allows subordinates to discuss current issues in the market and more better understanding of business operation and objectives. In this situation, there are only fewer level of management in the company. So it will cause the route of communication become shorter and the information that sent to each other not easy to go wrong and more clear. Next, lower-level members and subordinate units have a wide range of decision making. The wide range of decision making can
help to make more effective decision without excessive sacrifice and help to save more cost. Lower-level members and subordinates also have a strong overall concepts and greater autonomy. This make the employees easy to communicate to the superior . Besides that, this also help the employees to encourage direct communication to the superiors. It can save more time for waiting the final decision or transfer information to each other. Moreover, the trust form boss to worker will occur if workers can direct communicate with their superior. However, the work can be done efficiently as the task that are given by superior are very clearly and employees have their direction in their jobs. Manager can also give some feedback on the product development when the employees not done good enough even through the solution is discussed by every members in a team. Employees can learn some problem – solving skills and ways to thinking of problem from the feedback or advice.

References :
HYPERLINK ;https://www.nestle.com/asset-library/documents/library/documents/people/employee-relations-policy-en.pdf; https://www.nestle.com/asset-library/documents/library/documents/people/employee-relations-policy-en.pdf
HYPERLINK ;https://www.eformations.co.uk/2014/04/the-benefits-of-a-narrow-span-of-control-in-a-company/; https://www.eformations.co.uk/2014/04/the-benefits-of-a-narrow-span-of-control-in-a-company/
Analyse and give suggestions for possible improvement on the areas as discussed above. Be sure to give rationale for your suggestions. If you think it cannot be improved upon, explain what features make it so perfect and why.

In my opinion, I think that Nestlé company is a very perfect company in the world and it has no room for improvement because Nestlé company is organized according to matrix structure. Nestlé company group subordinates from different area of specialisation to work together temporarily on specific projects and emphasis on product development , creativity , special projects , communication and teamwork. Thus, employees in the Nestle company can broaden their skills and knowledge and these employees will be generalists as well as specialists. Sometimes, the creative ideas or solutions will be occur in the team to solve the problem faced by Nestlé company.This is due to the reason that the highly skills of teamwork in the project will be shared and more open communication lines is allowed which permits the precious and valuable information in the organisation can be shared among them. Besides, all members can share information and knowledge in a decentralised structure to produce the best and creative solution as long as Nestle company use team communication channels. Apart from that, the jobs and works can be delivered efficiently and effectively when Nestlé company use matrix organisation structure. For instance, it is allowed to serve global customers, manage supply chains that extend outside the organisation and run integrated business regions, functions and processes. Other than that, one of the reason why matrix structure made Nestle company so perfect and outstanding is managers have flexibility in assigning people to projects. Henceforth, employees have some autonomy in making decision and they are not in the environment of tight supervision. Besides, Nestlé company will make some changes on product based on the needs of situation because the decision can be changed easily. Aside from that, Nestle company is using matrix – style organisation to inculcate the team spirit among these employees so that they can solve problem together or doing task. This can also bring the effects of sharing knowledge and skills among them. So, Nestle company can create a good team which include the employees that are generalists as well as specialists to manage and run the project very well as compared to their competitors. In the long run, these employees can use their general knowledge which are taught by other teammates to solve the crisis situation.
Reference:
HYPERLINK ;https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php; https://www.ukessays.com/essays/management/nestle-system-and-organization-structure.php
HYPERLINK ;https://pmstudycircle.com/2012/08/what-is-a-matrix-organization-structure/; https://pmstudycircle.com/2012/08/what-is-a-matrix-organization-structure/
HYPERLINK ;https://en.wikipedia.org/wiki/Matrix_management#Management_advantages_and_disadvantages; https://en.wikipedia.org/wiki/Matrix_management#Management_advantages_and_disadvantages
HYPERLINK ;http://smallbusiness.chron.com/advantages-disadvantages-matrix-organizational-structures-business-organizations-26350.html; http://smallbusiness.chron.com/advantages-disadvantages-matrix-organizational-structures-business-organizations-26350.html
A) How the management of Nestle motivate their employees.

As we all know that well recognized food company – Nestle, their competition environment is getting cutthroat day after day, especially Nestle is a worldwide company that operate over 194 countries including Malaysia. Let’s focus on Malaysia, that’s a lot of Nestlé’s competitor in Malaysia, for example, Dutch Lady Malaysia is overwhelming Nestlé’s Milk product since 2011. Nestle is losing in the aspect of innovation because mainly their competitor launch new product year after year. Many employees will afraid will lose their job because of their company is losing on the market share. In other word, they’re losing faith to the company, but, Nestlé’s workforce is getting bigger and bigger because Nestle is very good on restoring confidence and yet showing the market dominant for their employees. First, Nestle held their Head Office Meeting every quarter yearly and it is discourse by their region head- Alois Hofbauer. The main reason why they doing this is purposely show their business result every quarter yearly to the employee and yet can showing their company is leading the business market and building their employees confident toward the company so they work harder and accelerate their working speed. Secondly, as we all know, recently, one of the Nestle product “MILO” had been criticize because they think it is too sweet and very unhealthy to consume. Leave aside all the criticism that the product had lately, MILO still managed to keep their health star rating but fell down from 4.5-star rating to 1.5-star rating in New Zealand and Australia. Furthermore, Milo product sold with ‘Pilihan lebih sihat’ which means Healthier choice logo at the package in Malaysia. As we can see, Nestle had been apply their organization culture with the word “Healthy.” “As the world’s leading Nutrition, Health and Wellness company.” They ensure their employees working in a healthy and total wellness status by held the Employee Health and Wellness Program. It provides wide selection of their meals which including high fiber fruit to ensure their employee is in a healthy status. Because of Nestle taking care of every aspect of their employee. Their employees will somehow fulfill their respect from their company. Lastly, Nestle had owned over 447 factories and operates in 194 countries, they fulfill their factories worker and their employees safety needs by trying to commit zero accident for their employees. In a conclusion, on the Malaysia’s 100 Leading Graduate Employer Award, Nestle company is listing on the 12th on 2017 and won the ‘The most popular graduate employer in FMCG’ award over 4 years since 2013, we can imagine that the job that offer by Nestle is very attractive for the fresh graduate because of the motivation and importance of Nestle can provide to their employees.
References :
HYPERLINK "http://www.theborneopost.com/2011/03/12/dutch-lady-aims-to-up-market-share-with-new-milk-formulalatest/" http://www.theborneopost.com/2011/03/12/dutch-lady-aims-to-up-market-share-with-new-milk-formulalatest/
HYPERLINK "https://www.worldofbuzz.com/heres-need-know-viral-milo-sugar-controversy" https://www.worldofbuzz.com/heres-need-know-viral-milo-sugar-controversy/
HYPERLINK "http://www.marketing-interactive.com/nestle-removes-milos-4-5-health-star-rating-in-anz/" http://www.marketing-interactive.com/nestle-removes-milos-4-5-health-star-rating-in-anz/
HYPERLINK "http://says.com/my/news/nestle-responds-to-allegations-that-milo-is-40-sugar-and-not-as-healt" http://says.com/my/news/nestle-responds-to-allegations-that-milo-is-40-sugar-and-not-as-healt HYPERLINK "https://www.nestle.com.my/careers/your_career_at_nestle_malaysia/your_work_lifehy-as-advertised" https://www.nestle.com.my/careers/your_career_at_nestle_malaysia/your_work_lifehy-as-advertised
HYPERLINK "https://www.nestle.com.my/careers/your_career_at_nestle_malaysia/your_work_life" https://www.nestle.com.my/careers/your_career_at_nestle_malaysia/your_work_life
HYPERLINK "http://malaysias100.com/winners.html" http://malaysias100.com/winners.html

5. B) Advice the management of Nestle on the benefits of having a motivated workforce.

Every person had their unlimited creativity and their undiscovered potential. As they said, ‘Employees is the company most value assets.’ Firstly, Nestle can held an innovative award that encourage their employees to innovative new product to launch to the market by giving them a bonus like cash prize. In prospective on Nestlé’s employees by participate this innovation award, they can fulfill their self-actualization and esteem needs and therefore, motivate them and increase their work performance. Secondly, having a motivated workforce in Nestle, it can increase their productivity, especially Nestle is a Fast-Moving Consumer Goods company. They need a high productivity of workforce to counter their rapid consumption of consumer so they can increase their sales and dominance the market. Thirdly, motivated workforce can increase engagement of employees. Increase engagement of employees is absolute important. Employee with a high engagement can enhance the sales of the produce and increase the productivity. However, a disengage employee can slow down the working process and hence, decrease the quality of a product. Furthermore, if Nestle have a large number of motivated workforce, they can save a lot of training cost. This is because if an employee is not motivated and somehow dislike the company, a high turnover possibility will occur. Moreover, the company have to reboot the hiring process and the training fee. That’s a lot of cost that need to cover. In the other way around, if the employee is highly motivated, Nestle could save a lot of cost from that. Finally, with a motivated workforce, nestle can build a better organization culture. With a better organization culture so the culture will be able to replace the formalization which that’s a lot of rules and regulation for the employees to obey. With a better organization culture, their employees working environment is no longer a torture, it is an enjoyment. Working with a highly stable social system, every employee is connected and bond like a friendship, working with friend is always free and enjoy the time. In the other word, it can eliminate the office politic between employees. In a conclusion, that’s a lot of benefits for Nestle from a motivated workforce. The employees can contribute the success and yet, strike and thrive for a better result of a company.

References:
HYPERLINK "https://www.business.com/articles/the-benefits-of-highly-motivated-employees/" https://www.business.com/articles/the-benefits-of-highly-motivated-employees/
HYPERLINK "https://inside.6q.io/employee-motivation-important/" https://inside.6q.io/employee-motivation-important/