Case Study Changing Nestle Example | Topics and Well Written Essays - 750 words

Changing Nestle - Case Study Example Efficient CEOs like Helmut Maucher and Brabeck-Letmathe initiated radical changes in the organization. Large-scale and transformational changes are necessary for maintaining organizational survival. Clardy says about the organization change as, â€Å"the field organization change was long equated with organization development (OD), whose proponents were up-front with the bona fides of their approach: full disclosure, informed consent, inclusive participation, and so on.†(Rothwell, Stavros, Sullivan & Sullivan, R. A, 2009, p. 12). The OD includes the dispositions to improve their organizations by applying knowledge from the behavioral sciences—psychology, sociology, cultural anthropology, and other related disciplines. Analyzing the changes taken place in the Nestle shows that the firm had undergone both the first order change and second order change. In a first order change, the firm makes only some changes in terms of transactional and organizational climate. On the ot her hand, Nestle had undergone a second order change in terms of transformational changes. Some of the important organizational changes were as follows. First order changes 1. Nestle started to transfer executives Switzerland to United States. 2. Nestle concentrated on the strengthening and centralization of its IT departments. 3. Started to purchase local subsidiaries in local markets and began to expand globally. Second order changes 1. Nestle completely refurbished the executive board with ten executives replaced (Palmer et al, 2005) 2. Nestle started to diversify its markets through their introduction into cosmetic and pharmaceutical markets. 3. Nestle introduced the acquisition and merger of several companies. The second order change is more evident in the organization. Transformational change had taken place as the organization switched from entrepreneurial to a wider and more professional management. An important transformational change that had taken place in the organizatio n was involvement in other fields of business through product diversification. In the same way, the acquisitions and mergers provided them accelerated growth, and increased popularity and reputation. However, throughout the course of change, the company took extra care in sustaining employees’ loyalty, impression, motivation, self belongingness, and positive behavior, even though the management had applied some ‘mid-management change theory’. As Palmer et al (2005) state, the change occurred in Nestle, emphasized by Peter Brabeck-Lemathe as incremental change. It is based on his leadership mindset, which focuses on substance over style, with strong dedication, and long term approach to growing business. In contradiction to Peter’s concept of incremental change on Nestle’s overall business, the incremental change was not incremental at all. Its market had expanded due to the aggressive acquisition of a number of food industries and due to the automat ion and integration of all its worldwide operation to facilitate better coordination in an aggressive strategic move; and the move had ended in closing 38 factories and cutting $1.6 billion in cost while improving the company’s ability to obtain volume discount, which Peter meant was incremental (‘Peter Brabeck-Letmathe-1944’). The three important lessons coming from the frontline are downsizing through retrenchment and down scoping,

International Business - Multinational Enterprises - Cross Boundary Research Paper

International Business - Multinational Enterprises - Cross Boundary Expansions - Research Paper Example (So & Westward, 2009) By 2007, â€Å"Taobao held 82 percent of the market, according to Analysys International† and eBay sold out of the EachNet venture, maintaining only its www.ebay.cn operations, which were not adopted in a widespread manner for domestic Consumer-to-Consumer (C2C) ecommerce transaction in China. (So & Westward, 2009) eBay can also be seen to have failed in the advancement of it PayPal strategy in China, which was surpassed by AliPay in usage by Chinese consumers. What is most striking in these examples is that eBay had the competitive advantages of pre-existing market dominance, brand name recognition, partnership with the dominant ecommerce auction website in China, and still failed in not only maintaining these market positions, but instead became a minority business operator in the Chinese domestic marketplace for online auctions. ... eBay’s failure to respect the local dynamics of Chinese culture and its patterns of internet use, its centralized corporate strategy internationally, as well as its failure to understand the threat of TaoBao to its business model in China all led to the eBay’s cross-boundary expansion strategy internationally being unsuccessful in accomplishing its aims of foreign market establishment, increased company profit, and the creation of long-term shareholder value. eBay – Company History eBay is widely regarded as one of the leading success stories of the Web 1.0 era, or the â€Å"dot-com boom† period in the late 1990’s that saw many internet companies go public with very high amounts of stock market speculation. eBay was founded by Pierre Omidyar in 1995 and Meg Whitman joined the company in 1998 with prior experience at Hasbro and Harvard Business School. (Gomes-Casseres, 2001) eBay outmaneuvered other web companies such as Yahoo!, Microsoft, and Amazon .com to earn significant revenue from ecommerce sales based on the auction and C2C model. eBay requires listing charges for people to advertise their goods for sale on the site, charges an additional percentage of the sale as a commission, and also receives a service charge from credit card transactions via its PayPal services. The company is the leader in the U.S. online auction market, and went public in 1998. As news sources reported, the company’s stock soared at the time of the IPO, â€Å"shares of eBay went up 163.2 percent† on the first day of trading to close at $47.375 with a market capitalization of $1.9 billion USD. (Kawamoto and Grice, 1998) Today, eBay trades on the NADAQ exchange under the symbol EBAY with a stock