Nestle Third Report

Nestle Third Report

Change Management

T-04

Submitted by:

Dina Teilab

Wafaa Ziad

Omar Bassiouni

Mai El Naggar

Amr Hassan

Tarek Ehab

Date Submitted: 13th of November 2014

1. Did Nestle undergo either first-order or second-order change according to the case? Answer with examples
   Nestle underwent both in the case. First-Order change means incremental adjustments in the system, process or structure with no major change in the strategy or core values whereas; second-order change means major and radical change in the organization’s core and nature.

There were a lot of changes that occurred in this case:

1. The different global strategy they pursed is a second-order change when they went for global expansion instead of sales agents.
2. Transferring the executives from Switzerland to United States is a first-order change as it required only change in the structure.
3. Entering a new market and diversification in the products is a second-order change as they went from only a food industry to also cosmetics and pharmaceuticals.

1. Brabeck- Letmathe emphasizes the need for incremental approach to change. Do you agree that this what he has done? Discuss the differences and similarities between his view and your view of what has occurred at Nestle, both historically and in recent times.

Yes, I believe Brabeck had gone for incremental changes because he believes that change should happen “slow and steady.” If you make all changes happen at once instead then this defies the whole concept of incremental change. He extended Nestlé’s products and product lines which helped them increase production. He also tried to utilize their strengths in the organization for their own benefit. I believe that he could have done this better financially because having too many investors can put a financial burden on the organization. With Brabeck-Letmathe using this approach, it gave the organization a chance to keep the core values and sustain strength rather than changing it entirely.

1. What implications for change managers would apply specifically to Nestlé? Outline how the Nestlé management team may have reacted to each implication.

First implication: Communication is key in any company. And in Nestle's case, it is very important in order for employees to understand the changes in a similar way, because they may understand changes in different ways.

Second implication: One change is not easy to control, but a handful of changes at the sametime can be very difficult to control. If Nestle was trying to implement various changes at the same time, the managers needed to prioritize those changes in order of importance and evaluation. Also the combined effect of these changes should be evaluated, as well as individually.