nestle hassam

8/3/2019 Nestle Hassam

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Contents

CONTENTS......................................................................................................................................................1

INTRODUCTION OF THE COMPANY ...................................................................................3

VISION:.........................................................................................................................................................3

MISSION STATEMENT:...............................................................................................................................4

OBJECTIVE:.................................................................................................................................................4

CORE VALUES:...........................................................................................................................................4

HISTORY OF NESTLE:................................................................................................................................5

History Nestle Pakistan Ltd..........................................................................................................................7

SWOT ANALYSIS .....................................................................................................................10

PLANNING PROCESS ..............................................................................................................12

Strategic Plan:............................................................................................................................................12

Operational Planning:.................................................................................................................................16

Operational Planning Product Design and Production Department Manufacturing Office..............16Operational Planning Sales Department Supply Chain Management Office..................................18

Operational Planning - Marketing Department - Advertising Office......................................................18Operational Planning Human Resources Department Staffing & Recruitment Office......................20Operational planning Finance Department - Tax Office.....................................................................21Operational planning Commercial Office............................................................................................22

Policies:......................................................................................................................................................24

Standard Operating Procedures:................................................................................................................25

CONTROLLING ........................................................................................................................26

Financial performance................................................................................................................................26

Human resources performance:.................................................................................................................27

Management by objects (MBO):.................................................................................................................28

ORGANIZING ............................................................................................................................29

Organizational chart:..................................................................................................................................29

Span of Control:..........................................................................................................................................30

TYPE OF STRUCTURE:............................................................................................................................31

DELEGATION OF EMPOWERMENT:......................................................................................................31

HR PLANNING PROCESS:.......................................................................................................................31


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GOAL SETTING:..............................................................................................................32

LEADING ...................................................................................................................................33

LEADERSHIP STYLES:.............................................................................................................................33

Suggesstions:.............................................................................................................................................33

References:................................................................................................................................................34

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Introduction of the company

Nestl is the worlds leading nutrition, health and wellness company.The company employs more than 280,000 people and has 456

factories in 84 countries. Nestl products are sold in almost every

country in the world.

Founded in 1866 in Vevey, Switzerland, where it is still based, Nestl

has often been called the multinational among multinationals. Only

about 1.5 percent of its sales are generated in its home country, and

all but 12 of its factories are situated abroad. The CEO is Paul Bulcke,

and the General Management includes a Belgian, two Canadians, one

Dutch, a Frenchman, a German, a South African/British, three

Spaniards, one Swiss, one American and a Swiss-American.

Nestl is a truly public company with over 250,000 shareholders of

which around one third are Swiss. No single shareholder owns more

than 3% of the stock. US investors, who, together, hold over 30% of

the capital, can purchase ADRs through a sponsored program. As the

worlds leading nutrition, health and wellness company, Nestl is the

worldwide leader in product categories such as soluble coffee, infant

nutrition, bottled water, condensed and evaporated milk, ice cream, as

well as chocolate and malt drinks, and culinary. The Group is also a co-

leader in pet care.

The Company is committed to delivering shareholder value through

sustainable, capital efficient and profitable long-term growth. Over the

past years it has concentrated on furthering organic growth and

performance improvement.

VISION:

The strategic priorities of Nestle Pak Ltd are focused on delivering

shareholder value through the achievement of sustainable, capitalefficient and profitable long term growth. Improvements in profitability

will be achieved while respecting quality and safety standards at all

times.

In line with this objective, Nestle Pak Ltd envisions to grow in the

shortest possible time into the number one food company in Pakistan

with the unique ability to meet the needs of consumers of every age

group - from infancy to old age, for nutrition and pleasure, through

development of a large variety of food categories of the highest

quality.Nestle Pak Ltd envisions the company to develop an extremely

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motivated and professionally trained work force, which

would drive growth through innovation and renovation.

It aspires, as a respected corporate citizen, to continue playing a

significant role in the social and environmental sectors of the country.

MISSION STATEMENT:

We strive to bring consumers foods that are safe, of high quality andprovide optimal nutrient to meet physiological needs. Nestle helpsprovide selections for all individual taste and lifestyle preferences.

OBJECTIVE:

Nestls business objective is to manufacture and market the

Companys products in such a way as to create value that can be

sustained over the long term for shareholders, employees,consumers, and business partners.

Nestl does not favor short-term profit at the expense of

successful long-term business development

.

Nestl recognizes that its consumers have a sincere and

legitimate interest in the behavior, beliefs and actions of the

Company behind brands in which they place their trust and that

without its consumers the Company would not exist.

Nestl believes that, as a general rule, legislation is the most

effective safeguard of responsible conduct, although in certain

areas, additional guidance to staff in the form of voluntary

business principles is beneficial in order to ensure that the

highest standards are met throughout the organization.

Nestl is conscious of the fact that the success of a corporation is

a reflection of the professionalism, conduct and the responsible

attitude of its management and employees. Therefore

recruitment of the right people and ongoing training and

development are crucial.

CORE VALUES:

A prerequisite for dealing with people is respect and trust.

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Transparency and honesty in dealing with people are

a sine qua non for efficient communication. This is

complemented by open dialogue with the purpose of sharing

competencies and boosting creativity.

To communicate is not only to inform; it is also to listen and to

engage in dialogue.

The willingness to cooperate, to help others and to learn is a

required basis for advancement and promotion within our

company.

HISTORY OF NESTLE:

Nestl was the result of a series of mergers of many small companies.In the mid-1860s, Henri Nestle, merchant, chemist and innovator,experimented with various combinations of cows milk, wheat flour andsugar. The resulting product was meant to be a source of nutrition forinfants, who could not be breast-fed by their mothers. In 1867, hisformula saved the life of a prematurely born infant. Later that year,production of the formula, named Farine Lactee Nestl, began in Veveyand the Nestle Company was formed.

Henri Nestle wanted to develop his own brands and decided to avoidthe easier route of becoming a private label. Henri also wanted tomake his company global. Within a few months of the launch, Henribegan to sell his products in many European countries. In thecompanys initial years, Henri took various steps to facilitate research,improve product quality and develop new products.

Meanwhile in 1866, two Americans, Charles and George Page had

founded the Anglo-Swiss Condensed Milk Company. The companylaunched a milk based infant food, which competed with Nestlsproducts. In 1875, Daniel Peter, a friend and neighbor of Henrideveloped milk chocolate. Peter became the worlds leading chocolatemaker, and later merged his company with Nestl. The rivalry betweenNestl and the Anglo-Swiss Condensed Milk Company intensified butended in 1905, when the two companies merged under the Nestlbanner.

World War I created a new demand for dairy products. Nestle grewmainly by executing government contracts. The end of the war created

a crisis for the company as people started using fresh milk again,instead of condensed and powdered milk. In 1921, Nestl recorded its

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first loss, which was partly due to the worldwide postwareconomic slowdown. Louis Dapples, a Swiss banking expertrestructured the company, streamling its operations and reducing thedebt burden.

In 1930, the Brazilian Coffee Institute approached Dapples, seekingnew products. After eight years of research Nestl developed a solublepowder that revolutionized coffee drinking around the world. Theproduct was launched under the brand name Nescafe and became aninstant success. The onset of World War II speeded up the introductionof Nescafe. The beverage also became a popular drink amongAmerican servicemen in Europe and Asia. The end of World War IItriggered off a new phase of growth for Nestl. Many new productswere added as the company grew through acquisitions.

After 1974, Nestls financial position deteriorated. Oil prices rose andgrowth in industrialized nations slowed down. The Swiss francappreciated and the price of coffee beans and cocoa shot up. Thissituation was partially offset by Nestls rapid growth in emergingmarkets.

In 1981, Helmut Maucher took over as CEO. His policies had asignificant impact on Nestls style of functioning. Maucher pursued atwo-pronged strategy to improve the companys financial situation:First he embarked on internal restructuring and divestments; secondhe decided to continue with strategic acquisitions. Between 1980 and

1984, he divested a number of non-strategic or unprofitablebusinesses, amounting to nearly SFr8 bn. The divestments includedcertain food products that were not consistent with Nestls emphasison high value added segments. To improve the companys financialsituation, he embarked on a cost-cutting exercise. While the employeestrength was reduced significantly, the inventory and outstanding debtwere brought down.

In 1990, Nestl formed a joint venture with General Mills called CerealPartners Worldwide to promote Nestl breakfast cereals. It covered 70countries accounting for about 75 per cent of the breakfast cereal

consumption outside the US and Canada. Nestl also formed a jointventure with Coca-Cola, called the Coca-Cola Nestl RefreshmentCompany, to market tea and coffee-based ready-to-drink beveragesunder the Nestea and Nescafe brands.

In 1996, Nestl decided to end its 50-50 Clinic Nutrition joint venturewith Baxter Healthcare and established Nestl Clinical Nutrition toprovide orally consumed nutrition products to hospitals and nursinghomes.

Nestl opened the 20

th

century by merging with the Anglo-SwissCondensed Milk Company to broaden its product range and widen its

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geographical scope. In the new millennium, Nestl is theundisputed leader in the food industry, with more than 470factories around the world. Nestl launched a Group-wide initiativecalled GLOBE (Global Business Excellence), aimed at harmonizing andsimplifying business process architecture; enabling Nestl to realize

the advantages of a global leader while minimizing the drawbacks ofsize.

The Companys strategy will continue to be guided by severalfundamental principles. Nestls existing products will grow throughinnovation and renovation while maintaining a balance in geographicactivities and product lines. Long-term potential will never be sacrificedfor short-term performance. The Companys priority will be to bring thebest and most relevant products to people, wherever they are,whatever their needs, throughout their lives.

History Nestle Pakistan Ltd.

As a consequence of joint venture arrangement between Nestle S.A. ofSwitzerland and Milkpak Ltd. in 1988, the existing production facility ofMilkpak in Sheikhupura became a part of Nestle Milkpak.

The Milkpak Sheikhupura factory commenced operations in 1981 as aproducer of UHT milk. By 1988, it had expanded its operation and was

also producing butter, cream, desighee - all under the brand name ofMILKPAK and juice drinks under the brand name FROST.

To meet the demands of the large food market that Pakistan offered,Nestle Milkpak reorganized and reinforced the production of existingbrands and gave shape to new production lines. The first to come wasa milk powder plant, which not only began producing NIDO in 1990 butwas also critical to the production of several milk-based products in thefuture.

With the installation of the roller dryer in 1990, the first such product

to come was CERELAC - an internationally recognized brand of infantcereal.

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This was followed by LACTOGEN 1 & 2 in 1991.

The year 1992 saw the introduction of tea whitener EVERYDAY andmilk powder in bulk packing named GLORIA. MILO and NESLAC cameunder production in 1994 and MILO RTD in 1995. Local packing of

imported coffee under the name of NESCAFE 3 in 1 commenced thesame year.

In 1996, Nestle Pak Ltd first confectionery plant of POLO Mint wasinstalled and the production of NESTLE PURE ORANGE JUICEcommenced.Packaging of coffee under the brand name of NESCAFE CLASSIC wasundertaken the same year.

In 1997 NESTLE WHEAT and two variants of POLO viz. Strawberry andOrange was introduced.

In 1998 a substantial capital investment was made to launch severalproducts and install two new state-of-the-art technologies.

SWEET TREETS were launched in early 1998. The addition of twoflavors of POLO: Blackcurrant and Strong Mint increased the number ofPOLO variants to five.

A new variant Lemony was added to the range of popular FROST fruitdrink flavors and a new 1-liter packing of FROST was introduced.

Flavored milks under the brand FRESH & FRUITY came underproduction on the new Tetra Filling Machine equipped with the modern"slim" format. MILO RTD and UHT

Cream were also shifted over to this new format. A new flexibleconfectionery line enabled the manufacture of a wide range of highand low boiled sweets and toffees, including TOFFO and two variants ofSOOTHERS' Menthol Eucalyptus and Honey Lemon.

Nestle Milkpak also contracted to supply dairy mixes to McDonald's, forits popular soft serves and milk shakes.

And to top it all, the most prestigious project, NESTLE PURE LIFE wasalso commissioned in December. Based on the latest water treatmentand bottling technology, this marked the entry of Nestle Milkpak in thePakistan water market and that of Nestle in the world water market.

The expansion of high boiled sweet line continued in 1999 with theintroduction of Fruit Drops and BUTTERSCOTCH.

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The year 2000 saw the production of some excitingproducts. First came NESCAFE Frothe Original, followed byits two other flavors: Mocha and French Vanilla. NESCAFE Frappe RTDwas to come next.

The fruit juice range was expanded by the production of Mango andOrange-Mango Mix. On the confectionery side, Tutti Fruiti was addedunder the umbrella of POLO and Wild Cherry was added to theSOOTHERS range.

The success of NESTLE PURE LIFE in PET bottles encouraged thecommissioning of 5-gallon bottles production line for home and officein June.

And the last product line of the year to be commissioned in Novemberwas that of NESTLE Plain Yogurt, a high quality product with specialStay-Fresh Seal.

To meet the needs of safe and quality storage for the ever expandingproduct range and their volumes, a National Distribution Center (NDC)was completed and became functional in June, 2000.Spread over 6614square meters; it has the capacity to store up to 8300 pallets(approximately 8000 tons).

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SWOT Analysis

STRENGTHS: Parent support - Nestle India has a strong support from its

parent company, which is the worlds largest processed food and

beverage company, with a presence in almost every country. The

company has access to the parents hugely successful global

folio of products and brands.

Brand strength - In India, Nestle has some very strong brandslike Nescafe, Maggi and Cerelac. These brands are almost

generic to their product categories.

Product innovation - The Company has been continuouslyintroducing new products for its Indian patrons on a frequent

basis, thus expanding its product offerings.

Operated factories in 77 countries (all six continents), a truly

global company.

Considered the innovation leader in the global food and nutrition

sector(3500 scientist in company R&D network)

Low cost operators (beat the competition by producing low cost

products, edging ahead with low operating costs)

Offering thousands of local products.

Have a great CEO, Peter Brabeck, and a very strong workforce.

WEAKNESSES:

Exports The companys exports stood at Rs 2,571 m at theend of 2003 (11% of revenues) and continue to grow at a decent

pace. But a major portion of this comprises of Coffee (around

67% of the exports were that of Nescafe instant to Russia). This

constitutes a big chunk of the total exports to a single location.

Historically, Russia has been a very volatile market for Nestle,

and its overall performance takes a hit often due to this factor.

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Supply chain - The Company has a complex supplychain management and the main issue for Nestle India

is traceability. The food industry requires high standards of

hygiene, quality of edible inputs and personnel. The fragmented

nature of the Indian market place complicates things more. Some of their product were positioned as too scientific, and

consumers didnt quite understand (i.e. LC-1 was a food and not

a drug)

OPPORTUNITIES:

Expansion - The Company has the potential to expand tosmaller towns and other geographies. Existing markets are not

fully tapped and the company can increase presence by

penetrating further. With India's demographic profile changing in

favor of the consuming class, the per capita consumption of most

FMCG products is likely to grow. Nestle will have the inherent

advantage of this trend.

Product offerings - The Company has the option to expand itsproduct folio by introducing more brands which its parents are

famed for like breakfast cereals, Smarties Chocolates, Carnation,etc.

Global hub - Since manufacturing of some products is cheaperin India than in other South East Asian countries, Nestle India

could become an export hub for the parent in certain product

categories.

Health-based products are becoming more popular in the world,

including in the United States

Unaffected by current economic conditions (itsshare of the UK

confectionery market rise to 15.6 per cent with a 0.5 per centgrowth this year)

THREATS:

Competition - The Company faces immense competition fromthe organized as well as the unorganized sectors. Off late, to

liberalize its trade and investment policies to enable the country

to better function in the globalised economy, the Indian

Government has reduced the import duty of food segments thusintensifying the battle.

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Changing consumer trends - Trend of increasedconsumer spends on consumer durables resulting in lower

spending on FMCG products. In the past 2-3 years, the

performance of the FMCG sector has been lackluster, despite the

economy growing at a decent pace. Although, off late thesituation has been improving, the dependence on monsoon is

very high.

Sectoral woes - Rising prices of raw materials and fuels, andinturn, increasing packaging and manufacturing costs. But the

companies may not be able to pass on the full burden of these

onto the customers.

Some markets they are entering are already mature

Global competitors.

There are intense competitions in the United States, especiallyyogurt market (General Mills)

PLANNING PROCESS

Strategic Plan:

Company Strategy:

The best strategy at the company level is horizontal diversification,taking into account the different dairy brands offered by Nestle,namely Nido, Sveltesse, La Laitire, LC1 and Ski. This is possible due totheir strong brand, but most importantly due to the possibility to usethe same technology to produce all these.Also, we have taken into account that the main raw material for theproducts is milk; therefore the company might use the same suppliers.Moreover, Nestle will choose the same distribution channel for all the

products, selling them mainly in supermarkets as it targets the sameconsumers.Another advantage from using this strategy is that the company will beable to diminish the risk by diversifying their offer. In this way if one ofthe products is not successful on the Pakistan market the subsidiarywill not be endangered, as it still has other products which might bringgood profits for the company.

NESTLS FOUR PILLAR STRATEGY:

The four-pillar strategy was established in 1997 to take Nestl to newperformance levels in all areas of its business: from the supply chain to

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the consumer. The strategy builds the edifice of Nestle' on 4strategic pillars. It remains the inspiration for day-to-daymanagement within Nestl as it continues to seek improvingprofitability and increasing sales. The four-pillar strategy is outlinedbelow:

1-Operational Efficiency

2-Innovation and Renovation

3-Consumer Communication

4-Whenever, Wherever, However

NESTLES CORPORATE LEVEL STRATEGIES:

Products growth through innovation and renovation (whilemaintaining a balance in geographic activities and product lines).

Long-term potential

Build business based on sound human values and principles.

Long-term commitment to the health and well being of people in

every country in the scope of their operations.

Business should be conducted by adhering to the values andmanagement principles of the organization.

BUSINESS LEVEL STRATEGIES:

Low cost - less price transparency is followed.

Differentiation - to reduce the risk of complexity of supply chain

and lower attractiveness for discounters.

COMPETITIVE ADVANTAGE:

Research and development (R&D),

Its product range

Global reach and

280,000-strong workforce

FOUR GROWTH PLATFORMS:

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Nutrition

Emerging consumers

Premium goods and

Out-of-home goods.

ALIGNMENT OF BUSINESS STRATEGIES AND HRPRACTICES:

Nestle is a company whose HR strategies or practices are developed

by keeping in mind the Business objectives of the company and the

strategies devised to run the business. The HR strategies are always in

alignment with the business goals. Nestle is unique in the sense that it

has been able to successfully inculcate its business objective as well as

its core values, consistently in its employees day-to-day activities

starting from recruitment till continuous performance appraisals.

Products Growth through innovation and renovation:To increase the product growth i.e. productivity human resource

strategies are adopted such as flexible, dynamic employees are

attracted, selected and then trained and motivated to be more

productive than the competition. One case in point is the Kit Kat

manufacturing plant in York England, under the managership of Ian

Jobson and, ultimately, Nestle CEO Peter Brabeck. In 1998, Time

magazine reports, it took 38 man-hours to produce a ton of chocolate.

This year, using a combination of robotics, automated packaging, and

production-line improvements, the forecast production time is 23

hours. This decrease in production time was feasible because of

process innovation.Adherence to the values and management principles of theorganization

Respect for other cultures and traditions

Nestl embraces cultural and social diversity and does not

discriminate on the basis of origin, nationality, religion, race,

gender or age. Furthermore, Nestl believes that its activities

can only be of long-term benefit to the Company if they are atthe same time beneficial to the local community. In short, global

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thinking and strategies can best be expressed through

local action and commitment.

Diversity

From creating hundreds of the worlds leading brands to offering

an amazing variety of career options to our employees, its clear

that Nestls businesses are exceptionally diverse. So it should

come as no surprise that Nestle values diversity in the people

working them just as much as they have diversity in their

products.

Its Nestls policy to provide an environment where respect is

shown to all individual employees and where employees are

valued, recognised and rewarded on the basis of their talent and

their contribution rather than any consideration of age, gender,

race, sexuality, religion or disability. As an organisation, Nestl is

opposed to any form of unfair discrimination and believe that an

inclusive approach will be of maximum benefit to all our

employees as well as our wider business goals and the society in

which we live.

Product strategy

Concerning the classification put forward by Michael Porter, thestrategy adopted by Nestle in Pakistan will be that ofoverall costleadership, as it is one of the companys goals to be efficient form anoperational point of view. By lowering manufacturing and distributioncosts the company will be able to offer better products as the quality-price ratio will be superior to its main competitors.The company has already implemented in other countries a cost-cutting program, Nestle Continuous Excellence which covers the entirevalue chain from raw material, manufacturing, packaging, distributionand customer to the consumer.The company will generate economies of scale, be producing at a largescale all the products, using the same employees; the same offices andthe same factory; which will inevitably lead to diminishing costs andincreased competitiveness on the Pakistan market.Next, according to the classification suggested by Miles and Snow, theappropriate strategy would be a prospective one, considering the factthe Nestle tries to enter the Pakistan market. The company, as aprospector organization will take some risks while entering a newmarket, by not knowing if it will be successful while handling thecompetition, finding the appropriate suppliers or the appropriatedistribution channel.

Most importantly, the company will use this strategy as it will bringinnovative products on the Pakistan market, containing a new culture:

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LA1 and a relatively new concept for the consumers, that ofhealth products.

Operational Planning:

Operational Planning Product Design and ProductionDepartment Manufacturing Office

The first operational goal is to establish the equipment and theingredients that are needed to produce the items containing La-1

probiotic genome, included in the chilled dairy products section

The operational plan consists of the following:

Actions Conduct, together with the Research and Development and

the Production department from the mother company, the

adequate research program for the identification of the

appropriate equipment and ingredients to produce the brands

containing La-1 probiotic genome

Resources A team of 5 to 7 members from the Production Department

Time This is an unique operational plan, of a medium length,

therefore we consider it should be completed until the 1st of July

2010

Responsibility The one responsible with this program is the Head of the

Manufacturing Office, supervised by the Head of the Products

Design and Production Department

The second operational goal is the research for new equipmentthat would bring about cost reduction for the production process


Actions Conduct, together with the Research and Development and

the Production department from the mother company, the

adequate research program for the identification of new

equipment existing on the market

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If the solutions the market is offering are not

sufficiently efficient, undertake, together with the R&D

department, the research to develop in-house new means of

production, in accordance with the cost efficiency principles

Resources A team of 5 members from the Production Department

Time This is an permanent operational plan, that should be

undertaken for the whole period, because cost reduction is

always a matter to be kept under the spotlight

Responsibility The one responsible with this program is the Head of the

Manufacturing Office, supervised by the Head of the Products

Design and Production Department

The third operational goal is to appoint the supervising teamover the whole production cycle


Actions First of all, one of the members of this team should be

chosen among the staff of the Product Design and Production

department, in order to be aware of all the standards and

regulations that are into force

The other 2 members are recruited from the employees

involved directly into the production process, in order for them to

be aware of the technical aspects of the matter

Resources A new team of 3 members within the Production

Department

Time The supervision of the production process is an permanent

operational plan, of unlimited extent; however, the appointment

of the commission is due until the 1st of October 2010

Responsibility

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The one responsible with the recruitment and

appointing is the Head of the Manufacturing Office, in

collaboration with the Head of the Human Resources department

Operational Planning Sales Department SupplyChain Management Office

The opening of a subsidiary in Pakistan is a premise for the SalesDepartment to create a supply chain by adding together local suppliersand foreigners. This will establish the base for future investments inPakistan.

The operational goal reffers to creating a system of localsuppliers for the Pakistan subsidiary.

The resulting operational plan, which is a standing one, beingput into practice all long the activity of the subsidiary, will

comprise of:

Actions: Conduct a research program for identification of possible

local suppliers

Construction of a supplier data base

Resources: These activities should be accomplished by a team from

the Supply Chain Management Office from the subsidiary in

Pakistan.

Time: The research for suppliers should begin as soon as possible

and the data base should be completed until the 1st of June 2010.

Responsibility: The person at the helm of this plan is the Head of SupplyChain Management Office Manager

Operational Planning - Marketing Department -Advertising Office

The first operational goal is to establish contacts with the mainPakistan publications and network channels and acquire

information about the fees charged according to the visibility of

the product;


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Actions Set meetings with the heads of the main Pakistan

publications and network channels and get initial offers for

advertisements of our products in their magazines/channels on

which to negotiate further according to the number of readers,exposure etc;

Resources A team of 2 to 4 members from the Marketing Department;

Time This is an unique operational plan, of a medium length,

therefore we consider it should be completed until the 1st of July

2010

Responsibility The one responsible with this action is the Head of the

Marketing Department, in collaboration with the Head of the

Sales Department

The second operational goal is the research for newcollaborators that would bring about cost reduction for the

marketing process;


ActionsConduct, together with the Research and Development and the

Production department from the mother company, the adequate

research program for the identification of new potential

collaborators existing on the market;

If the solutions the market is offering are not sufficiently

efficient, undertake, together with the R&D department, the

research to develop in-house new means of advertising, in

accordance with the cost efficiency principles

ResourcesA team of 5 members from the Marketing Department

TimeThis is an permanent operational plan, that should be

undertaken for the whole period, because cost reduction is always

a matter to be kept under the spotlight

Responsibility

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The one responsible with this program is the Head of

the Marketing Department, supervised by the Head of

the Research and Development Department

Operational Planning Human Resources DepartmentStaffing & Recruitment OfficeIn order to fulfill the goal of the Human Resources Department, theStaffing & Recruitment Office has the following goal.Operational goal: Recruit a number of 200 workers in order tooperate the production facilities at the required Nestle standards.This operational plan is a single-use one, consisting in a recruitmentprogram on a short time span. After the necessary personnel is foundand employed, the goal will be achieved


Actions: Design a recruitment program

Establish the employee profile and selection criteria

Establish the recruitment methods formally, through

recommendations from friends or colleagues and informally,

from inside of the company or from outside

Compose an advertisement and a press release announcing the

call for employees

Distribute the press release and advertisements in the national

Paksitan media channels

Collect and organize the applications (The applicants will be able

to submit their CVs and intention letters by sending an e-mail to

the companys address).

Plan the interviews and run the interviewing process

Select the appropriate candidates according to the compatibility

with the job description and selection criteria

Resources: financial resources budget for the recruitment process,money for advertising the hiring announcement, the fee of therecruiters; human resources recruitment officers, the employees ofthe Staffing & Recruitment officeTime: 3 monthsResponsibility: the plan will be coordinated by the head of theStaffing & Recruitment operational office.

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Operational planning Finance Department -Tax Office

The Tax Operational Office is responsible with the billing, recordkeeping and administration of all taxes levied; therefore it is a very

important part of the Finance Department as it ensures the goodrelationship with the Government.The first operational goal is to find the necessary information aboutthe taxes levied and accounting procedures in pakistan.

In order to fulfill this goal the operational plan supposes thefollowing:

Actions:Send 2 staff members to intensive training courses regarding the

Pakistan procedures

Present these fiscal procedures to the entire finance department,

namely all the information concerning the VAT (Value-Added-Tax),

profit tax and other taxes relevant to the company; mainly to the

employees that are from outside Pakistan

Resources:Financial resources: paying the courses for the two employees

Human recourses: the two representatives and the entire office

should take part in this plan in order to achieve the goal

Time:2 weeks for the training courses

2 more weeks to present the information to the colleagues

Responsibility:The head of the Tax Office has to appoint the two

representatives

The two representatives should attend the courses and explaineverything to the entire office afterwards

Taking into account the fact that this goal once attained there is noneed to further continue the actions, the operation plan is a single-use one. It actually represents a program, due to its small scale andlack of complexity. Therefore, once the employees in the FinanceDepartment are accustomed with the fiscal policies applied in Pakistan,at the end of these 4 weeks there will be no need to achieve this goalagain.The second operational goal is to develop a responsible allocation ofthe human resources inside the office.

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In order to fulfill this goal, the operational plansupposes the following:

Actions: Find the main areas of activity of the Tax Office like

keeping track of the different changes in the legislation, filling in

the monthly (for example VAT and salary taxes) or semi-annually

declarations ( for example the income tax) and of course

submitting them.

Appoint the responsible persons for different activities.

Make sure that the deadlines for submitting the

declarations are respected

Continuously change the structure of the office in case oneperson fails to do his job properly or if there is another person

more fitted for that position.

Resources: Human resources, namely the employees in the Tax Office

Time: The first two actions should be completed within 2 weeks,

whereas the following two should be done on a regular basis,

monthly.

Responsibility: The Head of the Tax Office is responsible with overlooking

the plan.

This operational plan is a standing one, as the activities occurregularly over the entire staying of Nestle in Pakistan. Moreover, due tothe fact that this operation plan underlines the way in which certainactivities should be performed, we can classify it as being part of therules and regulations category.

Operational planning Commercial OfficeThe Commercial Office is responsible with the legal aspects of settingup the subsidiary in Pakistan and with the legal aspects when closingthe contracts with dairy vendors.The first operational goal is to find the necessary information abouthow to set up a subsidiary in pakistan.In order to fulfill this goal the operational plan supposes thefollowing:

Actions:

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Hiring a Pakistan law firm in order to collaborate

during the process of setting up the subsidiary;

Present the procedures necessary for establishing a

subsidiary to the general management;

Resources: Financial resources: paying Pakistan law firm;

Human recourses: two staff members from the commercial

department in order to coordinate this process;

Time: 2 weeks for choosing the Pakistan law firm to collaborate with

2 days to present the information to the general management

Responsibility: The head of the Commercial Office has to choose the Pakistan

law firm to collaborate;

Taking into account the fact that this goal once attained there is noneed to further continue the actions, the operation plan is a single-use one. It actually represents a program, due to its small scale andlack of complexity. Therefore, once subsidiary is set up there is noneed to perform the action again.

The second operational goal is to research about the legalrestrictions and procedures regarding the commercialization of dairyproducts in Pakistan.In order to fulfill this goal, the operational plan supposes thefollowing:Actions:

Selecting 2 lawyers from the department to make the

research regarding the legislation about dairy products in

Pakistan;

Communicating the restrictions and regulations to theother departments and to the general management;

Resources: Human resources, namely the employees in the Office

Time: The actions should be completed within 2 weeks

Responsibility: The Head of the Commercial Office is responsible with

overlooking the plan.

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This operational plan is a single use one, as the legaldepartment communicates the legislation regarding theproducts at the beginning when the products are adapted to themarket and only updates if modifications should appear in thelegislation.

Policies:

Nutrition, Health and Wellness:

Our core aim is to enhance the quality of consumers lives every day,everywhere by offering tastier and healthier food and beveragechoices and encouraging a healthy lifestyle. We express this via our

corporate proposition Good Food, Good Life.

Quality assurance and product safety:

Everywhere in the world, the Nestl name represents a promise to theconsumerthat the product is safe and of high standard.

Consumer communication:

We are committed to responsible, reliable consumer communicationthat empowers consumers to exercise their right to informed choiceand promotes healthier diets. We respect consumer privacy.

Human rights in our business activities:

We fully support the United Nations Global Compacts (UNGC) guidingprincipleson human rights and labour and aim to provide an example of goodhuman rights and labour practices throughout our business activities.

Leadership and personal responsibility:

Our success is based on our people. We treat each other with respectand dignity and expect everyone to promote a sense of personalresponsibility. We recruit competent and motivated people whorespect our values, provide equal opportunities for their developmentand advancement, protect their privacy and do not tolerate any formof harassment or discrimination.

Safety and health at work:

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We are committed to preventing accidents, injuries andillness related to work,and to protect employees, contractors and others involved along thevalue chain.

Supplier and customer relations:

We require our suppliers, agents, subcontractors and their employeestodemonstrate honesty, integrity and fairness, and to adhere to our non-negotiablestandards. In the same way, we are committed to our own customers.

Agriculture and rural development:

We contribute to improvements in agricultural production, the socialand economic status of farmers, rural communities and in productionsystems to make them more environmentally sustainable.

Environmental sustainability:We commit ourselves to environmentally sustainable businesspractices. At allstages of the product life cycle we strive to use natural resourcesefficiently, favour the use of sustainably-managed renewableresources, and target zero waste.

Water:We are committed to the sustainable use of water and continuousimprovementin water management. We recognize that the world faces a growingwater challenge and that responsible management of the worldsresources by all water users is an absolute necessity.

Standard Operating Procedures:

"A Standard Operating Procedure is a document which describes theregularly recurring operations relevant to the quality of theinvestigation. The purpose of a SOP is to carry out the operationscorrectly and always in the same manner. A SOP should be available atthe place where the work is done".

(The Nestle Company did not tell us about the following

information as they considered it confidentional to them.)

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CONTROLLING

By managerial control the parent company ensures that the actualperformance of the subsidiary is equal to its planned performance. The

purpose of control is to facilitate the implementation of plans bycontinuously monitoring the performance of the people responsible forcarrying them out.The process of control and the problems associated with it are morecomplex in a multinational company than in its domestic counterpart,due to the diverse cultural, economic, political and legal environmentsin which the subsidiaries operate.The General Manager of the Pakistan subsidiary of Nestle will report itsactivity to the zone director of Europe, as it can be seen from theorganizational chart. Consequently, when using the term homecompany, we will refer to the headquarters of Nestle Europe.

The control process will begin by setting the adequate standards andobjectives of the financial, quality and human resources performance.The next step is to develop instruments and techniques to monitor theperformance of these key areas. The third step is to compare theperformance measures obtained from the monitoring activity with theplans of the company. Finally, the employment of effectuating oraction devices should be employed in order to correct any deviationsthat occur from the company standards.The managerial control process will supervise the following key areas:

Financial performanceThe financial performance of a company is used as a general measureof the overall financial health and of how well the company can use itsassets and generate revenue, over a given period of time. Therefore, itis very important for the home-company executives to have a frequentand detailed view over these issues.The assessment of financial performance will be done first of allthrough means ofindirect control. This will consist of written reports,concluded by the financial department, which will present thesereports to the General Manager of the subsidiary. This is a form ofverification control. We have chosen this method, as it cheaper interms of costs and it also provides a clear and objective picture of theactivity of the subsidiary.The written financial reports will comprise of the following information:facts concerning the performance of the subsidiary financial analysesof sales, profits, return on investment. In addition, there will berequired financial statements, the balance sheet, the profit and lossstatement and details about cash budget, financial ratios.The financial statements should be done in three ways one to meetthe Pakistan accounting standards and procedures, one to comply withthe accounting principles and standards used by the home country and

a third one denominated in the home countrys currency.

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These statements should be done and handed in to theGeneral Manager on a monthly basis. There will be also ageneral financial review at the end of every quarter and at the end ofthe financial year.A form ofdirect control should also be used, for a better coordination

and communication with Nestle Europe headquarters. Therefore, everysix months, the General Manager of Nestle Pakistan will have ameeting with the Director of Nestle Europe, where he will present thefinancial reports and a description of potential problems affecting theoperation.

Quality performance:Maintaining a high quality of its products is one of Nestls key values,therefore it is extremely important for the managers of the subsidiaryto make sure that the products manufactured in Pakistan respect

international quality standards, in terms of composition, taste, visualattributes and so on.The method used will be the one ofdirect, current control, as this isthe most efficient way to check the quality of the products. This formof control will consist of regular inspections performed by a team ofsupervisors, who will thoroughly observe the production process andwill ensure that the rules and procedure are respected. There are threemain points that will be checked and reviewed: raw materials used inproduction, the production process and the final products prior to thedispatch to final consumers.Nestle is proud of having a state-of-the-art milk production and

processing sector, therefore the Pakistani subsidiary should maintainthis standard.The quality control will also be exerted on the distributors and retailersof Nestle, who also must comply with certain standard, in order for theproducts to reach the customer in the best conditions possible.

Human resources performance:

In assessing the performance of the human resources of thesubsidiary, specific HR Key performance indicators (KPIs) will be used.

This is a form of indirect control, through verification, as it is costeffective and provides a clear view of whether the objectives were metor not and whether the standards are respected.The following key performance indicators will be measured:

Recruitment KPI (recruitment costing per person, average time to

recruit, average numbers of interviews, % recruitment

achievement meet hiring plan);

Training KPI (company training expenditure, average number of

training hours per employee, employee satisfaction with training,

the percentage of employees gone through training);

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Health and Safety KPI (Percentage of staff with

adequate occupational health and safety training,

Health and safety prevention costs within the month);

Performance KPI (% of high/low performing employees, % of

employee with their performance increased/decreased compared

to last month);

Employee loyalty KPI (he rate of life cycles of employees = total

time served in enterprises of all staff / total staff recruited);

Working time KPI (% of total hours lost to absenteeism, average

overtime hours per person, total time lost by work late);

Compensation (salary rate/sales turnover, cost rate of social

insurance, medical insurance, average income per employee per

hour);

Employee satisfaction (% Average satisfaction by each

department, average satisfaction by field - attitude about

compensation and benefits, about coworkers, about supervisors /

managers, about promotions, training, work tasks);

Job leaving (Job leaving ratio per year, job leaving ratio per

department, average age of employees that retire, percentage of

early retirements, attitude of employee who leave the job).

In addition, each employee should fill a monthly report, in which theywill write their monthly objectives regarding sales, productdevelopment, team development and so on, with comments related tothe status of achieving these objectives, the actions through they planto achieve them and the problems they had to overcome or mayappear at a certain point. Comments and suggestions are also to bementioned. Each report should be handed in to the departmentmanager, who in turn will submit it to the HR department for

processing. The manager of the human resources department will thenpresent the compiled form of these reports, along withrecommendations.

Management by objects (MBO):

Management by objectives is a dynamic system which seeks tointegrate the company's need to clarify and achieve its profit andgrowth goals with the manager's need to contribute and develophimself. It is a demanding and rewarding style of managing a business.

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(The Nestle Company did not tell us about thefollowing information as they considered itconfidentional to them.)

ORGANIZING

Organizational chart:

National Sales Manager

Zonal Sales Manager

Regional Sales Manager

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Customer

Service

Manager

Customer

Service

Officers

Area Managers System Support Event


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Management

Span of Control:

30

B.O.D.s

Head OfMarketing

Head ofSales

Head of

Technical

Head of

supply

chain

Head ofH.R.

Head of

Legal

affairs

Managing

Director

.Manager

Plant

Manager Q.C

Q. Assurance

Officer

Manager

Procurement

Manager

Purchase

Logistics

Officer

Territory In

ChargeSystem Support

Officer

Sales Associates Sales Associates


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Span of control or span of management is a dimension of organizational designmeasured by the number of subordinates that report directly to a given manager.This concept affects organization design in a variety of ways, including speed of

communication flow, employee motivation, reporting relationships, andadministrative overhead. Span of management has been part of the historicaldiscussion regarding the most appropriate design and structure of organizations.

TYPE OF STRUCTURE:

Its a vertical structure.vertical organizations have a top-down structurein which directives are passed from top-level managers to mid-levelmanagers, then to low-level managers and finally to associates orentry-level employees. This structure calls for distance betweenregular employees and the managers who make decisions about thecompany, working conditions, pay rates and other important factors.

Vertical structures are particularly useful in organizations such asfactories or other production facilities where efficiency andstandardized processes are of the utmost importance. In contrast, a

horizontal or decentralized structure implies that each department ormanager can make important business decisions in a different mannerthan the next group or supervisor. Companies such as large accountingfirms and certain nonprofits, which have strict guidelines, are not wellsuited for non-vertical structures. Maintaining order is easier in acompany with a set chain of command.

DELEGATION OF EMPOWERMENT:

At Nestle' Milkpak, jobs have been effectively engineered to ensure that employees arenot over loaded with work. The jobs in their nature are enriched i.e. a job is vertically

loaded to provide more responsibility and accountability of the various employees. As

they say A Managers efficiency is best judged by the working of his Department in his

absence. True to this statement, the employees at Nestle' Milkpak are empowered and

authorized to perform their tasks independently unless the situation proves otherwise.

However reporting and verification of the work of subordinates is also done on a

consistent basis, which is a need for such a complex company.

HR PLANNING PROCESS:

Nestl Pakistan believes that its management culture, which contributes to a stimulating

working environment, is a catalyst for strong individual performance. This capacity to

enhance human energy is an essential component to ensure the long-term competitiveness

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of the Company. The leadership style and the dynamic approach to their

objectives ensure that there is no room at Nestl for complacency whilst

employee commitment is kept to the maximum.

GOAL SETTING:

The goal setting process is delegated to the HR management team at nestle who are then

responsible for its implementation in the various departments. Goal setting aids the

management in controlling the activities of the subordinates on the whole while at the

base level authority is delegated to them thus creating a decentralized unit. Also the

managers make sure that these goals are maximally challenging but attainable.

MANAGING THE DIVERSE WORKFORCE:

Managing people is one of the most difficult responsibilities that anymanager assumes. For Nestle Pakistan, this responsibility is magnifiedwith the number and diversity of the people forming the organizationand the different work groups within it. Nestle' Pakistan is made up ofa heterogeneous population with diverse cultural backgrounds,genders, ages, beliefs and physical& mental capabilities. Anothersetback for the Organization is that the original culture of PakistanLimited still prevails and the HR managers face a tough task ofmanaging the people and making them adapt to the culture the Nestle'team wants to incorporate in the company.

IMPRESSION MANAGEMENT:

In an organization as complex as Nestle Pakistan, impression management plays a large

role. Since the Managers do not have much coercive power over their subordinates and

their reward power is limited with the policies of the Organization, the major form of

power they exert is expert power. Thus the impressions and attitudes that these Managers

carry with them are an important indicator of whether these managers will be successful

as Managers or not.

OPEN-DOOR POLICY:

An "open-door policy" is observed and implement by the HRdepartment at Nestle Pakistan. In fact open, two-way communication isthe only way that Nestle Pakistan could have survived with the diverseculture it possesses. The employees at the Organization know thattheir opinions and inputs are valued and welcomed at all times. Thiscreates a greater sense of ownership of their respective department's

mission and the organizational mission as a whole.

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ORGANIZATIONAL CLIMATE:

The quality of work life is exceptionally good at Nestle'. The teamsformed, both formal and informal are productive and this promotes agood organizational climate. The HR department interconnects the

various departments to depict a very friendly atmosphere wherepeople and Managers are interlinked in ways that add to this favorableenvironment.

LEADING

LEADERSHIP STYLES:

DEMOCRATIC LEADERSHIP

A "democratic style"of leadership is observed at the organization. This style indicates amanagement that tends to involve subordinates in decision making, delegates authority,

encourages participation in deciding work methods and goals, and uses feedback as an

opportunity for coaching.

Suggesstions:

Nestle' Milkpak Limited is a well-established firm, with its management

concentrated in foreign expertise. Human Resource policies are

designed to manage the major and the minor issues. Relationships

with the employees are maintained at a cordial level. Employees work

with commitment and dedication to achieve the best for the

organization. Job satisfaction soars at a high level.

Although, it is a relatively new Multinational on the Pakistani front, but

it has established a strong footing for itself in the food industry.

Apparently, there are no loopholes in the working of the organizationsHuman Resource Department, but still some areas require more

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attention to maintain long-term competitiveness of the

company.

Employee satisfaction was observed to be at a higher level in the

Marketing and Sales Division as compared to the Finance Sector.

Opportunities for the employees to flourish, are more at the

marketing side for the reason that the organization is a

manufacturing concern. The employee benefits and the career

ladder at the Finance Division should be enhanced, so that

employees work with further dedication and no gap between the

two divisions is felt.

The Human Resource Department should be more communicative

with the employees. Questionnaires regarding the attitude of

mangers, work conditions, and job satisfaction should be distributed

periodically amongst the employees where they do not have to

mention their names. Before making any policy decisions, these

answers should be thoroughly analyzed to gain added benefit for

the organization. This would also create a sense of affiliation for the

employees with the organization

Sales Teams can be made more productive by giving them targets

with deadlines and offering incentives at good performance.

References:To collection information we have considered following source in order to gather

authentic data:

www.nestle.pk

www.nestle.com

www.wekipdia.com

Personnel concerned

SHAUKAT HUSSAIN[shift leader(NPL) ]

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http://www.nestle.pk/http://www.nestle.com/http://www.wekipdia.com/http://www.nestle.pk/http://www.nestle.com/http://www.wekipdia.com/


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29th kilometer,Lahore-Sheikhupura Road,Sheikhupura-39320,PAKISTAN

TEL SKP:92-42-6369321-26

:92-42-7228300

FAX :92-42-6368710

E-mail:[email protected]

nestle hassam

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