Executive Summary

This report is on the organizational structure of Nestl Pakistan. It starts with

an introduction about Nestl followed by the history of Nestl. It gives a briefing
about all the products offered by Nestl. This report also includes the management
committee. The report shows an internal architecture of the working of the Nestl
confectionary business. It includes the organizational behavior practices which define the
communication style and the culture. It also defines the behavior of individuals and about the
group in general. The objectives and policies of the organization are also stated along
with the practices.

INTRODUCTION

Nestl Pakistan Ltd is a subsidiary of Nestl S.A. - a company of Swiss origin headquartered in
Vevey, Switzerland. It is a food processing company, listed on the Karachi and Lahore stock
exchanges and operating in Pakistan since 1988 started as a joint venture with Milk Pak Ltd. and
took over the management in 1992. For ten years in a row, the company has won a place among
the top 25 companies of the Karachi Stock Exchange.
Headquartered in Lahore, the Company operates four production facilities. Two of its
factories in Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad
and one in Karachi produce bottled water. Through its effective marketing and a vast sales and
distribution network throughout the country, it ensures that its products are made available to
consumers throughout the country.
Nestl Pakistan has large operations with multi-dimension areas but people, quality
products and brands are the main flag bearers of the companys image.Nestl Pakistan now
operates the biggest milk collection operation in Pakistan, Currently; Nestl Pakistan collects
milk from an estimated 190,000 farmers spread over 146,000 sq Kms in the province of Punjab
and Sindh.
Nestl believes in creating shared value and is committed to the communities it works
and lives with. In Pakistan, the company is working closely with communities in areas related to
Nutrition, Water and Rural Development, and continues to enhance the quality of life of people
throughout its value chain.
Nestl Pakistan today is the leading Food & Beverage Company in Pakistan with a key
focus on Nutrition, Health and Wellness and reaching the remotest of locations throughout
Pakistan to serve the consumers. Nestl Pakistan prides itself in being the leader in Nutrition,
Health & Wellness. Ever since 1867, when Henri Nestl invented the first infant food, nutrition
has been in their DNA. Today more and more consumers mirror our emphasis on nutrition, as
they realize that food choices affect their health and quality of life.
The companys strategy is guided by Nestls Corporate Business Principles which are
in line with internationally accepted best practices and ethical performance culture. The
Companys priority is to bring the best and most relevant products to people, wherever they are,
whatever their needs are, and for all age groups. Nestl is not a faceless corporation catering to
faceless consumers, but is a human company providing a response to individual human needs. It

respects the cultures of the countries and is committed to make a contribution to the quality of
life of people.
In line with Nestls global philosophy, Nestl Pakistan is proud of its commitment
to excellence in product safety and quality and to providing value and services to its consumers.
As a socially responsible corporate, we always focus on environment friendly operations, ethical
business practices and our responsibility towards the communities.

ISSUES AND PROBLEMS IN NESTLE:

Conflict Management:
Conflict is a state of disagreement caused by the actual or perceived opposition of needs, values
and interests between people working together. There was a problem which occurs almost in
every organization which is conflict management. Nestle compromised of few conflicts when
there is greater level of responsibility on employees shoulders, assigning tasks to the members of
team, control the place of the work, so the conflicts arises.

The conflict occurs in the management because they have to make decisions through discussion
between the team members, take actions to solve the problems. Sometimes misperceptions or
stereotypes, poor communication or miscommunication, or repetitive negative behaviors occurs
so the conflict arises in the management of Nestle.

Communication Barrier in Nestle:

The problems those are faced by Nestle are as follows:
Cultural Difference:
Since Nestle is a multinational company having thousands of employees from different areas and
having entirely different culture, it faces a great problem in its day to day business activities.
Emotional Interference:
Nestle has a huge area all over the world. And operate this huge mob employees is not an easy
task. There are many reasons in which the employees become anger and which may cause of
barriers.
Information overloads and message competition:
Nestle in Lahore is the land office in Pakistan which deals to the whole Pakistan. There are
millions of messages which come from customer and they have not enough time to read and
reply, thus barrier in communication.

Power and Politics:

Power is a potential ability and influence for a people which direct other people in desired
direction to do something. In Nestle managers use normally two types of power interpersonal
and position power. As position power is based on an individual position in the organization and
personal power comes from an individual unique characteristics.
Legitimate Power:
Legitimate power is used in Nestle as it is based on the power a person receives as a result of his
or her position in the formal hierarchy of an organization. The employee has the authority to
control and use the organizational resources. Because if they use autocratic approach so they
would be harsh and command tone. While on the other hand if they are not autocratic they would
be soft spoken and would be more polite and would be consultative.
Expert Power:

Expert power is the influence based on special skills, knowledge or expertise. Expertise has
become one of the most powerful sources. As jobs have become more specialized the
organizations have become increasingly dependent on experts to achieve goals.

Self managed teams:

In Nestle, there is somehow the problem that there occurs a small group of employees whose
members determine, plan, and manage their day-to-day activities and duties under reduced or no
supervision in some of the departments. As it have pros and cons as well.

Extended time: Sometimes self-managed teams require extended time to complement plans and
policies.
High investment:
High investment is required for skill development.
Inefficiency:
Due to job rotation organizations suffer from early inefficiencies.
Employee inability:
Some employees become unable to adapt to a team structure.
Demand for equal treatment:
Self-managed team members sometimes demand for equal treatment for their success.

Organizational Behavior Of Nestle:

Individuals are the bricks of an organization and Individuals create groups and groups create
organization

Nestle organizational behavior focuses primarily on two major areas.

Individual Level:
Organization behavior looks at individual behavior based mainly on contributions from
psychologist; this area includes such topics as personality, perception, learning and motivations.
Nestle knows the importance of individuals (MAN) who are the main bricks for organization
behavior. Nestle has been placing greater focus on employee empowerment and participation,
which are essential for long-term growth and success of the company, and therefore employees
have been encouraged to put forward their issues, concerns and suggestions. Nestle trust its
employees focus on integrity, competence, consistency, loyalty and openness. Manager stops at
people desks during the day to chat with them about their work, keeping up to date also earns the
trust of employees.

Biographical Characteristics:
To observe the application of dependent variables (productivity, job satisfaction, absence, and
turnover) at individual level at Nestle. If there is a young employee or fresh graduate he would
be more satisfied with his job, productivity would be high, less turnover and low absenteeism
rather than old workers.
Group Level:

Secondly their organizational behavior is concerned with group behaviors, which influence roles,
team building and conflict. The organization group behavior is good. Once the individuals are
skillful, energetic, responsible, agreeable etc, then it is easy to make form successful groups. All
these things make the organization behavior successful. In order to make all business affairs
transparent, smooth and effective, following committees and teams have been formed which
work cohesively and independently.
Teams and groups:
A group whose individual efforts result in performing that is greater than the sum of the
individuals input. At Nestle, employees work in teams. By working in teams, employees bring
their collective skills and knowledge to bear on problems and to develop innovative ideas for the
organization. But conflict arises because of the diversification in teams.
To be effective, teams should be formed with employees from a variety of functional
areas. Work satisfaction relates to personal satisfaction of team members for the work they have
done. In Nestle their team consists of individuals who have technical expertise, problem solving,
decision making and interpersonal skills. And the work team members do provide them freedom,
the opportunity to use different skills, the ability to complete it and that work has a substantial
impact on others.

ORGANIZATIONAL CULTURE OF NESTLE

Organization culture is a system of shared meaning within an organization that
determines in large degree how employees act.
After Nestles inception, the corporate culture underwent a comprehensive renewal
program which was fully implemented in 2004. This program over the years
included the revamping of the organizational architecture, rationalization of staff,
employee empowerment and transparency in decision making through cross
functional teams. This new corporate renewal program has divided the companys
major operations into independent activities supported by legal, financial,
informative and other services. In order to reinforce and monitor this structural
change, related check and balances have been established by incorporating
monitoring and control systems.
IMPORTANCE OF CULTURE IN Nestle

According to the opinion of the Nestls sales officer Nestl is a sales oriented
company. Strong culture is a symbol of more profit more earning and sense of
responsibility. It is also a monument of well-disciplined enterprises in which every
organ of that organization is well concerned with the ultimate objective of the
organization. As its a fundamental truth that every individual from worker to Top
manager is aware of his rights privileges responsibilities and outcome of efforts
being invested.
Special efforts for continuously enriching our business systems and implementing
relative strategies have always been fruitful which are aimed at augmenting a work
culture that enhances employee motivation as well as gaining a better
understanding of forces that shapes motivation, attitude, behavior patterns and
expectations.

SIX DIMENSIONS OF CULTURE

1. Innovation and risk taking: According to our survey what we have found is
that employees are not much encouraged to be innovative and take risks.
2. Attention to detail: According to our survey employees has given importance.
3. Outcome Orientation: The managers focuses on both results or outcomes and
the techniques needed to achieve those outcomes.
4. People Orientation: Management decisions do not take into consideration the
effect of outcomes on people within the organization. They have made their
employees a central part of their culture.
5. Team orientation: They emphasize on team orientation i.e. work activities are
organized around them. Stability Nestle is maintaining the status in contrast to
growth.

Zero Tolerance Nestle have high ethical standards and a Business Principles and
Ethics Policy in place. They value, encourage and inculcate corporate reforms,
good governance, best business practices and an environment of continued
adherence to Zero Tolerance, resulting in the development of our human capital
and meeting all business challenges.

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