Question:
Discuss About The Leadership A Bureaucratic Organizational?
In the modern era, analysis, of an organization at regular intervals has become crucial for long-term success and growth. Furthermore, frequent analysis support companies to identify loop holes in their existing system and practices. Based on the information collected, businesses can take corrective measures to eliminate those identified loops holes and to improve operational efficiencies.
The present essay is based on Nestle which is considered as the largest food company in the world regarding revenue and market share. The brand was founded in the year 1866, and at present, the business operations of Nestle are carried out all across the world (NESTLE 2017). It can be expressed the company has adopted a bureaucratic organizational structure to carry out its operations and activities. The key characteristic of this structure is that the organization posses the high degree of formality within all areas, communications, and operations.
The aim of this essay is to carry out internal analysis of Nestle with regards to areas such as organizational structure and international operations. Apart from this, the essay also highlights the management of structural tension within Nestle.
NESTLE S.A. is a Swiss multinational food and beverage company headquartered in Switzerland. The company is well known in the market for the range of products it offers to its target market. Further, the organization is considered to be largest regarding revenue (Wilkins 2014). The range of products offered by the company involves breakfast cereals, dairy products, confectionary items, medical food, baby food, etc.
The main operation of the enterprise is associated with the production of different type of food items as per the need and requirement of the target market. Further, the bureaucratic structure has been employed in its internal structure where top executives hold the main responsibility to take crucial decisions (Bauer & Ege 2016). Apart from this, to manage overall operations, they develop different strategies such as employing new technology, etc. So, this allows in managing overall performance in the marketing. The main tasks undertaken by the company involves offering the wide range of products by managing internal structure. Further, proper chain of command is followed where communication flow from top to bottom and this contributes a lot to the success of the enterprise (Wang 2015).
It can be expressed that to carry out its business practices and objectives, Nestle has developed defined short and long-term goals. The short-term goals of the company include certain business targets with it aims at achieving within one year or less. This includes adopting new marketing strategies such as social media and email. On the other hand, the long-term objective of Nestle includes maintaining its existing market share, increasing customer base and enhancing the volume of sales and profitability.
The company is facing intense competition from local and international players in the food industry of the world. Therefore, in the long run, it aims at maintaining its position of being a market leader in the entire industry (Van der Voet 2014). For this purpose, it carries out market research at regular intervals to understand the changing demand, need of customers and it develops products according to the same. The result of this is that the company can maintain the interest of customers in the long run. Apart from this, increasing existing customer base is another goal of Nestle. Here, the company keeps on exploring new markets and areas where it can operate. Furthermore, strategies linked with mergers and acquisitions are adopted by the company to penetrate new markets effectively.
Centralization is the concept where control of all the business activities lies under the single authority. Further, in case if any organization undertakes this concept the top management of the business holds the main power and employees working at the lower level are not at all allowed to take part in the business affairs (Steenkamp 2017). Organizations that are operating at wider basis have adopted the concept of centralization where management carries out all the practices on their own. Apart from this, top executives are responsible for developing different strategies that are associated with the performance of the enterprise in the market. Since establishment Nestle is operating with the help of centralized structure where in every nation top executives are responsible for conducting the overall business operations.
From the above diagram it has been assessed that Nestle focuses on Bureaucratic organizational structure in which all the major decisions are taken by the higher authorities. This assists the company in taking quick and fast decision for the company. The interference of manager and other level staff within the decision making of company is very less. Top management broad all the strategies and policies within the company (NESTLE 2017). The key function within company is related with their operations as it assists the company in accomplishing their goals and objectives.
Formalization is the process where job activities along with the behavior are standardized, and it undertakes various ways through which it is accomplished. In an organization like Nestle, all the job activities are formalized where every job activity is carried out by the employee as per the criteria set by the business (Spillard 2014). Further, the behavior of all the staff members is managed in the proper manner where they have to act formally for conducting the overall tasks assigned to them within the workplace. Proper rules and regulations have been developed within the workplace and employees have to strictly work in accordance with the regulations formed within the workplace by top officials. The main advantage associated with formalization is that it enhances the rationality of the firm. But on the other hand, sometimes environment of de-motivation is developed within the workplace as employees are not allowed to exercise their own judgment (Montagnes & Wolton 2017). Apart from this discrimination of workload sometimes arises and this directly has the adverse impact on the enterprise.
Apart from this, complexity is one of the elements present that is most crucial. It helps in knowing whether organizational structure of the business is crucial or not. Nestle relies on the bureaucratic structure where top management holds the main power and involvement of employees in the main affair is very less. So, this is somehow considered to be unfavorable. But on the other hand, all the operations are managed by top officials of Nestle, and this is one of the main reasons behind the success of the company in the market where it operates. Structure of the company is not complex as Nestle is operating through this structure for the longer period. All these elements are properly present in the organizational structure of Nestle, and it has somehow contributed to the success of the business (Matte 2017).
Apart from this, the involvement of employees in the major affairs is very less where they are generally given the command, and by this, they have to carry out overall operations. So, this is the way through which Nestle has managed its performance along with the key tasks that involve manufacturing, managing product line, etc. This structure is followed in every market where Nestle operates, and the overall contribution of top executives in the main strategy of the business is maximum as compared with other employees within the workplace (Bauer & Ege 2016).
In today’s corporate scenario, developing effective coordination among management and employees is considered as one of the most challenging tasks for companies. The concept of job specialization results in separating the workers according to their talent, skill set, and specialization (Maggetti & Verhoest 2014). On the other side of this, the concept of coordination emphasizes on bringing employee together and developing harmony among them.
The demand of coordination is increasing among global businesses such as Nestle, and it can be expressed that it is very complicated for the brand to achieve the same. The bureaucratic organizational structure adopted by Nestle has resulted in developing various types of structural tension between management and staff members (Laforet 2015). The company carries out its business operations in different countries of the world, and now the main tension is that the staff members working in various overseas units have developed their perspective towards the objectives. At the same time, the employees have created their own opinions with regards to how the goals are going to be accomplished. The characteristic of the bureaucratic organizational structure is that the decision-making lies in the hands of management and workers are required to behalf very formally within the enterprise (Hatch & Cunliffe 2013). Nestle does not encourage employees or staff members to present their opinions in decisions making and the process of strategy formulation. Such kind of practices develops dissatisfaction among workers, and it is considered as a tension for the management of Nestle.
On the other side of this, differentiation in interpersonal style is another tension which has been faced by the management of Nestle. This can be justified by the example that people working in research and development department of the company prefer to take calculative decisions. Furthermore, these personnel’s take adequate time to arrive at a particular decision, and they evaluate every alternative very carefully. On the other side of this, employees and managers in production department prefer to take fast decisions, and these people always choose clear communication channels (Fuller 2016).
The mentioned above differentiations can result in developing a situation of conflict between workers and management, and this is a significant threat for Nestle. Furthermore, the organization may also face various obstacles regarding achieving long-term growth and development. The key benefit of the bureaucratic organizational structure is that the managers working at the top level of Nestle have high command and control over the process of decision-making. However, it can be critically argued that such kind of organizational structures discourages creativity and innovation with the business practices (Dischner 2015). The rationale behind this is that employees working in middle and lower level are not encouraged to take part in the process of decision-making. At the same time, the high degree of dissatisfaction is created among workers, and this may result in increasing the rate of turnover within the business enterprise.
Regarding managing these tensions, Nestle has adopted certain strategies and practices. For example, the brand has adopted various approaches to encourage and develop effective coordination among middle, lower and higher level of management. In addition to this, basic management mechanism has also been adopted by the brand to ensure smooth flow of coordination and corporation among staff members (Dan-Cohen 2016). The bureaucratic organizational structure has resulted in setting up a strong chain of command within the enterprise. It can be stated that such kind of practices facilitates the efficient flow of information within management and employees working in the organization (Carpenter & Krause 2014).
Nestle also emphasize on adopting efficient mechanism and different practices for resolving conflicts. This supports the company to manage the tension between the degree of differentiation and degree of integration in the best possible manner. The brand also relies heavily on setting up direct contact between managers working in different international units. Nestle has also given the role of liaison and coordinative to all its managers with a purpose to resolve the tension between differentiation and integration (Daft 2015). Regular team meetings and sessions are also carried out by the management to communicate with workers and become aware of the key issues or challenges which they are facing. Based on the information collected, corrective measures are taken by the top management of Nestle to resolve the conflict and tension.
Conclusion
The above-conducted essay outlines that Nestle has adopted for bureaucratic organizational structure for carrying out its international operations and practices. Here, the company has developed a high degree of formality within its business practices and employees are encouraged to follow this formal structure strictly. The key benefit associated with the use of the bureaucratic organizational structure is that Nestle can carry out fast and efficient decision-making as the power of decision-making is concentrated in few hands, i.e., people working in top management.
On the contrary, it can be inferred that bureaucratic organizational structure has resulted in creating several tensions between differentiation and integration. Now, the product of this is that higher degree of dissatisfaction has been developed among workers and it has also affected the level of creativity within the enterprise. To manage these tensions, various types of strategies and approaches are adopted by the selected business enterprise.
References
Bauer, MW & Ege, J 2016, ‘Bureaucratic autonomy of international organizations’ secretariats.’, Journal of European Public Policy, vol 23, no. 7, pp. 1019-1037.
Carpenter, D & Krause, GA 2014, ‘Transactional authority and bureaucratic politics’, Journal of Public Administration Research and Theory, vol 25, no. 1, pp. 5-25.
Daft, RL 2015, Organization theory and design., Cengage learning., Delhi.
Dan-Cohen, M 2016, Rights, persons, and organizations: A legal theory for bureaucratic society (Vol. 26), Quid Pro Books, psychology.
Dischner, S 2015, ‘Organizational structure, organizational form, and counterproductive work behavior: A competitive test of the bureaucratic and post-bureaucratic views’, Scandinavian Journal of Management, vol 31, no. 4, pp. 501-514.
Fuller, GW 2016, New food product development: from concept to marketplace., CRC Press, Florida.
Hatch, MJ & Cunliffe, AL 2013, Organization theory: modern, symbolic and postmodern perspectives, Oxford university press, Oxford.
Laforet, S 2015, ‘Managing brand portfolios: audit of leading grocery supplier brands 2004 to 2012’, Journal of Strategic Marketing, vol 23, no. 1, pp. 72-89.
Maggetti, M & Verhoest, K 2014, ‘Unexplored aspects of bureaucratic autonomy: a state of the field and ways forward.’, International review of administrative sciences, vol 80, no. 2, pp. 239-256.
Matte, R 2017, ‘ Bureaucratic structures and organizational performance: A comparative study of Kampala capital city authority and national planning authority.’, Journal of Public Administration and Policy Research, vol 9, no. 1, p. 1.
Montagnes, BP & Wolton, S 2017, ‘Rule versus Discretion: Regulatory Uncertainty, Firm Investment, and Bureaucratic Organization’, The Journal of Politics, vol 79, no. 2, pp. 457-472.
NESTLE 2017, About Us, viewed 16 September 2017, <https://www.nestle.com/>.
Spillard, P 2014, Organization and Marketing (RLE Marketing), Routledge, Abingdon.
Steenkamp, JB 2017, Organizational Structures for Global Brands. In Global Brand Strategy, Palgrave Macmillan UK, UK.
Van der Voet, J 2014, ‘The effectiveness and specificity of change management in a public organization: Transformational leadership and a bureaucratic organizational structure.’, European Management Journal, vol 32, no. 3, pp. 373-382.
Wang, X 2015, Coping with Police Social Service Role Strain: Findings of the Paramilitary–Bureaucratic Structure and Structural Empowerment of the Police Organization. In Empowerment on Chinese Police Force’s Role in Social Service, Springer Berlin Heidelberg, Berlin.
Wilkins, M 2014, ‘When and why brand names in food and drink?’, Adding Value: brands and marketing in food and drink, pp. 15-40.
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