ORGANISATION BEHAVIOUR BBGO4103

FACULTY OF BUSINESS AND MANAGEMENT

SEPTEMBER 2014
BBG04103
ORGANISATION BEHAVIOUR
ASSIGNMENT

NO. MATRIKULASI: 810622085729-001

NO. KAD PENGNEALAN: 810622-08-5729
NO. TELEFON: 012-2500877
E-MEL: elazhar83@gmail.com
PUSAT PEMBELAJARAN: PETALING JAYA

ORGANISATION BEHAVIOUR BBGO4103

1.0 INTRODUCTION

Nestl is a multinational company and is of the worlds largest in food and beverages
industry. Heinrich Nestl, whom also known as Henri Nestl, was the founder of Nestl
Company which headquarter is in Vevey, Switzerland in the year of 1866. Nestl Malaysia was
established in the year of 1912 in Malaysia as Anglo-Swiss Condensed Milk Company. Nestl
Malaysia head office is now located in Mutiara Damansara, Petaling Jaya, Selangor, and has 6
sales offices with more than 5000 employees nationwide. Besides, Nestl manufactures its own
products in 7 factories and markets over 300 Halal products across the nation. Nestl specialized
in foods and beverages industry, a few of the many well-known brands Nestl has in Malaysia
includes Maggi, Nescaf, Milo, Kit Kat, Nesvita (formerly known as Nestum), as well as pet care
products such as Purin.
Nestls vision is to be the leader in Nutrition, Health, and Wellness Company by
delivering world-class products of the highest consistent quality, reliability, and convenience
based on business excellence principles throughout the operation. Nestls mission is to enhance
the quality of life with good food and beverages, everywhere, so people could live a healthier
life. In order to achieve their vision and mission, Nestl Nutrition Research Centre pays great
attention to understand the consumers nutritional and emotional needs and utilize todays world
superior science and technology to produce high quality products to the world.

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2.0 FOUR METHODS TO ACHIEVE ORGANISATIONAL GOAL

2.1 Leadership

There are many ways of looking at leadership and many interpretations of its meaning, but
essentially it is relationship where each person influences the actions as well as the behavior of
the other people. The leader-follower relationship is reciprocal and effective leadership is a twoway process. Leadership is related to motivation, the process of communication, the activities of
groups and the process of empowerment. The changing nature of business organizations has
placed increasing importance on leadership. There is a close relationship between leadership and
management, especially in work organizations, and an increasing tendency to see them as
synonymous. The attention given to leadership style is based on the assumption that subordinates
are most likely to work effectively for managers to adopt a certain style of leadership than they
will for managers who adopt alternative styles. Leadership styles are illustrates by theories of
leadership. Leadership styles can be defined as the way in which the functions of leadership are
carried out the way in which the leader typically behaves towards members of the group or the
organization. In other words leader styles are the patterns of behaviors which a leader adopts in
influencing behavior of his or her followers. The different styles of leadership are;

Autocratic leadership style

Democratic leadership style

Laissez fair leadership style

2.2 Motivation

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A work place has members of group and the group has to achieve an objective or
objectives. Thus the objectives or objectives can be achieved by the combined effort of its group
members. The manager needs to know how best to elicit the co-operation of staff and direct
their efforts to achieving the goals and objectives of the organization. The study of motivation is
concerned, basically, why people behave in a certain way. For this effort to achieve objective or
objectives efficiently and effectively, motivation of the group members should be there.
Therefore it is necessary to know how to motivate group members of workplace. There are
different theories of motivation attempted to explain the nature of motivation. These theories
show

that

there

are

many

motives

that

influence

peoples

behavior.

There are many competing theories that attempt to explain motivation at work. The different
theories may be divided into two contracting groups: content theories and process theories.
Content theories place emphasis on what motivates and are concerned with identifying peoples
needs and their relative strengths, and they pursue their goals in order to satisfy these needs.
Main content theories include Maslows hierarchy of needs model; Alderfers modified need
hierarchy model, Herzbergs two-factor theory and McClellands achievement motivation theory.

1. Maslows Hierarchy of Needs Theory

This motivation theory developed by Abraham Maslow and according to him people is being
with needs and what they want depends on what they already have .He suggests that human
needs are arranged in a series of levels depicting a hierarchy of importance.

2. Herzbergs two factors Theory

Herzberg identified that there were two sets of factors affecting motivation and work. He
introduced these factors as hygiene factor and motivators. For hygiene or maintenance factor3

ORGANISATION BEHAVIOUR BBGO4103

Herzberg identified pay, job security, status, work environment, rules and regulations, nature of
interpersonal relations and personal esteems as hygiene factors. By this factor dissatisfaction will
be able to eliminate because this factor is related job context and they concerned with job
environment and extrinsic to the job itself. Motivators or Growth factor- Herzberg identified
recognition, responsibility, room for development and work place as motivator factors. It will
lead to motivate employees. That means motivators are serve to motivation individual to superior
effort and high level of performance. These are related to job content of the work itself. In a
work place according to this theory by providing hygiene factors dissatisfaction of the employees
can be removed and by providing motivators, employees can be kept satisfied.

3. Alderfers modified need hierarchy model

This theory was introduced by Alderferand by this theory he condensed five levels of needs as
Maslows Hierarchy of Needs Theory into three levels of core needs. They are;

Existence

Relatedness

Growth

4. McClellands achievement motivation theory

This theory was presented by McClellands and colleagues and they identified three main arousal
based and socially developed motives. They are;

Needs for Affiliation

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Needs for Power

Needs for Achievement

In this theory they identified the desire for friendly and close interpersonal relationship as needs
for affiliation. The need to make others behave in a way that they would not behave otherwise
was identified the derive to excel to achieve in relation to set of standards and to strive to
succeed as needs for achievement.

2.3 Job satisfaction

In practice a manager must draw conclusions on a daily basis from social observations
and interactions in the workplace. Sometimes, however, it is a good idea to conduct a more
formal survey. This can be accomplished through interviews, surveys, or focus groups that often
involve only a specific group of employees. Two useful surveys are the Minnesota Satisfaction
Questionnaire and Job Descriptive Index. Both of these surveys address areas of employee
satisfaction in regard to different aspects of organization and provide managers with useful
information. They cover work, working conditions, rewards, opportunities for advancement, and
the quality if relationships with managers and coworkers. Increasing the Job satisfaction is
another important managerial duty. It is essential for leaders to maintain the job satisfaction level
of the employees within the organization. This would not only decrease the turnover of the
employees but also generate the healthy environment within the organization. Organizational
Behavior theories help the managers to understand the general behavior of the employee about
job satisfaction, but it does not showcase how to increase job satisfaction for a particular
employee. According to dispositional theory individual who is happy in his life is happy at his
job as well. According to this theory there are the factors affecting job satisfaction i.e. positive
and negative affectivity, personality attributes and self-evaluation. This theory as well does not
find the actual reason specific to a particular individual and hence managers would need to carry
out the analysis specific to the individual.
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2.4 Increased Productivity

The productivity of the employees could be increased by increasing the motivational

level of the employees and by imparting training and development programs. An organization is
said productive if it converts its inputs into outputs at lowest operating costs. Organizational
behavior studies help managers to understand the general behavior of the individuals, but not the
exact behavior of the individual. For example Douglas McGregors Theory X and Theory Y give
an idea about type of people in the organization. According to Theory X, people would tend to
avoid the work and are not responsible, on the other hand according to Theory Y, people are selfdirected and self-motivated. Now this theory does not highlight the exact reasons for being lazy
and self-motivated. In this way organizational studies only direct the managers about the general
concepts, but could not point the exact behavior of the individual. It is so because the behavior of
individual may vary from situation to situation and may also differ from person to person.
(Douglas

McGregor-Human

Relations

Contributors,

Theory

and

Theory

Y)

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3.0 CHALLENGES FACED BY MANAGERS

3.1 Globalization
Nestl produces hundreds of products, has a global network of suppliers, and multiple
distributions and selling channels. Hence, to anticipate and respond in this rapidly changing in
market demand condition is very difficult. When forecasting a market demand, Nestl will need
information to detect shifts in demand early so they could adjust for trends and send the right
messages to the suppliers, shippers, and distribution centers before they are flood with unwanted
or defective goods or shortages.

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However, every company has its weakest links, so is Nestl. The weakest links are issues
they are unable to control. Firstly, the most common problem is the sources of supply of raw
materials. This is due to a sudden and unexpected increase in demand, which will cause extreme
supply shortages for commodities that will result in major price increases. For instance, bad
weather and natural disasters have always been an issue affecting incoming raw materials.
Secondly, the inaccuracy of orders received in inventory. No company can ever achieve the
requirement of zero defects especially in foods and beverages industry. For example, when the
purchasing department of Nestl ordered 10,000 of mixed berries yoghurt from its dealer, but
what the retailer received was only 8,000 of mixed berries yoghurt, or on another occasion they
might receive defective inventories. Another example is, when Nestl tells its dealer that they
needed extra orders of a particular product to be shipped right away because of unexpected
increase in demand, but in fact, the supplier may already has orders from other customers. This
usually happen during special occasion such as Chinese New Year, the demand of Nestl
Cornflakes cereal will increase because many people will buy this product to make cookies. This
will causes Nestl to encounter a great loss because of inaccurate order of magnitude because
they could not produce the actual output needed.

3.2 Ethical Behavior

Nestle was one of the biggest purchasers of cocoa from Ivory Coast, a country in West
Africa. UNICEF studies and International Labor Organization (2002) revealed that the workers
on this plantation lived and worked in poor conditions. They were paid minimal wages and
exploited by the land-owners. Most of the workers had been trafficked by bought and sold,
making them practically slave labor. Nestle purchased cocoa from these farms despite its
awareness of the conditions of the laborers, thus making it a party to their exploitation. Child
labor was also employed on the plantation. UNICEF and The International Institute of Tropical
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Agriculture (IITA) studies (2002) revealed that over 200,000 children were shipped to Ivory
Coast and other cocoa producing countries in Western Africa from neighboring countries like
Mali and Burkina Faso, to work on the plantations, especially during the harvesting of cocoa or
coffee beans. Another unfair labor practice was occurred in Thailand. When a group of 13
workers, wording in a sub-contracting facility of Nestle in Thailand, organized themselves to
form a union, Nestle immediately cut the number of orders to that company and asked the
company to put the unionized workers on indefinite leave with half pay. The workers were force
to quit because of their lowered pay (Manager 2001). In doing so, Nestle had clearly denied these
workers their right to organize themselves to better their interests.

3.3 Workforce Diversity

Inequality in the workplace is any form of bias or discrimination that takes place in a
work environment and is established, promoted, or allowed to persist by the workplace authority.
It is common for a workplace to have inequalities based on gender, race, and social class. There
is usually a hierarchy that exists in the workplace in which managers, leaders and executives are
paid higher wages and have more authority and prestige than those below them (Acker & Joan,
2011.) Ethnicity in Nestle has a large influence on the quality of jobs as well as the amount of
money an individual will make in the workforce. Today, African American men working fulltime and year round have 72 percent of the average earnings of comparable white men. Between
African American and white women, the wage ratio is 85 percent. The black unemployment rate
is typically at about double the rate among white people. White men have many substantial
advantages in the workplace (Rodgers III & Williams, 2008.). They are offered a larger variety
of job opportunities. The positions that earn the most money and have the most power are usually
occupied by white men. Though this type of inequality has been lowered in the last 20 years, it is
still common. In Nestle organization women farmers face a daily struggle with inequality.
Women are only hired for lower paying work while men do some of the more physically
demanding jobs that command a higher wage. And sometimes, even when men and women do
the same jobs, men earn more for that work.
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4.0 RECOMMENDATIONS

Therefore, in order to solve these problems, it is crucial for Nestl to engage with
multiple suppliers or dealers in that particular region, so they could acquire inventories from
multiple dealers, which will definitely decrease the risk of shortage due to incontrollable
situation. Besides, Nestl should also base on their demand and purchase planning on last couple
of years of sales to forecast current year of demand and supply. Other than that, mutual trust and
strong relationship with all the dealers are needed in order to increase the flexibility of material
supply management, as well as to enhance the bargaining power of Nestl. However, if there is a
surplus, Nestl may need to plan a promotion to clear their inventories, otherwise Nestl will
encounter a great loss such as paying high material handling cost, waste of warehouses space, or
inventories that are not sold became defective and may need to be disposed which no profit will
earn. Therefore, when there is a big event organized such as Jom Heboh Carnival. Nestl will set
up a booth at the carnival to sell its products, which are close to the expiry date at lower price
such as Maggi products, Nescaf, Milo, yoghurt drinks, Nestl ice creams and so on. People
often buy the products in big quantity because of the lower price than the market price. As a
result, Nestl could clear their inventories rather fast and save some space in the warehouses
which is a win-win situation.

As a result of The Cocoa Plan initiatives, many have benefited. Nestle, as a partner of
International Cocoa Initiative and the World Cocoa foundation tackled problems such as child
labor and lack of excess to health and education. For example, sending farmers to field schools
not only educates the farmer on methods to increase cocoa productivity, but they are also
educated on diseases and prevention methods. Also, because of the boost in the production of
cocoa, household incomes have increased. Besides that, the boost in production of cocoa could
also increase their exports and in turn reduce their foreign debt. By setting up the research centre
in Cte d'Ivoire, the locals sent to work and learn there could gain new skills, study the
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technology and share the information with the other locals towards having useful technological
advances of their own. Needless to say, Nestle has demonstrated that they are corporately
responsible towards their stakeholders, particularly the farmers who supply them with cocoa and
their families, impacting their lives positively. Increased gender equality measures are necessary
to keep Nestle as a contender in the competitive global market. These measures are also essential
to: fight demographic decline by maintaining an active workforce; achieve adequate forms of
work flexibility both for workers and employers; maximize available human resources to
contribute to tomorrows pensions; improve work organization patterns; and to increase
productivity and prevent poverty.

5.0 CONCLUSIONS

The relationship between the organization and its members is influenced by what
motivates them to work and the rewards and fulfillment that derive from it. The work
organization, and the design and content of jobs, can have a significant effect on the satisfaction
of staff and their levels of performance. The underlying concept of motivation is strength within
individuals by which they try to achieve their goals in order to fulfill some need or expectation.
Individuals have a variety of changing, and often competing, needs and expectations which they
3

ORGANISATION BEHAVIOUR BBGO4103

attempt to satisfy in a number of ways. Leadership is related to motivation, the process of

communication, the activities of groups and the process of empowerment. The changing nature
of

business

organizations

has

placed

increasing

importance

on

leadership.

Leadership style is the way in which the functions of leadership are carried out, the way in which
the manager typically behaves towards the members of the group. The attention given to
leadership style is based on the assumption that subordinates are most likely to work effectively
for managers to adopt a certain style of leadership than they will for managers who adopt
alternative styles.

The concept of job satisfaction has been developed in many ways by many different
researchers and practitioners. One of the most widely used definitions in organizational research
is that of Locke (1976), who defines job satisfaction as "a pleasurable or positive emotional state
resulting from the appraisal of one's job or job experiences". Job satisfaction can also be seen
within the broader context of the range of issues which affect an individual's experience of work,
or their quality of working life. Job satisfaction can be understood in terms of its relationships
with other key factors, such as general well-being, stress at work, control at work, home-work
interface, and working conditions. The productivity of the employees could be increased by
increasing the motivational level of the employees and by imparting training and development
programs. An organization is said productive if it converts its inputs into outputs at lowest
operating costs.

The challenge faced by managers is the sources of supply of raw materials. This is due to
a sudden and unexpected increase in demand, which will cause extreme supply shortages for
commodities that will result in major price increases during the bad weather and natural disasters
have always been an issue affecting incoming raw materials. In 2001, Nestl faced huge criticism
for purchasing cocoa from the Ivory Coast and Ghana suppliers, which may have been produced
using child slaves. An investigation by BBC showed that hundreds of children who lived in Mali,
Burkina and Togo were being purchased from their parents and sent to countries such as Ivory
Coast and Ghana to be used in production of coca (BBC, 2001). Most of the children who work
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in coca farms are ranged between 12 to 14 years old, and are forced to work 80 to 100 hours each
week while they are not paid fairly, barely fed and beaten regularly (Corporatewatch, 2003).
After the widespread of these reports Nestl Company faced huge criticism from health and
labour organisations around the world to put a stop to these anti-humanities act, as a result the
company did not have any choice except to express its concern over the use of child labour in
coca farms to, however the company never confirmed that none of its chocolate products derived
from these anti-humanities resources (Mcspotlight, 2002).

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6.0 REFERENCES

INTERNET

http://eurofound.europa.eu/observatories/emcc/articles/other-business-working
conditions/achieving-gender-balance-strategies-for-competitiveness

http://smallbusiness.chron.com/factors-improve-productivity-1229.html

http://en.wikipedia.org/wiki/Inequality_in_the_workplace

JOURNAL/ARTICLES

Acker, Joan (2011). Inequality Regimes: The Kaleidoscope of Gender. p. 355

Rodgers III, Williams (2008). "Understanding the Black-White Earnings Gap

Manhattan Associates. 2010, Planning and forecasting: Anticipate and Respond to

Changes in Demand, Manhattan Associates
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Labs. 2010, Supply Chain Efficiency Starts at the Top, Food Engineering

Locke,E.A. (1976). The nature and causes of job satisfaction. In M.D. Dunnette (Ed.),
Handbook of industrial and organizational psychology (pp.1297-1349). Chicago: Rand
McNally.

Tomaevi, N., Seljak, J. & Aristovnik A. (2014) Factors Influencing Employee

Satisfaction in the Police Service: The Case of Slovenia. Personnel Review, 43, 2, pp.
209-227.