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NESTLE GOOD FOOD GOOD LIFE

University of Sahiwal

Department of Business Administration

Comparative Management

Submit To……..
Ma’am Sana Tariq
Submit by………
Kashif Raza
Roll No……….
MBS-15-32
Class……….
MBA (morning)
Semester……….
7th
Session……….
2015-18

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 Dedication

We would like to dedicate this project to our parents who has given us opportunity to
study here in Bahauddin Zakariya University Multan, Sub-campus Sahiwal, and to our
respected teacher who has given us a chance to work on this project.

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 ACKNOWLEDGEMENT
Working on this report on “Nestle Ltd.” was a source of immense knowledge to us. We
are thankful to Almighty ALLAH “most beneficent and the most Merciful” Who made us
able to complete our given project successfully and for giving us much cooperation and
supporting parents who has given us this opportunity to study here. We acknowledge
with a deep sense of gratitude, the encouragement, inspiration and valuable time
received from our faculty members, our colleagues. We would like to thank Ma’am Sana
Tariq for giving us the confidence and opportunity to prove ourselves.

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Executive Summary
This report is prepared to analyze the culture of the Nestle Company in different
countries and comprehend how the company develop strategic intent for their business
organizations following the analysis of external and internal business environments. I
will analyze the culture of Nestle in Pakistan, China, Canada and also in India. I will
discuss the organizational structure and corporate social responsibility of Nestle all
around the world.

Purpose of this study is analyze the Negotiation and communication process of Nestle
how the Nestle communicate in different cultures in our organizations. Nestle make top
management team to ensure that the Nestle understand all communications across
boundaries. Also discuss the decision making of Nestle how the Nestle make their
decisions in our organization they involve all levels of managers in their decision
making.

Information overload in the Nestle messaging system all around the world where Nestle
discuss with there customers and ask their queries but because of many messages
Nestle can’t have much time to reply to their customers and solve their complaints.

It also aims to identify market place opportunities and threats in the external
environment and to decide how to use their resources, capabilities and core
competencies in the firm’s internal environment to pursue opportunities and overcome
threats. In order to strengthen this assignment about Nestle, there are several methods
of gathering data has been conducted, such as PESTEL analysis and SWOT analysis.

By the end of this project, discuss the strategic alliances of Nestle like as Nestle make
partnership with Coca Cola and Fonterra and make 7 billion licensing with Star Bucks
and Nestle also make partnership with Polar Beverages.

Nestle is a low cost leader with its efficient operations hence it provides its customers
with high quality products and sells them at a premium price. Therefore it is earning
good profits.

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 Contents
Introduction of Nestle ............................................................................................................................... 11
Nestle International History..................................................................................................................... 12
History of the Nestlé Logo....................................................................................................................... 18
Philosophy of Nestlé ................................................................................................................................ 19
Good Food, Good Life. ........................................................................................................................ 19
Good Food, Good Life ......................................................................................................................... 19
Good Ingredients .................................................................................................................................. 20
Vision Statement of Nestle ......................................................................................................................... 21
Mission Statement of Nestle....................................................................................................................... 21
Nestle Goals and Objectives ....................................................................................................................... 22
Values .......................................................................................................................................................... 22
Global Brands of Nestlé .............................................................................................................................. 23
Brands in Pakistan ....................................................................................................................................... 23
Nestle Organization Structure .................................................................................................................... 26
Nestle Organization Chart ........................................................................................................................... 27
Top Level of Management ...................................................................................................................... 27
Middle Level of Management ................................................................................................................. 27
Lower Level of Management .................................................................................................................. 28
Culture of Nestle ......................................................................................................................................... 29
Organizational culture of Nestle in Pakistan............................................................................................... 29
Features of Nestle’s Organizational Culture in Pakistan......................................................................... 30
Performance with Purpose.............................................................................................................. 30
Real World Leadership .................................................................................................................... 30
Collaboration ..................................................................................................................................... 31
Organizational culture of Nestle in China ................................................................................................... 31
Features of Nestle’s Organizational Culture in China ............................................................................. 31
People-Centricity .............................................................................................................................. 32
Individual Learning ........................................................................................................................... 32
Organizational Learning .................................................................................................................. 32
Diversity and Inclusion..................................................................................................................... 32

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Organizational Culture of Nestle in Canada ................................................................................................ 33
Features of Nestle’s Organizational Culture in Canada .......................................................................... 34
Integrity .............................................................................................................................................. 34
Leadership ......................................................................................................................................... 34
Ownership ......................................................................................................................................... 35
Passion for Winning ......................................................................................................................... 35
Trust ................................................................................................................................................... 35
Organizational culture of Nestle in India .................................................................................................... 36
Focus on performance......................................................................................................................... 36
Focus on quality ................................................................................................................................... 36
Efficiency ............................................................................................................................................... 36
Diversity in Nestle ....................................................................................................................................... 36
Hofstede Value Dimensions ........................................................................................................................ 37
Power-Distance .................................................................................................................................... 37
Individualism vs Collectivism .............................................................................................................. 37
Uncertainty-Avoidance ........................................................................................................................ 37
Masculinity vs Femininity .................................................................................................................... 38
Long-term Orientation vs Short-term Orientation ............................................................................ 38
Indulgence vs Restraint ....................................................................................................................... 38
SWOT ANALYSIS OF NESTLE ........................................................................................................................ 39
Strengths ................................................................................................................................................. 39
Strong brand image ......................................................................................................................... 39
Loyalty from customers ................................................................................................................... 39
Decentralized culture ....................................................................................................................... 39
Strong financial position .................................................................................................................. 39
Strong core competencies .............................................................................................................. 39
Modern operation facilities .............................................................................................................. 39
Own distribution network ................................................................................................................. 39
Parent company support ................................................................................................................. 40
Good quality products ...................................................................................................................... 40
Worldwide existence ........................................................................................................................ 40
Introducing new products ................................................................................................................ 40
Weaknesses ............................................................................................................................................ 40

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 Dependent on the outside Milkmen ............................................................................................... 40
Packaging dependence ................................................................................................................... 40
Complex supply chain ..................................................................................................................... 40
Advertisement ................................................................................................................................... 40
Opportunities .......................................................................................................................................... 41
Can establish its own diary forms .................................................................................................. 41
Potential to expand to smaller towns ............................................................................................ 41
Open stores ....................................................................................................................................... 41
Threats .................................................................................................................................................... 41
High Price .......................................................................................................................................... 41
Fierce competition ............................................................................................................................ 41
Instability of Government ................................................................................................................ 41
PESTEL Analysis ........................................................................................................................................... 42
Political Forces ..................................................................................................................................... 42
Labor Laws ........................................................................................................................................ 42
Laws on hiring & promotions .......................................................................................................... 42
Environmental Protection Laws...................................................................................................... 42
Foreign trade Regulations............................................................................................................... 42
Political instability ............................................................................................................................. 43
Economic Forces.................................................................................................................................. 43
Economic growth rate ...................................................................................................................... 43
Social Forces ........................................................................................................................................ 43
Social Forces & Cultural Health Consciousness ......................................................................... 43
Environmental concerns ...................................................................................................................... 44
Work life quality ................................................................................................................................ 44
Technological Forces........................................................................................................................... 44
Total spending on R&D ................................................................................................................... 44
New communication technology .................................................................................................... 44
Legal Forces ......................................................................................................................................... 45
Nestle’s Corporate Social Responsibility in Global ..................................................................................... 45
Nestle’s Corporate Social Responsibility Initiatives ........................................................................ 45
Consumers (Highest Priority). ............................................................................................................. 46
Employees (Inspire and Motivate). ................................................................................................ 46

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 Investors(Innovation for Success). ................................................................................................ 47
Suppliers (Mutually Productive Relationship). ............................................................................. 47
Communities (Sustainability). ......................................................................................................... 48
Social responsibility towards Human rights................................................................................................ 48
Rural Development .............................................................................................................................. 48
People .................................................................................................................................................... 49
Understanding the Risks to Children ................................................................................................. 49
Tackling Human Rights Abuses in Palm Oil .................................................................................... 49
Improving Labour Standards in Seafood .......................................................................................... 49
Improving Sugar Workers’ Conditions in Mexico ............................................................................ 49
From Labour to Education .................................................................................................................. 50
Remedying Labour Violations in Mexico .......................................................................................... 50
Ethical Issues of Nestle................................................................................................................................ 50
Restricting trade union rights through fake “supervisors’’ .............................................................. 51
Nestlé Water workers were denied the right to water ..................................................................... 52
Interfering in trade union elections .................................................................................................... 52
Communication at Nestle ........................................................................................................................... 53
INTERNAL COMMUNICATION ................................................................................................................. 53
Downward Communication ................................................................................................................ 53
Upward Communication .................................................................................................................. 54
EXTERNAL COMMUNICATION ........................................................................................................ 54
Barriers to Communication in Nestle ..................................................................................................... 55
Cultural Difference ............................................................................................................................... 55
Emotional Interference ........................................................................................................................ 55
Information overload and message competition.............................................................................. 55
CROSS CULTURAL COMMUNICATION ......................................................................................................... 55
Giving Written Instructions .................................................................................................................. 56
Making Sure People Understand ....................................................................................................... 56
Reinforcing Communication Tools..................................................................................................... 56
Benefiting From A Multicultural Top Management Team............................................................... 56
Be Flexible, Tolerant And Aware Of Cultural Taboos ..................................................................... 57
Encouraging Interaction ...................................................................................................................... 57
CROSS CULTURAL NEGOTIATION ................................................................................................................ 57

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 Time Considerations ............................................................................................................................ 57
Formal Versus Informal Negotiation Styles ...................................................................................... 58
Negotiation Objectives......................................................................................................................... 58
Eye Contact ........................................................................................................................................... 58
BUSINESS PRACTICE AND CUSTOMS ........................................................................................ 59
Business Card Exchange .................................................................................................................... 59
Taking Out a Business Card............................................................................................................... 59
Consulting Service ............................................................................................................................... 60
Negotiations on Technology Transfer ............................................................................................... 60
CROSS CULTURAL MOTIVATION ................................................................................................................. 61
REWARDS & BENEFITS .................................................................................................................... 61
PERFORMANCES APPRAISAL........................................................................................................ 62
COMPENSATION & BENEFITS ........................................................................................................ 62
MAINTENANCE ................................................................................................................................... 62
SAFETY & HEALTH MEASURES ..................................................................................................... 63
CROSS CULTURE DECISION MAKING ........................................................................................................... 63
Strategic Alliances of Nestle........................................................................................................................ 65
1. Partnership of Nestle with Polar Beverages ............................................................................ 65
2. Nestlé Enters into Strategic Partnership with Belgian Luxury Chocolate Maker............................ 65
3. Nestlé and the Coca-Cola Company Ending their Beverage Partners Worldwide Joint
Venture .................................................................................................................................................. 66
4. Starbucks and Nestlé close $7Billion licensing deal ............................................................... 66
JOINT VENTURES .............................................................................................................................. 67
Conclusion ................................................................................................................................................... 68
Recommendation ..................................................................................................................................... 69

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Introduction of Nestle
Nestle Pakistan is proud of its commitment to excellence in product safety and quality
and to providing value and aims to be the leading Nutrition, Health and Wellness
Company. As a socially responsible corporate, we always focus on environment friendly
operations, ethical business practices and our responsibility towards the communities.
Nestle in Pakistan is operating since 1988 under a joint venture with Milk Pak ltd and
took over management in 1992.

The company’s strategy is guided by Nestlé’s Corporate Business Principles which are
in line with internationally accepted best practices and ethical performance culture.
Nestlé’s existing products grow through innovation and renovation while maintaining a
balance in geographic activities and product lines. Long-term potential is never
sacrificed for short-term performance. The Company’s priority is to bring the best and
most relevant products to people, wherever they are, whatever their needs are, and for
all age groups.

Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key
focus on Nutrition, Health and Wellness and reaching the remotest of locations
throughout Pakistan to serve the consumers. Nestlé Pakistan also prides itself in being
the leaders in Nutrition, Health & Wellness. Ever since 1867, when Henri Nestlé
invented the first infant food, nutrition has been in our DNA. Today more and more
consumers mirror our emphasis on nutrition, as they realize that food choices affect
their health and quality of life.
Nestlé Pakistan operates in many ways but people, products and brands are the main
flag bearers of the Company’s image, and we continue to enhance the quality of life of
Pakistanis.

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Nestle International History
History of Nestle

1866-1905
The key factor which drove the early history of the enterprise that would become The
Nestlé Company was Henri Nestlé's search for a healthy, economical alternative to
breastfeeding for mothers who could not feed their infants at the breast. Nestlé’s first
product was called Farine Lactée (“corn flour gruel” in French) Henri Nestlé. Nestlé's
first customer was a premature infant who could tolerate neither his mother's milk nor
any of the conventional substitutes, and had been given up for lost by local physicians.

People quickly recognized the value of the new product, after Nestlé's new formula
saved the child's life and within a few years, Farine Lactée Nestlé was being marketed
in much of Europe.

The Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles

and George Page, broadened its product line in the mid-1870s to include cheese and
infant formulas. The Nestlé Company, which had been purchased from Henri Nestlé by
Jules Monnerat in 1874, responded by launching a condensed milk product of its own.
The two companies remained fierce competitors until their merger in 1905.

Some other important firsts occurred during those years. In 1875 Vevey resident Daniel
Peter figured out how to combine milk and cocoa powder to create milk chocolate.
Peter, a friend and neighbor of Henri Nestlé, started a company that quickly became the
world's leading maker of chocolate and later merged with

Nestlé. In 1882 Swiss miller Julius Maggi created a food product utilizing legumes that
was quick to prepare and easy to digest. His instant pea and bean soups helped launch
Maggi & Company.

1905-1918
The Company formed by the 1905 merger was called the Nestlé and Anglo-Swiss Milk
Company. By the early 1900s, the Company was operating factories in the United States,

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Britain, Germany and Spain. In 1904, Nestlé added chocolate to its range of food products after
reaching an agreement with the Swiss General Chocolate Company.

Condensed-milk exports increased rapidly as the Company replaced sales agents with
local subsidiary companies. In 1907, the Company began full-scale manufacturing in
Australia, its second-largest export market. Warehouses were built in Singapore, Hong
Kong, and Bombay to supply the rapidly growing Asian markets.

Most production facilities remained in Europe, however, and the onset of World War I
brought severe disruptions. Acquiring raw materials and distributing products became
increasingly difficult. Fresh-milk shortages throughout Europe forced factories to sell
almost all their supplies to meet the needs of local towns. Nevertheless, the war created
tremendous new demand for dairy products, largely in the form of government
contracts. To keep up, Nestlé purchased several existing factories in the United States.
By war's end, the Company had 40 factories, and its world production had more than
doubled since 1914.

1918-1938
The end of World War I brought with it a crisis for Nestlé. Government contracts dried
up following the cessation of hostilities, and civilian consumers who had grown
accustomed to condensed and powdered milk during the war switched back to fresh
milk when

it became available again. In 1921, the Company recorded its first loss. Nestlé's
management responded quickly, bringing in Swiss banking expert Louis Dapples to
reorganize the Company.

1938-1944
The effects of the onset of World War II were felt immediately by Nestlé. Profits dropped from
$20 million in 1938 to $6 million in 1939. Neutral Switzerland became increasingly isolated in a
Europe at war, and the Company transferred many of its executives to offices in Stamford,

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The first truly global conflict ended forever the traditional Company structure. To
overcome distribution problems in Europe and Asia, factories were established in
developing countries, particularly in Latin America.

Ironically, World War II helped speed the introduction of the Company's newest product,
Nescafé. After the United States entered the war, Nescafé became a staple beverage
of American servicemen serving in Europe and Asia. Annual production levels reached
one million cases by 1943.

As in World War I, production and sales rose in the wartime economy: Nestlé's total
sales jumped from $100 million in 1938 to $225 million in 1945. As the end of the war
approached, Nestlé executives found themselves unexpectedly heading up a worldwide
coffee concern, as well a company built upon Nestlé's more traditional businesses.

1944-1975
The close of World War II marked the beginning of the most dynamic phase of Nestlé's history.
Throughout this period, Nestlé's growth was based on its policy of diversifying within the food
sector to meet the needs of consumers. Dozens of new products were added as growth within
the Company accelerated and outside companies were acquired.

In 1947, Nestlé merged with Alimentana S.A., the manufacturer of Maggi seasonings
and soups, becoming Nestlé Alimentana Company. The acquisition of Crosse &
Blackwell, the British manufacturer of preserves and canned foods, followed in 1960, as
did the purchase of Findus frozen foods (1963), Libby's fruit juices (1971) and Stouffer's
frozen foods (1973).

Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales of instant
coffee nearly tripled, and from 1960 to 1974, they quadrupled.

1975-1981
After the agreement with L'Oréal in 1974, Nestlé's overall position changed rapidly. For
the first time since the 1920s, the Company's economic situation deteriorated as the
price of oil rose and growth in the industrialized countries slowed. In addition, foreign
exchange rates deteriorated with the French franc, dollar, pound sterling, and mark all
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losing value relative to the Swiss franc. Finally, between 1975 and 1977, the price of
coffee beans quadrupled, and the price of cocoa tripled. As in 1921, the Company was
forced to respond quickly to a radically changed marketplace.

Nestlé's rapid growth in the developing world partially offset a slowdown in the
Company's traditional markets, but it also carried with it the risks associated with
unstable political and economic conditions. To maintain a balance, Nestlé made its
second venture outside the food industry by acquiring Alcon Laboratories, Inc., a U.S.
manufacturer of pharmaceutical and ophthalmic products.

Taking such a step in a time of increased competition and shrinking profit margins
required boldness and vision. Even more than the L'Oréal move, Alcon represented a
leap into unknown waters for Nestlé. But, as Group Chairman Pierre Liotard-Vogt noted,
"Today we find ourselves with a very wide range of activities, all of which have one thing
in common: they all contribute to satisfying the requirements of the human body in
various ways."

1981-1995
Under a new Chief Executive Officer, Helmut Maucher, Nestlé approached the 1980s
with a renewed flexibility and determination to evolve. The Company's strategy for this
period was twofold: improve its financial situation through internal adjustments and
divestments, and continue its policy of strategic acquisitions.

Thus, between 1980 and 1984, the Company divested a number of non-strategic or
unprofitable businesses. At the same time, Nestlé managed to put an end to a serious
controversy over its marketing of infant formula in the Third World. This debate had led
to a boycott of Nestlé products by certain lay and religious organizations. This issue is
still alive in some quarters, but there is no longer any significant boycott activity.

In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of
acquisitions, including a public offer of $3 billion for the American food

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1996-2002
The first half of the 1990s proved to be a favorable time for Nestlé: trade barriers crumbled and
world economic markets developed into a series of more or less integrated trading areas. The
opening of Central and Eastern Europe, as well as China, and a general trend towards
liberalization of direct foreign investment was good news for a company with interests as far-
flung and diverse as Nestlé. While progress since then has not been as encouraging, the overall
trends remain positive.

In July 2000, Nestlé launched a Group-wide initiative called GLOBE (Global Business
Excellence), aimed at harmonizing and simplifying business process architecture;
enabling Nestlé to realize the advantages of a global leader while minimizing the
drawbacks of size.

There were two major acquisitions in North America in 2002: in July, Nestlé announced
that the U.S. ice cream business was to be merged into Dreyer's, and in August, a USD
2.6bn acquisition was announced of Chef America, Inc. , a leading U.S.-based hand-
held frozen food product business.

Also in 2002, the joint venture Dairy Partners Americas was set up with Fonterra; and
Laboratoires innéov was set up, another joint venture, this time with L'Oréal.

2003 +
The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé's
position as one of the world market leaders in this product category. The years that followed
saw consistent business growth through innovation and renovation of the products.

In 2006, Jenny Craig, the USA weight management company and Uncle Toby's were
acquired as well as Delta Ice Cream.

Nestlé made three significant acquisitions in 2007. The first was Novartis Medical
Nutrition which put Nestlé in a a strong number two position globally for healthcare
nutrition. Gerber, the iconic US baby food brand was the second acquisition and the
third was the Swiss water company, Sources Minérales Henniez S.A.

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The end of 2007 was marked by a strategic partnership with the Brussels-based luxury
chocolate maker Pierre Marcolini.

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History of the Nestlé Logo
The Nestlé logo was launched by Henri Nestlé in 1868 on the basis of the meaning of
his name in German, i.e. little nest, and of his family emblem.

Henri obtained a 15-year French patent for his logo in 1868.

After he retired, it was registered in Vevey in 1875 by the new owners of
his company.

In 1938, the traditional nest design was combined with the "Nestlé"
name to form what is called the combined mark.

In 1966 the design was simplified.

In 1988, the worm in the mother bird's beak was removed and the fledglings
became two instead of three. It is said that it was meant to better illustrate the
activities of the company, no longer active only in nutrition, and to reflect the
average modern family of two children.

The logo we know now has just been simplified. The tree is supposed to
represent an oak and the bird’s thrushes.

Guiding Principles of Nestlé

Nestlé is committed to the following Business Principles in all countries, taking into
account local legislation, cultural and religious practices:

 Nestlé's business objective is to manufacture and market the Company's

products in such a way as to create value that can be sustained over the long
term for shareholders, employees, consumers, and business partners.
 Nestlé does not favor short-term profit at the expense of successful long-term
business development.

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  Nestlé 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.
 Nestlé 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.
 Nestlé 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.
 Nestlé continues to maintain its commitment to follow and respect all applicable
local laws in each of its markets.

Philosophy of Nestlé
Nestlé‘s philosophy is summed up in four words:

Good Food, Good Life

In their quest to become the world's leading health, nutrition and wellness company,
they do everything they can to help people live more fulfilling lives.

Good Food, Good Life

Henri Nestlé choose his own coat of arms to represent the
company's philosophy: a bird's nest, with a mother feeding her
young.

The image represents Nestlé core values: care, family values, nutrition, healthy growth,
safety and comfort. It is a guarantee of quality and a commitment to responsibilities as a
food company and experts in nutrition.

Over the years Nestlé has reaffirmed its commitment to wellness, helping consumers to
live longer, healthier, and more productive lives, no matter their age, gender or
socioeconomic status.
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Good Ingredients
Three vital ingredients lie at the heart of Nestlé and come together in their brands: Their
people, their research and development, and their commitment to quality.

The 250,000 dedicated people who make up the Nestlé family are their source of
strength and energy. Realizing this, Nestlé offer them constant professional
development, and feel their cultural diversity is one of greatest assets.

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Vision Statement of Nestle

Mission Statement of Nestle

“Nestlé is the largest food company in the world. But, more important to them is to be
the world’s leading food company”

At Nestlé, we believe that research can help us make better food so that people live a
better life. Good Food is the primary source of Good Health throughout life. We strive to
bring consumers foods that are safe, of high quality and provide optimal nutrition to
meet physiological needs. In addition to Nutrition, Health and Wellness, Nestlé products
bring consumers the vital ingredients of taste and pleasure.

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 Nestle Goals and Objectives
Marketing objectives are compatible with the overall corporate objectives of nestle.
Company’s objective is to be the world’s largest and best branded food manufacturer
while insuring that nestle name is synonymous with the products of the highest quality.

Its chief objectives are:

 To achieve compatibility with international voluntary standards on environmental

management systems.

 To build mutual trust with consumers, governmental authorities and business

partners.

 To ensure continuous improvement of nestles environmental performance.

 Conservation of natural resources and minimization of waste.

 To establish the benchmark for good business practice.

 Employing new technologies and processing.

Values
As the world’s leading nutrition, health and Wellness Company, our mission of “Good
Food, Good Life” is to provide consumers with the best tasting, most nutritious choices
in a wide range of food and beverage categories. “Good Life” also refers to the way we
live and work together. We believe that when we share common values, it makes our
work that much better. These include:

 Integrity coupled with a strong work ethic

 The desire to do quality work

 Friendly, open and honest communication

 A spirit of cooperation and openness to other ideas and opinions

 A realistic approach to business

 An openness to future trends and new business opportunities

 Pride in enhancing our company’s reputation and performance

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 From Food Technologists who bring product ideas to life to Sales Representatives who
bring our products to our customers, everyone at Nestlé shares our core values and
plays a key role in moving the company forward.

Global Brands of Nestlé

Following are the categories in which Nestlé global is manufacturing its products.

 Baby Food

 Drinks

 Bottled Water

 Food Service

 Cereals

 Chocolate & confectionary

 Coffee

 Culinary, chilled & frozen food

 Dairy

 Food Service

 Health care nutrition

 Ice-cream

 Pet care

 Food Management

Brands in Pakistan
Nestle product line is divided into following major categories:

2-Ambient Dairy
 NESTLÉ MILKPAK

 NESTLÉ MILKPAK Cream

 NESTLÉ BUNYAD

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 NESTLÉ MILO

 NESTLÉ EVERYDAY

 NESTLÉ NESVITA Calcium Plus

 NESTLÉ NIDO FORTIGROW

2-Chilled Dairy
 NESTLÉ Yogurt Sweet ‘N’ Tasty

 NESTLÉ RIWAYATI MAZAA YOGURT

 NESTLÉ ACTIPLUS Yogurt

 NESTLÉ MILKPAK YOGURT

 NESTLÉ ZEERA RAITA

 NESTLÉ PODINA RAITA

3-Juices
 NESTLÉ FRUITA VITALA

 NESTLÉ NESFRUTA

4-Bottled Water
 NESTLÉ PURE LIFE

5-Culinary & Food

 NESTLÉ MAGGI NOODLES
 MAGGI CHOTOO

6-Baby Food
 NESTLÉ CERELAC

7-Breakfast Cereals
 NESTLÉ KOKO KRUNCH

 NESTLÉ MILO CEREAL

 NESTLÉ CORN FLAKES

8-Coffee
 NESCAFÉ CLASSIC

 NESCAFÉ GOLD

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 9-Confectionery
 KITKAT

NESTLE FRUITA VITALS

As we already know that Health. Fitness and nutrition is the basic plan of Nestle. And
Nestle Fruita Vitals fulfills the needs of its consumers with vitamin, calcium and minerals,
all the necessary Vitamins. Calcium and minerals are filled in fruit juices. Nestle Fruita
Vitals includes Apple Nectar, Red Grapes, Pineapple Nectar, Guave Nectar, Orange
Nectar and Peach Nectar.

Nestle Nescafe:

Nescafe is the instant coffee. It Keep you fresh, awake your soul and keep you active is
the ultimate goal of Nescafe, what I think. Nescafe Classic, Nescafe Gold and Nescafe
Cold Coffee are here to keep you fresh with its taste.

Nestle Cereals:

A delicious breakfast cereal made with whole grain with a rich chocolate taste that kids
love. Plus it includes important vitamins, iron and calcium. The whole grain tick on our
breakfast cereals with the green banner – this is your guarantee that they contain at least
8g of whole grain in every delicious serving. Our breakfast cereals also typically provide
25% of the recommended daily allowance (RDA) of vitamins and minerals per serving.

Nestle Bottle Water:

Due to its brand name Nestle Pure Life is the most favorite of Pakistani people. Every
bottle of Nestle is very safe & secure to keep you healthy and the important thing is that
Nestle Bottle Water is processed under safety Security System (SSS).

 Pakistan is the proud birth place of the NESTLÉ PURE LIFE brand ,it was first
launched in 1998.

 Today, NESTLÉ PURE LIFE takes pride in being the world’s most popular bottled
water brand.

 The NESTLÉ PURE LIFE brand is now one of NESTLÉ’s billionaire global brands,
Present in 30 countries spanning 5 continents.

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Nestle Organization Structure
A company’s organizational chart typically demonstrates relations between people
within an organization. Such relations might include managers to sub-workers, directors
to managing directors, chief executive officer to various departments, and so forth.
When an organization chart grows too large it can be split into smaller charts for
separate departments within the organization.

The different types of organization charts include:

Hierarchical
Matrix
Flat (also known as Horizontal)

Nestle Company is a decentralized organization that is organized according to the

matrix structure. Nestle as a decentralized organization permits to subordinate branches
to enjoy a proportionately high-level of independence. Although it still makes major
strategy decisions at the headquarter level, daily operations are left up to subordinate
branches to derive and perform. The responsibility for operating decisions is push down
to local units.

In organization structure, Complex system is a system that is comprises a large number

of entities that display a high level of nonlinear interactivity. There are number of basic
observations that have been made through the examination of complex systems, mainly
using computer simulation and the mathematic of non-linearity.

Complex systems are usually open systems. Nestle, over its long historical
development from a small village operation to the world’s leading food Company, has
illustrate an excellent capability to adjust to an ever-changing external environment,
without losing its basic beliefs and core values, so important for long-term success.
Over the years to come, this capability will continue to be challenge even more as
Nestle is growing in size and complexity up to a dimension, which demands a
continuous development of its organization and of the way in which it run.

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Nestle Organization Chart
In Organization chart, we can see that the management of Nestle is also divided into 3
types’ top-level management, middle level of management and low-level management.

Top Level of Management

It contains of board of directors, chief executive or managing director. The top
management is the final source of authority and it manages aims and policies for an
initiative. It dedicates more time on planning and coordinating functions.
The role of the top management can be summarized as follows:
Top management broad policies of the enterprise and lays down the objectives.
 It issues necessary instructions for preparation of subdivision procedures,
schedules, budgets, etc.
 It prepares strategic policies & plans for the initiative.
 It appoints the executive for middle level for instance departmental managers.
 It coordinates & controls the activities of all the departments.
 It is also responsible for maintaining a contact with the outside world.
 It provides direction and guidance.
 The top management is also responsible towards the stockholders for the
performance of the initiative.

Middle Level of Management

The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the operative of their department. They devote
more time to directional and organizational functions. Their role can be highlighted as:
 They execute the plans of the organization in accordance with the policies and
directives of the top management.
 They make plans for the sub-units of the organization.
 They participate in training & employment of lower level management.
 They understand and explain policies from top-level management to lower level.

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  They are also responsible for inspiring lower level managers towards better
performance.

Lower Level of Management

Lower level is also known as operative/supervisory level of management. It contains of
supervisors, superintendent section, officers etc.. Their activities include –
 Assigning of jobs and tasks to various workers.
 They instruct and guide workers for day-to-day activities.
 They are responsible for the quality as well as quantity of production.
 They are also entrusted with the responsibility of maintaining good relation in the
organization.
 They communicate workers problems, suggestions, and recommendatory
appeals etc. to the higher level and higher-level goals and objectives to the
workers.
 They help to solve the complaints of the workers.

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Culture of Nestle
People are the essence of Nestlé. Our work environment is energetic and collaborative.
Our people are empowered to impact the business while advancing their skills and
building their knowledge. Nestle asks its employees to bring their dedication,
determination and great ideas to the table. At Nestlé, you’ll find an enthusiastic team
behind you, ready to hear your ideas and share in the challenges and successes.

A high performance culture supported by differentiated rewards and development is key

to the delivery of individual and business objectives. This is driven by the alignment of
clear and challenging responsibilities and priorities and ensuring that employees are
aware of how their work impacts Nestlé. Your performance is the most important factor
in determining your opportunities within Nestlé. If you’re keen to take on new and bigger
responsibilities, you have to show that you’re able to do so. You have to demonstrate
through our performance evaluation process that you have performed strongly and
consistently over a number of years. This doesn’t just mean hitting your results; you
have to show that you have achieved them in the right way. How you achieve is as
important as what you achieve. We should stress the words ‘strongly’ and ‘consistently’.
It is important that you’re able to make a significant impact by what you do. You need to
point to great results – not once, but again and again. And to do that you need to stick
with a role and show that the results you’ve achieved in it can be sustained. At Nestlé,
the end and means are equally important. We value people who achieve results in the
Nestlé way.

Organizational culture of Nestle in Pakistan

Nestle’s in Pakistan organizational culture integrates excellence and corporate social
responsibility.

Nestle’s in Pakistan organizational culture indicates the company’s commitment to

maximizing the strengths of its human resources. A firm’s organizational culture defines
the traditions, values, and ways through which workers perform. In Nestle’s case,
employees are encouraged to focus on excellence in a collaborative way. As the
biggest foods company in the world, Nestle continually strives to improve its workforce.

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 It is essential to maintain a high performance culture to sustain this market position.
Nestle uses its organizational culture as a strategic approach to optimize its
performance by harnessing the strengths of its people.

Nestle’s organizational culture emphasizes taking care of employees and using their
capabilities to achieve high business performance.

Features of Nestle’s Organizational Culture in Pakistan

Nestle adjusts its organizational culture through the years. This aspect of the business
responds to changes in leadership as well as business situations. At present, the
following are the main characteristics of Nestle’s organizational culture:

1. Performance with Purpose

2. Real World Leadership
3. Collaboration

Performance with Purpose

Nestle employees perform with the purpose of achieving excellence for the company,
customers, communities, and the planet. This feature of the organizational culture
indicates Nestle’s commitment to fulfill its corporate social responsibilities. In essence,
employees are encouraged to address the concerns of Nestle’s stakeholders. The most
significant impact of this characteristic of the organizational culture is that it motivates
workers to do better. For example, Nestle employees are motivated to excel in what
they do, and to ensure that their efforts contribute to the improvement of the business
and its stakeholders.

Real World Leadership

Nestle’s organizational culture emphasizes leadership based on what employees,
investors, customers and communities really need. The company uses employee
knowledge to develop its leadership. More specifically, Nestle promotes employees to
leadership positions. This internal leadership development indicates that Nestle’s
organizational culture facilitates the use of employees’ work-based experiential

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knowledge to fuel business leadership and growth. As a result, the process of
organizational learning is maintained through Nestle’s organizational culture.

Collaboration
Teamwork is an integral part of Nestle’s organizational culture. The company believes
that collaboration enables the business to achieve excellent performance. While Nestle
recognizes the strengths of individual employees, its corporate culture sustains the use
of these strengths through collaborative efforts. For example, teams are used
throughout the organization. Through this feature of the organizational culture, Nestle
supports synergy in its human resources, instead of just relying on separate individual
efforts.

Organizational culture of Nestle in China

A Nestle in China. Nestle in China organizational culture emphasizes support for
people, learning and diversity.
Nestle organizational culture supports the company’s industry positioning goals. As the
biggest player in the global foods products market, Nestle uses its organizational culture
to attract customers and qualified employees. A firm’s organizational culture defines the
traditions, habits and values that influence workers’ behaviors. To ensure business
efficiency in production and service, Nestle organizational culture encourages learning.
In a way, the continuing evolution of the organization reflects the firm’s effectiveness in
applying its corporate culture to achieve the desired levels of human resource
capabilities. This condition highlights the significance of organizational culture as a
success factor in Nestle international business.

Nestle organizational culture supports operational efficiency to maximize productivity.

Service quality is also enhanced through the effects of Nestle corporate culture.

Features of Nestle’s Organizational Culture in China

Nestle organizational culture emphasizes human resource development and efficiency.
It supports business growth and success in the international food products market. This

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 organizational culture has the following characteristics, arranged according to Nestle
prioritization:

1. People-centricity
2. Individual learning
3. Organizational learning
4. Diversity and inclusion

People-Centricity
Nestle organizational culture prioritizes employees’ needs and development. The
company’s Core Values and Standards of Business Conduct emphasize the importance
of supporting people. This is understandable, considering that Nestle is a service
business. To ensure support for people, the company’s organizational culture
encourages employees to engage management to help improve processes and
procedures.

Individual Learning
Nestle organizational culture highlights the importance of lifelong learning. The belief is
that individual learning promotes productivity, quality, and business effectiveness. To
facilitate individual learning, the company offers training and development opportunities
through Hamburger University, internships, global mobility, and leadership development
programs. These efforts ensure that Nestle maintains an organizational culture that
motivates employees to keep learning.

Organizational Learning
Nestle organizational culture also supports organizational learning. The firm aims to use
individual learning to develop organizational knowledge to push the business forward to
new heights of performance. Nestle applies this feature of its organizational culture
through policies, programs and meetings that encourage employee feedback and
knowledge sharing.

Diversity and Inclusion

Nestle official human resource management policy states that diversity and inclusion
are key factors in the firm’s organizational culture. Nestle recognizes the importance of

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diversity and inclusion in optimizing HR capabilities to deal with an increasingly diverse
market. To ensure support for diversity and inclusion, Nestle organizational culture
encourages employees, suppliers, franchisees, and customers to give their feedback
and engage in meaningful conversations to improve the business.

Organizational Culture of Nestle in Canada

The Nestle Company’s organizational culture supports leadership in the biggest food
products and facilitates employee accountability. A firm’s organizational culture or
corporate culture refers to the customs, values and principles that affect the behavior of
individual employees, groups, and the organization as a whole unit. At Nestle, the
corporate culture reflects business goals in achieving leadership in the global market.
For example, the company aims to increase its portfolio of globally popular food
products. Also, its large organizational size is a contributor to the strength of economies
of scale, but the company needs to employ its organizational culture to address tough
competition from other food products firms, such as Unilever. Nestle’s organizational
culture has a direct effect on employees’ performance. Thus, this culture also helps
determine Nestle’s business performance. For long-term competitive advantage and
success, Nestle’s leaders must effectively use the organizational culture for the
workforce to achieve higher levels of performance and output.

As one of the biggest firms in the food products market, Nestle must ensure that its
organizational culture reflects the strategic objectives of the business. It is also essential
that this corporate culture remains relevant to the external business environment. Over
time, Nestle must adjust its cultural characteristics. Such adjustment should aim to
match Nestle’s business needs and empower its workers in fulfilling their roles in the
business. An appropriate organizational culture supports Nestle’s human resource
development programs necessary to maintain high productivity and competitive
advantage.

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 Features of Nestle’s Organizational Culture in Canada
The Nestle Company has a purpose-driven organizational culture. Purpose is viewed as
a factor that guides individual and group activity toward the success of the food
products business. Specifically, the corporate mission determines much of the
characteristics of the corporate culture. For example, the company integrates quality
and value as factors that influence employee behavior, necessary for business
competitiveness. The following characteristics define Nestle’s organizational culture:

1. Integrity
2. Leadership
3. Ownership
4. Passion for Winning
5. Trust

Integrity
This characteristic of Nestle’s organizational culture points out the significance of laws
and rules of ethics. This corporate cultural characteristic covers the various principles
that apply to Nestle’s human resources and HR management. For example, integrity
involves the principles of mutual respect, personal mastery, and innovativeness among
Nestle employees. Also, this feature of the organizational culture encourages workers to
ensure beneficial impact of the food products business on its external environment.
Such environment includes consumers, communities and Nestle’s suppliers. As a result,
this cultural characteristic involves the purpose of corporate citizenship. It is worth
noting that the fulfillment of corporate citizenship is emphasized in Nestle’s corporate
social responsibility strategy.

Leadership
The Nestle Company instills leadership in various aspects of business performance in
the consumer goods industry. For example, leadership in fulfilling job responsibilities is
covered in this characteristic of Nestle’s organizational culture. In addition, this cultural
trait pushes Nestle employees to achieve leadership in business direction and in
individual and organizational output. The company benefits from this aspect of the
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corporate culture in terms of the purpose of optimized strategy implementation and
fulfillment. Nestle’s individual and group decision-making processes are also supported
through this cultural trait.

Ownership
This characteristic of Nestle’s organizational culture focuses on the purpose of
accountability. Ownership is applied at the individual, group and organizational levels.
For example, Nestle inculcates personal accountability throughout its workforce.
Individual employees and their groups behave like owners of the business, thereby
ensuring strategic success in the process. Also, Nestle takes ownership and
accountability of all its activities, especially in terms of impact on external stakeholders
of the consumer goods business. The company has programs and institutional
procedures that support employees in applying this trait of the corporate culture.

Passion for Winning

Nestle’s corporate mission and vision require the company to keep improving in the
food products market. Passion for winning is an organizational culture characteristic that
compels Nestle employees, especially leaders to win for the purpose of excellence. For
example, the corporate culture drives managers to develop strategies for Nestle’s
product excellence. Moreover, this cultural feature motivates employees to keep
improving to better support business goals. Thus, this organizational culture trait
supports Nestle’s generic strategy and intensive growth strategies in terms of product
innovation and development.

Trust
This characteristic of the organizational culture establishes a foundation of trust in
Nestle. The purpose and objective is to develop employees’ confidence in each other’s
work. This condition helps Nestle in minimizing conflict and promoting beneficial
positivity in workers’ behaviors. For example, this feature of the corporate culture
facilitates high quality relations among employees, between employees and customers,
and between Nestle and consumers. This effect contributes to Nestle’s high
performance in the food products market.

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Organizational culture of Nestle in India
Nestle in India has an organizational culture of performance, which emphasizes the
significance of employee output. This corporate culture also points to the importance of
criteria or measures used to determine required output and adequacy of output. Nestle’s
organizational culture of performance has the following characteristics:
Focus on performance - individual performance and organizational performance
Focus on quality – quality of output in all areas
Efficiency – efficient work through technology and other tools

Nestle’s organizational culture is focused on performance and quality. This corporate

culture is observable in the long history of the company. The business has grown from a
small firm to a global powerhouse. Such success is significantly based on the ability of
Nestle’s organizational culture to instill high performance and quality in employees’ work
ethic to maximize business output. For example, because of high quality, the company’s
food products remain competitive in the global market despite tough competition. This
emphasis on quality is also a reflection of the emphasis on product effectiveness in the
firm’s mission statement. Nestle has also mastered efficiency through technology and
innovation in its internal business processes, including human resource development.

Diversity in Nestle
Respect for diversity means respect for other ways of thinking, other cultures, and all
facets of society, and requires openness and inclusiveness in all our interactions both
inside and outside our company.

Diversity and Inclusion are an integral part of the Nestlé culture. We aim to provide a
workplace culture that generates equal opportunities for everyone, where people are
treated with dignity and respect. We are expanding our efforts to strengthen this
inclusive culture. It is helping us leverage the unique skills, knowledge and experiences
of our diverse workforce.

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Inclusion
Gender Balance has been a priority for us since 2008, and it helped us to increase the
number of women at all levels in the organization. We want to be a gender balanced
company by creating the enabling conditions in our work environment to achieve annual
increases in the percentage of women managers and senior leaders. Our global and
local initiatives on gender diversity include:

Development opportunities: mentoring and coaching programs

A flexible and supportive work environment

Role model events, round tables and network discussions

Leadership development training and unconscious bias workshops

Hofstede Value Dimensions

Power-Distance
According to Geert Hofstede’s Cultural Dimensions Theory, power distance means that
the members of any organization or institution accept the fact that power is not equally
distributed. However, it does not measure the distribution of power in any culture. It
analyzes the way people feel about the unequal distribution of people among the people
within an organization or institution. Nestle’s has a culture with low power-distance. This
means that power relations in the organization are democratic. Also this explains that all
the employees in the organization are treat as equals. That explains that Nestle is a flat
organization and there are few levels of management levels.

Individualism vs Collectivism
The Nestle organization has a collective culture. The employees in the Nestle
organization all tend to work in groups. Group work is more preferred in the
organization. They work more as a whole to obtain than the goals of the groups, rather
than working towards individual goals. Hence, the well being of the group is valued
more than the well being of individuals.

Uncertainty-Avoidance
Nestle does not believe in making dramatic one-time changes. The organization rather
believes in continuous improvement. Continuous improvement is improvement to
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survive in the market over the years. The employees of the firm reacts little to changes
made in the organization. It is good for the organization because the organization
doesn’t have to worry before making changes and advancing with the emergence of
new and advanced technology.

Masculinity vs Femininity
This part tells us if the organization stereotypically assets masculine values on the
culture of the organization. Nestle doesn’t employ more males than females. They look
for talent in their employees and they are not biased towards any particular sex. This
type of culture is very motivating towards both the sexes and makes sure that there is
no unfairness towards any sex in particular.

Long-term Orientation vs Short-term Orientation

The Nestle organization doesn’t believe in making short-term profit and increasing
shareholder’s wealth. They make long-term strategic plans and want to grow over the
years. They plan for the future to obtain long-term strategic goals for the organization.

Indulgence vs Restraint
Nestle provides its employees with recreation facilities. The company does not follow
strict social norms. The company is more open to the immediate needs and personal
desires of its employees.

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SWOT ANALYSIS OF NESTLE
Strengths and Weaknesses are being analyzed on the basis of internal environment
and internal organizational factors. Whereas, Opportunities and Threats are being
identified on the basis of external and internal environment and factors.

Strengths
Following are some strengths for Nestle Pakistan Limited
i. Strong brand image
Having strong brands like NESCAFE, MAGGIE, CERELAC etc. had given Nestle
a strong position in the industry. Nestle is world reputed and recognized
organization which has positive impact on people perception about it.
ii. Loyalty from customers
Loyalty from customers is also the major strength for the company.
iii. Decentralized culture
Employees are also loyal due to the decentralized culture of the company.
iv. Strong financial position
Nestle has strong financial position which enable it to attract more new investors
and help it to raise funds from banks.
v. Strong core competencies
Nestle has strong core competencies i.e. highly expert human resources which
enable it to produce new high quality innovative products.
Company has the ability to compete in a dynamic environment.

vi. Modern operation facilities

They have highly developed websites. They are always ready to answer any
query online. Nestle modern operation facilities are also important strength which
enable it to produce high standardized quality products.
vii. Own distribution network
Nestle has its distribution network which make it easy to provide Nestle products
at all possible places on time.

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viii. Parent company support
Nestle has strong support from its parent company (Situated in Switzerland). So,
this support helps the company to flourish.
ix. Good quality products
The world largest processed food and beverages Company. And the good quality
of the products has given it a strong position.
x. Worldwide existence
A presence in almost every country. This worldwide existence (Africa, America,
Asia, Europe, and Oceania) is a key strength of Nestle.
xi. Introducing new products
Continuously introducing new products on frequent basis thus expanded its
products offering. Example, coffee capsules of different flavors.

Weaknesses
Following are some weaknesses for Nestle Pakistan Limited
i. Dependent on the outside Milkmen
Raw material is basic input for every organization and milk is core raw
material of Nestle for which it is dependent on the outside Milkmen. Nestle
has no single its own dairy form which provide high quality milk to the firm.
ii. Packaging dependence
Another weakness of Nestle Milkpak Ltd. is that its total packaging depends
upon Packages (Pvt.) limited.
iii. Complex supply chain
Having complex supply chain management.
iv. Advertisement
Company mostly advertises its milk products, advertisement of confectionary
products is not so better.

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Opportunities
Following are some opportunities for Nestle Pakistan Limited:
i. Can establish its own diary forms
Nestle can go for “Backward integration” and establish its own diary forms.
Currently, Nestle is dependent on the outside Milkmen. Nestle should open its
own diary forms because Nestle has strong financial position.
ii. Potential to expand to smaller towns
Potential to expand to smaller towns and other geographies. The company
has the option to expand its product folio by introducing more brands.
iii. Open stores
Company is trying to open new stores in universities. Company can enter in
ice cream products and snacks.

Threats
Following are some threats for Nestle Pakistan Limited
i. High Price
Purchasing power of people in Pakistan is decreasing day by day and prices
of Nestle products are comparatively high. So in long run, Nestle may face
problem if such trend continues.

ii. Fierce competition

In some products Nestle is facing fierce competition. For example, in Milkpak
Nestle is facing competition from Chaudhary Dairies Limited who has
launched “Dairy Queen” at lower prices which has decreased market share of
Milkpak. CDL has also launched “N’rish” milk powder at lower prices, it also
has capability to decrease the market share of “NIDO”. So in long run, if
Nestle do not respond to such competitors, they may create a lot of problems
in other products also.

iii. Instability of Government

Pakistan politics structure is very instable and is depressing economic
activities and volatile business environment in the state. Such instable
environment may influence the performance of all industries operating in state
and Nestle may also be influenced from such trends of instability.

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PESTEL Analysis
1. Political Forces
If government imposes heavy taxes on the industry then it badly effects the
industry growth. The taxes impose is from government side and it varies from
industry to industry. FMCG’s have to pay heavy taxation, change
sin any taxation system can badly effect Nestle’s productivity & sales(profits).
Nestle’s some product has like butter and cream which has more taxes.
i. Labor Laws
Labor is being privileged here having all the laws. Nestle company also
follow these law like government announce minimum salaries of an
employ Rs 6000. But if any labor laws changes it will affect the Nestlé’s
management all to gather because it’s difficult to get potential labor now a
days. Nestle’s main aim to or key potential factor is to keep their
employees happy &contended because as one said happy employees
happy management & it leads to prosperity.
ii. Laws on hiring & promotions
Hiring & promotion is followed by law. People with better capabilities
are privileged because they deserve it, for the betterment of the
organization as well as a well educated & skilled experienced person is a
precious asset for the company suit should be hired onbetter term &
conditions and be promoted on the basis of it capabilities.
iii. Environmental Protection Laws
They do concern for environment and contribute more and more for the
betterment of environment. Nestle’s considers a lot about CSR, Nestle is
worldwide a environmental company so as Nestle Pakistan, Nestle care
for poor & urban areas, in the start Nestle gave the concept about friendly
environment & to care for your environment.
iv. Foreign trade Regulations
Foreign trade regulation does not affect the overall policy and the working
of the Nestle because they operate nationally not internationally. However

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 it affect when the condition get so worst. But as the last two years whole
the world is suffering from great depression so any economy of the world.
v. Political instability
Foreign trade regulation does not affect the overall policy and the working
of the Nestle because they operate nationally not internationally. However
it affect when the condition get so worst. But as the last two years whole
the world is suffering from great depression so any economy of the world.
The government stability also plays a great role for any industry. In
Pakistan government face lot of difficulty from the side of terrorism and
also its activity that badly effect environment of the country which is totally
very upset. Recently in Punjab instability of government creates lot of
problem for
the industry like shortage of electricity that badly affects the industry
operational process. Nestle have not much affect this condition but in
future it may be face some difficulty for operating.

2. Economic Forces
i. Economic growth rate
Economy growth rate accelerate is 7% and plus which eventually affect
the Nestle productivity & sales.

3. Social Forces
i. Social Forces & Cultural Health Consciousness
Today people are more health conscious so Nestle products by identifying
this need of the people they are also producing health conscious products
with more elements of pure & quality, which create the market for Nestle &
trend of its products in the market. However when launches it Milk in 1988
back then it was not so much popular but now a day’s people are more
health conscious.

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 4. Environmental concerns
About the environmental concerns of Nestle products are the symbol
of good health & nutrition no matter which product is under consideration.
Nestle also consider a lot about the environmental factors because they are very
much socially responsible towards nature & humans.
i. Work life quality
Quality of work life is very safer & environment friendly company of the
world as every MNC is maintaining the same standards abroad with a
slight cultural changes maintain the efficient scale of production which
normally called economies of scale.

5. Technological Forces
i. Total spending on R&D
Spending on R&D is long term investment for any organization. Nestle has
R&D department and Nestle total spending on R&D 70 million because
with true technological changes this research & development cannot takes
place. So with the help of technological changes Nestle can enhance its
products & diversify its portfolio of products.
ii. New communication technology
All the modern as well as traditional ways of communication are being
adopted by Nestle including own emails, letters, faxes and monthly visit
indifferent offices of Nestle for better communication among customers.
Nestle has also established own web site which can be visited any one for
most recent news innovation and activities being taken in the organization
with the technological change adoption the whole organization can be
increased.

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 6. Legal Forces
i. Changing nature of regulation.
ii. Need to adhere to global regulations and changes across different
international markets.

Nestle’s Corporate Social Responsibility in Global

The company’s corporate social responsibility (CSR) strategy, through the Nestle
Foundation and related programs, satisfies stakeholders’ interests in the food products.
Nestle’s corporate social responsibility (CSR) contributes to the strength of the brands
of the food products business. At the same time, stakeholders significantly affect
business performance. In the case of Nestle, these stakeholders include consumers,
employees, investors, suppliers, and communities. The company’s corporate citizenship
and social responsibility strategy prioritizes these stakeholders according to their
importance to the business. As a major firm in the global food products market, Nestle
utilizes its corporate responsibility strategy as a supporting approach to maintaining
industry position and business sustainability.

An effective corporate social responsibility (CSR) strategy adds to Nestle’s efforts for a
sustainable business in the food products industry. Stakeholders’ interests are satisfied
through appropriate approaches that ensure holistic corporate citizenship and
responsibility fulfillment.

Nestle’s Corporate Social Responsibility Initiatives

Nestle implements a systematic strategy to fulfill its corporate social responsibilities.
This strategy supports the company’s corporate citizenship ideals, especially with
regard to satisfying the expectations and interests of consumers as stakeholders. For
example, Nestle’s CSR prioritization puts consumers at the top. Business sustainability
is also maintained through the strategy. Such corporate responsibility strategy
addresses the interests of the following stakeholder groups, arranged according to their
significance in Nestle’s food products business:

1. Consumers (Highest Priority)

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2. Employees (Inspire and Motivate)
3. Investors (Innovation for Success)
4. Suppliers (Mutually Productive Relationship)
5. Communities (Sustainability)

Consumers (Highest Priority).

Nestle’s corporate social responsibility strategy assigns the highest priority to
consumers. These stakeholders’ interests are focused on product quality and price, as
well as the environmental impact of the food products business. Consumers are
significant because they directly determine Nestle’s profits. For example, satisfied
consumers increase the company’s revenues from repeat sales. Nestle’s corporate
responsibility strategy satisfies these interests through extensive innovation processes
and quality assurance policies for a diverse product mix. The company’s CSR strategy
also extends to address the demands of this stakeholder group for business
sustainability. For instance, Nestle continues to enhance its production processes’
environmental footprint. As a result, an effective image of corporate citizenship is
created to influence consumer perception. These corporate social responsibility efforts
suggest that Nestle maintains its position in the food products market partly by
satisfying consumers’ various expectations.

Employees (Inspire and Motivate).

Nestle considers employees as the second priority in its corporate social responsibility
strategy. The importance of these stakeholders is in their direct influence on
organizational performance in the food products industry. Employees are interested in
competitive compensation and holistic career development. For example, suitable HR
policies for work-life balance help satisfy workers’ needs. Nestle’s corporate
responsibility strategy addresses these interests through high compensation that
effectively competes against other employers in the labor market. In addition, the Agile
Working program addresses these stakeholders’ interest in holistic career development.
In this program, Nestle’s CSR approach includes flexibility for employees to work
anywhere and anytime, as long as they satisfy their job roles and responsibilities. This
program also contributes to the company’s sustainability efforts by reducing employees’
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travel, thereby ensuring corporate citizenship fulfillment. Moreover, basic concerns such
as workplace safety and healthful work practices are considered. Thus, Nestle satisfies
this stakeholder group’s interests through a multi-pronged approach to corporate social
responsibility.

Investors(Innovation for Success).

Investors are given the third priority in Nestle’s corporate social responsibility strategy.
This stakeholder group is interested in the performance of the food products business.
For example, higher revenues and profitability increase investors’ satisfaction and
confidence in the company. Investors are significant in influencing the capital available
to fund Nestle’s business. The company addresses these stakeholders’ interests and
the corresponding corporate responsibility through continuing business expansion. For
instance, a history of acquisitions to ensure dominance in the food products market
characterizes Nestle’s intensive growth strategies. Such CSR strategy also includes the
company’s efforts in product innovation for higher quality, and process innovation for
better efficiency, productivity and sustainability. The satisfaction of this stakeholder
group increases Nestle’s success in addressing its corporate citizenship.

Suppliers (Mutually Productive Relationship).

Nestle includes suppliers in its corporate responsibility strategy. As stakeholders,
suppliers have interests in profitable business with the company. This stakeholder group
is significant in affecting Nestle’s business capacity, based on the availability of
materials for producing food products. As part of its CSR efforts, the company maintains
the Partner to Win strategic program to ensure mutual benefit between the business
and this stakeholder group. The program satisfies suppliers’ interests through extensive
collaboration that supports Nestle’s and suppliers’ growth. For example, the program
provides strategic plans to guide suppliers in growing together with the company. In this
way, Nestle’s corporate social responsibility policies on sustainability also influence
suppliers’ business activities, thereby maximizing the benefits of corporate citizenship.

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Communities (Sustainability).
As stakeholders, communities are included in Nestle’s CSR strategy. Communities’
interests include environmental protection and community development. This
stakeholder group significantly influences how consumers perceive Nestle. For
example, the company is more likely to gain positive consumer confidence through
community involvement. The Nestle Foundation is the company’s main corporate
citizenship body that satisfies these interests. The Foundation funds community
programs for sanitation, nutrition, and personal development. These corporate
responsibility initiatives enable Nestle to contribute to community development and
business sustainability. The stakeholder group provides positive feedback that boosts
corporate and brand image, which is one of the firm’s strengths (Read: Nestle’s SWOT
Analysis: Strengths, Weaknesses, Opportunities, Threats). The resulting impact of such
corporate social responsibility efforts on brand image translates to sales and
attractiveness of food products from the company.

Social responsibility towards Human rights

Rural Development
In Rural Development, Nestle’ launched an Entrepreneurship Development Programme
at Institute of Business Administration, Karachi, with a focus on agriculture. It is a
weekend certificate programmed spread over 4 months. A batch of 40 students will be
trained each year for three years. The technical knowledge and skills that they acquire
will enable them to make use of modern agricultural and business management
practices comprising on-farm and off-farm value addition innovation and growth. Two
other Rural Development projects, which Nestle’ is proud to share with people is its
Chaunsa Project – under which Nestle’ continued to implement Best Farm Practices in
the Chaunsa Mango Sector – and its support for Driver Training Facility at the National
Highways and Motorway Police (NH&MP) Training Institute in Karachi. This will be
along the same lines as the NH&MP Training Institute in Sheikhupura, which it has been
supporting for years.

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People
Nestlé’s Kero Aitemaad Programme designed to attract career aspiring women has
grown exponentially in 2015. Seven seminars have already been conducted. More than
850 girls were reached out to across 76 colleges and universities nationwide. The main
achievement is that Nestle’ has created opportunities for women in Sales and
Technical.

Understanding the Risks to Children

Nestlé co-funded a Strengthening Child Protection workshop led by supplier Wilmar.
The workshop was a multi-stakeholder consultation to gain insight from palm oil
businesses, and document challenges encountered by business to ensure the well-
being of children of plantation workers. As well as Nestlé, representatives from UNICEF,
the International Labour Organization (ILO), Humana Child Aid Society, the Indonesian
Consulate and other important players in the palm oil industry contributed to the
discussion.

Tackling Human Rights Abuses in Palm Oil

We have completed our first human rights impact assessment in an upstream supply
chain – our palm oil supply chain in Sumatra, Indonesia. By assessing a supplier’s mill,
and interviewing more than 200 employees, community members and other
stakeholders, we can identify the key human rights and labour challenges to be
addressed, and formulate solutions.

Improving Labour Standards in Seafood

In partnership with the Thai government and a supplier, we have developed a showcase
fishing vessel to ILO standards for use in training to address labour rights abuses in the
seafood industry. The boat will be used to train owners and crew members and
demonstrate the standards we expect on all boats.

Improving Sugar Workers’ Conditions in Mexico

Working with Proforest we are tackling labour rights issues and child labour in the sugar
cane industry in Mexico. Focusing on the La Gloria mill, we have implemented
measures and training that have resulted in a significant drop in child labour. We have

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also renovated three workers’ shelters in 2017, providing workers with access to
sanitation, including showers, better cooking facilities, and individual bed and storage
space.

From Labour to Education

Child labour is a complex and sensitive issue, nowhere more so than in the cocoa
supply chain in Côte d’Ivoire. Through education, awareness raising and address the
root causes, we are making real progress in taking children out of labour and into
school.

Remedying Labour Violations in Mexico

Labour rights abuses have been identified in the coffee industry in Mexico. We are
working with the specialized NGO Verite to assess violations as a first step towards
building a system that will enable us to act more systematically on remediating such
violations.

Ethical Issues of Nestle

As a nutrition, health, and wellness company, Nestlé holds the responsibility to promote
its products in an encouraging balanced consumption, especially for children. Nestlé
states that all of their products are always advertised responsibly by adhering to
detailed policies and principles, along with voluntarily signing up for industry pledges in
more than fifty countries. Nestlé promises to continue to review and update its
principles to ensure that all of their products are advertised legally and in an honest
manner. In the past, Nestlé has experienced a few ethical issues that have resulted in
dishonest and unlawful scenarios.

In Pakistan, Nestle started its water plant due to which, the water level was decreased
from the nearby village. This resulted in a scarcity of water due to which the villagers
had no choice but to drink the dirty water, which lead to many people getting sick The
blame was put on Nestlé because of the well that had been dug in their community that
not only is very dirty, but very scarce. “The water is not only very dirty, but the water
level sank from 100-300 to 400 feet,” Dilwan says from an article in Worldcrunch. The
village requested for clean water to be piped in and Nestlé refused their

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request. Nestlé gains its success from countries, such as Pakistan, that have
extremely bad drinking water. The problem that Nestlé was facing was the fact that
they were telling people that their product, Pure Life Water, is the answer to their
problems. However, Nestlé was selling the Pakistani people, their own ground water
that they have enhanced with minerals to make clean and healthy for them by at the
same time, leaving them with no water coming out of their own house faucets. The little
water that did come out of their faucets was dirty and undrinkable. The only way that
Nestlé helps Pakistan people is by making them purchase Nestlé’s water that can only
be afforded by a few families.

Nestlé defended itself by stating the fact that they have built two water filtering facilities
that were providing over 10,000 people in Pakistan with clean drinking water, saving
lives. The company also brings the communities that it sells its water to tax dollars that
are welcomed by officials, and is fully supported by an armada of lawyers and Project
resource people. Nestlé pumps several million cubic meters annually and transports
the water in tanker trucks to bottling plants. Nestlé is draining developing countries from
their ground water to create their Pure Life bottled water that is purified and cleaned
with minerals for the people to purchase back at high prices.

Restricting trade union rights through fake “supervisors’’

In countries such as Pakistan, Indonesia and Philippines, Nestlé management created
hundreds of “supervisory” positions on production lines. These “supervisors” don’t
supervise anyone, have no authority and have the same (or worse) wages and benefits
as workers. They’re different in just one way ... they can’t join the union.

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Nestlé Water workers were denied the right to water
The Nestlé Kabirwala plant in Pakistan started producing "Pure Life" bottled water in
2000. But the only drinking water workers were allowed was ordinary tap water. This is
despite daytime temperatures reaching 47 C° in the summer! In April 2006 the union
won the right to have water dispensers installed in the plant, supplied with Nestlé "Pure
Life" water. So after 6 years of producing Pure Life bottled water, workers finally won
the right to drink it.

Interfering in trade union elections

From August 2006 to July 2007 the management of Nestlé Pakistan interfered in union
elections, harassing then illegally firing the candidate for union president. On 28 July
2007 a ruling by the Labor Court finally forced Nestlé management to respect the right
to free union elections and end its harassment of the elected union president.

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Communication at Nestle
Communication Strategies followed by Nestle:
 At Nestle the working environment was very formal.
 People were encouraged to participate and they could easily communicate with
their co-workers. Few of the things that we noticed about their communication
flow were Mostly downward communication occurs. However employee
suggestions were also welcomed. They can talk to their superiors easily.
 Employees and workers are encouraged to participate in decision making to
some extent. They are asked their opinions in any new package that the
company is offering.
 But mostly at higher level, GM of all the departments interacts with each other for
major decisions. And the lower level is informed about the decision.
 No trend of memos, unless there is a major event or an unexpected holiday
announcement. There is not much written communication.
They mostly contact through a phone call or email. In a way we see that there is an
open communication channel within the company.
There is the network of communication links within organization, to achieve the goals as
well as institutional objectives.

INTERNAL COMMUNICATION
Nestle has maintained open communication channels both downward and upward in the
company’s hierarchy. This is quite effective in creating a good working environment for
the employees.
Mostly all the conversation that is being carried on is through e-mails within
departments and employees. All sorts of announcements are made through e-mails
most of the time no such memos are used.

Downward Communication
 In Nestle message which is sent to workers by top authority is called downward
communication.

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 It is the is deliberate creation of communication channels by the top authorities on
formal lines to inform, instruct, direct, suggest and evaluate employees in the
process of coordinating individuals efforts towards organization goal.
 Downward communication takes place when managers like to inform or educate the
employees.
 Downward communication is also utilized by the managers to send feedback to the
subordinates as a response to the upward communication.

Upward Communication
 The message or any other data which is sent to authorities by the employees is
called upward communication.
 Through this, top management can maintain continuous touch with the low levels.
 In absence of this communication top level will be isolated and in the long run
managers will be totally fail to manage people and work
 Examples include, Complaints about working conditions or about any other
negligent employee. The medium used include letters and emails.

EXTERNAL COMMUNICATION
In Nestle the external communication means sending messages to persons outside the
company. The sources used by Nestle for its external communication are as follows:
 By Annual Report
 Media Advertisement
 Print media advertisement
 By giving packages
 Through services
 Through Presidents message

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Barriers to Communication 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 overload 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.

CROSS CULTURAL COMMUNICATION

From Nestle’s cross cultural communication we can learn several things about the
important link between the communication within a big multicultural company and the
ability to understand each culture. Indeed, as businesses are becoming more and more
intercultural and mostly thanks to globalization factors, it becomes crucial to for
companies to reflect their capacity to adapt a global understanding of foreign cultures,
from an internal point of and even from an external point of view. Indeed, on one hand,
if a company has some subsidiaries abroad, as Nestlé does, the key is then to
understand that each culture has its own way to work to provide the best performance
within the company. Then, in another hand, is it also essential for a company from an
external point of view to understand its customers on different countries, to better fit
their needs.

It is critical to notice that the goal of a top management team is to ensure that they are
understanding and being understood across cultural boundaries. Knowing that, one
could then classify different lessons to strongly take into account, in order for a

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company to provide the best communication tools as possible in its intercultural
process:

Giving Written Instructions

In the case of Nestlé, one see the importance of taking notes in order to then better
communicate the information. Moreover, even if the company never oblige its
subsidiaries to follow its instruction to the letter, it is essential to provide a guideline that
is materialized by written instructions. Bases on these instructions, subsidiaries will then
be able to adapt it according to their own needs and cultural factors.

Making Sure People Understand

This lesson is following the previous one, in the sense that written instructions are made
to help people to understand the ideas and spirit of a company. But it also has to be
verified. It is then important for a company to obtain regularly feedbacks and question
about the provided documents. Moreover, this process is noticed at Nestlé during the
moment when participants from various markets explain what they did for the success
of the communication effort in their terrain.

Reinforcing Communication Tools

Because different subsidiaries are away from each other, and also because the good
ability to communicate within its different structures is one of the most crucial things for
a company to avoid misunderstandings.

Benefiting From A Multicultural Top Management Team

We previously noticed that workforces are becoming more and more heterogeneous,
but what about the top management teams that are often located in headquarters?
Nestlé is then giving a perfect illustration of a global understanding while putting people
from different countries at the head of its headquarters in Switzerland. Indeed, its
“Group Management” is then composed of two Austrian people, one Spanish, one
Swiss, one Mexican, two Americans, one British and also one Swedish.

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Be Flexible, Tolerant And Aware Of Cultural Taboos
As seen in the Nestlé case and following the idea to provide written instructions, it is
very important to adopt a flexible way of thinking, to fit each subsidiaries needs. The
notion of tolerance is a key in intercultural communication: it is not all about respecting
each people’s beliefs, but also to be tolerant of different practices and methods of
application across countries. In the same time, being aware of cultural taboos is
essential to avoid problems of communication between a company and its subsidiaries.
In the Nestlé case, the Human Resource Director in each country is deciding by him the
manner and method of “Principles” dissemination.

Encouraging Interaction
It is also an essential thing to encourage interaction within the company. At Nestlé, the
establishment of the International Training and Conference Centre has been following
this objective of giving employees the possibility to express themselves about the way
to apply process and also to interact between each other to better share knowledge of
way of doings things.

CROSS CULTURAL NEGOTIATION

Cultural differences play a significant role in negotiation styles. Both spoken and
nonverbal communication can impact a delicate negotiation between two or more
parties. Taking the time to learn about cultural differences and business etiquette is an
important part of preparing for any important business negotiation.

Time Considerations
One basic difference between cultures is the way time is perceived. A culture's
relationship to time defines it as either a monochronic or a polychronic culture.
Characteristics of a monochronic culture include a preference and expectation for
schedule adherence, meeting agendas, scheduled breaks and detailed communication.
Countries considered to be monochronic are countries such as the U.S.(Nestle
company), Switzerland, Scandinavia and Germany. Japan also falls in this category. In
contrast to the monochronic cultural perspective on time, polychronic cultures start and
end meetings spontaneously, take breaks as necessary and are comfortable with a less

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structured meeting where dialogue and information flows freely. Countries identified as
polychronic include France, Italy, Greece, East African countries and Mexico.

Formal Versus Informal Negotiation Styles

Many negotiations are less than successful, ending abruptly when one party decides
they are being rushed or disrespected. Different cultures' expectations can differ
radically about the formality of the negotiation process. For instance, if an Nestle
company called a Japanese negotiator by his first name at a first meeting, the Japanese
businessperson would be offended. In the Nestle company, a person's first name is
often used as a sign of friendliness. This is representative of the type of
misunderstanding that undermines many negotiation efforts. A formal style of
negotiation includes using a person's titles and refraining from conversation directed
toward a person's family or private life. Anecdotes are considered too informal for
people to introduce into the conversation. The Germans and the Japanese are thought
to be more formal than Nestle company (United States)

Negotiation Objectives
Business people from different cultures have varying objectives when they participate in
a negotiation. This is a very important distinction that should be understood prior to
attending a meeting. Nestle company attend negotiations seeking an agreement, often
in the form of a contract. The Spanish also strive to obtain a contract as a sign of
successful negotiation. Conversely, in Latin American countries, parties focus on
developing the relationship. Similar to the Latin American culture, the Japanese are
likely to focus more on the relationship being forged and less on the details.

Eye Contact
Interpreting Behaviour is always a challenge in an important negotiation. Understanding
both verbal and nonverbal communication is helpful for interpreting the actions of
someone from a different culture. A good example of nonverbal communication that can
be significant is eye contact. In the U.S.(Nestle company), Canada and Arab countries,
direct eye contact is considered a sign of trustworthiness. Where misunderstandings
could crop up is how differently Asian countries view eye contact. In Asian society,
looking down is considered a sign of respect.

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Example cross cultural negotiation business between Nestle company and Japanese
company.

BUSINESS PRACTICE AND CUSTOMS

Many Japanese businessmen tend to wear dark suits of navy blue, dark gray or brown.
They consider these colors to be acceptable at business meetings, for working in the
company, for meeting their client, and the like. The suits and neckties that they wear are
quite conservative.
A Japanese businessman usually fastens the high button of his suit when he comes into
a room to meet with his Nestle counterpart to discuss possible business negotiations.
Based on Japanese business practice, it is common for a Japanese businessman to
fasten that button before he greets his partner for the first time or when he talks to a
superior or an older person, while standing. However, it is permissible for him to
unbutton it while he is sitting in a chair. If his superior or a client comes in to introduce
him to another person while he is seated, it is also a common practice for him to fasten
the higher button first and to stand up in order to talk to them.

Business Card Exchange

Among the Japanese, when businessmen meet each other, business begins with the
exchange of business cards. "Each day in Japan, an estimated 10 million to 12 million
of the 2-by-3-inch meshi (business cards) are passed in a precise ceremonial exchange
of bows that help keep this status-oriented society together.

Taking Out a Business Card

There are many different methods of taking a business card out of a business suit. One
way is to keep some business cards in a small pocket located on the lower left part of
the inside of the jacket. Another way to take out a business card is to keep the cards in
a small wallet. Either way is acceptable as long as the businessman does not spend too
much time looking for his business card, thus making his partner wait.1 When giving a
business card, picking up papers from a briefcase, putting papers back into a briefcase
and the like, it is considered very important to the Japanese not to make one's
counterpart wait.

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Consulting Service
When an Nestle company wishes to offer his services as a translator, an interpreter, or
a negotiator to a Japanese firm, the Japanese firm becomes the client. In this situation,
it would be rude for the consultant to speak of the service fee such as "We charge $50
an hour if the job requires a day but if it takes two, we will charge $40," and so on. The
right time to speak of the service charge is determined by the client, after finding out
whether or not the client can utilize the service. The first step is for the Japanese to
determine the value of the service. When the client feels a necessity to ask for a
service, he will usually inquire about the service charge. Nestle company may feel that
discussing the charge may be a consideration for the Japanese client in accepting the
services. However, to many Japanese, it is a topic for the client to bring up. If the Nestle
firm starts talking about the service charge, the first impression the Japanese may have
is, "How dare you speak of the charge before we decide to accept your services!" The
Japanese company clearly knows that the consulting service fee will be assessed of it
relies on their service. They know that "there is no free lunch." The consultant should
wait until the client starts talking about the fee.

Negotiations on Technology Transfer

When a Japanese company wishes to obtain the technology for the manufacture and
sale of a product from an Nestle company, the issues for the Japanese negotiating team
are the reliability of the technology and whether or not other companies have developed
similar products utilizing this technology. Unless the Japanese finds it worthwhile to
have the technology, negotiations on the royalty and/or transfer fee should not be dealt
with. To many Nestle negotiators prices are a part of the entire negotiation agenda,
however, price and/or royalty for the transfer is a second stage in the negotiations. A
Japanese negotiator would rarely discuss the price in the first stage. This should be
dealt with as a separate entity to be initiated be the buyer. In the American mind, costs
are always a consideration, but this is not necessarily true with the Japanese. As has
been pointed out, the first goal of the Japanese team will be determining the quality of
the technology and the potential advantage of possessing it. The content of the two
stages are entirely separate in the minds of the Japanese.

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 CROSS CULTURAL MOTIVATION
Motivation is internal and external factors that stimulate desire and energy in people to
be continually interested in and committed to a job, role, or subject, and to exert
persistent effort in attaining a goal. Employee motivation is very importance because
enthusiastic employees are not only more satisfied with their jobs, they also deliver
better customer service and higher sales. When it comes to motivating employees,
there is simply no downside. Empowering and encouraging staff members to do the
best job they’re capable of helps create job satisfaction, lowering turnover in an industry
that has a reputation for burning through its employees. And a happy, stable workforce
not only delivers better customer service, it is also more effective at building sales and
attracting repeat business.
Nestle operates in 130 countries. They manufacture around 10,000 different products
and they have manpower of near 250,000 around the globe. As a leading Nutrition,
Health and Wellness Company, Nestlé’s name is instantly recognizable. But what
excites new hires and keeps current employees engaged is much more than just our
name. So it is very important for Nestle to motivate their employees such as:

REWARDS & BENEFITS

 Passion to Win’ awards-These quarterly awards have been institutionalized to reward
those who over-achieve their targets. Long-service Awards- To recognize employees
who have been with the company for more than 30 years.
 Nestle Idea Award’- It was found from the correspondent that the company institutes
Nestle Idea Award every quarter to recognize and award employees who come up with
relevant and innovative ideas which have the potential of being implemented at Nestlé.
For all aspects of Reward Nestle apply the fundamental principles outlined below.
Reward Principles.
 Performance Driven -The level of your Reward is linked to your performance, hence the
highest performers will see the greatest Reward. There is also a direct link between the
performance of the business and the Reward we're able to offer.
 Competitive – Nestle benchmark all aspects of reward to ensure we offer all our
employees a competitive reward package.

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 Inclusive – Nestle reward programmed is designed to reflect the valuable contribution
which every employees makes, not just senior managers.
 Flexible – Nestle have made it top priority to allow employees to tailor the reward them
receive from circumstance, whenever possible or practical.

PERFORMANCES APPRAISAL
A performance appraisal, employee appraisal, performance review, or (career)
development discussion is a method by which the job performance of an employee is
evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor. Nestle give importance to their employees their
work place because Nestle totally depend on their quality, so quality achieved by the
Nestle on the bases their employees performance. So if employees are on right track so
company gives incentives to their employees.

COMPENSATION & BENEFITS

Compensation is a key part of Nestle Real Reward package and helps to attract,
motivate, and retain a workforce of top performance. Nestle philosophy is to provide and
maintain disciplined compensation programs which value long-term relationships with
employees while recognizing individual performance. Nestle is also committed to
offering compensation packages, including base pay, short and long term incentives
and benefits, that are competitive in today's market.
The following benefits are also provided to all employees, with no discrimination:
 Leave-Personal & Medical
 Children Education Assistance Scheme
 Provident Fund
 Group Insurance & Accidental Insurance Scheme
 Conveyance Reimbursement Scheme

MAINTENANCE
Nestle provides a very healthy working environment which is one of the reasons why
Nestlé’s employees state their commitment level to be very high.
In Nestle, management dealing with people is respect and trust. There can be no room
for intolerance, harassment or discrimination of any kind as they are the expression of

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 an elementary lack of respect. This principles suffers no exception and is to be applied
at all levels and under all circumstances.

SAFETY & HEALTH MEASURES

Nestle regards its people as its most valuable assets and places the highest priority on
protecting them. In every country where they operate, their company emphasizes the
need for safe working environment, which must meet their strict global corporate
standards.
Nestle are determined to provide safe working environment for all their employees,
contractors and visitors and Nestle are vigilant in continuing to implement Health and
Safety practices and programs at all their sites.

 Valuing our people by providing a safe place to work

 Identifying, assessing and reducing risk and preventing injury or illness to our
employees, contractors and visitors.
 Encouraging a similar Health and Safety commitment from our supplier and contractors.
 Consulting with employees and other stakeholders on Health and Safety.

CROSS CULTURE DECISION MAKING

The Nestle Corporation produced some of the finest instant formula in the world. It is an
international company with excellent product superb marketing skill, and code of ethic.
In selling infant formula worldwide Nestle successful in a number of markets including
Europe, North America and Asia. In particular, in Singapore it claim to have saved
thousands of lives of infant whose mothers could not nurse their babies.
From one perspective, even these facts it seem reasonable to take the same product,
the same marketing plan, and the same communication technique to market infant
formula in new countries. From a utilitarian perspective, too this approach seems to be
the right thing to do, all thing considered. So Nestle began marketing infant formula in
East Africa, using text book and tested general marketing principles that had been
successful in the number of markets. The result has been deaths of hundreds of
thousands of infants as a direct result of taken off breast milk.

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In this new environment Nestle failed to take into account a new context, a context in
which most customer cannot read direction on the formula labels, where clean water to
mix the formula is nonexistent, and where the poverty level is so high that mothers over
diluted the formula, thus starving their children .Moreover ,Nestle failed to realize that
some culture frame their experiences differently than other. In a number of tribes in East
Africa, medicine men are thought of as gods.
When men in white coats promote infants formula, thousands of mothers thought it was
their duty to feed it their children. Thus, what appeared to be reasonable and indeed a
proper marketing approach failed because Nestle did not take into account traditions of
African culture or the religions conceptual scheme through which an East African
mother project her experiences, or the level of poverty and ecology in the countries.
This suggests that what appears to be rational perspective, while crucial to moral
decision-making, may create a disconnect between what appears in theory to be correct
and what , in particular fact, is so. I am suggesting that what seems to be a rational
perspective, simply applying rules, for example, well-tested marketing principles and
technique, to a new situation may not be enough, by itself, to avoid moral disasters.
Nestle was universally highly criticized for this marketing scheme and it practices were
condemned by WHO. Hundreds of moral philosophers wrote papers on how Nestle had
ignored moral rules and flaunted human rights in carrying out these activities.
Interestingly, however, Nestle ignored these diatribes, not understanding the application
of moral principles of this case, arguing that there was nothing wrong with the formula.
That was true the infant formula is a great product. What was wrong was that Nestles
principled marketing technique did not functions adequately in the context of developing
African countries. The company ignored the second principle of marketing : “know your
customer.”
Interestingly, while operating by applying the general (marketing principles) to the
particular (East Africa ),Nestle seemed unable to integrate the normative proscription of
morality into these particular sets of actions that is Nestle seemed unable to apply
general principles to this particular. Only when a US market share, did Nestle food
product produced a 40% reduction in the US market share, did nestle reform its
marketing practices in East Africa . Nestle understood that particular very well.

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Strategic Alliances of Nestle
1. Partnership of Nestle with Polar Beverages
A distribution agreement has been made between Nestlé Waters North America
Inc. and Polar Beverages, Inc. to produce cans under Nestea and Poland Spring
brand names. The agreement is being called “Polar Strategic Ventures,” and it
will become effective July 15, 2015 and will cover the Eastern U.S.

“This agreement allows us to combine our strong premium brands with one of the
premiere can manufacturers and distributors in the U.S.,” said Tim Brown,
president, CEO and chairman of Nestlé Waters North America. “It will advance
our goal of having our products available for immediate consumption in all
formats, at anytime and anywhere.”

Polar Beverages and Nestlé Waters have a 20-year history of working

together. Polar currently co-packs some Nestlé Waters sparkling and tea
products and is distributing several Nestlé Waters products in New England.

The new strategic alliance will be jointly led by longtime Nestlé Waters veteran
Jeff Weston as chief operating officer, reporting into Tim Brown, CEO Nestlé
Waters North America, and Ralph Crowley Jr., president and CEO of Polar
Beverages.

“We look forward to strengthening our long partnership with Nestlé Waters and
adding Nestea and Poland Spring cans to our strong brand portfolio,” added
Ralph Crowley.

2. Nestlé Enters into Strategic Partnership with Belgian Luxury Chocolate

maker Pierre Marcolini

Nestlé today announced a strategic partnership with Brussels-based luxury

chocolate maker Pierre Marcolini. The partnership will allow Nestlé to benefit
from the know-how and artistic talent of one of the world's leading luxury
chocolate makers, while Pierre Marcolini will gain access to Nestlé's global
experience. Pierre Marcolini will provide inspiration for future Nestlé chocolate

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 ranges, while Nestlé will help Pierre Marcolini expand his network of boutiques
across the world. Pierre Marcolini will continue to lead his company as an
independent and autonomous operation, and Nestlé will join its board. The
parties have agreed not to reveal the financial details of the new partnership.

3. Nestlé and the Coca-Cola Company Ending their Beverage Partners

Worldwide Joint Venture
While the Beverage Partners Worldwide (BPW) joint venture has performed well
for more than 15 years, Nestlé and The Coca-Cola Company have agreed to
dissolve the 50-50 ready-to-drink tea joint venture as of 1 January 2018.

Created in 2001, BPW offers ready-to drink tea, in particular NESTEA, in Canada
and Europe. The ready-to-drink tea market has evolved, and Nestlé believes the
time is right to develop Nestea independently.

As part of this agreement, Nestlé is granting the Coca-Cola Company a license

to manufacture and distribute NESTEA in Canada, Spain, Portugal, Andorra,
Romania, Hungary and Bulgaria. In other countries that are currently part of
the JV, The Coca-Cola Company will no longer produce or distribute NESTEA.

Through its Nestlé Waters division, Nestlé already manages the NESTEA brand
in several countries, including the United States. Following this new agreement,
Nestlé Waters will also manage NESTEA in all the European countries that are
not concerned by the licensing agreements.

4. Starbucks and Nestlé close $7Billion licensing deal

Nestlé and Starbucks today closed a $7 billion deal that gives Nestlé the rights to
market, sell, and distribute the coffee brands packaged coffee and tea around the
world.
The licensing arrangement includes the rights to market everything from whole
bean coffee to portioned coffee pods for each brand owned by Starbucks.
The partnership brings together iconic brands owned by both companies.
Nestlé’s biggest brands include Nescafé, Nespresso and Dolce Gusto.
Starbucks’ brands include Starbucks (ground and whole bean coffee, K-Cups,

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 and Via Instant) Seattle’s Best Coffee, Starbucks Reserve, Teavana, and
Torrefazione Italia.
“This partnership demonstrates our growth agenda in action, giving Nestlé an
unparalleled position in the coffee business with a full suite of innovative brands,”
Nestlé CEO Mark Schneider said in a statement.
The deal does not include the chain’s ready-to-drink bottled beverages. PepsiCo
still distributes those drinks, which have grown into a more than $2 billion retail
business.
Starbucks CEO Kevin Johnson said the Nestle deal opens the door for the
restaurant chain — which has more than 25,000 locations worldwide — to reach
a global scale in the retail sector as well.
“This global coffee alliance with Nestlé is a significant strategic milestone for the
growth of Starbucks,” Johnson said in a statement. “Bringing together the world’s
leading coffee retailer, the world’s largest food and beverage company, and the
world’s largest and fast-growing installed base of at-home and single-serve
coffee machines helps us amplify the Starbucks brand around the world while
delivering long-term value creation for our shareholders.”

JOINT VENTURES
1990 Nestle Joint Venture with General Mills (Cereal Partners world wide)

1991 Nestle Joint Venture with Coca Cola (formerly CCNR) Beverage Partners
Worldwide

2002 Nestle Joint Venture with Fonterra (Dairy Partners Americas)

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Conclusion
Nestlé exerts great efforts to achieve its visions to be the leader in Nutrition, Health, and
Wellness Company by producing better quality of products to the consumers. Nestlé
also study about the consumer’s needs from time to time and satisfy the consumers as
much as possible. Nestlé’s strengths such as high financial capability, effective strategic
marketing capability, strong research and development, as well as great leaderships
have helped them through the obstacles. Above all, Nestlé focuses on its missions and
ensures consistency by making the right decisions to manage and build its business to
deliver the promise of Good Food, Good Life all over the world.

Problem is nutrition for elderly, we notice that it is a large extent by a person diet and
also their nutrition consumption. By taking an improper nutrition and unbalanced nutria
diet can increase the risks to have disease. Children obesity caused mainly because
their consuming to much chocolate and confectionary, taking a lots of chocolate cause
them to have disease in early ages. We realize that Nestle is producing less energy
drinks.

After analyzing the culture of Nestle we have come to a conclusion that the organization
is open to new ideas and believes in continuous improvement. Also it is a flat
organization and there are very few levels of management within the organization.
Nestle provides facilities to its employees and doesn’t always follow social rules and
norms.

Nestle could not use the advanced tools to make good relationship with customers and
for internal customers

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Recommendation
Firstly, Nestlé could use both manual and automation system in managing sales,
services, and others. This is because one cannot trust wholly to a machine, as it may
not be documenting the steps in its own processor. Because some steps can’t be
automated and may required operator intervention to prevent the escapement
processing steps, even though adapting advanced technologies could help saving cost
as labour cost is reduced, but if there are still problems occur, it will affect the business
such as loss of customers because of the mistake. Therefore, Nestlé must update the
system software regularly and full utilization of available technology as well as the
manual operators, which will effectively increase the efficiency and dependability of the
supply chain systems.

We will like to recommend to Nestlé to produce more products that are suitable for older
people such as protein milk and cereal with necessary nutrition where every older
people can make it as their daily use and also they should produce some organic
product to whom are very health conscious so it can be a healthy snack. Since children
obesity is increasing, Nestlé can produce a chocolate bar with less sugar so that obesity
will not increase. Moreover, Nestlé should produce more energy drink that is suitable for
all ranges such as students and people that is active in their daily life.

Although the employees and the employer within the organization have few conflicts
these conflicts should be handled carefully. These conflicts need to be carefully treated
because they may turn into something violent in the near future and might get out of
control. Therefore, conflicts should not be encouraged within any organization because
they are not healthy for any organization.

A recommendation is to improve policies to accommodate diversity. Higher diversity is

inevitable in global business, and the company must take advantage of it. Also, Nestle
can implement improvements in information technologies. For example, these
technologies can support workers in all areas through advanced tools for market
research, customer relations and internal communications. These improvements can
help strengthen the firm’s organizational culture of performance.

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