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INTRODUCTION
Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organization decisions have to be made about the delegation of various tasks. Thus, procedures are established that assign responsibilities for various functions. It is these decisions that determine the organizational structure. In an organization of any size or complexity, employees responsibilities typically are defined by what they do, who they report to, and for managers, who reports to them. Over time these definitions are assigned to positions in the organization rather than to specific individuals. The relationships among these positions are illustrated graphically in an organizational chart. The best organizational structure for any organization depends on many factors including the work it does; its size in terms of employees, revenue, and the geographic dispersion of its facilities; and the range of its businesses (the degree to which it is diversified across markets). There are multiple structural variations that organizations can take on, but there are a few basic principles that apply and a small number of common patterns. The following sections explain these patterns and provide the historical context from which some of them arose. The first section addresses organizational structure in the twentieth century. The second section provides additional details of traditional, vertically-arranged organizational structures. This is followed by descriptions of several alternate organizational structures including those arranged by product, function, and geographical or product markets. Next is a discussion of combination structures, or matrix organizations. The discussion concludes by addressing emerging and potential future organizational structures. It refers to the framework within which managerial and operating tasks are performed .it specifies the relationship between people, work and resources .The type of organisational structure that is appropriate for an organisation will depend upon many issues. Some issues are fairly obvious. For example, small and medium-sized businesses will have smaller and less complicated organisational structures than very large companies such as Unilever or Procter and Gamble. The number of different country markets and the current size of the company market share in different market swill influence the need for the number and type of people to be employed internationally.
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Centralisation vs DecentralisationCentralistion-Companies centralize or keep key activities with themselves in order to control and coordinate Decentralization provide more auotonomy at local country level the company will need to take account of specialisation across the dimensions of function, product and geography    Function is concerned with occupational specialisation. Product is concerned with the co-ordination, integration and control of activities based on the product Geography is concerned with matching the company with its external environment.

1.1 OBJECTIVE 1. To study organisational structure 2. To study the organisational structure of nestle 3. To study the types of organisational structure 1.2 RESEARCH METHDOLOGY This research has been based entirely on secondary data sources which were subject related the source used were books, journals, newspapers and website.

1.3 Factors Affecting Choice of Organisational Structure We have already touched on several factors that will affect the choice of the most appropriate type of organisational structure for international business. In summary the following represent the major factors:    

Company size.

Extent of international market spread.

Range and diversity of products/services.

Level and nature of involvement in international business.

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  

Overall corporate and marketing objectives.

Company capabilities and resources.

Organisational culture.

Many of these are self-explanatory but the final two on our list of factors affecting organisational structure, namely ‘organisational culture’ and ‘company capabilities and resources’, need exploring further

1.4 The Importance of a Good Organizational Structure Communication The flow of information is essential to an organization’s success. The organization structure should be designed to ensure that individuals and departments that need to coordinate their efforts have lines of communication that are built into the structure. The financial planning and analysis department might report to the Chief Financial Officer and the Senior Vice President of Marketing, because both of these members of the top management team depend on information and reports provided by financial planning. Reporting Relationships Reporting relationships must be clear so all members of the organization understand what their responsibilities are and know to whom they are accountable. These clear relationships make it easier for managers to supervise those in lower organization levels. Each employee benefits by knowing whom they can turn to for direction or help. In addition, managers are aware of who is outside the scope of their authority, so they do not overstep their bounds and interfere with another manager’s responsibilities. Growth And Expansion Companies that grow rapidly are those that make the best use of their resources, including management talent. A sound organization structure ensures that the company has the right people in the right positions. The structure may suggest weak spots or deficiencies in the company’s current management team. As the company grows, the
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Project managers can better identify the human resources available to them if the scope of each department’s responsibility -. The various types of structures that fall under traditional structures are: 4 . is vital to that type of company’s success. Fits Company’s Needs Companies in different industries require different mixes of talent and a relatively greater emphasis on certain management functions. Traditional Structures These structures are based on functional division and departments. Companies often have to go through a reorganization phase in which individual positions or even whole departments are repositioned on the organization chart in an effort to better utilize the company’s human resources and make the operation run more smoothly. They are characterized by having precise authority lines for all levels in the management. and whose permission must be obtained for the research to be done.5 Different Types of Organisational Structures. Structuring the reporting relationships within the development team so creativity and productivity are maximized.organization structure must evolve with it. The project manager needs to know who in the organization can provide this research. A project to develop a new product would require market research. 1. Task Completion A well-designed organization structure facilitates the completion of projects. Many times more layers of management are created. when one department head has too many individuals reporting to him at one time to give each employee the attention and direction needed for the employee to succeed. and deadlines are met. A software company often has a large development staff. They are the kind of structures that follow the organization's rules and procedures to the T.and each team member’s capabilities--are clear.

✔ There are good career advancement prospects for individuals who deliver quality work. ✔ Prompt decisions result in quick and effective actions. with staff departments for support and specialization. ✔ As the control rests with one superior. Line and staff organizational structures are more centralized. Merits ✔ It is the simplest kind of organizational structure. ✗Communication only happens from top to bottom. especially the small ones. it accords him the flexibility to adjust the department. The decision-making process becomes 5 . This is where the line and staff organizational structure comes into play. it is not effective for larger companies. Line Structure: This is the kind of structure that has a specific line of command. Demerits ✗ There are chances of the department head being biased. ✗ The department head may be burdened with lots of work. ✔There is clarity in the structures of authority and responsibility. The approvals and orders in this kind of structure come from top to bottom in a line. Hence it is known as a line structure. ✗ Decisions are taken by a single person and can go wrong. This structure allows easy decision-making and is informal in nature. ✔ Strict authority results in a stronger discipline. ✗ Lack of specialization is a persistent problem. but staff managers have no authority over line managers and their subordinates.  Line and Staff Structure: Though a line structure is suitable for most organizations. This kind of structure is suitable for smaller organizations like small accounting firms and law offices. Managers of line and staff have authority over their subordinates. Line and staff structure combines the line structure where information and approvals come from top to bottom. ✗ Superiors with authority can misuse it for their benefit.

etc. ✔ It helps line managers to concentrate on the task at hand. ✔ It has clear lines of authority.slower in this type of organizational structure because of several layers and guidelines. an Administration Department. ✗ Decision-making may be time-consuming.  Functional Structure: This kind of organizational structure classifies people according to the function they perform in their professional life or according to the functions performed by them in the organization. The organization chart for a functional organization consists of a Vice President. Demerits ✗ Confusion may be created among employees. an Accounting Department. ✗ As staff specialists exist. ✔ It results in less operational wastage and increases productivity. there is formality involved. it is costlier than a simple line organization. Merits ✔ It enables the employees to perform at a faster rate. Also. ✗ There are too many levels of hierarchy. ✗ Employees may have differences of opinions and this may slow down the work. ✗ Employees lack operational knowledge to give result-oriented suggestions. ✔ Employees feel that they are given the due credit for their contribution. a Customer Service Department. Merits ✔ It has high degrees of specialization. ✔ It facilitates easy accountability for the work. ✔ Little or no resistance is met when organizational changes take place. an Engineering or Production Department. a Sales Department. 6 . ✔ It helps employees to accept responsible jobs and specialize in a particular area.

✔ The need for duplication of work is eliminated. ✔ It also gives a lot of independence to the decision makers. it gets difficult to exercise control on its operations. Here is a detailed description of a divisional structure. 7 . This type of structure can be best utilized for retail stores with a number of products.  Product Structure: A product structure is based on organizing employees and work on the basis of the different products. markets and geographical locations covered. ✔ It accords rapid and easy decision-making. ✔ It enables the organization to have a high productivity and efficiency quotient. ✗ As all the functions are separated. ✗ There may be lack of teamwork between different departments or units. Demerits ✗ Communication has several barriers which makes coordination difficult. ✗ More focus is laid on individuals rather than the organization. ✔ Individual products get separate attention as per the problems they face. they will have three different divisions for these products. ✔ All the functions command equal importance. Merits ✔ Units which are not working can be closed down easily.  Divisional Structure: These are the kinds of structures that are based on different divisions in the organization. ✗ The decisions taken by a single person may not always work in favor of the organization. ✗ As the organization expands.✔ It accords a high level of speed and efficiency. ✔ Each unit can be operated and treated as a separate profit center. They group together employees based on the products. If the company produces three different products. employees may not gain knowledge about other specializations.

organizational goals may not be achieved. ✗ Marketing individual products may add up to the cost significantly. ✗ All the units may not be considered as equal. ✗ Unhealthy competition may exist among internal business units. if need is felt. ✔ The problems in a particular market can be isolated and dealt with separately. Merits ✔ Employees can communicate with customers in the local language. Demerits ✗ There can be intense competition among the employees. 8 .  Market Structure: Market structure is used to group employees on the basis of the specific market the company sells in. tasks are completed on time. it may hamper the business. ✔ As individuals are responsible for a particular market. ✗ All the markets may not be considered as equal. ✗ There may be lack of communication between the superiors and the employees. ✗ Employees may misuse their authority. ✗ Accounting work and taxes may increase considerably.Demerits ✗ As each unit operates on its own. ✗ Decision-making can cause conflicts. ✔ Employees are specialized in catering to a particular market. each would be a separate division. ✗ It is difficult to determine the productivity and efficiency. ✔ New products for niche markets can be introduced. A company could have five different markets they use and according to this structure. ✗ As it has too many managerial levels. ✔ They are available for the customers.

The organizational structure. Demerits ✗ It may give rise to a feeling of division among the employees of the organization. ✔ Decisions are taken thoughtfully and work when implemented. ✗ Tracing the performance and profits of each region may be time-consuming and tedious. ✔ Customers feel a better connection with local managers who can speak their ✔ A record of the work of individual markets and groups can be maintained. in such a case. for example. It uses teams of employees to accomplish work by capitalizing on their strengths while creating weaknesses which are of functional form. west zone and east zone. beliefs and practices may differ from location to location. ✗ There may be poor communication among the employees at different locations. there could be a north zone. The different types of matrix structures are:  Weak/Functional Matrix: In this type of matrix structure. Matrix Structure: This structure is a combination of function and product structures. ✗ There may be unhealthy competition among different zones. It combines the best of both worlds to make an efficient organizational structure. This structure is the most complex structure. Merits ✔ There is better communication among the employees at the same location. Geographic Structure: Large organizations have offices at different places. south zone. he has 9 . However. ✗ Collaboration and cooperation between employees at different locations may not work out. a project manager is assigned to look over the cross-functional aspects of the project. follows a zonal structure. ✗ Core company ethics. ✔ New products or product modifications catering to a specific area can be introduced.

✔ The functional manager is responsible in case anything goes wrong. This type of structure is suitable for huge enterprises that involve complex operations and require smooth administration of the same. ✗ If not supervised. ✔ The functional manager controls the project. resources and the project. Merits ✔ Employees are not attached to temporary staff or temporary work. the better are the results. ✔ The decision-making rests in the hands of the functional manager. ✗ The project manager is a weak authority who has no control over the employees. workers can reduce the productivity of the entire unit.a very limited authority and it is the functional manager who actually controls the inventory. the responsibility and power is shared equally by both the project manager and the functional head. the project manager is primarily responsible for the work while the functional head gives technical advice and allocates resources. processes and procedures are all standardized. ✗ He cannot even give a performance review. Demerits ✗ The project manager may face strong apathy from his workers. 10 . It is highly recommended for industries like food. ✔ The project manager can make things happen without being in control. beverage. In the strong/project matrix. etc. Other Organizational Structures  Bureaucratic Structure: This kind of structure can be seen in tall organizations where tasks. ✔ The more the project manager communicates with the employees. as they have to adhere to stringent rules and regulations. ✗ He has no control over workload management and task prioritization. ✗ The project manager does not have complete authority. In the balanced/functional matrix. This may create a power struggle between them. There are two more structures namely balanced/functional matrix and strong/project matrix.

✔ Employees have to adhere to policies and procedures. 11 . This structure is highly recommended for small-scale industries and start-ups. ✔ Strict hierarchies ensure timely completion of tasks and quality. it is easy to achieve organizational goals. standardization of tasks. if any. ✔ Standardization and the best practices can be implemented easily. ✔ It helps in easy cooperation and coordination among the employees. ✔ Production takes place efficiently and effectively. ✔ Communication mostly happens on a one-on-one basis. and there is very little. he gets noticed. Demerits ✗ A centralized authority can discourage employees. Merits ✔ It has a centralized structure with only one decision maker.Merits ✔ As the complete control rests in the hands of one person. ✗ It can trigger a power struggle in the organization. ✗ It can lead to employee dissatisfaction and attrition. ✗ It does not encourage innovative ideas. ✗ It cannot adapt to changes in the business environment. ✗ One person cannot be responsible for coming up with creative ideas every time.  Pre-bureaucratic Structure: This structural form is best-exemplified in organizations where administration and control are centralized. ✔ If an employee works hard. ✔ Productivity and profits are closely monitored. ✔ The founder has complete control on decisions and their implementation. ✔ Decisions are made and implemented quickly.

it can lead to conflicts. ✗ As a formal hierarchy is missing. ✔ There is a certain level of flexibility for the employees.Demerits ✗ Decisions taken by one person stand the risk of going wrong. ✗ Lack of standardization can lead to inconsistencies. ✔ There can be a collaborative relationship between the supervisor and the employee. hence this structure is also known as a virtual structure. Most of the time.  Merits ✔ The employees can be closer to the location of the customer. ✔ Even if something like a natural disaster occurs. 12 . ✔ It helps in optimizing the knowledge potential of the organization. ✗ Employees are not part of the decision-making process and this can demoralize them. these relations are maintained and tasks are coordinated via telecommunication and electronic media and. organization managers are required to maintain and coordinate business/professional relations with third parties such as clients. vendors and associates in order to achieve a collective goal of profitability and growth. ✗ Effective communication may not take place as people do not open up in front of the authority.  Network Structure: In this structure. ✔ It can be dynamic and easily adaptive to changes in the business environment. ✗ Due to lack of flexibility. Demerits ✗ An employee may have to report to too many supervisors and this may affect his work. the work of network employees can continue. employees may feel frustrated. ✗ It is only applicable to small businesses and cannot sustain once they expand.

✗ It can lead to increased work stress among the employees.✗ Too much dependence on technologies like the Internet. ✔ If one employee in the team fails to work. ✔ The relationships and communication between employees improve. phone. ✔ It eliminates traditional scalar chains of command for getting approvals. ✗ As there is no physical place for employees. it affects communication. to get a high-performing employee. Merits ✔ It facilitates practical decision-making and implementation. can cause problems. the other can take his place. Demerits ✗ There is very less contact with teams of other functions. 13 . ✗ If teams undergo constant changes and alterations. ✗ The need for an effective leader can be felt. it can affect work. they may take a long time. ✗ An intense competition exists among the supervisors. ✔ It enables the heads to staff resources which complement each other.  Team Structure: Organizations with team structures can have both vertical as well as horizontal process flows. ✔ Decisions are taken unanimously and not by an individual. ✗ Each team contributes on its own and may not be in alignment with the organizational goals. etc. The most distinct feature of such an organizational structure is that different tasks and processes are allotted to specialized teams of personnel in such a way that a harmonious coordination is struck among the various teams. ✗ As decisions are given by many people. ✗ Team members need to be proactive and incorporate better project management.

14 . innovation oftentimes is hampered due to red-tapeism. it ensures that the work is done in a disciplined manner. In an organization following the organic structure.  Vertical Organization Structure: It relies on the middle management to monitor and control the work of the employees. communication takes place laterally. Hence. As it eliminates the need for middle management. Also. They are highly flexible to adapt to the changes in the external business environment. However. The hierarchy of the authority is well-defined.  Mechanistic Structure: This is the most formal and the strictest kind of structure with a clear distinction in the hierarchy and roles. the authority is delegated and is decentralized. There is a lot of flexibility in this type of an organization. As a hierarchy exists. These structures have well-defined roles and responsibilities for the employees. Employees are also involved in the decision-making process. It only comprises two to three vertical levels and the duties of the employees overlap. Employees work separately and are specialists of a task. the leaders find it difficult to deal with competition. Decisionmaking rests in the hands of the senior management. It requires a strong leader at the top of the hierarchy as he is the one to take all the decisions.  Horizontal Organization Structure: It is also known as a flat structure. it contributes towards giving a quick response to customer feedback. It also exhibits easy responsiveness and adaptability to change in the business environment. Entrepreneurial Structure: The authority of such organizations oftentimes is heavily centralized and lies with one person. it may not be applicable and practical for big organizations. these structures are vertically oriented. Hence. As a lot of bureaucracy is involved in these structures. Hence.  Organic Structure: It is the exact opposite of a mechanistic organizational structure. delegating tasks to the employees becomes easier. It is suitable for small or new organizations where the decision of one person matters the most. there is absolutely nil or very less interference from the senior management which allows the employees to conduct their tasks smoothly. In this type. Employees generally work together and coordinate different tasks.

 Post-bureaucratic Structure: This is a structure that is not bureaucratic in nature. Now that you know about the various organizational structures. implement the right one based on its applicability. 15 . personal treatment. Though there is hierarchy. responsibility and empowerment. It also incorporates techniques like total quality management (TQM) and culture management. This encourages employee participation. post-bureaucratic ones offer more freedom to the employees. the leaders are open to new ideas. The decisions are taken after discussion and consensus is not dependent on hierarchy. advantages and disadvantages. trust. This type of structure is often used in housing cooperatives and non-profit organizations. It is important to find an organizational structure that works best for the organization as a wrong setup can hamper functioning and be detrimental to organizational success. While bureaucratic organizations are too controlled.

line and staff organ. Demand Media Stated in his articles that As your business grows. much like a human skeletal structure.html. by Lisa Magloff. line organ. Rodani Ramesh Stated that organisation structure are based on distribution of authority and responsibility from top to bottom or from bottom to top in which involve entrepreneurial organ. this can work well. Demand Media. If there are only a few employees. It is based on the principle survival of the fittest.jobdig.1 Rodani Ramesh. How an organization is structured basically means how the reporting 16 .New Delhi.C Graw hill Education Private ltd.Tata M.com/articles/439/Organizational_structure_can_be_underlyin g_cause_of_workplace_issues.2.html. a new structure may be needed. Review of literature 1. Many small businesses have a centralized organizational structure. committee organ and project organ. By Joan Lloyd. Organi design is a plan that leads to specific organisation structure. Organisation structure must fit with existing (internal and external) environment. Information technology and globalisation processes are the key issue of the present environment that affect organisational design 1. Lisa Magloff. Organ must adjust and readjust with outside focus to survive and grow.3http://www. Choosing and using the correct organizational structure for your business can ensure you achieve maximum profitability. Environmental forces shape the design of the organisation. determines what shape an organization will take. 1. and so it goes with organizations.com/importance-correct-organizational-structure- 3791.chron. We don't spend much time thinking about our skeletal structure until something breaks. matrix organ.2 http://smallbusiness. Once the business begins to grow larger and more employees are added. Management and Organisational Behavior. you may need to change the organizational structure. functional organ. No single correct organizational structure fits every business. with the owner making all the decisions. Joan Lloyd stated in his articles that Organizational structure.

structure is one of the components I examine. 17 . One of the best examples of the impact structure has on operations is the transformation that began in the 1970's and is still going on today: flattening.relationships and work teams are organized. Perhaps it is a cause of problems where you work. It reveals a great deal about the culture. since it can be an underlying cause of problems. In the early part of this century. companies had many levels between the worker in the shop or office and the President. Here are a few examples I've come across: Too many levels of hierarchy slow decision-making and are a barrier to empowerment. function and leadership of a company. When I work with an organization. Decisions had to pass through many levels of approval before anything got done.

3. whatever their needs. Long-term potential is never sacrificed for shortterm performance.000 people and have factories or operations in almost every country in the world. We employ around 247.1 PROFILE OF THE COMPANY Nestlé with headquarters in Vevey. The Company's strategy is guided by several fundamental principles. The Company's priority is to bring the best and most relevant products to people. with a net profit of CHF 6. Nestlé's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Switzerland was founded in 1866 by Henri Nestlé and is today the world's biggest food and beverage company.2 BACKGROUND 18 . wherever they are. Sales at the end of 2004 were CHF 87 bn. throughout their lives. 3.7 bn. Nestle as Organisation 3.

Maggie. In 1978. Manufacturing of Nescafe started in 1964 at the same factory. The company set up its Nanjangad (Karnataka) factory in 1989 and the Samlakha (Haryana) factory in 1992. Switzerland. Nestle is one of the oldest food MNC operating in India. infant foods. a wholly owned subsidiary of Nestle Holdings Ltd. The parent plans to continue hiking stake through open market purchases. Parent stake in the company as at 2001 end stood at 53. culinary aids. Over the years. is among the leading branded food player in the country. milk products and noodles. Nestle’s leading brands include Cerelac. the Company expanded its product range with new products in instant coffee. noodles.8%. The company has launched Dairy Products like UHT Milk. Nassau. It has also strengthened its presence in chocolates. The Company set up its sixth manufacturing unit in 1997 at Bicholim in Goa 19 . It has a broad based presence in the foods sector with leading market shares in instant coffee. Bahama Islands.Nestle was promoted by Nestle Alimentana. to the current name in 1981. Kitkat. Nestle was incorporated as a limited company in 1959. For a long time. It has FIPB approval to hike stake by 10% and has been gradually acquiring shares from the open market.The parent held 51% stake in the company as at 2000 end. 3. dairy products and mineral water. Munch and Pure Life.3 PLANT LOCATIONS Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory. for manufacture of infant foods. coffee etc.. confectioneries and other semi processed food products during the last few years. pickles. Nestum. The company set up another factory at Cherambadi in Tamil Nadu. Nestle India Ltd. Its name was changed from Foods Specialties Ltd. with a presence of over a century. Nestle India’s operations were restricted to importing and trading of condensed milk and infant food. Nescafe. For almost two decades there were no new additions of manufacturing facilities due to restrictive policy environment. Butter and Curd and also ventured into the mineral water segment in 2001. The Ponda (Goa) factory started operations in 1995. 51% subsidiary of Nestle SA. chocolates and confectionery. the Company issued shares to the Indian public to reduce its foreign holdings to 40%. sauces.

Decentralization is a basic 20 . component of long-term success. people and products are more important at Nestlé than systems. and reflects the basic ideas of fairness.this applies to employment conditions and relations with employees as well as to the conflicts and opposing interests of the trade and the industry. Of course. While our Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world. employees and executives is a decisive. if not the decisive. Systems and methods. and saved the life of a neighbor’s child. its international headquarters and the registered office of Nestlé's holding company. Decentralization: Switzerland is home to Nestlé's Swiss subsidiary. variety and price -. It gives priority to the long-range view. A strong orientation toward human beings.4 BUSINESS PRINCIPLES Since Henri Nestlé developed the first milk food for infants in 1867. and a general concern for people.3. but Nestlé does not regard its Swiss headquarters as the center of the universe. should remain managerial and operational aids but should not become ends in themselves. convenience.products that can stand their ground even in the face of fierce competition. the Nestlé Company has aimed to build a business based on sound human values and principles. Quality products: Our focus is on products. People first: Employees. Long-term thinking defuses many of the conflicts and contentions among groups -. This is why Nestlé strives to maintain a satisfactory level of profits every year. honesty. while necessary and valuable in running a complex organization. our ability to focus on long-term considerations is only possible if the company is successful in the struggle for short-term survival. Long-term view: Nestlé makes clear a distinction between strategy and tactics. The ultimate justification for a company is its ability to offer products that are appealing because of their quality. It is a question of priorities. our basic foundation is unchanged from the time of the origins of the Company.

consumers. but only in the context of a carefully considered corporate marketing policy. Nestlé strives to be an "insider" in every country in which it operates." Uniformity: A very important concern at Nestlé has to do with uniformity: how consistent Nestlé's principles. mentalities and situations. unless there are compelling reasons in a given market that justify deviation from policy. 21 . and business partners. region. branch or group of products. This policy creates stronger motivation for Nestlé's executives and employees and a greater sense of identification with Nestlé's business. Our policy is to adapt as much as possible to regional circumstances. not an "outsider. Nestlé wants to operate only those businesses about which it has some special knowledge and expertise. Diversification: Nestlé does not want to become either a conglomerate or a portfolio manager. not a conglomerate hodgepodge. Nestlé is committed to the following Business Principles in all countries. taking into account local legislation. employees. It is not Nestlé's policy to generate most of its sales in Switzerland. In general. Nestlé tries to limit the uniformity of its policy to a requisite minimum. we create strength and flexibility and are able to make decisions that are better attuned to specific situations in a given country. subsidiary. and to what extent they should differ depending on the country. This minimum is then systematically enforced. 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. Policies and decisions concerning personnel. marketing and products are largely determined locally. policies. supplemented by a few satellite subsidiaries abroad.  Nestlé does not favor short-term profit at the expense of successful long-term business development. Nestlé is a global company. By decentralizing operational responsibility. rules of conduct and strategies should be.principle of Nestlé. We regard acquisitions and efforts at diversification as logical ways to supplement our business.

Foresight: At present. the world's population will 22 . These centers play a key role in product safety and quality and also have their role in conserving resources and protecting the environment. Malnutrition and poor eating habits are still serious problems in many developing countries. 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. In addition. studies are carried out to find new ways of using industrial residues to create value added byproducts. to the final packed product. legislation is the most effective safeguard of responsible conduct.  Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism. from raw materials. Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior. although in certain areas. The Nestlé Research Center provides the scientific support needed to prevent and solve environmental problems arising in the development groups as well as manufacturing. the world faces daunting questions about its ability to provide enough wholesome food for everyone. as a general rule. By 2100. These cover all aspects.  Nestlé believes that. The Nestlé development centers prepare environmental impact studies for new products and manufacturing processes. Environmental concerns are an integral part of any development process to ensure that our future commercial operations meet the desired criteria.  Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its Research and development: The Nestlé research and development centers have two main tasks: to create new products and manufacturing processes and to improve those that already exist. through processing. Therefore recruitment of the right people and ongoing training and development are crucial. beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist. or to introduce a new or modified process. conduct and the responsible attitude of its management and employees. This will reduce total emissions and effluents. These analyses provide additional elements for use in deciding whether to commercialize a new product.

double. a larger company has an advantage. Raw materials have to meet clearly established quality criteria and are checked for possible contaminants including environmental contaminants. but the natural production conditions exist. competition. it is desirable for a firm to achieve the size best suited to a specific industry or mode of production. Flexibility and simplicity: The public's sense of the power and size of a corporation is often inaccurate. regulatory bodies and publicity. From a business point of view. for a company's power is limited by a host of factors including legislation. Our purchasing specifications comply not only with legal requirements but go further to ensure highest safety and wholesomeness of our products. We support plant growing and livestock husbandry methods which:  preserve and improve natural soil productivity and economize and protect water resources  allow the lowest. we encourage local production and provide assistance for cultivation and dairy farm management. Our response to this situation is to intensify research. it is spread out over many countries and each of Nestlé's factories has its own management and responsibility. simple structures work best and excessively large units should be avoided whenever possible. In general we use locally available raw materials and purchase them either directly from producers or through existing trade channels. the big picture is all about feeding the world and providing food and nutrition for an evergrowing population. strive for innovations and improve quality. In those cases where the required agricultural raw materials are not available locally. In both respects Nestlé has a natural advantage: Although it is a big company. To be competitive internationally and make significant investments in research and technology. Whenever possible we give preference to those goods for which environmental aspects have been taken into consideration. most appropriate and safe use of agro-chemicals 23 . Will it be possible to feed a world with so many inhabitants? At Nestlé. From a strictly organizational point of view. Handling of raw materials: The Nestlé Group is in principle not directly involved in primary production of raw materials and other food ingredients. flexible.

printed matter. Packaging: Manufacturing comprises all unit operations necessary to transform perishable raw materials into finished products. Environmental product claims in advertising. instore promotions. Information on developments in environmental protection technology and practices is disseminated as required to ensure that all plants are using the most effective environmental practices for their type of processing. with the aim to make them safe and convenient for the consumers. This applies also for co packers. based on solid scientific evidence and used in a serious and reasonable manner. company environmental standards. These assessments include:  evaluation of individual plant performance with regard to operations which have an impact on the environment   definition of targets for improvement review of plant compliance with local government regulations. in particular through more precise targeting of marketing activities. Our aim is to minimize wastage in communication. leaflets. This means due consideration of environmental 24 . Marketing and distribution: Marketing is based on the principle of satisfying consumer needs. use the least energy. This is the foundation also for the environmental marketing approach of Nestlé. etc. take environmental aspects into account. Consumer promotions and merchandising material such as consumer offers. The manufacturing activities of the Nestlé Group:    respect natural resources by efficient use of raw materials and energy minimize waste generation and emissions ensure environmentally safe disposal of all waste which cannot be recycled. as well as results achieved in comparison with targets for improvement  full investigation of incidents which may affect the environment. Regular assessments of processing practices are carried out. promotional material and on packaging are in accordance with legal requirements. display material. publicity and promotional material.

Lip-smacking desserts can be whipped up in the shortest possible time. ii. focused distribution. In distribution. NESTLÉ MILKMAID is a globally recognized and popular brand of Nestlé. On account of aggressive marketing. 3. this product was launched in 1986. NESTLÉ MILKMAID is a versatile product and excellent as a dessert ingredient. Thanks to all these synergies. NESTLE EVERYDAY: To meet the requirements of the tea-whitening segment. 25 . this brand has shown strong growth and holds good promise for the future. energy efficient and pollution controlled methods are encouraged wherever possible. NESTLE MILKMAID: It is a Partly Skimmed Sweetened Condensed Milk.impact in selecting both materials and printing methods.5 PRODUCTS OF NESTLE MILK PRODUCTS i. excellent consumer acceptance and product quality. It has been available in India ever since the Company first started importing and selling its products over 90 years ago. we can contribute to valuable discussions and be recognized as an active partner in helping authorities to formulate comprehensive strategies in the field of the environment.

high quality pasteurised toned milk. It comes available for your convenience in 85g. NESCAFÉ CLASSIC has the unmistakable taste of 100% pure coffee and is made from carefully selected coffee beans picked from the finest plantations. The pouch packs are currently available only in Delhi NCR. NESTLE DAHI: Is made from fresh. NESCAFÉ CLASSIC: It is 100% Pure Instant Coffee. It has all the goodness of natural Calcium and the Cultures used in NESTLÉ Dahi help improve digestion.iii. BEVERAGES i. 200g and 400g Tubs and 200g and 1kg Pouch packs. 100% coffee…100% pleasure… 26 . blended and roasted to perfection.

.NESCAFÉ Choco Mocha and NESCAFÉ Vanilla Latte.. iii. healthy goodness of Green tea into your glass.now has power of Calcium! Outdoor champions. 27 . Comforting. grab one now. Feel good everyday with the refreshingly light taste of NESTEA with Green Tea..the tasty chewy MILKYBAR .a delicious cup of NESCAFÉ Cappuccino is a great way to enjoy a true café experience at home. NESTEA: New NESTEA Iced Tea with Green Tea brings natural. Treat yourself to its rich coffee taste and delicious froth. mm..ii. relaxing .. Green tea is a good source of NATURAL ANTIOXIDANTS which are known to protect body cells from damage caused by free radicals. MILKYBAR CHOO: MILKYBAR CHOO . Also available in yummy Strawberry and Choko flavours!! mm. CHOCOLATES i. mmmmmmmmm. NESCAFÉ CAPPUCCINO: The world's favourite instant coffee brand NESCAFÉ brings two delicious new Cappuccino variants .

the authentic Italian brand. 28 . which has been producing pasta and sauces in Italy since 1827. became part of the Nestlé Group in 1988. Buitoni.ii. POLO Prepared Foods Maggi merged with Nestlé in 1947. MILKYBAR ECLAIRS: Introducing a delicious new wave of strawberry flavour in your favourites MILKYBAR Éclairs. iii.

000 employees (Our Global Organization). may also set limits to decentralisation’ (The Nestlé Management and Leadership Principles) meaning there is only a certain extent to which decentralisation in this company is possible. Solution for that is the decentralised power that has been brought to lower level employees. Nestlé is a Function-based organization. Organisational Structure of Nestle Nestlé is a highly decentralised organisation which means the lower level managers are eligible to give significant share in the company’s development and even make some fast and important decisions. Company’s external environment is complex and uncertain and geographical location is dispersed in more than 80 countries in five continents with over 265. However.1 Organizational Structure Organizational structure is the formal framework by which jobs tasks are divided. and their employees are the most important asset that the company has. as well as the group-wide need for alignment and people development. Teamwork is an important element as Nestlé has acknowledged. The tasks are divided into separate jobs and then these jobs are grouped together under different departments i. That is achieved by having highly skilled and trained professionals as a part of Nestlé’s team. Each major area is kept under the manager who is specialist in that concerned field and is responsible for all activities. Nestlé is a people’s company because they care about their employees and their opinions (The Nestlé Spirit). 4. In Nestlé employees do not require high number of rules nor high direct supervision. and coordinated.e. grouped. due to the complex and unpredictable external environment in which Nestlé is in. they acknowledge that ‘operational efficiencies.4. 29 . which that department performs. Nestlé also belongs to organic organisation type that is characterised as highly adaptive and flexible. where even lower level managers are empowered to make their own decisions. fuctional departmentalization is found in organization. It is stated in Nestlé’s Management and Leadership Principles that they encourage employees to practice open communication and active co-operation in order to contribute to the company and personal development.That makes it hard to keep an eye on all departments from Headquarters only.

There is a chain of command that extends from upper organization levels to the lowest levels and clarifies who reports to whom. there are explicit job descriptions. It encourages employees to give their suggestions and share the new ideas. there has been distinct trend in this organization toward decentralizing decision-making. it is strict but not rigid organization. In effort to be more flexible and responsive. So. But in spite of formal rules and regulations. The jobs are formalized. The orders move from upward to downward and suggestions move downward to upward direction. Nestlé keeps on changing to keep a pace with the changing environment. The continuous improvement section is made for this purpose. and clearly defined procedures covering work procedures.Organizational structure of Nestlé is hierarchical. numerous organizational rules. 30 .

To put the pre-going discussion into nut-shell.Conclusion Organizational structure is the formal framework by which jobs tasks are divided. 31 . In Nestlé employees do not require high number of rules nor high direct supervision. and clearly defined procedures covering work procedures. where even lower level managers are empowered to make their own decisions. and coordinated. Nestlé is a Function-based organization. grouped. due to the complex and unpredictable external environment in which Nestlé is in. numerous organizational rules. there are explicit job descriptions. It can safely be ventured to opine that Nestlé company has s much potential at that time but if Nestlé use the always differential strategy in proper manner we easily conclude that Nestlé will be able to lead the companies in the India and abroad. That is achieved by having highly skilled and trained professionals as a part of Nestlé’s team. It encourages employees to give their suggestions and share the new ideas. The jobs are formalized.

by Lisa Magloff.html. Rodani Ramesh.C Graw hill Education Private ltd.html.com/importance-correct-organizational-structure3791. Demand Media.http://www. By Joan Lloyd BOOKS: 1.Tata M.New Delhi. http://smallbusiness.chron.Bibliography WEBSITES VISITED: 1. 32 . 2.jobdig. Management and Organisational Behavior.com/articles/439/Organizational_structure_can_be_underlying_caus e_of_workplace_issues.

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