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History And Organisational Examination Of Nestle Corporation

Paper Type: Free Essay Subject: Business
Wordcount: 2626 words Published: 1st Jan 2015

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Nestle is a multinational company with its worldwide operations in over 84 countries. Nestle is the world’s largest food company with its international headquarters at Vevey, Switzerland. Nestle has almost 500 factories world wide out of which 220 are located in Europe, 150 in America and 130 in Africa, Asia and Oceania. It employs almost 2,30,000 people. 

Founder of Nestle was German born “Henry Nestle” who was living in a small town of Switzerland named “Vevey”. From a modest beginning he founded the company in 1866 at Switzerland for manufacturing milk powders for babies. “Necessity is mother of invention” is applicable in the   invention of a special food product “Farine Lactee” made from Cereals & milk to saved the lives of many infants because, at that time Switzerland faced one of the highest infant mortality rate & the milk formula act as nectar that saved the lives of many infants whose mothers were un-able to breast feed successfully. Since than Company have always looked forward and have achieved set targets & goals.

 At present Nestle is the world’s largest food company, with its international head quarters at Vevey, in Switzerland. Nestlé is often quoted by most as “Multinational of Multinationals.” There is a good reason, as less than 2% of the turnover comes from domestic market in Switzerland.

 Nestlé is very much decentralized in its operations & most of the markets are given considerable autonomy in its operation. It is more of a people & products oriented company rather than systems oriented company. There are “unwritten guidelines” which are to be followed, based on common senses & a strong set of moral principals emphasizing a lot of respect for fellow beings. Nestle has always adapted to the local conditions and at the same time integrates its Swiss heritage. It has always taken a long-term view in the countries in which it operates.

Therefore, one can see a lot of investment R&D and risk taken in new product areas. There is a great emphasis placed on training by the company. It believes in rewarding and promoting people from within.

Today its product brand name ‘Nestle’ is associated with ‘quality products’ in worldwide consumer markets.


The Nest       

When Henry Nestle introduced the first commercial infant formula in 1867, he also created a symbol of the “Bird’s Nest”, graphic translation of his name, which personifies the company’s business. The symbol, which is universally understood, evokes security, motherhood and affection, nature and nourishment, family and tradition. Today it is the central element of Nestlé’s corporate identity and closely parallels the company’s corporate values and culture.

Main point

World’s leading nutrition, health and wellness company.

Founded in 1866 in Vevey, Switzerland.

It has around 280,000 employees all over the world.

It owns 450 factories in 84 countries.

Product categories include Soluble Coffee, Infant Nutrition, Bottled Water, Condensed and Evaporated milk, Ice Cream, Chocolate and Malt drinks.


“Nestlé’s aim is to meet the various needs of the consumer everyday by marketing and selling foods of a consistently high quality.”


“We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient to meet physiological needs. Nestle helps provide selections for all individual taste and lifestyle preferences”



“Making Big Investments in People”

Believes in building Leaders of Tomorrow


A prerequisite for dealing with people is respect and trust.

Transparency and honesty in dealing with people are necessary for efficient communication. This is complemented by open dialogue with the purpose of sharing competencies and boosting creativity.

To communicate is not only to inform; it is also to listen and to engage in dialogue.

The willingness to cooperate, to help others and to learn is a required basis for advancement and promotion within the company.

Human Resource Policies

Designed in alignment to the Business Objectives.

Incorporates practices like Job Enlargement as well as Job Enrichment.

It follows mainly three different policies:-

Nestle management & leadership principles

Nestle human resources policy

Nestle people development review

Nestlé’s Culture

Commitment to a strong work ethic, integrity, honesty and quality.

Personal relations based on trust and mutual respect..

A personalized and direct way of dealing with each other. Openness and curiosity for dynamic and future trends in technology, changes in consumer habits, new business ideas and opportunities, while maintaining respect for basic human values, attitudes and behavior.

HR Practices



Performance Management

Rewards and Incentives

Employee Relations

Change Management


Literacy training- to upgrades essential literacy skills, especially for workers who operate new equipment

Local Training Program’s- on issues ranging from technical, leadership, and communication and business economics.

Performance Management

Transparent performance appraisal system

It has the following characteristics:-


Formal assessment by Line Managers and HR once in a year with feedback.

Subordinate can question an unfair evaluation.

Specific Key Performance Indicators have been enlisted by the HR department.

Key performance indicator:-Achievement following the Nestle management and leadership principles.

Remuneration structure and promotion criteria take into account individual performance.

People with realism, hard work, honesty and trustworthiness are looked for.

Match between candidate’s values & company’s culture are recruited.

Recruitment for management levels take place in the head office by top management and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies to look for the enthusiastic, motivated and fresh pool of talent.

Decision to hire a candidate is finally taken by HR professionals only and no preference is given to external consultant. This is done to finally have the discretion power in the hands of Company.

Employee Relation

Employee turnover is less than 5%., which is considered to be very low for a multinational corporation.

Nestle has an open culture & upward communication especially in case of grievance redressal is encouraged.

Work/Life balance is given importance, as illustrated in the Nestle Human Resource Policy document.

‘Nestle Family’ annual events are organized by their HR department whereby employees along with their families are invited.

Emphasis is laid on safety of employees


Passion to Win Awards

Long-service Awards

Nestle Idea Award

Talent Management:-

To develop the framework and processes which will enable the company to identify and develop the potential of employees at Nestle. 

Learning and development:-

Continuous Improvement Creativity and Innovation

Changing Role of HR

Motivate and to develop people.

Develop open-mindedness as well as a high level of interest in other cultures and life-styles.

create a climate of innovation

HR professionals should be able to inculcate the willingness to accept change and the ability to manage it.

International experience and understanding of other cultures will prepare the employees to face the challenges in global markets.

The aim of the Human Resources Strategy is to support staff. This it will do by developing and promoting good HR practice for the recruitment and development of high quality staff, by effectively managing their performance and by providing appropriate rewards and flexible opportunities that allow individuals to manage their own development.

Core Functions of International Human Resources In Nestle


Selection Process


Performance Appraisal

Training and Development


Sources of Recruitment

There are many different types of interviews. Once you are selected for an interview, you may experience one or more of the situations described below. When you schedule an interview, try to get as much information about whom you will be meeting. It is rare to have only one interview prior to a job offer.

Most employers will bring back a candidate a number of times to be sure a potential employee will fit into the company culture.


1) Walk-In -: The busy global organizations and the rapid changing companies do not find time to perform various functions of recruitment. Therefore they advise the candidates to attend for an interview directly and without a prior application on a specified date, time and at a specified place.

2) Consult-In -: The busy and dynamic global companies encourage the potential job seekers to approach them personally and consult them regarding the jobs. The international companies select the suitable candidates from among such candidates though the selection process.

3) Head-Hunting -: The global companies request the professional organizations to search for the best candidates particularly for the senior executive positions. The professional organizations search for the most suitable candidates and advice the global company regarding the filling up of the positions.

4) Body-Shopping -: Professional organizations and the hi-tech training institutes develop the pool of human resources for possible employment. The prospective employers contact these organizations to recruit the candidates. The body shoppers appoint people for their organization and provide the required/specific employees to various organizations on request. In fact, body shoppers collect fee/commission from the organizations and pay the salary/benefits to the employees.

5) Business Alliance -: It is like acquisitions, mergers, and takeovers help in getting human resources. In addition, the companies do also have alliances in sharing their human resources on ad-hoc basis.

6) Tele-Recruitment -: The technological revolutions in telecommunication helped the organizations to use internet as source of recruitment. Organizations advertise the job vacancies though the World Wide Web internet. The job seekers send their application though e-mails or internet websites.


Nestle was one of the biggest purchasers of cocoa from the Ivory Coast, a country in West Africa. Most of the world’s cocoa production came from farms and plantations located in Ivory Coast. Studies conducted by some of the major welfare organizations in the world like the International Labor Organization, UNICEF and other independent agencies revealed that the workers on these plantations lived and worked in poor conditions. They were paid minimal wages and exploited by the land-owners. Most of the workers had been trafficked i.e. bought and sold, making them practically slave labor. Nestle purchased cocoa from these farms despite its awareness of the conditions of the laborers, thus becoming it a party to their exploitation.

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Child labor was also employed on the plantations. UNICEF studies revealed that over 200,000 children were shipped to Ivory Coast and other cocoa producing countries in Western Africa from neighboring countries like Mali and Burkina Faso, to work on the plantations, especially during the harvesting of cocoa or coffee beans. The children were sometimes as young as nine years and could not escape from the plantations to return to their homes.

A report released by the International Institute of Tropical Agriculture (IITA) also confirmed that child labor was used extensively on plantations in Africa, from where Nestle sourced most of its cocoa. The report – which surveyed 1,500 farms in Ivory Coast, Ghana, Nigeria, and Cameroon – found that more than 200,000 children worked in hazardous conditions using machetes and spraying pesticides and insecticides without the necessary protective equipment.

The labor was usually supplied to the plantations by labor broker, totally unrelated to the laborer. The workers actually received only a very small proportion of the price paid for the Nestle product by the final consumer. Nestle was aware of the exploitative labor practices used by its suppliers and was also in a position to pressurize them to change, as it was a major buyer. Besides the report of several credible organizations, public interest groups also sent several petitions and representations to Nestle to stop buying bonded labor-tainted cocoa. However, the company chose to ignore these petitions, and continued its purchases of cocoa from these suppliers.

Nestle was also involved in union busting in some countries. For instance, when a group of 13 workers, working in a sub-contracting facility of Nestle in Thailand, organized themselves to form a union, Nestle immediately cut the number of orders to that company and asked the company to put the unionized workers on indefinite leave with half pay. The workers were forced to quit, because of their lowered pay. In doing so, Nestle had clearly denied there workers their right to organize themselves to better their interests.

Companies like Nestle made a public show of their support to social causes, in order to divert attention from their irresponsible behavior elsewhere. Nestle set up the ‘Nestle Trust’ to support social issues relating the children and aged. However, some people believed the company was using these social causes for pure promotional purposes Nestle has well laid out charters to govern their social responsibility and behavior, but more often than not, these are only on paper.


Traditional HRM

Strategic HRM

Responsibility of HRM

Staff specialists

Line managers


Employee relations

Partnerships with internal and external customers

Role of HR

Transactional, change follower, and respondent


Slow, reactive, fragmented

Fast, proactive, integrated

Time horizon

Short term

Short, medium, long (as necessary)


Bureaucratic-roles, policies, procedures

Organic-flexible, whatever is necessary to succeed

Job Design

Tight division of labor, independence, specialization

Broad, flexible, whatever is necessary to succeed

Key Investment

Capital, products

People, knowledge


Cost center

Investment center


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