Danone - Key Issues

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Dax Foley – 10520701
Groupe Danone is a world leader in the production of diary products being one of the largest dairy food and water produces in the world. With 90,000 employees in 120 countries of the world the company is very much knowledge-intensive and innovation-driven. Growing to become one of the most successful food and beverage companies in the world has not been without its challenges, primarily for Danone this has been successful knowledge management through all levels of the business. Danone’s success lies in the company’s innovativeness when it comes to new and creative ways of transferring knowledge throughout the company coupled with a clear strategy for future growth. Frank Mougin, executive vice president of human resources, and Benedikt Benenati, organisational development manager, were given the task of developing a means of sharing knowledge between employees from around the world in a company with a highly decentralised business structure with little horizontal communication among divisions (Edmondson, Moingeon, Dessain, Jensen 2008, p6). Creating a successful way of sharing knowledge to ensure long term sustainability of the company was Danone’s key issue. Groupe Danone’s mission is to bring health through food to a maximum number of people in an effort to create sustainable development. Danone realised that most company’s these days target only a small percentage of the world’s population when marketing their products. In order for the company to succeed in such a competitive industry, it was necessary to ensure sustainable development. As such, in 2001, the company launched the Danone Way, as a “practical and sustainable approach to building socially responsible corporate values into the company’s policies and aspirations” (Edmondson et al 2008 p.4). Through this initiative, Danone took responsibility for and assured excellence throughout the product lifecycle, from the guarantee of quality raw materials to the protection of water reserves in production. In order for the company to remain profitable, whilst servicing the entire population, including those living in poverty, the company had to be extremely efficient and this meant effective communication and knowledge sharing across the company. “Knowledge involves the ability to exercise judgement and draw distinctions, and requires knowing how to apply knowledge in new contexts” (Soo, 2008). “At Danone, we don’t have a lot of quantified organisational expertise. The expertise that we have is the sum of our individual knowledge” stated Fabien Razac (Marketing Director) (Edmondson et al 2008 p.6). Thus in order for the company to survive, networking amongst employees is extremely important. If the company fails to network efficiently, the company will struggle to transfer knowledge across employees and will fail to become a learning organisation that is “skilled at creating, acquiring and transferring knowledge and at modifying its behaviour to reflect new knowledge and insights” (Soo, 2008). The company’s primary challenge lies in developing a sustainable method of transferring knowledge across the company and over the past decade numerous approaches have been trialled. One of Danone’s first attempts at knowledge management was to leverage company talent without centralised governance. The company developed the Growth Program and looked for good performers in areas such as renovation, innovation, proximity and affordability. The company believed that by bringing all of these ingredients into one basket, they would be able to outperform their competitors. This program initially proved successful increasing growth to a steady 5% (Edmondson et al, 2008 p.6). In 2001, Danone launched a group wide SAP business software program called THEMIS which contained a list of 144 formalised best practises for varying operations. The company soon began to realise that this system was not suited to the organisations...
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