Nestle Malaysia

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Summary

This analysis builds a case for Batato to move on with the implementation of the SWATs now. It first presents an analysis of the current Organizational Alignment w.r.t. to the external environment & internal alignment (work/tasks, people & rewards systems). Then it talks about the key features of the SWAT & what aspects of the Organizational Alignment would be affected as a result of the implementation of the SWATs. Along the way are given the recommendations for handling the mis-alignments arising as a result of this.

Nestle Malysia- Current Organizational Alignment

In June 2005, Nestle Malaysia is performing well above the average in the Malaysian context running smoothly & performance between 75% & 90% of their target KPI.

The external environment is quite smooth with Malaysia being a peaceful place & competitive landscape having been well marked out & perfectly aligned with the company’s strategy.

Internally all the elements of the organization – structure, work systems, people & processes seem well aligned to achieve the objectives while following the company strategy to achieve the best performance.

While this picture looks very good at the moment, there are clear indications that some things need to be changed to achieve better operational performance in the factories so that target KPIs can be elevated a notch higher & motivation level of the workers can be challenged to help achieve better overall performance.

Introduction of SWAT

While SWAT looks like a good answer to the sustainability issue at the first glance, the implementation of this approach should be studied very carefully w.r.t to the organizational & cultural fit as it aims at challenging all the 3 aspects of the structure, work system/ tasks/ processes & people.

Therefore all the features should be carefully studied in the current context when people have high beliefs about their self-efficacy & self-esteem being among the top performers in the industry.

The following analysis brings out the key features of SWAT by placing them alongside which aspects of the current organizational structure it will challenge & how they can be addressed.

SWAT -> Key Features & their fit into the existing Organizational structure

1. Frontline productions teams who are aligned with the management of the company & the plant

2. Self-determination of the goals & directions for improvement-> Self management & self discipline

3. Take accountability for results & rewards based on
a. Meeting individual goals
b. Contribution to the overall goals of the plant

4. Immense focus on initiative taking through coaching & empowerment

5. Work together in a collaborative way

6. Goal alignment

Challenges- Identification

This problem should be tackled by first identifying the issues using the MBI model where we first begin with mapping to develop an understanding of the cultural & other differences about working in the Malaysian context. Then try to bridge these differences & integrate people to move forward together towards better performance.

Mapping:

Strict Hierarchical Structure -> Malaysia is one of the most hierarchical societies in the way businesses are run & the relationship between the supervisor & sub-ordinates work. As SWAT implementation puts a lot of emphasis on de-centralization & empowerment of the smaller teams, this would need a total shift in the mindset across the organization.

This hierarchical bend of mind also in a way stops creative thinking as people often tend not to question the seniors & in the process the motivation to do more dies down.

Multi-cultural work force-> The Malaysian work force is an interesting mix of ethnicities & nationalities comprising of indigenous Malays, Indians & Chinese. This would be a real challenge as different cultures have different...
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