Nestle – the Employment Relationship

– Assignment
Nestle is a large international food manufacturer with over 250,000 employees worldwide Nestle
has a broad range of products and is the largest food manufacturer in the world. Nestle has set
high standards incorporate principles and its relationship with all of its stakeholders. Nestle has
such a large scale of workers and must ensure they have a good management system to maintain
the employment relationship. 2. What is the employment relationship? The employment
relationship is the agreement of conditions and arrangements between an employer and an
employee and in most cases can be covered under a contract of employment either written or
psychological.

The direct influence now in the relationship is between the managers and the employee’s
communications. The employer wants a skilled workforce who can deliver the execution
requirements for a successful company and develop with changing markets and new directions.
The employee wants remuneration, stability, rewards, and ability to grow and develop within role
through training or on the job experience. The relationship in Nestle is first introduced by a detailed
HRM policy formulating the Manager / Employee relationship.

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The relationship has an impact on all stakeholders in the company which in includes the
managers, employees, customers, suppliers, governments, shareholders, local communities and
media. No employees no company, no customers
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control of employment relationship is important to maintain the external influence with the
customers. The marketing section’s relationship with customers is the most important relationship
for the company. 3. The importance of the employment relationship

Competitive markets and demanding business environments are key reasons the employment
relationship is important to Nestle and all other companies. (Guest et al, audio)Nestle is in
competition globally with other companies like Kraft foods, PepsiCo, Cadbury’s, Mars, Kellogg’s
and many more in the supply of similar product. Nestle as such a large employer with a broad
range of business means recruitment of staff in general puts them in competition with all
companies . Nestle must promote itself as a good company to work for to attract the calibre of
employee to suit the ever changing usiness directions and requirements. Good references to
working at Nestle are available on each of their country specific and on the main website. Nestle
benchmarks itself with similar food manufacturers and has to focus on the importance of the
employment relationship to retain its workforce, change with the times and remain competitive.
The relationship evolves better when the employer and employee reach a common goal or
agreement and this can be facilitated through a high skilled management workforce and good HR
policies..

Nestle has a non-union HRM style with limited trade union involvement although it has trade
unions in certain sectors and recognises these accordingly. Nestle is a global company; their
corporate business principle includes reference to human rights, human resources in the
workplace and in essence sets the standards of their employment relationship worldwide. The
principles are written in 40 different languages and distributed to all their management everywhere
Nestle refers to the employee as an integral part of the company’s assets.

Nestle has clear management controls, HR practices and mentions recruitment as the task of
employing the right people for the job all strengthening their open concept of the employment
relationship. 4. Changes affecting the employment relationship 4. 1 HRM vs. IR (Pluralist vs.
Unitarist) The changing employment relationship has seen a move away from Industrial Relations
or Personnel towards HRM style which has resulted in much more direct manager interface with all
employees. Industrial Relations were a pluralist style open to conflict with divisions on power.

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HRM is a unitarist style, there is more power with the direct line managers and as a result
employees have retrospectively become more involved in their own career possibilities. Nestle has
a unitary style which helps employees become more aware of the company’s directions and
strategies as a result. 4. 2 Globalization Global markets have grown rapidly, there are less
embargoed countries, there are more free trading possibilities and there has been a rise in Asia
markets most notably the emergence and growth of the China market.

Nestle challenge is retaining its business in the right areas globally and foreseeing growth
opportunities for its workforce worldwide. The internalization of companies has caused relocation
to lower cost labour economies Nestle has an extensive global interface of business and impacts
of this nature have caused relocation of sectors or entire plants in order for Nestle to remain
competitive. 4. 3 Advances in Technology Nestle has to develop its technology with the industry
and its competitors. Nestle has to strengthen its research and development activity and upgrade
production equipment as necessary.

Nestle production lines will continually change with demands. 4. 4 Diverse Workforce The HRM
system and corporate principles at Nestle focus on diversity but the increasing challenge in the
employment relationship is being able to adapt and integrate all cultures. In areas where Nestle
operate high domestic employment it is more a matter of adjusting to the countries culture but in
the UK or Ireland for example the HR policies have to provide diversity training on induction to all
employees. 4. 5 Restructuring and the Decline of manufacturing

Companies have had to restructure in the past decades for many reasons Nestle included.
Manufacturing has declined and is now leaner, less employees on production lines with the same
or even more output than before. Manufacturing has had downsizing in sectors towards more
service or distribution function. Technology improvements have been a factor. This is also one of
the reasons companies have to continual train their employees to be prepared for changes in
direction. 4. 6 Trade unions decline and marginalization In recent years trade union membership
and influence has declined.

The structure of employment was as David Guests says (Guest et al audio) ‘A fair days work for a
fair days pay ‘but organizations of today want commitment, flexibility and adaptability. In the UK
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particularly the trade unions had collective bargaining power. The decline in power began when
governments intervened during the Thatcher era and legislation was introduced restricting
industrial action. Unions prior to this staged conflict, walkouts and pickets at will. Legislation
changed on public order and employment relations in the UK creating open dialogues between
employees and employers reducing the requirements of unions.

This is just a UK example but similar acts have changed trends worldwide. Nestle has sectors
worldwide with trade union membership and has continued this relationship. The introduction of
HRM style and the restructuring changes in employment markets has at minimum marginalized
unions. 4. 7 Terrorism / Civil unrest The affects of 9/11 and other terrorist activities have impacted
certain sectors particularly US citizens working overseas. Nestle for example has business in
Kenya where there is present unrest, this is a factor for expatriates that may have to leave
countries where they work because of threats etc. . 8 Short term contracts, remote working, work
life balance, agency work The employment market has seen more contracts, seasonal, and agency
type relationships in the workforce along with less long term security in permanent employment.
Employees may feel insecure or under threat which can have an impact on their overall
commitment and can affect the employment relationship (Guest et al). There is more pressure on
work life balance; factors like both parents working and requests for 5. Changes in HRM for the
employment relationship

The general concepts of any of the HR management models or theories are all striving for the
similar results but there are many different ways of achieving results. The hard HRM (Michigan
Model) is becoming more prominent in business at present although it may be disguised to some
as a wolf in sheep’s clothing. In the case of Hard HRM the company’s strategy is the primary driver
for HR in developing their policies. HR implements its policies and procedures in line with the
strategies; every employee is then expected to live the strategy and values of the company.

Soft HRM the Harvard model (beer et al) also incorporates strategy but its primary driver is
ensuring the employee is at the forefront of the HR policies, a more subtle approach to gaining
employee commitment in the business functions. The next 3 diagrams are examples of HR Models
Company’s use, they can work off one only but may utilise a combination of all plus other models
not listed Fig 2 The Harvard Model Beer et al Fig 3 The Michigan model – Fonbrun et al. (US) Fig 4

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David Guest’s model (Guest, 1992) 5. 1 Human resources style at Nestle Nestle Human resources
policy is clear on strategy through their business and leadership principles.

The documented process has strong emphasis on people which suggests some soft HRM
approaches; there are extractions of hard HRM style in relation to corporate principles to suggest
that Nestle have incorporated both styles in harmony with its business objectives. Storey’s theory
(25 item checklist) for human resources (Pinnington, Edwards et al p17) and outlines the clear
differences between the old IR and the new HRM styles. The checklist really explains how the
business functions were managed before and clearly diffuses any argument against HRM
introduction. Nestle fits in on all the checklist points for HRM style using the theory.

Cadburys, Heinz, Danone, Kraft foods, Hershey’s, Kellogg’s, PepsiCo and Mars to name a few all
have similar HR practices, strategies and in their approach to employee expectations and
development. Psychological contracts are discussed by Guest as key to HR practice but volatile if
employees do not receive promises made, do not feel secure, become reluctant on change or feel
unstable in career development. This has resulted in some negativity but companies just have to
work harder on their execution . 5. 2 People Management The focus now in management
development is good people skills.

Managers are no longer just functional they have to be able to develop and interact well with their
workforce. Nestle and other companies are now investing resources in developing People
Managers very much linked with the move of HR to an advisor relationship. In the old industrial
relations style this was an issue as a lot of the employee relations were dealt with through a
separate personnel department. Employee relations were segregated from mainstream operations
or forgotten in the course of business, a gap most companies now realise cannot exist in a
developing market. . 3 Training Nestle has put high focus on the development of its managers and
employees. There website includes a people development reference with plenty of details for
succession planning at all levels, internal and external training availability, coaching and overall
employee development. This has become a requirement for all companies in leading their
employees towards new business functions and changing business demands. 5. 4
Communication Nestle have all their extensive company information on their websites and
intranetsFound
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The new era of the employment relationship is more informative. Employees are kept aware of all
of the key developments in their companies; and now can become more motivated or prepared for
change. The internet has become much more of a business tool and also a communication source
for employers. HR news and company strategies can be constantly updated and delivered online to
employees through email and web conferencing. 5. 5 Recruitment Recruitment techniques are now
psychometric testing, aptitude tests, role plays and personality tests to hire specific employee
types.

Nestle has a Geocentric approach to employment and the right person is hired for the job
regardless of race creed or nationality. Nestle asks candidates to be prepared for psychometrics
tests as part of the recruitment process. Psychometrics: ‘The science of measuring mental
capacities and processes. ‘ The internet is now the main recruitment tool. Nestle uses the internet
for advertising but also retains data for future candidates. It is now possible to work remotely via
broadband communications and work direct from home or travelling through a server with only a
laptop. Nestle have an offer for top graduate talent.

In the UK Nestle offer ? 2000 sign on for graduates to help them settle in. With the cost of higher
education this is a real marketing strategy to encourage graduates choosing Nestle as an
employer. The Nestle CEO published a presentation on the Nestle website on creating a successful
future. He outlines empowerment of people as a value for shareholders. He shows reward and
recognition for performance, a clear HRM value. The full transcript covers much more detail on his
vision for the future and sets out his expectations for Nestle clearly. (Brabeck et al 2008)
Conclusion

The HRM style is not a new concept but recently has become more necessary in the development
of strategic organisations. Companies like Nestle for instance use the HRM model well and still
maintain shareholder value. Nestle want committed employees who will commit to change before
it happens, Nestle expect their workforce to be competent and develop requirements for any
change, and Nestle want a good relationship between their employees and managers. In summary
the principles of HRM are achievable but in the general they need to remain consistent on
promises to keep employee inputs at the required levels. Word Count – 2,212

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Reference & Bibliography Pinnington and Edwards, ‘Introduction to Human Resource Management’
Chapters 1, 2, 4, 5, 8 and 10 (2000) Storey, J. (1995) Human Resource Management: a critical text,
London, Routledge Guest, D. (1992) `Employee commitment and control’, in Hartley, J. and
Stephenson, G. (eds) Employment Relations, Oxford, Blackwell. Peter brabeck presentation
http://www. nestle. com/Resource. axd? Id=3B092B84-9BB0-4E68-BFBF-191128F2F0D4
(accessed 9th Feb 2008) Oxford online Dictionary http://www. askoxford.
com/concise_oed/psychometrics? view=uk (accessed 5th Feb 2008) Nestle Graduate offer
http://www. Nestle. co. k/Careers/Graduates/TrainingAndBenefits/ (accessed 5th Feb 2008)
Nestle website (Links to all other sectors can bee accessed in further links within) http://www.
nestle. com/ (accessed 9th Feb 2008) Nestle Corporate Principles http://www. nestle.
com/Resource. axd? Id=70014B84-A4FC-4F82-BFA0-23939DC52E9D (accessed 9th Feb 2008)
Nestle Leadership Principles http://www. nestle. com/Resource. axd? Id=5A62507B-3B19-4056-
9CD0-4C442D96419F (accessed 9th Feb 2008) Nestle Human Resource Policy http://www. nestle.
com/Resource. axd? Id=E9EC6B84-3562-4FD3-99D6-51AD66F37CE8 (accessed 9th Feb 2008)
NESTLE – Document on People Development http://www. estle. com/Resource. axd?
Id=19DB9174-7B14-4AF2-AE20-6E305729A8B5 (accessed 5th Feb 2008) Nestle – At a glance
http://www. nestle. com/AllAbout/AtGlance/Introduction/Introduction. htm (accessed 7th Feb
2008) The world of Nestle PDF download http://www. nestle. com/Resource. axd? Id=602C42FE-
04D6-4669-BEE1-1027492FE5E8 (accessed 7th Feb 2008) Careers at Nestle http://www. Nestle.
co. uk/Careers/RecruitmentTips/ (accessed 9th Feb 2008) http://www. nestle. co.
uk/Careers/RecruitmentTips/SelectionEvents. htm (accessed 9th Feb 2008) http://www. Nestle.
co. uk/Careers/Graduates/TrainingAndBenefits/ (accessed 9th Feb 2008) http://www. nestle. o.
uk/Careers/RecruitmentTips/SelectionEvents. htm WHAT TO EXPECT WHEN APPLYING FOR A
ROLE AT NESTLE if you’re looking to Nestle to assist you with your next career challenge, then
great! We pride ourselves on recruiting talented people and developing and promoting them within
the business, so we’re delighted that you’re interested in working for us Exercises can include
psychometric tests, role plays, in-trays, presentations, group discussions, personality
questionnaires and case studies. NESTLE – Document on People Development http://www. nestle.
com/Resource. axd? Id=19DB9174-7B14-4AF2-AE20-6E305729A8B5 (accessed 9th Feb 2008)

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All About Nestle http://www. nestle. com/AllAbout/AllAboutNestle. htm (accessed 9th Feb 2008)
Since Henri Nestle developed the first milk food for infants in 1867, and saved the life of a
neighbor’s child, the Nestle Company has aimed to build a business based on sound human values
and principles. While our Nestle Corporate Business Principles (accessed 9th Feb 2008) will
continue to evolve and adapt to a changing world, our basic foundation is unchanged from the
time of the origins of our Company, and reflects the basic ideas of fairness, honesty, and a general
concern for people.

Nestle is committed to the following Business Principles in all countries, taking into account local
legislation, cultural and religious practices: •Nestle’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. •Nestle does not favor
short-term profit at the expense of successful long-term business development. Nestle 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. •Nestle 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. Nestle 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. •Nestle continues to maintain its commitment to follow and respect all applicable local
laws in each of its markets. http://www. nestle. com/AllAbout/AtGlance/Introduction/Introduction.
htm Introduction Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri
Nestle and is today the world’s biggest food and beverage company.

Sales for 2006 were CHF 98. 5 bn, with a net profit of CHF 9 bn. We employ around 265,000 people
and have factories or operations in almost every country in the world. The Company’s strategy is
guided by several fundamental principles. Nestle’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
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and most relevant products to people, wherever they are, whatever their needs, throughout their
lives.

The Nestle Addresses navigation at the top of this page will give you access to Nestle offices and
websites around the world. We demonstrate through our way of doing business in all the countries
where we are present a deep understanding of the local nature of food; we know that there is no
one single product for everyone – our products are tailored to suit tastes and habits wherever you
are. _____________________________________________________________________ http://www. nestle.
com/Common/Header/AddressesResults. htm?

WHT=7 (accessed 9th Feb 2008) note – sites are all in specific lanquage of the related country
NESTLE business in a global market country listing. Africa •Ghana ,South Africa Americas
•Argentina ,Brazil ,Canada ,Chile ,Colombia ,Costa Rica ,Ecuador ,El Salvador ,Guatemala ,Honduras
,Mexico ,Nicaragua ,Panama ,Peru ,United States of America ,Uruguay ,Venezuela Asia •China
,Hong Kong ,India ,Indonesia ,Iran ,Japan ,Malaysia ,Philippines ,Republic of Korea ,Singapore
,Taiwan ,Thailand ,United Arab Emirates ,Vietnam Europe Austria , Belgium ,Bulgaria , Croatia
,Czech Republic ,Denmark ,Finland ,France ,Germany ,Greece ,Hungary ,Italy ,Netherlands ,Nestle
Netherlands ,Norway , Poland ,Portugal ,Republic of Ireland ,Russia ,Serbia ,Slovakia ,Slovenia
,Spain ,Sweden ,Switzerland ,Turkey ,Ukraine ,United Kingdom Oceania •Australia ,New Zealand
________________________________________________________________________ The world of Nestle PDF
download http://www. nestle. com/Resource. axd? Id=602C42FE-04D6-4669-BEE1-1027492FE5E8
(accessed 9th Feb 2008) Extracts below used in research

Principles, not rules Two fundamental documents (The Nestle Corporate Business Principles and
the Nestle Management and Leadership Principles) lay down principles that permeate the whole
Nestle Group. They govern our policies and strategies. They set the tone and style for our
approach. They affect everyone who works at Nestle. They also impact everyone with whom we do
business. In effect, they form ‘a code of conduct’ which is lived out by each one of us at Nestle.
Although less than 2% of our sales are generated in Switzerland, Nestle is a Swiss company.

Several Swiss characteristics are noticeable in the way we run our business. Our organization is
effective, reliable, hard working and pragmatic. But Nestle is also a very human company. Above
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all, we care about our people. We are committed to creating value – over the long term – not only
for our shareholders, but also for all those communities around the world where we market our
products. The changing consumer World demographics will carry on changing. Other geographic,
economic and social factors will all affect our diets and eating habits.

In this changing world, Nestle will continue to put priority on nutrition, health and wellness, and
apply its science-based research to develop food and beverage products that improve the quality
of living at every stage of life. It’s not enough to meet existing consumer needs. To stay in tune
with developments, we have to be ahead of the game, fully aware of trends, and ready to meet
consumer needs that haven’t yet fully emerged. A multi-cultural business The Nestle Management
and Leadership Principles are based on the many experiences that have led to the company’s
success throughout its long history.

They relate mainly to the human aspects of our management and our employees, and stress the
multi-cultural nature of the Company. Nestle embraces cultural and social diversity and does not
discriminate on the basis of origin, nationality, Religion, race, gender or age. Nor does Nestle have
any political involvement. Nestle operates in many countries and in many cultures throughout the
world. This rich diversity is an invaluable source for our leadership, and also for broadening our
employees’ experiences.

A key theme of the Management and Leadership Principles is that we put our priority on people
rather Than systems. This results in a structure that is as flat as possible, rather than hierarchical,
and gives individuals plenty of opportunities to advance their careers. Together with our Corporate
Business Principles, the Management and Leadership Principles form the foundation of our
approach to doing business. It’s an approach that has been recognized by top Harvard academics
as having generated real benefits both for Nestle and for society – over many decades.

Harvard Business School Professors Michael Porter and Mark Kramer have stated that this puts
Nestle in the front rank of companies who create real shared value for themselves and society at
every step of their business Process or “value chain”. Porter and Kramer argue that our approach
has already stood the test of time; and will continue to do so precisely because there are winners
on all sides. Nestle in the community: reaching out beyond our business A good example is India
where Nestle finances and helps to organize deep bore wells and sourcing of Clean water.
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We construct storage tanks and install submersible water pumps at village schools near our
factories. The company bears 90% of the cost of each facility, the remaining 10% is funded by the
village and voluntary contributions. The projects are complemented with school programmes
about water conservation, hygiene, and health. So far, some 20,000 children have benefited from
60 wells. We have recently extended our partnership with the Red Cross and Red Crescent in the
form of a commitment to improved water and sanitation.

The major part of our financial support over the next few years will be dedicated to various
activities in Africa addressing the immense life threatening problems resulting from the chronic
lack of water and sanitation. Consistent, sustainable growth Nestle has had almost 150 years of
continuous, steady, sustainable growth. This is attributable to our long-term approach and focused
business strategy, and to our record of well principled governance and management. People are
Nestle’s greatest asset Perhaps it’s because food is such a fundamental human need.

Perhaps it’s because we have to be extraordinarily close to our consumers and understand their
physical and emotional desires. Whatever the reason, Nestle is a very human company. We care
about our people. We encourage and bring out the best in them. We work hard to ensure that they
benefit as much as they can from their work at Nestle. Wide variety of career opportunities Among
university and MBA students and graduates from many backgrounds – for example in the
sciences, economics or marketing – Nestle is often cited as one of the top favorite companies to
work for. ______________________________________________________________________ Nestle Corporate
Principles http://www. nestle. com/Resource. axd? Id=70014B84-A4FC-4F82-BFA0-23939DC52E9D
(accessed 9th Feb 2008) Extracts below used in research First, we have had six years of
experience in using the Nestle Corporate Business Principles as a management tool. They have
been translated into over 40 languages and given to all our management worldwide, which has
provided us with useful feedback about their application.

While our Nestle Corporate Business Principles will continue to evolve and adapt to a changing
world, our basic foundation is unchanged from the time of the origins of our Company, and reflects
the basic ideas of fairness, honesty, and a general concern for people. Given the growing public
interest in the area of corporate social responsibility, we openly share these Principles, not only

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with all our employees, but also with anyone in the public who is interested in understanding the
Principles on which this Company is based.

As CEO, I am committed to making sure that our Company is managed according to these basic
Principles, and commend them to all our employees worldwide. Nestle’s business objective, and
that of management and employees at all levels, is to manufacture and market the Com-pany’s
products in such a way as to create value that can be sustained over the long term for
shareholders, employees, consumers, business partners and the large number of national
economies in which Nestle operates; Nestle operates in many countries and in many cultures
throughout the world.

This rich diversity is an invaluable source for our leadership. No single document can capture every
legal obligation that may be required in each of these countries. Indeed, there may be conflicting
legal requirements. Nestle continues to maintain its commitment to follow and respect all
applicable local laws in each of its markets. If an interpretation of anything contained in this
document is construed as contrary to local laws, such interpretation should not be followed in that
country. Henri Nestle also insisted that every mother able to breast-feed should do so.

This principle is still the cornerstone of Nestle policy today, and is in line with the aim of the
International (WHO) Code of Marketing of Breast-milk Substitutes, which was adopted by the
World Health Assembly in 1981. Nestle regards its personnel as its most valuable asset.
Involvement at all levels starts with open communication, whether on specific aspects of the
business, or about the activities of the Company in general. Suggestions for changes and
proposals for improvements of Nestle’s practices are encouraged.

Nestle therefore upholds: Freedom of association and the effective recognition of the right to
collective bargaining (Principle 3) Relationship with Suppliers Nestle aim to deal only with
reputable suppliers who are willing to apply Nestle quality standards. Supplier relationships are
benchmarked and evaluated with the objective of striving for continued improvement in the areas
of quality, service, etc. As a relationship between a supplier and Nestle strengthens and
progresses, it may evolve into one of preferred supplier status.
_____________________________________________________________________ Nestle Leadership
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Principles http://www. nestle. com/Resource. axd? Id=5A62507B-3B19-4056-9CD0-4C442D96419F
(accessed 9th Feb 2008) Extracts below used in research Nestle is also convinced that it is the
people who form the strength of the Company and that nothing can be achieved without their
commitment and their energy, which makes people its most important asset. Involvement of
people at all levels starts with appropriate information on the Company’s activities and on the
specific aspects of their work.

Through open communication and active co-operation, everyone is invited to contribute to

improvements enhancing Company results and personal development. A more pragmatic than
dogmatic approach to business. This implies being realistic and basing decisions on facts.
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. Pride in contributing to the reputation and the performance of the Company.

This calls especially for nurturing a sense of quality and long-term achievement in the daily work
beyond fashion and shortsighted gain. Loyalty to and identification with the Company. Members of
the Nestle Management at all levels are more concerned with continuously adding value to the
Company than exercising formal authority. This can only materialize with a high involvement of
each employee and a common mindset geared to results. Contributing to results through project
work and special assignments becomes more frequent, reaching beyond conventional boundaries
in order to contribute to wider group performance.

The broader the responsibility of a Nestle Manager, the more the following specific criteria should
be considered, in addition to professional skills, practical experience and result focus: Personal
commitment and courage. This includes the capacity and the willingness to take initiatives and
risks as well as to maintain composure under pressure. Nestle is as decentralized as possible,
within the framework imposed by fundamental policy and strategy decisions requiring increasing
flexibility. Operational efficiencies, as well as the group-wide need for alignment and people
development, may also set limits to decentralization.

Nestle is committed to the concept of continuous improvement of its activities, thus avoiding more
dramatic one-time changes as much as possible.
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Nestle Human Resource Policy http://www. nestle. com/Resource. axd? Id=E9EC6B84-3562-4FD3-
99D6-51AD66F37CE8 (accessed 9th Feb 2008) Extracts below used in research HR managers and
their staff are there to provide professional support in handling people matters but should not
substitute themselves to the responsible manager.

Their prime responsibility is to contribute actively to the quality of HR management throughout the
organization by proposing adequate policies, ensuring their consistent application and coherent
implementation with fairness. Acting as business partners, the HR manager advises and offers
solutions which results in positive impact on the organization’s effectiveness. The Nestle
Management and Leadership Principles describe the management style and the corporate values
of the Nestle Group, specifically in the area of interpersonal relations.

Their respect calls for specific attitudes which deserve to be outlined in the present policy: It is the
responsibility of each manager to propose, within the framework of the company policy, the
remuneration of her/his employees, taking into account the local market, individual performance,
skills and potential for development. It is also the responsibility of each manager, if needed with
the support of HR management, to communicate properly, clearly and with sufficient transparency,
the individual remuneration of each staff member taking into account her/his professional
performance and her/his specific responsibilities.

Each operating company will establish a compensation practice taking into account relevant
external compensation levels as well as the requirement of internal fairness. It is recommended to
undertake regular surveys so as to gather relevant information on the remuneration levels
practiced at a local or national level. Learning Learning is part of the Company culture. Each
employee, at all levels, is conscious of the need to upgrade continuously her/his knowledge and
skills. The willingness to learn is therefore a non-negotiable condition to be employed by Nestle.

First and foremost, training is done on-the-job. Guiding and coaching is part of the responsibility of
each manager and it is crucial to make each one progress in her/his position. When formal training
programs are organized they should be purpose oriented and designed to improve relevant skills
and competencies. Therefore they are proposed in the framework of individual development
programs. As a consequence, attending a program should never be considered as a reward. Nestle
upholds the freedom of association of its employees and the effective recognition of the right to
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collective bargaining.
Nestle wishes, also through its relationship with unions and other representative associations, to
sustain the long-term development of the Company, both to the benefit of the employees and of
the Company, by maintaining a level of competitiveness adapted to its economic environment.
Industrial relations are a clear responsibility of local management and will be handled at the
appropriate level: first at site level (factories, warehouse) subsequently at regional or national level,
according to local law and practices. Presentations http://www. estle.
com/MediaCenter/Presentations/Group+General/Group+General. htm (accessed 9th Feb 2008)
http://www. nestle.
com/MediaCenter/Presentations/Corporate+Responsibility/Corporate+Responsibility. htm
(accessed 9th Feb 2008) Document on creating a successful future Jan 17 2008 Mr. P Brabeck
http://www. nestle. com/Resource. axd? Id=3B092B84-9BB0-4E68-BFBF-191128F2F0D4
(accessed 9th Feb 2008)
______________________________________________________________________________________
http://www. nestle. com/AllAbout/History/AllHistories/1996Future. tm (accessed 9th Feb 2008)
1996-2002 The first half of the 1990s proved to be a favorable time for Nestle: 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 Nestle. While progress since then has not been as encouraging, the overall trends
remain positive.

In July 2000, Nestle launched a Group-wide initiative called GLOBE (Global Business Excellence),
aimed at harmonizing and simplifying business process architecture; enabling Nestle 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, Nestle 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 inneov was set up,
another joint venture, this time with L’Oreal. Nestle Competitors all below (accessed 7th Feb 2008)
http://www. cadbury. com/ , http://www. heinz. com/Corporate. aspx , http://www. danone.
com/en/company/introduction. html , http://www. kraft. com/ http://www. hersheys. com/ ,
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http://www2. kelloggs. com/ , http://www. pepsico. com/ http://www. mars. com/global/home.
htm

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