Management TIMES

Management TIMES

Report on Management

Topic

Managing Decision Making and Problem Solving

Submitted To, Tasman Pasha.

Submitted By,Group

I.I. Hira Ilyas,6

II.II. Saba Javaid,8

III.III. M. Ahmad,19

IV.IV. M. Adnan, 27

V.V. Waqar Akram 13

Date of submission 27-6-2011

Department B.B.A

Semester2nd

TIMES

The Institute of Management & Emerging Science Multan, Pakistan

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Dedication

We dedicated this report to our Parents. Who taught us that the best kind of

knowledge to have is that which is learned for its own sake. Without their

Patience, understanding, Support and most of all Love, the completion of

this work would not have been possible.

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ACKNOWLEDGEMENT

This is not a traditional research project. It is the result of brain storming of our group

members. Keeping in mind the target we have to select a product with some creativity in its

advertising campaign. While doing the project we worked very hard and tried our best to use our

efforts.

We would like to express our gratitude to all those who gave us the possibility to complete this report.

We want to thank the Mr. Imran Atari for giving us permission to commence this report in the first

instance, to do the necessary research work and to use company’s data. We have furthermore to

thank the Miss Shazia H.R Manager who gave and confirmed this permission and encouraged us to

go ahead with our report.

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We are deeply indebted to Prof. Mr. Tasman Pasha from the TIMES University Multan Pakistan

whose help, stimulating suggestions and encouragement helped us in all the time of research for and

writing of this report.

My former colleagues from the Department of B.B.A supported us in our research work. I want to

thank them for all their help, support, interest and valuable hints. Miss Arifa and Mr. Adnan were of

great help in difficult times. Moreover, looked closely at the final version of the report for English style

and grammar, correcting both and offering suggestions for improvement.

Especially, we would like to give our special thanks to Nestle Company that enabled us to complete

this work.

PREAMBLEPraise is to Allah Almighty, the one testing us all at all times and making decisions about what we do

not know and can’t know.

Today it is impossible for a common person to run the business especially in this period of

competition. This situation demands energetic, duly qualified experienced business administrators

who could meet the challenges of this age of modernization. Department of Business Administration

undertakes to produce management specialists fully aware of the ins and outs of the business

management, and capable of meeting the challenges of

modern business environment.

Gratitude

It’s been so long since I learned my first word, but I promise that I still remember the first day at

school, when I was just four and very reluctantly entered my Nursery class, my teacher gave me a

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pat on my back and a packet of Chips. I wonder how time passes without letting anyone know how

much it has actually passed.

When I was starting this preface portion of my report, my heart almost stopped beating and my eyes

filled, with gratitude for every single person whom I owe my bits of knowledge, and now when I am

verge of leaving my academic career, I feel that those sixteen years are never existed in my life. This

report, one of the last monuments of study career, makes me sad.

I do not want to take any of the credit for this report; instead, I want to dedicate to all those people

who have contributed to my learning at any stage. I would not be going justice in presenting this

internship report without mentioning the people around me who have been inextricably related with

the completion of this report.

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Introduction Nestle is a multinational company. As the world's number one Food and Beverages Company, Nestlé

is a complex organization, operating in challenging and varied business environments.

To fulfill our commitment to serve our customers better, we are adopting common business practices

in all areas of business.

This vision is at the heart of GLOBE – Global Business Excellence, and Nestlé Pakistan is proud to

be part of this international initiative. We know that by standardizing the way we capture and report

business data, and by putting our IT infrastructure on a global platform, we can be more flexible and

focused on our products and brands, and therefore more responsive to our customers.

Company’s Vision

Nestlé’s global vision is to be the recognized leading Nutrition, Health and Wellness Company. Nestlé

Pakistan subscribes fully to this vision of being the number one Nutrition, Health, and Wellness

Company in Pakistan.

In particular, we envision to;

• Lead a dynamic, motivated and professional workforce – proud of our heritage and positive

about the future.

• Meet the nutrition needs of consumers of all ages – from infancy to old age, from nutrition to

pleasure, through an innovative portfolio of branded food and beverage products of the highest

quality.

• Deliver shareholder value through profitable long-term growth, while continuing to play a

significant and responsible role in the social, economic, and environmental sectors of

Pakistan.

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Company’s Mission

To positively enhance the quality of life of the people of Pakistan by all that we do

through our people, our brands, products, and our CSV activities. Mission Statement.

Nestlé is dedicated to providing the best foods to people throughout their day,

throughout their lives, throughout the world. With our unique experience of anticipating

consumers’ needs and creating solutions, Nestlé contributes to your well-being and

enhances your quality of life.

Good Food for Good Life.

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Company’s AmbitionGOOD FOOD GOOD LIFE

To be the leading Nutrition, Health and Wellness Company

We believe that every single company, no matter where in the world it operates, ought to be fully integrated into the local social, cultural & economic life. We must be good corporate citizens, and give back to the societies to which we belong.

• Through social investments: giving to charities, leading and supporting cultural or welfare initiatives.

• Through the realizations that businesses create social and environmental impacts, both positive & negative, through the daily operations of their value chain.

MD`s Message

Commitment to excellence, good food & good life are words that best describe Nestlé. We at Nestlé Pakistan are a team of people committed to adding value to the lives of the Pakistani people by helping them live a life full of wellness & vitality.

We welcome you to this life.

Nestlé with its operational excellence, best management practices and total commitment to quality has you our consumer at the heart of everything we do.

We sincerely thank you for believing in Nestlé and our products & making our journey to success ever more possible.

Our aim is to make our consumers well aware of what they eat and how to take care of their nutritional needs. We, therefore, invite you to get to know our products better and to look at our unique features on this website where you will discover informative pieces that will help you make healthier and balanced choices in your and your family’s lives.

Enjoy your visit to our Nestlé Pakistan website and we hope you will visit again often.We wish you Good Food Good Life.

Ian James DonaldManaging Director

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HistoryNestlé headquarters in Vevey.

Nestlé S.A. is the largest food and nutrition company in the world,

founded and headquartered in Vevey, Switzerland. Nestlé

originated in a 1905 merger of Anglo-Swiss Milk Company,

established in 1867 by brothers George Page and Charles Page,

and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé.

The company grew significantly during the First World War and

following the Second World War, eventually expanding its offerings

beyond its early condensed milk and infant formula products. Today, the company operates in 86

countries around the world and employs nearly 283,000 people.

The company dates to 1867, when two separate Swiss enterprises were founded that would later

form the core of Nestlé. In the succeeding decades, the two competing enterprises aggressively

expanded their businesses throughout Europe and the United States.

In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA established

the Anglo-Swiss Condensed Milk Company in Chum. Their first British operation was opened at

Chippenham, Wiltshire in 1873.

In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon began

marketing it. The following year, 1868 saw Daniel Peter begin seven years of work perfecting his

invention, the milk chocolate manufacturing process; M. Nestlé's was the crucial cooperation M. Peter

needed to solve the problem of removing all the water from the milk added to his chocolate and thus

preventing the product from developing mildew. Henri Nestlé retired in 1875, but the company, under

new ownership, retained his name as Farine Lactée Henri Nestlé.

The key factor, which drove the early history of the enterprise that would become the Nestlé

Company, was Henri Nestlé's search for a healthy, economical alternative to breastfeeding for

mothers who could not feed their infants at the breast.

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In the mid-1860s Nestlé, a trained pharmacist began experimenting with various combinations of

cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant nutrition for

mothers who were unable to breast feed. His ultimate goal was to help combat the problem of infant

mortality due to malnutrition.

He called the new product Farina Late Henri Nestlé. Nestlé's first customer was a premature infant

who could tolerate neither his mother's milk nor any of the conventional substitutes, and had been

given up for lost by local physicians. People quickly recognized the value of the new product, after

Nestlé's new formula saved the child's life and within a few years, Farine Lactee Nestlé was being

marketed in much of Europe.

Henri Nestlé also showed early understanding of the power of branding. He had adopted his own

coat of arms as a trademark; in his German dialect, Nestlé means 'little nest'. One of his agents

suggested that the nest could be exchanged for the white cross of the Swiss flag. His response was

firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have a different

trademark in every country; anyone can make use of a cross, but no-one else may use my coat of

arms."

Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles and

George Page, broadened its product line in the mid-1870s to include cheese and infant formulas. The

Nestlé Company, which had been purchased from Henri Nestlé by Jules Mannerist in 1874,

responded by launching a condensed milk product of its own. The two companies remained fierce

competitors until their merger in 1905.

Some other important firsts occurred during those years. In 1875 Velvety resident Daniel Peter

figured out how to combine milk and cocoa powder to create milk chocolate. Peter, a friend and

neighbor of Henri Nestlé, started a company that quickly became the world's leading maker of

chocolate and later merged with Nestlé. In 1882 Swiss miller Julius Maggie created a food product

utilizing legumes that was quick to prepare and easy to digest.

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His instant pea and bean soups helped launch Maggie & Company. By the turn of the century, his

company was producing not only powdered soups, but also bouillon cubes, and sauces and

flavorings.

The Company formed by the 1905 merger was called the Nestlé and Anglo-Swiss Milk Company. By

the early 1900s, the Company was operating factories in the United States, Britain, Germany and

Spain. In 1904, Nestlé added chocolate to its range of food products after reaching an agreement

with the Swiss General Chocolate Company.

Condensed-milk exports increased rapidly as the Company replaced sales agents with local

subsidiary companies. In 1907, the Company began full-scale manufacturing in Australia, its second-

largest export market. Warehouses were built in Singapore, Hong Kong, and Bombay to supply the

rapidly growing Asian markets.

Most production facilities remained in Europe, however, and the onset of World War I brought severe

disruptions. Acquiring raw materials and distributing products became increasingly difficult. Fresh-

milk shortages throughout Europe forced factories to sell almost all their supplies to meet the needs

of local towns.

Nevertheless, the war created tremendous new demand for dairy products, largely in the form of

government contracts. To keep up, Nestlé purchased several existing factories in the United States.

By war's end, the Company had 40 factories, and its world production had more than doubled since

1914.

The first half of the 1990s proved to be a favorable time for Nestlé: 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 Nestlé.

While progress since then has not been as encouraging, the overall trends remain positive.

In July 2000, Nestlé launched a Group-wide initiative called GLOBE (Global Business Excellence),

aimed at harmonizing and simplifying business process architecture; enabling Nestlé to realize the

advantages of a global leader while minimizing the drawbacks of size.

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There were two major acquisitions in North America in 2002: in July, Nestlé 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 Laboratories

innerve was set up, another joint venture, this time with L’Oreal.

The year 2003 started well with the acquisition of Move pick Ice Cream, enhancing Nestlé's position

as one of the world market leaders in the super premium category.

In 2006, Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novelties

Medical Nutrition, Gerber and Hinnies join the Company.

Nestlé entered into a strategic alliance with the Belgian chocolaty Pierre Marceline at the end of that

year. In 2008, Nestlé began a process of selling Alcona by divesting 24.8% to Novelties.

In 2009, Nestlé opened the Chocolate Centre of Excellence in Broc, Switzerland, with Pierre

Marceline one of the master chocolates.

The new decade began with Nestlé announcing the finalization of the sale of Alcona to Novelties,

which was completed mid-year. This represented a remarkable investment on behalf of Nestlé

shareholders. Immediately following the Alcona announcement, Nestlé bought Kraft’s frozen pizza

business.

Further highlights were the launch of the Specialty tea machine system and the completion of the

CHF 25 billion share buyback programmer – and the announcement of a new CHF 10bn

programmed.

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PROFILE OF THE COMPANY

Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and is today the

world's biggest food and beverage company. Sales at the end of 2004 were CHF 87 bn, with a net

profit of CHF 6.7 bn. We employ around 247,000 people and have factories or operations in almost

every country in the world.

The Company's strategy is guided by several

fundamental principles. Nestlé'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 and most relevant products to

people, wherever they are, whatever their needs,

throughout their lives. Our products are manufactured in five facilities scattered around the country,

from Islamabad in the north, to Karachi in the south. Two state-of-the-art multipurpose factories are

located in the agricultural heartland of the Punjab, and the remaining three are dedicated to

producing our trusted brands of bottled water. As citizens of Pakistan, we consider it our duty to make

sure that our manufacturing processes are clean, hygienic and safe. We are constantly working to

reduce emissions at our factories, reducing and treating wastewater, and making our packaging

environmentally friendly. Regular audits have confirmed that our factories' environmental

management meets the Nestlé international standard.

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Kabirwala Factory

Kabirwala Dairy Ltd., as it then called, was establish in 1983 as a UHT milk processing plant. Nestlé

Milkpak Ltd acquired it in 1990 as a subsidiary and installed the MAGGI NOODLES plant in 1992.

Nestlé Milkpak Ltd setup its second milk powder plant at Kabirwala in September 1996, which

produces NIDO, GLORIA, AND skims milk powders.

A new evaporator was installed and commissioned in 1999, followed by a capacity increase of milk

powder production by 150%. The year 2000 also witnessed the launching of premier quality cultured

butter in 100gm And 200 gm packing. In 2001, this butter made available for institutional sale in 10gm

packing.

This factory is now a fully owned unit of Nestlé Milkpak Ltd since April 1997 and is called Kabirwala

Factory.

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Nestle products:

Nestle Milkpak

Welcome health, strength and happiness into your home with delicious and

nutritious MILKPAK; standardized UHT milk that benefits from Nestlé’s

expertise in bringing you the very best in health, wellness and nutrition.

MILKPAK is a trusted brand known throughout the country for its nutritious

wholesome goodness and pure natural taste. Nestlé MILKPA K is the pioneer

brand in the U HT milk market, lends credibility and holds strong brand equity

with consumers. I t continues to enjoy market leadership position in the U HT

category because of it’s excellent product, aggressive sales & marketing and consistent efforts from

technical and production.

In order to keep fulfilling the nutritional requirements of the consumers and create a

significant differentiating factor, Iron Fortified Nestlé MILKPA K offers consumers

value addition in the form of Iron, which is a very important mineral performing

several key functions in the human body. In addition, Vitamin C and A have also

been added. Nestlé MILKPA K is now every homemaker’s partner in helping her

strengthen her home.

MILKPAK UHT cream launched in 1986 is the market leader in the packaged U HT cream category.

It has established this respectable position through developing a longstanding bond of trust with

consumers based on its quality and 24 year history under the MILKPA K brand. Its silky creamy

texture is ideal with delicious fruits, coffee and used commonly as a generous dollop on “naan”. This

brand has emotionally reached out to ethnic cultures through family values and traditions.

One of the biggest brands of Nestlé globally, NI DO was launched in Pakistan in

1990. Since then NIDO has grown from strength to strength to become the

mother’s most trusted partner in catering to her children’s growth and

development. A long with the natural goodness of pure milk, NIDO is now enriched

with Minerals and Vitamins that help in holistic development of children.

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Pakistan’s Favorite Water.

NESTLÉ PURE LIFE is pure, safe and healthy drinking water for you and

your family. Every bottle of NESTLÉ PURE LIFE is produced with the

Nestlé Safety System and is carefully sealed with a proprietary seal. An

optimal balance of essential minerals, enhancing the health and wellbeing

of your family, matches purity of the highest standards.

NESTLÉ PURE LIFE, the world’s number one bottled water brand with presence in 26 countries, was

launched in 1998 in Pakistan.

Nestlé Waters Pakistan is one of largest Nestlé Waters markets, and still continues to grow well

today. This fact is evident in the ever growing distribution, customer base and communication

investments made by the company for its consumers.

The brand is rated as the most preferred bottled water brand in Pakistan by

consumers according to research studies. In 2009, the brand continued to

expand its mission to delight consumers by providing high quality, safe and

pure drinking bottled water. To promote healthy hydration as part of health

and wellness, the 8 glasses a day campaign was used throughout the year

in communication to educate consumers on the need for adequate

hydration. The communication reached consumers on platforms like TV,

radio, print, billboards, packaging, internet and POS

materials.

The idea was incorporated in a nationwide lucky draw consumer promotion on the PET format at the

end of the year which enabled the PET business to enhance growth and enabled the brand to own

the “8 G lasses a Day” platform.

A mega consumer promotion was launched on the HOD format to acquire new consumers at the start

of the year. Two more activities were rolled out at the end of the year to drive consumption and sales.

To stay competitive in the market by offering the right price for the consumers, an innovative shrink

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wrap packaging solution was launched on the PET format. State of the art machinery was installed in

the Shiekhupura factory in May 2009. T his enabled the palletized shipment of the product from the

factory to the distributors; increasing the efficiency through out the value chain.

Cerelacwhether it is your first-born or even your third bundle of joy – each baby is

unique and special. You want the best for your baby in every way and that

means the best nutrition for your baby’s healthy development, giving him or her

solid foundation for a bright and healthy future! Baby Food: March 2009 saw

the launch of CERE LAC Stage 3 in two variants:

“CERE LAC with Apple, Strawberry& P ear pieces” and “CERE LAC with O

range & Apple pieces”. Both variants, targeted to extend CERE LAC consumption beyond the age of

8 months, offer functional benefits of “Helping Baby Learn to Chew” and introducing the baby to new

textures. Launch of these variants was aptly supported by a strong campaign centered on “baby Bara

HoGya” central idea. Response from consumers has been overwhelming and is reflected in

exceptional sales of these newly launched variants.

Even bigger was the reliance of entire portfolio of CERE LAC with addition of Proboscis, offering the

big internationally claimed benefit of strengthening of baby’s natural defenses through the critical first

year of life. T he launch is being supported by a big T V campaign along with extensive outdoor

presence, medical detailing, sampling through health care professionals and extensive trade

presence. Additionally, the entire packaging has been redesigned so that it is not only more vibrant,

but also illustrates the functional benefit clearly.

Infant Formula: LACTOGEN GO LD was launched with the aim to

create inroads into the premium segment by leveraging STRONG

brand equity of LACTOGEN, owning benefit-based territory of “Gut

Comfort”. Available in an exclusive moralized soft packaging, the

newly designed GO LD color packaging has received tremendous

appreciation in the Nestlé world.

Similarly, LACTOGEN 3 was launched in April 2009 as a Junior Follow

up formula for infants 10 months and above. The new extension has received tremendous

acceptance as the volumes have been increasing continuously on a monthly basis.

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In addition to the above launches, the renovated recipe of New A L 110, with beneficial ingredients

DHA/ ARA, was introduced in July 2009.

These new ingredients are present in human milk, and are important for adequate cell membrane

structure and function development, and immunomodulation. Extensive launch and training sessions

were conducted with more than 1,500 Nestlé sales and distribution personnel followed by

independent training sessions for the medical detailing staff.

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Have a break, have a KITKAT

Chocolate is one of the most loved indulgences around the world.

It is one of life's little pleasures, which delights the senses of all ages.

KITKAT is by far one of the most popular chocolates all around the world! Its trademark red and white

colors and the distinct KITKAT logo make it one of the most recognized brands ever. Chocolate is a

small but fast growing segment in Pakistan.

Nestlé KIT KAT was launched in 1996 to make in roads in this market. It is available in 11g (Mini) 17g

(Two finger) and 35g (Four finger) sizes. With a focused distribution approach and marketing

activities the brand has shown potential to grow in the market and is a leading value driver for the

confectionery business of the company in Pakistan.

KITKAT Chunky is a single solid finger that is perfect for those who want a mouthful!

Launched in Pakistan in 2005 KIT KAT Chunky is Nestlé’s giant single wafer version of the world

famous brand – KIT KAT . T he launch was part of the global strategy to make. KIT KAT the largest

selling chocolate brand in the world.

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MAGGI realizes that mums feel the need of being more fun around their children; therefore, it gives

them a chance to break out from their mum mould. Now involve your little ones in the kitchen for a

supervised activity full of fun and great learning as they help prepare MAGGI Noodles for themselves.

2 Minute Noodles

Nestlé pioneered the instant noodles category in Pakistan with the launch of MAGGI 2-MINUTE NOO

DLES in 1992. Today the MAGGI brand is well known, with strong equity amongst its target

consumers. During 2009 MAGGI has reinforced its image of being a partner for mothers to deliver

good food-moments to their kids. Keeping consumer at its heart, the brand is utilizing global R &D

expertise to further innovate & renovate its portfolio in the coming years.

NES QUIK2009 saw the addition of another fun filled brand for Nestlé Pakistan with the

launch of NE SQUI K. T he brand recognizes the challenge faced by the mums of

today who continuously try to strike a balance between their kids needs e.g. good

health and education and their wants pertaining to a fun filled childhood. For this

same reason NE SQUI K is here to celebrate childhood for kids and to become

an ally for mom’s in their battle to get their kids to drink milk. NE SQUI K

dissolves instantly in both hot and cold milk and is available in the following SKUs.

NE SQUI K Chocolate 200g

NE SQUI K Chocolate 400g

NE SQUI K Strawberry 200g

NE SQUI K Chocolate 12g - Single Serve

NES CAFÉ

NE SCAFÉ is the world’s favorite coffee brand. No matter whether you like a cup of pure and black

coffee or a frothy and creamy cappuccino NE SCAFÉ is there to suit your taste and your mood. In

2009, NE SCAFÉ continued to exhibit a growth trend. This growth is mainly attributed to focused

distribution efforts and a timely consumer promotion that was rolled out with the objective of

increasing off-take.

Nestlé MILOReady To Drink (RTD) MILO RT D is a major player in the flavored milks category and enjoys a strong association with the consumers. Launched in 1994, MILO RT D has shown sustainablePerformance over the years. T his year the 200ml wedge pack was changed to a more convenient 200ml slim pack, this helped in further enhancing the value of the brand. I t is popular with all age

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groups specially children and consumers who are looking for energy and taste and seek a healthy active lifestyle.

Nestlé FRUITA VITALS

2010 proved to be yet another “fruitful” year for the brand. Even in the wake of

floods and rising inflation, that put pressures on the consumers’ purchasing power,

Fruita Vitals continued it’s double digit volume growth on account of a strong

consumer pull. The year commenced with a holistic, 360 degree, “Rise and Shine

to Life” campaign focusing on slice of life representing different consumption

occasions. As a result of this campaign,

Fruita Vitals is the preferred juice brand of the consumer. The third quarter marked

the addition of Peach Nectar, a new exotic variant. The consumer response for

peach was overwhelming with the actual sales doubling versus forecast. In

addition, the off-season launch helped retain excitement on the brand even during the lean months.

On digital, 2010 was a landmark year, with Nestlé Fruita Vitals becoming the largest Pakistani FMCG

brand with a Face book fan following of 100,000+. “Aurora”, an advertising magazine, also

commended the success of the brand’s Face book page. Given the passion of the new generation for

music and style, we recognize that young people are always on the lookout for entertainment, and

that musical events and style awards can be a great way to reach out to them. Nestlé Fruita Vitals is

committed to creating healthy, recreational platforms for youth and endorsing youth icons. To this

end, we organized and sponsored several music and style events graced by various celebrities and

glitterati. These events were also captured on digital and TV for an extended reaches.

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Other Products

We believe that food plays a key role in achieving a well-balanced person. And so our philosophy is

Good Food for a Good Life! At Nestlé, our products are developed keeping our consumers, their

preferences and health in mind. Millions of consumers the world over trust Nestlé products for good

reason: when they choose a Nestlé product they have the satisfaction of choosing quality, taste,

variety, convenience and the good nutrition. With over 140 years of experience and expertise, we

take great pride in bringing you a portfolio of health and wellness because happy, healthy consumers

are important to us.

Nestlé’s Developing Programs

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Rural developmentUnder its R Ural Development, Nestlé Pakistan Limited refurbishes

Primary Schools in the most remote areas of the country. Selection of

schools is carried out keeping in mind the Nestlé “Creating Shared Value

guide lines”, requirements of local community and with feedback from

field staff. The projects for these schools include construction of new

block, addition of new classrooms and repair / renovation of existing

facilities. In addition, provision of facilities / utilities, such as, provision of electricity, clean drinking

water, and computer labs, furniture, playground equipment etc are carried Out as part of activity.

Nestlé Pakistan Ltd. also donated a 14 bed CCU Ward at the District Headquarter Hospital

Sheikhupura which is now fully functional and catering the medical needs of Distt Sheikhupura and its

surroundings. Nestlé Pakistan also provides significant support for research and development, and

need/ merit based scholarship Programs, to some of the most prestigious educational institutions in

the country.

Farmer Development

Dairy is the major business component of Nestlé Pakistan and the

company collects milk from 150,000 associated farmers spread over

145,000 square kilometers. The farming practices are still very traditional

with low yield animals, poor infrastructure in rural areas, lack of modern

and best farm practices and lack of skilled farmers. The sustainability in

long-term needs a CSV based “Dairy Sector Development Approach”, both for the farmer and the

Industry. Nestlé Pakistan has established a formal Agri-Services Division to provide free of cost

veterinary support to farmers in rural areas.

Driver Safety Training Project

Nestlé Pakistan signed an agreement with National Highways & Motorway Police through which the

Company extended support for the development of a fully equipped Driver T raining facility at the

National Highways & Motorway Police T raining Institute at Sheikhupura. T his training facility will

include a T raining Hall equipped with a Driver training Simulator, with adjacent offices and rest room

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facilities for the trainees, and a driver-training track. T his is first of its

kind initiative in the country, which promotes the concept of public

private partnership in Pakistan.

The training facility will allow participants to acquire specialized

driving practices and would curb accident rates on motorway through

requisite skills that will be gained during the training period. What started as a pilot drivers training

program in April ’08, has up till now resulted in 13 batches of drivers, i.e. more than 300 drivers,

graduating from the Motorway T raining Institute

Sheikhupura.

This unique training facility will not just provide training facilities to the Nestlé Pakistan’s Drivers but will be extending support in road safety awareness to the entire corporate sector in the country.

Healthy Kids Program in Pakistan

Mr. Paul Bulcke, CEO, announced at our Creating Shared Value Forum in New York this year, the

creation of the Nestlé Global Healthy Kids Programmed, to be implemented in all countries where

Nestlé has operations. The aim of this program will be to raise awareness for addressing the

nutritional needs of the school going Children from the age group of 06 years to 16 years. The plan is

to launch the pilot phase in 2010, with the objective of active program in 2011. Nestlé Pakistan

subscribes fully to this vision. And it is this vision that will steer our way towards the development of

the Healthy Kid program for Pakistan.

Nestlé UNDP Partnership Project

The project titled as “Community Empowerment through Livestock Development & Credit”

(CELDAC), started in Sep 2006 and successfully ended in September 2009. During this three-year

program, a total of 3400 female livestock workers were trained, covering more than 2000 villages in

rural Punjab (Nestlé Component). These trained women livestock workers are now successfully

working as:

• Livestock Health Caretakers

• Village Milk Collection A gents

• Animal Feed Suppliers

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Nestlé Professional

Our vision: “To be an inspiring growth partner that delivers creative, branded food and beverage

solutions, enabling operators to innovate and delight their consumers.” As part of the world’s largest

food and beverage company, Nestlé Professional is passionate about supplying you with branded

solutions that are creative, customized and commercially viable. In our relentless drive for excellence,

we aim to continue to:

1. Share our expertise with you

With over 100 years’ knowledge and experience in food and beverage, we’re here to share our skills

with you and advise you, using our deep, authentic market and industry knowledge, and our

scientific and technological knowhow. Our knowledge is from hands-on industry experience;

it’s not just research based. So, whatever channel you’re in – full service or quick casual restaurants,

college & university, lodging, education, health care, business and industry, leisure, convenience

stores, vending - we can quickly understand your challenges and help you develop profitable

solutions that best meet your needs and delight your customers.

2. Create profitable solutions tailored to you

At Nestlé Professional, we use our global consumer insight to create and deliver profitable new

business solutions that are right for your channel. We bring you brands that your customers trust and

love. We also offer you the service and training you need to maximize customer satisfaction,

efficiency and profitability.

3. Deliver safe, superior quality – every time In an increasingly global, competitive,

regulated and demanding market, we deliver consistently excellent products that you and your

customers can trust. With extensive research, development and qualitative analysis, we aim to

create many more such innovative products, helping you to differentiate your food service

establishment from the competition.

Management TIMES

Marketing and Sales

During 2010, the company continued to achieve sustainable growth by offering high quality products

to our consumers. Our sales team is fully aligned with the Nestlé Corporate Business Principles,

which forms the foundation of all our functional practices.

In alignment with Nestlé’s global priority of enhancing the distribution network, and the concept of

availability of our products “whenever, wherever and however” are fully integrated into our distribution

system. Through our strong sales infrastructure, we ensure product availability from Khunjrab pass to

Karachi in Pakistan and from Mizar-e-Sharif to Heart in Afghanistan. The Nestlé sales set up is

composed of a complex, yet efficient structure spanning over 600 cities and small towns.

This geography is covered through a distributor field force of over 6000 people and 1500 vehicles to

meet the demand. Nestlé has also embarked on a journey of rural penetration through our PPP

(popularly positioned products). To penetrate deeper into narrow streets where it is difficult to reach

with vans, “Motor bike operations” have been introduced in a bid to offer Nestlé products to the

masses so that they can also benefit from the high quality products at affordable prices.

Channel Category Sales department (CCSD)

The CCSD (Channel Category Sales Development) team has played an instrumental role in driving

the sales growth. During 2010 there have been a lot of new initiatives including the development of

new route to markets (RTM), better understanding of shoppers behavior, introduction of channel

wise Plano grams, development of the large groceries channel and sales automation. The process of

Integrated Commercial Planning was managed in a professional manner to lay down strong

foundations to capitalize on all opportunities that the market offers.

Key Accounts

The Key Account business was another growth driver in 2010 where the team worked in close

collaboration with our customers, leveraging the potential of the fast growing modern trade channel in

the country. The Key Account team has worked with an objective to generate sustainable, mutual,

profitable growth for Nestlé products and categories. Moreover, the team has focused on creating

purchase moments that enable our shoppers to make informed choices and make each shopping trip

a delightful experience at the point of purchase.

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Communications:

Efforts continued towards improving the communication of our value added offerings to our

consumers in a way that is most understandable and spot on to the benefits sought after. To better,

equip the generating demand team to drive NHW leadership recognition,

a one full day workshop was organized by the unit. There was great involvement and discussion from

all participants that brought much clarity on the Nestlé NHW vision and the strategies developed to

reach our ambition.

Management TIMES

Production

New ProductsKabirwala factory (KBF) achieved its all time record of new products in a calendar year by introducing

NIDO 1+, NIDO 3+, and Everyday UHT, new MAGGI Noodle flavors Karara, Bar-B-Q, Masala and

new MAGGI Umda Maza seasoning in 2010. Passed Total Performance Management (TPM)

Readiness Assessment & begun TPM journey at Liquid Dairy Pilot line KBF is the Pilot TPM factory

in Pakistan Market. We passed TPM Readiness Assessment and kicked off TPM phase Zero on 29

March 2010. Our TPM Pilot Line is “Tetra D” in Liquid Dairy Plant.

During assessment, no major roadblock was observed and 70 people from TPM pillars and work

Groups are being trained in Phase Zero. This was a great achievement by the KBF Team towards

the TPM journey.

New filler for MAGGI Umda Maza seasoning line

MAGGI, being one of our major food brands, shall play a vital role in this regard. A new Wolf machine

type VPZ 140 has been installed in our Noodle plant to pack the new Umda Maza product. MAGGI

Umda Maza is an 8gm sachet, which is used to enhance the future of everyday food cooked at home.

The Wolf Line’s capacity is to produce 70 packs /minute.

New WOLF Duplex filler, K&L lines, for Milk Powder

At KBF, a new Wolf Duplex (Double Head) machine has been added to meet market requirements.

Main activities of this project were to create space for a new filling machine and to relocate the

Schumacher. More importantly, the safety guidelines were strictly followed while working in this high

hygiene area, where there was continuous production going on. To ensure correct ratio of nitrogen

and Carbon Dioxide, the old gas mixing station was replaced with a new one. This filler will add value

towards our business and enable us to grow further in smaller SKUs.

Nestlé Continuous Excellence (NCE)

NCE is a group wide initiative, officially launched in 2008 throughout the Nestlé world. NCE is an

enabler to be brilliant at the basics, in order to delight our valuable consumers & customers with an

even higher quality, competitive cost and freshness, while excelling in compliance throughout the

value chain. This is a journey towards a LEAN enterprise where everyone is focused on activities

driving towards continuous excellence.

Management TIMES

Kabirwala Factory is the first site, which embarked on the NCE journey in Nestlé Pakistan in 2009.

Kabirwala successfully passed NCE Assessment in 2009, kicked off (Total Performance

Management - TPM) in March 2010, and is aiming to pass TPM phase-1 by end of 2011. Kabirwala

vision to do TPM is to be the excellent factory in the eyes of our Consumers and Customers.

Sheikhupura Factory made remarkable efforts and achieved 80% score during NCE Foundations

Assessment in Nutrition & Chilled Dairy Plants. This is one of the top scores any factory received in

Nestlé Zone Asia Oceana & Africa (Zone AOA). Sheikhupura next step is to expand NCE foundations

to rest of the factory and be part of first LEAN pilot in Chilled Dairy Value Stream.

Management TIMES

Supply Chain

Supply Chain, despite the challenges in 2010 due to floods and socio-economic conditions, has

successfully managed a fleet of 800 vehicles to collect, and deliver over 1.2 million tons of fresh milk

and finished products to 70 cities across Pakistan without a fatality on the road. In addition to this, we

have also managed to ensure smooth and timely supply of materials and services to our factories.

This is indeed a solid achievement for a complex operation like ours. Additionally, the Supply chain

function extended good support to the flood relief activities by engaging it’s staff and transport

tankers for the relief activities.

A number of good initiatives were taken and implemented for continuous excellence and improving

processes, and with due commitment and dedication of our Supply Chain team, the company

operations were able to improve efficiencies and reduce our cost in a number of areas.

One milestone that is of special significance is the successful completion of “Safar Bakhair” project,

aimed at transformation of our fresh milk transport fleet. This project has also helped Nestlé Pakistan

win Nestlé’s Global “Safety at Work” Gold Award for Safe Driving in 2010.

Procurement (Responsible Sourcing)

In 2008, Nestlé globally launched the Supplier Code initiative involving the Procurement function.

Nestlé Pakistan was selected as one of the 20 Pilot markets for implementing Responsible Sourcing

and Packages Limited was selected as our first supplier. Responsible Sourcing is the process of

purchasing goods and services, which are.

• produced or provided in conditions that do not cause harm to humans, animals or the natural

environment.

• from suppliers that meet minimum requirements regarding business integrity, labor conditions,

health and safety and environmental standards in their business activities, production processes,

service provision and their own purchasing procedures.

This initiative was further introduced to all critical suppliers of Raw, Packaging & Promotional

materials. During 2009 & 2010 awareness, sessions were held with these suppliers to ensure that

they understand the requirements and become fully compliant with the underlying principles of the

Supplier Code.

Management TIMES

It is a source of great pride that not a single Pakistani supplier rejected the Supplier Code and all

acknowledged and embraced the benefits. In 2010, most of our critical suppliers have passed

through the Self Assessment Questionnaire and 6 have been audited and

Declared compliant by 3rd party Auditors. Further details on Responsible Sourcing initiative are

available on www.nestle. Com/suppliers.

Management TIMES

Marketing Communication

It all starts with the consumer and/or customer. Deep understanding and a feel of our consumers is at

the heart of all we do at Nestlé Pakistan. It is the basis of our product innovation/renovation efforts,

marketing strategies and communication platforms. The Consumer Insight & Market Research

(CIMR) Unit plays a key role of being a strong service pillar to the various Businesses. Other than

assisting Businesses in getting required formal researches, it organized 252 consumer connects /

home visits for the Nestlé business and research teams, and our creative agency partners allowing

them to gain invaluable “feel” of our consumers. NESCAFÉ had a breakthrough with a detailed

consumer segmentation and strong insight forming the basis of future business growth and strategy.

Additionally consumer research played a key role in defining the ideal cup of coffee (milky, creamy,

&frothy) keeping in mind the taste palate of the Pakistani consumer.

The Culinary Business continued it’s consumer insight driven portfolio expansion strategy with the

launch of MAGGI Umda

Maza. The Strategic Media Unit, utilizing the learning’s on the consumer, assisted Businesses to

transform that into effective communication to our consumers and customers. Important to mention

here that we continued to ensure that all our consumer communications are in line with local and

global best practices as well as Nestlé’ own policies & guidelines. In doing so, utmost care is taken to

ensure that our advertising campaigns are responsible, ethical, in good taste and do not mislead the

consumer, while staying true to brand values & consumer needs. Our policy on Marketing to Children

warrants special mention, whereby we do not conduct any marketing activity, including advertising,

directly targeting children under 6. Also, direct contact is avoided with older children too so that

parental authority is not undermined.

As the consumers take more control of their own media choices and adapt to new technology and

trends – Internet and Mobile have become extremely important media to communicate with

consumers. With an estimated 18 million Internet users and 60 million Mobile Users in the country,

Nestlé Pakistan has been at the forefront of Digital Marketing, being the only FMCG this active on

Social Networks in Pakistan. In 2010, Nestlé talked to 280,000 consumers through Face book, You

Tube and Twitter through 3 brands (FRUITA VITALS, MAGGI, and NESVITA).

In addition to using, traditional and Digital touch points to reach our consumers; our Consumer

Services Unit is dedicated to establishing direct consumer contacts with a cross section of SECs. The

Management TIMES

aim is to engage and educate consumers, build two-way communication and be part of their

everyday life. The education is specified to basic nutrition, health, and wellness, identification of

health needs, along with generating

Awareness on Nestlé’ product portfolio that meets those needs. These activations are conducted

through road shows and in house sessions at various educational institutes, professional universities

and community centers.

In 2010, we successfully carried out activities reaching over 373,000 consumers. To us it is extremely

important to listen to our consumer feedback and suggestions. To encourage more of our consumers

to more frequently get in touch with us we introduced in 2010 our toll free number 0800

62282(NAATA) through our outsourced call center. Nestlé NAATA, a one-stop solution has evolved

for the consumers of today –enabling them to connect and engage with us more frequently – creating

a bond and endearing the people of Pakistan to us. Through personalized calls to every complainant,

alignment of all key stakeholders to one shared goal – maximization of consumer delight – a strong

foundation of “care” has been set. This is a gateway to bridge the gap between us and our

consumers – addressing their complaints, answering their queries, and hearing their suggestions –

providing a human, caring interface each time.

Management TIMES

Topic

Managing, Decision Making and Problem Solving

Topic out line

1) The nature of decision making2) Rational Perspectives on decision making3) Behavioral Aspect of Decision Making4) Group and Team Decision Making in Organization

The nature of decision-making.

The act of choosing one alternative from among a set of alternatives.

Decision making can refer to either a specific act or a general process. Making a decision implies that there are alternative choices to be considered, and in such a case we want not only to identify as many of these alternatives as possible but to choose the one that (1) has the highest probability of success or effectiveness and (2) best fits with our goals, desires, lifestyle, values, and so on.

Decision making is the process of sufficiently reducing uncertainty and doubt about alternatives to allow a reasonable choice to be made from among them. This definition stresses the information-gathering function of decision making. It should be noted here that uncertainty is reduced rather than eliminated. Very few decisions are made with absolute certainty because complete knowledge about all the alternatives is seldom possible. Thus, every decision involves a certain amount of risk. If there

is no uncertainty, you do not have a decision; you have an algorithm--a set of steps or a recipe that is followed to bring about a fixed result.

Decision-Making Process

– The process of recognizing and defining the nature of a decision situation, identifying alternatives, choosing the “best” alternative, and putting it into practice.

– An effective decision is one that optimizes some set of factors such as profits, sales, employee welfare, and market share.

– Managers make decisions about both problems and opportunities.

Management TIMES

Types of Decisions

Programmed Decisions

– A decision that is a fairly structured decision or recurs with some frequency or both.

• Example: Starting your car in the morning.

Nonprogrammed decisions

– A decision that is relatively unstructured and occurs much less often a programmed decision.

• Example: Choosing a vacation destination.

Decision-Making Conditions

Decision Making Under Certainty

• A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.

• Decision Making Under Risk• A condition in which the availability of each alternative and its potential payoffs and costs are

all associated with risks.• Decision Making Under Uncertainty• A condition in which the decision maker does not know all the alternatives, the risks

associated with each, or the consequences of each alternative.

Level of ambiguity and chances of making a bad decision

Lower

Higher

Moderate

Certainty

Uncertainty

Risk

The decisionMaker facesConditions of...

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Problem Analysis vs. Decision Making.

It is important to differentiate between problem analysis and decision making. The concepts are

completely separate from one another. Problem analysis must be done first, then the information

gathered in that process may be used towards decision making.

Problem Analysis

• Analyze performance, what should the results be against what they actually are.

• Problems are merely deviations from performance standards.

• Problem must be precisely identified and described.

• Problems are caused by some change from a distinctive feature.

• Something can always be used to distinguish between what has and hasn't been effected by a

cause.

• Causes to problems can be deducted from relevant changes found in analyzing the problem.

• Most likely cause to a problem is the one that exactly explains all the facts Decision Making.

• Objectives must first be established Objectives must be classified and placed in order of

importance Alternative actions must be developed.

• The alternative must be evaluated against all the objectives

• The alternative that is able to achieve all the objectives is the tentative decision.

• The tentative decision is evaluated for more possible consequences.

• The decisive actions are taken, and additional actions are taken to prevent any adverse

consequences from becoming problems and starting both systems (problem analysis and

decision making) all over again.

• There are steps that are generally followed that result in a decision model that can be used to

determine an optimal production plan.

Management TIMES

The Classical Model of Decision Making

The Classical Model of Decision Making is a prescriptive apporach that tells managers how they should make decision: assumes that managers are logical and rational and that their decision will be in the best interst of the organization.

• Decision Makers have complete information about the decision situation and possible alternatives.

• They can effectly eliminate uncertanty to achieve a decision condition of certainty.• They evaluate all aspect of the decision situation logically.

Steps in the Rational Decision-Making Process

I.I. Recognizing and defining the decision situation

Some stimulus indicates that a decision must be made. The stimulus may be positive or negative.for example, A plant manager sees that employee turnover has increased by 5 percent.

II.II. Identifying alternatives

Both obvious and creative alternatives are desired. In general, the more important the decision, the more alternatives should be considered.For example, The plant manager can increase wages, increase benefits, or change hiring standards.

III.III. Evaluating alternatives

Each alternative is evaluated to determine its feasibility, its satisfactoriness, and its consequences. For example, Increasing benefits may not be feasible. Increasing wages and changing hiring standards may satisfy all conditions.

When faced with adecision situation,managers

Should

. . .

. . . and end up with

a decision that bestServes the interestsof the organization.

• Obtain completeand perfect information

• Eliminate uncertainty

• Evaluate everythingRationally and logically

Management TIMES

IV.IV. Selecting the best alternative

Consider all situational factors, and choose the alternative that best fits the manager’s situation. For example, Changing hiring standards will take an extended period of time to cut turnover, so increase wages.

V.V. Implementing the chosen alternative

The chosen alternative is implemented into the organizational system. For example, The plant manager may need permission from corporate headquarters. The human resource department establishes a new wage structure.

VI.VI. Following up and evaluating the results

At some time in the future, the manager should ascertain the extent to which the alternative chosen in step 4 and implemented in step 5 has worked. For example, The plant manager notes that, six months later, turnover has dropped to its previous level.

Management TIMES

Behavioral Aspects of Decision Making

Sometimes when a decision is made with littleregardfor logic, it can still turn out to be correct. An important ingrediant in how these forcese work is a Behavioral Aspects of Decision Making.

The Administrative Model of Decision Making

Administrative model is ac decision making model that argues that decision makers (1) have incomplet and imperfact information, (2) are consterained by bounded rationality, and(3) tend to

satisfied when making decision.

• Bounded Rationality

The concept that decision makers are limited by their values and unconscious reflexes, skills, and habits.

• Satisficing

The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem.

• Coalition

A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal.

• Intuition

An innate belief about something without conscious consideration.

• Escalation of Commitment

A decision maker is staying with a decision even when it appears to be wrong.

• Risk Propensity

The extent to which a decision maker is willing to gamble when making a decision.

• Ethics and Decision Making– Individual ethics (personal beliefs about right and wrong behavior) combine with the

organization’s ethics to create managerial ethics.– Components of managerial ethics:

Management TIMES

• Relationships of the firm to employees.• Employees to the firm.• The firm to other economic agents.

Group and Team Decision Making in Organizations

In more & more organization today, important decision are made by group or team rather then

individuals. Example include the executive committee of General Motors and marketing planing

group at dell. Managers have choose whether to have individual or team make a particular

decision.

There are several aspects of group cohesion which have a negative effect on group decision

making and hence on group effectiveness. Risky-shift phenomenon, group polarization, and

group-think are negative aspects of group decision making which have drawn attention.

Group-think is one of the most dangerous traps in our decision making. It's particularly because it

taps into our deep social identification mechanisms - everyone likes to feel part of a group - and

our avoidance of social challenges. But consensus without conflict almost always means that

other viewpoints are being ignored, and the consequences of group-think can be disastrous.

Decision making in social setting

Decision making in groups is sometimes examined separately as process and outcome. Process

refers to the group interactions. Some relevant ideas include coalitions among participants as well as

influence and persuasion. The use of politics is often judged negatively, but it is a useful way to

approach problems when preferences among actors are in conflict, when dependencies exist that

cannot be avoided, when there are no super-ordinate authorities, and when the technical or scientific

merit of the options is ambiguous.

In addition to the different processes involved in making decisions, group decision support systems

(GDSS) may have different decision rules. A decision rule is the GDSS protocol a group uses to

choose among scenario planning alternatives.

Management TIMES

• Gathering involves all participants acknowledging each other's needs and opinions and tends

towards a problem solving approach in which as many needs and opinions as possible can be

satisfied. It allows for multiple outcomes and does not require agreement from some for others

to act.

• Sub-committee involves assigning responsibility for evaluation of a decision to a sub-set of a

larger group, which then comes back to the larger group with recommendations for action.

Using a sub-committee is more common in larger governance groups, such as a legislature.

Sometimes a sub-committee includes those individuals most affected by a decision, although

at other times it is useful for the larger group to have a sub-committee that involves more

neutral participants.

Moral dimension of decision making

The ethical principles of decision making vary considerably. Some common choices of principles and

the methods which seem to match them include:

• The most powerful person/group decides.

• Everyone participates in a certain class of meta-decisions.

• Everyone participates in every decision.

There are many decision making levels having a participation element. A common example is that of

institutions making decisions that affect those for whom they provide. In such cases an understanding

of what participation level is involved becomes crucial to understand the process and power

structures dynamics.

Decision-makers and influencers

In the context of marketing, there is much theory, and even more opinion, expressed about how the

various 'decision-makers' and 'influencers' (those who can only influence, not decide, the final

decision) interact. Large purchasing decisions are frequently taken by groups, rather than individuals,

and the official buyer often does not have authority to make the decision.

Management TIMES

Forms of Group Decision Making

– Interacting groups or teams

• are the most common form of decision-making groups which consists of an

existing group or newly formed team interacting and then making a decision.

– Delphi groups

• are sometimes used for developing a consensus of expert opinion from a panel

of experts who individually contribute through a moderator.

– Nominal groups

• are a structured technique designed to generate creative and innovative ideas

through the individual contributions of alternatives that are winnowed down

through a series of rank-ordering of the alternatives to reach a decision.

Management TIMES

Advantages and Disadvantages of Group and Team Decision

Making

Advantages

• More information and knowledge are available.

• More alternatives are likely to be generated.

• More acceptance of the final decision is likely.

• Enhanced communication of the decision may result.

• Better decisions generally emerge.

Disadvantages

• The process takes longer than individual decision making, so it is costlier.

• Compromise decisions resulting from indecisiveness may emerge.

• One person may dominate the group.

• Groupthink may occur.

Managing Group and Team Decision-Making Processes

• Managers Can Promote the Effectiveness of Group and Team Decision

Making

– Being aware of the pros and cons of having a group or team make a decision.

– Setting deadlines for when decisions must be made.

– Avoid problems with dominance by managing group membership.

– Have each group member individually critically evaluate all alternatives.

– As a manager, do not make your position known too early.

– Appoint a group member to be a “devil’s advocate.”

– Hold a follow-up meeting to recheck the decision.

Management TIMES

Decision Making in Nestle:

Nestlé 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. Decentralization:

Nestlé 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. Nestlé 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. Nestlé 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. Nestlé continues to maintain its commitment to follow and respect all

applicable local laws in each of its transparent performance appraisal systems and the freedom given

to those to question their seniors benefit not only the employees but even the organization as well.

CHALLENGES TO DECISION MAKING TEAMS

Strategic decision makers regularly use teams to solve urgent problems such as in the drug wars

where both civil and military assets, and federal and state resources are jointly employed. Most

strategic-level decision-making teams exist for brief periods to resolve a major problem or to develop

national policy and strategies to meet future challenges. While these teams carry great

responsibilities, they are often "ad hoc" in nature.

STRATEGIC LEADERS AND TEAMS

Why be concerned about consensus team decision making at the strategic level? What is so

important about that approach to policy making? Consensus decision making offers the benefit of

using more fully the experience, judgment, perceptions, and thinking of a team of people. To those

who have not participated in consensus decision making, the process may seem frustrating. But,

mastery of small group consensus decision making processes may be the key to achieving a

successful resolution of whatever crisis appears in this complex environment. Because of the nature

of modern issues in the global environment, strategic decision makers must rely on teams to solve

problems and to make policy recommendations. A high performing team can be a positive force in

assessing strategic situations and formulating national policy.

LONG-TERM VISION. Effective strategic leaders employ a strategic team to help them in the

visioning process. This team "sees" the strategic environment from various frames of reference,

visualizing the effectiveness of proposed strategies over time. Teams help leaders to understand a

complex situation and gain insight into how to achieve long-term objectives, allocate resources and

integrate operational and tactical decisions into strategic plans.

CONSENSUS STYLE. Effective strategic leaders know how to get everyone involved in policy

making and build consensus in the process. Within large complex organizations, whether public or

private, consensus is the engine that sustains policy decisions. No strategic leader can succeed

unless he or she can build such consensus. Thus, the search for consensus among peers, allies, and

even competitors becomes a requirement for shared commitment to a national policy, and to

corporate, business policy.

TEAM BUILDING. Successful strategic leaders use their knowledge and skills to structure and lead

high performing teams. Strategic teams that perform with unity of purpose contribute to the creation

of strategic vision, develop long-range plans, implement strategy, access resources, and manage the

implementation of national policy. Given the nature of the strategic environment and the complexity of

both national and global issues, strategic leaders must use teams. They cannot do it alone.

Common observations of the strategic decision making process that contribute to the leadership challenge include:

• Diverse Team Membership. There are often several agencies involved, each having

different terminology, goals, and priorities. Members may lack understanding of various

agency roles and contributions to the issues. And, members have different perceptions about

how the government works.

• Lack of Policy Guidance. Strategic-level decision-making teams often are not given

clearly defined policy guidance from above due to politics or concerns about media scrutiny.

This often leads to involvement in undesirable arenas.

• Low Team Authority. The framework for getting things done is either ambiguous or

nonexistent. Nobody is in charge of the process. The "lead agency" concept is confusing and

agencies are designated without specific guidance. Standard military formats and structures

are not useful.

• Internal Politics. Bureaucratic bias impedes team performance. Team member mindsets

emphasize agency goals and programs at the expense of overall government objectives.

There is a strong preference for agency autonomy due to narrow budget constraints and rigid

resource controls. A powerful bias against adapting and integrating operations precludes

coordinated implementation.

• Organizational Inertia. There is strong inertia toward familiar situation assessments and

courses of action. Members resist change or divergence from existing policies.

• Lack of Integration. Sub-groups produce uncoordinated products because they work in

parallel, even when dealing with sequential tasks. There is no coordination mechanism to

integrate subgroup work while in development. In the end, the team staples together

disconnected subgroup products for implementation.

• Gaps and Ambiguities. In interagency teams, the economic component and the private

sector often have no spokespersons. The resource dimension security is often lacking, and

team assessments in this area are absent, weak, or wrong.

Observations & Findings

Nestlé is the pioneer company in introducing several products in this country. It is a leading

Multinational Corporation. Upon studying its operating practices, we concluded that many of the

principles that we studied in class have been applied by Nestlé.

However, the efficacy of these principles is completely dependent on the way in which they are

implemented and the context in which they are applied. Nestlé managers have carefully evaluated

their environment, the challenges they are facing and the situation they are in, and then they have

chosen the practices they employ.

For example, for many companies, matrix organization presents the solution to integrating the

product departmentalization and the cost savings ensured by the functional approach.

However, Nestlé has implemented the matrix successfully by having several liaisons and

coordinating officers in between such as its Business Partners and Category Managers. Similarly

they have also implemented the performance appraisal system effectively tread its full benefits.

It is for this reason that today Nestlé is the fastest growing company in Pakistan today, and more is

on its way as it aims to achieve the Rs. 100 billion mark by 2014. It can continue to expand by

employing its favorite principles of innovation, research, introducing new products, exploring new and

finer market segments, and venturing into unknown territories. Further diversification and introduction

of greater value added products will help it realize its ambitious goals.

Interview with the Human Resource Manager

Name: Uzma Qaiser Butt:

Human Resource Manager-Commercial Tasks and Responsibilities of

the Manager.

Chain of command and Span of control

Uzma Qaiser is a two boss manager in the matrix structure. He has a

dual chain of command and reports to the Head of Human Resource

Department and the Head of Sales Department. Two people report directly to him. He also shares

targets with the recruitment centre and can be held accountable for its actions. He comes to the

forefronts the first line of contact person for the Shared Services and recruitment.

Strategic Vs Operational Roles

She is more involved in strategic decision making as opposed to making tactical and operational

decisions. His role can be interpreted as a link between the departments and the centre.

The Human Resource Department is responsible for providing tools, processes and procedures to

the managers and then it’s their responsibility to apply it according to the demand of the situation. He

ensures those tools are being used and implemented effectively.

Ensuring Coordination & Integration

Different departments come up with different plans which need to be evaluated not only on terms of

finance but also in terms of the business entity as a whole. This places a lot of emphasis on the

decision making ability of Mr. Janjua. Authority is delegated so that others are involved in making

changes and plans but he has to remain involved at all times with the concerned department. He has

to remain continuously in touch with the departments and has to remain updated about their future

growth objectives. Communication has to be ensured on a regular basis.

Observations & Evaluations

It can be evaluated from his interview that he has the legitimate power and a direction to ensure

coordination and consistency in the organization. He has to optimize and maintain balance. He can

be referred to as following a middle of the road management system to keep a balance between

control and delegation. His functions basically include decision making and planning (to evaluate

plans), leading (to ensure motivation and good communication) and controlling. As he can be seen as

a middle manger, human skills are important for motivating, Conceptual skills are necessary to

ensure consistency between objectives of different departments and the organization as a whole and

some technical skills to provide guidance when needed.

Interview with the Category Manager

Name: Fuad Ghazanfar Saqib Designation: Category Manager

Tasks and Responsibilities of the Manager

The Category Manager’s job is a transitional one. He identifies different channels and shoppers (who

ultimately purchase the product). Nestlé Dairy provides its products to approximately 270,000 shops

within Pakistan alone. There are 8-9 channels through which products are provided to customers:

• Large groceries

• Super markets

• Small stores

• Khokhas (cigarette/ pan shops)

• Bakeries14

• Pharmacies

• Wholesalers

Market Research

Mr. Saqib’s job description also requires him to carry out market research on a regular basis. This

helps in identifying the changing consumer demands and tastes. This also enables the company to

review their strategy so that it synchronizes with the company’s goals and objectives. In this era of

fast changing trends it has become almost impossible for an organization to survive without being

aware of the consumers’ needs. Market research helps to serve the organization’s purpose in this

regard.

Shopper Segmentation

An interesting task that is performed by the Category Manager is to analyze the

shopper segmentation i.e. evaluating various customers according to their status, nutritional needs,

age, gender etc and which channel are they prone to buy from. For instance, a huge percentage of

population buying from the grocery stores such as H. Karim Buksh and Al-Fattah are working

mothers. Thus products that cater to the needs of working mothers should be distributed to various

grocery stores. Moreover, keeping in view the shorts helve life of dairy products it becomes vital to

distribute appropriate products to each channel, which meet the needs of each channel’s ultimate

consumers.

He says,The strategy is not to find the solution to the problem but to find the person who has the

solution. The idea is then to sit down and come to a mutual decision on how to go about solving it.

One should have an open mind…the fault can be at your own end too.’

Observations & Evaluations

The Category Manager is not directly involved in the planning management function. Though he is

involved in collecting data that helps develop strategic plans but his role in the planning function is

limited. The Category Manager’s role as an organizer is essential. He needs to allocate human

adnoun-human resources to various channels. To ensure that no stock outs occur he needs to

arrange his resources in a manner so that each product is available at each channel. Moreover, an

excellent coordinator and communicator are essentials of a Category Manager. He coordinates with

the sales, finance and the marketing department constantly. Moreover, to ensure that everything is

running smoothly at each channel he needs to maintain regular contact with the relevant person at

each channel. Since there are not much people working under Mr. Saqib, the leading management

function doesn’t really come into play.

Questions

REFERENCES I have collected all the data from the following sources,

• www.nestle.com • http://www.nestle.pk/index/contact-us.aspx • http://www.nestle.pk/index/milk-collection-system.aspx• By communicating with the employees