History

It all began from a little venture by a Swiss pharmacist, Henri Nestl, to develop an alternative for infants who cannot be breastfed, with a combination of milk, wheat flour, and sugar. Not only did this formula help reduce infant mortality from malnutrition across Europe, but also formed the basis for the worlds largest food and beverages company. To this end, Nestl soon added chocolate, milk, and Nescafe coffee to its line of items through mergers and research. Nestl kept increasing the length and width of its product lines to cater to a wide range of consumer needs. As Nestl was making its operations global, it found an eager market in Pakistan. Nestl has been serving Pakistani consumers since 1988, when its parent company, the Switzerland-based Nestl SA, first acquired a share in Milkpak Ltd. Few of the milestones achieved by Nestl Pakistan and Milkpak Ltd. are mentioned in Exhibit 1.

Global Structure
At the international level, the world is divided into four parts, each reporting to the world headquarters in Switzerland. Nestl employs bottom-up as well as top-down reporting. For yearly budgeting, each territory reports next years forecasted sales to its Area Manager who after gathering all these reports sends a summary for his area to the Regional Manager. Regional and Zonal Manager do the same process until National Sales Manager has the forecasted sales for the entire country. Target sales are then reported down to each zone, from where it is sent to each region, and the process continues until each territory has its target sales (Exhibit 2).

Organization Structure
Nestl Pakistan follows a flat, matrix organizational structure (Exhibit 3). The departments are divided function-wise and product-wise. All the products use different functional departments, and all the functional departments have specific product departments within them. The span of control is wide, as each department head has many direct and indirect reporting relations with his subordinates. Also, as in a pure matrix form, nearly all employees have two or more departments to report to, directly or indirectly. The Managing Director of Nestl Pakistan reports directly to the Head Office in Switzerland, and gets guidance and objectives from them. Directly under the Managing Director are different functional departments: Business Executive Managers Head of Human Resource Department Head of Sales Department Head of Supply Chain Head of Food Services Department Head of Technical Department Head of Finance Department Head of Corporate and Legal Department

The following departments have an indirect reporting relationship with the Managing Director:

Head of Nutrition Head of Waters UNDP Project

The first two departments are required to report directly to the Head Office, while the UNDP Project comes under the United Nations. Since this paper aims to analyze the Human Resource Function and the Brand Function in detail, the following is the departmental structure of the aforementioned functions.

Human Resource Department

The Human Resource Department is subdivided into three branches: Shared Services Centre of Expertise Business Partners

Shared Services
Shared Services are responsible for data and record collections of all the employees of Nestl Pakistan. They handle the payrolls, division of provident funds, medical allowances, travel allowances, and all other administration of the employee funds.

Centre of Expertise
The Centre of Expertise is the department responsible for recruitments, remunerations and organization development through Nestls training programs, both local and international.

Business Partners
The Business Partners form the link between different human resource activities of the organization, and the functional departments they are working with. The Human Resource ManagerCommercial is a Business Partner for Sales and reports to the Head of Sales Department. He is supposed to form a link between the Human Resource Department and the Sales Department, making sure all decisions made by the Sales Department are in line with the Companys goals and policies.

Brands Department
The department for Brands has been subdivided into departments for each product line that Nestl produces. Each of these product lines comes under a Business Manager, who has two Brand Managers under him. Each Brand Manager is responsible for specified products under a certain product line, and has two Assistant Brand Managers reporting to him.

In each of the units that are under the Business Managers, there is a Category Manager, who is equivalent in position to the Brand Manager. A Category Manager reports indirectly to the Business Manager, and directly to the Head of Sales Department.

Dairy
Dairy is the chosen product line for the project. Dairy is divided into four different product lines, which are further divided into units each headed by a Business Manager. The product lines of dairy are: Child Nutrition Tea Creaming Adult Health and Wellness Chilled Dairy

The first two are responsibilities of one Business Manager and the last two of the other. The Category Managers job is to form a link between the Brand Manager and the Sales Manager from the Sales Department.

Mission Statement
At Nestl, we believe that research can help us make better food so that people live a better life. Good Food is the primary source of Good Health throughout life. We strive to bring consumers foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In addition to nutrition, health and wellness, Nestl products bring consumers the vital ingredients of taste and pleasure. As consumers continue to make choices regarding foods and beverages they consume, Nestl helps provide selections for all individual taste and lifestyle preferences. Research is a key part of our heritage at Nestl and an essential element of our future. We know there is still much to discover about health, wellness and the role of food in our lives, and we continue to search for answers to bring consumers Good Food for Good Life.

Vision & Strategy

The Nestl global vision is to be the leading health, wellness and Nutrition Company in the world. Nestl Pakistan subscribes fully to this global vision along with its national vision to become a Rs. 100 billion company by 2014. It envisions to: Lead a dynamic, motivated and professional workforce.

Meet the nutritional needs of consumers of all age groups 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 the country. Nestl milk collection and agri-services will continue to play the primary role in development of the dairy sector in rural Pakistan. Fully integrated systems (Nestl Pakistan, suppliers, customers) ensure efficient business processes. Non-strategic activities and products are outsourced or discontinued.

Core Business Activities

Nestl Pakistan is in the business of manufacturing food items. It seeks to provide products that have quality, taste, variety, convenience and nutrition. It caters to the needs of infants to young people, providing foods for both nutrition and pleasure. It has several product lines, namely: Milk, dairy and chilled dairy products, e.g. Milkpak, yogurts; Beverages, e.g. juices; Bottled water i.e. Nestl Pure Life Water; Baby food, e.g. Nido; Prepared meals, e.g. Maggi noodles; Breakfast cereals, e.g. Kokocrunch, Honey Stars and Chocolate and confectionary, e.g. Kit Kat. Apart from that, Nestl also provides food services, i.e. food and beverage solutions, to out-ofhome establishments, including restaurants and hotels. The Boston Consultancy Group Matrix in Exhibit 4 analyzes Nestls dairy products in terms of their market growth rate.

Consumer Service
Nestl believes in providing efficient consumer service as part of its strategy. And this consumer service is not only limited to handling consumer complaints, rather it revolves around building a long-term holistic relationship with consumers. In fact, for Nestl, the organization chart (Exhibit 5) is upside down. The consumers, and not the managers, lie at the top of the hierarchy. Thus all the activities aim to provide timely and efficient response to consumer needs and fulfilling their wants in the best possible manner. Nestls advanced consumer contact management system CONSO+ helps it in customer relationship management, and forging close, long term and trustworthy ties with its consumers. Apart from the more formal lines of communication, the company also has the human elementthe field staff, which remains in contact with the consumers.

Thus efficient consumer service goes a long way in ensuring consumer loyalty, as well as guaranteeing higher revenues per consumer, from more consumers.

Corporate Social Responsibility

Nestl understands its role as a corporate entity in the socio-economic demographics of Pakistan, for which it performs social investments and realizes and promotes the positive impacts while at the same time restricts the negative impacts that occur as a result of its operations in the value chain.

Social Investments
Nestl Pakistan complies with Environment Act (1997), and tries to ensure that at every stage of its operations, the environmental impact is minimal. All Nestl factories are eco-efficient (more production for less resource consumption, waste, and emissions) and have environment committees that manage and review environment issues. Nestl Pakistan responded immediately to the earthquake that struck Northern Pakistan in October 2005 by providing its infra-structure and resources to work in the affected areas in collaboration with Pakistan Air Force to distribute goods worth over Rs. 20 million. Nestle and its employees together also donated about Rs. 36 million for the rehabilitation process. Nestl Pakistan has wide range of activities under its social investment programme. A brief outline of each activity is as follows: Nutrition program for mothers and children Financial support to victims of natural disasters Well and hand pump installation projects Help centre for farmers School rehabilitation and education advancement Research and development initiatives

Creating Shared Value

Nestl realizes that every business is dependent on the society it operates in. For a business to prosper, its imperative for the society to be a part of that success. Therefore, Nestl creates shared value at every step of its value chain under the framework demonstrated in Exhibit 6.

Human Resource Function Shared Services (SS)

As explained in the organization structure, this department is responsible for maintaining the data and records of the employees to decide about their pays, allowances etc. The department is also supposed to carry out the performance appraisals (PA) with the help of the line managers. The SS sets guidelines and provides the line managers with tools, systems and processes to evaluate their subordinates. Based on these evaluations, pays and remunerations are decided. (Remunerations are done by the Centre of Expertise). The pay and compensation strategy is tied to the achievement of the business objectives and helps them build a growth-oriented culture. Apart from payrolls, SS is in-charge of administration of employee funds. It is supposed to decide that which employee gets which fringe benefit, and to what extent, for example, medical allowances, travel allowances etc. The provident funds for employees are also calculated by SS. The SS is a vital department for maintaining employee motivation and loyalty to Nestl. It needs to be ensured that all data collection and PAs are done correctly, and in line with the procedures and guidelines set by the organization. It also needs to give enough allowances and leverages to the employees to allow them to balance their personal and professional life. Nestl believes that employees private and professional life should have a good balance. In the same spirit, Nestl encourages flexible working conditions whenever possible and encourages its employees to have interests and motivations outside work. This not only maintains satisfaction with the job, it also increases loyalty, productivity and provides motivation for better performance in the future.

Centre of Expertise
The Centre of Expertise is the department in Human Resource Function which is responsible for recruitments, organization development (training programs) and remuneration.

Hiring & Recruitment

Hiring and requirement is the most important task performed by Centre of Expertise. It is the process on which the entire companys future and performance relies upon. The Business Partners are supposed to communicate the staff requirements of different departments, and set the job description and requirements. Contacts with universities and recruitment events are maintained to have good visibility of the Company and recruitment sources. The recruitment office looks for three key characteristics: knowledge, personality and motivation. For managerial positions, specific leadership qualities and business acumen is required. Even when promoting employees from within the organization, it is their role to keep an eye on valuable candidates. Those who meet the essential requirements are then evaluated through a series of screening tests, interviews and group discussion sessions to gauge their suitability for the job. It is extremely

important to hire the right person, not just for Companys objectives, but to help integrate newcomers in the organization so that their skills and behavior can merge smoothly with the company culture. At Nestl the recruitment is done keeping the objective of diversification in mind. The organization has a global mindset which involves diversity to encourage and foster creativity and new ideas, which forms the unique selling proposition of a business.

Training Programs
Training is seen as an ongoing process. It doesnt only involve training sessions and lectures, but day-to-day interactions with the superiors and fellow employees, absorbing their knowledge and ideas: guidance and coaching by managers is a given. Knowledge also comes through the tasks assigned: simple learning-by-doing and on-the-job training. Apart from that, Nestl is committed to enhancing employee skills and competencies through formal training programs. These are selected according to individual requirements and the job they are working for. The candidates are selected based on their performance, potential and personal development goals and recommendations come from the Head of Human Resource Department and the Business Partners of respective departments. The Centre of Expertise is responsible for designing and providing the requisite training once the candidate and his needs are identified. The programs are not just limited to functional specific training, for example sales training, but also for augmenting interpersonal skills and image building, in short, the softer skills. The training could be local, regional or international, based on need and performance. At the International Training Centre in Switzerland, the trainee has the opportunity to meet managers and leaders from all over the globe, getting training sessions from even the CEO, Peter BrabeckLetmathe.

Remuneration
Nestls remuneration is benchmarked against other organizations and surveyed on a regular basis to ensure that it remains competitive and fair. The policy needs to be framed keeping local market, individual performance, skills and potential for development in mind. This is what they call the Total Competitive Remuneration. The managers task is to ensure that the remuneration structure facilitates the implementation of flat organizational structure and be flexible so as to be able to adapt to the evolution. It is also the managers task to evaluate remuneration of each staff member taking into account her/his professional performance and her/his specific responsibilities. These specialists need to know about stock options, and how to compare and compensate the employee payroll system. They need to make regular changes in their strategies and find new ways of operating to increase the efficiency of the whole organization. This helps ensure not just the companys growth, but motivation for individual growth as well.

Interview with the Human Resource Manager

Name: Omar Hassan Janjua Designation: Human Resource Manager-Commercial

Tasks and Responsibilities of the Manager Chain of command and Span of control
Mr Janjua 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 forefront as the first line of contact person for the Shared Services and recruitment.

Strategic Vs Operational Roles

He 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 its their responsibility to apply it according to the demand of the situation. He ensures those tools are being used and implemented effectively.

Role as a Business Partner

His tasks and responsibilities can be clearly explained with his position in the business as a Business partner. A business partner is a link between the whole of the organization and the Human Resource Department. His main focus is on coordinating and integrating the strategies and plan of actions of different departments in line with the whole organization. He ensures that the growth objectives and plans of the departments dont come into conflict with the mission of the organization as a whole. The Centre of Expertise is concerned with making changes and finding new ways of operating to increase the efficiency of the whole organization. Mr Janjua has to be careful in maintaining a balance between innovation and business objectives. His role is not transactional and he is not involved in the paper work For example, if there is a need to recruit people in a department, he doesnt advertise the job description himself. Instead he communicates the needs of the particular department to the Human Resource Department. He then actively participates in the selection process i.e. selects the right person from a pool of applicants through interviews and assessments.

In contrast to the Centre of Expertise which requires specialists, Mr Janjua is a generalist; he doesnt have to be an expert but has to be aware of everything that is going around in the organization.

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.

Training & Development of Employees

Mr Janjua placed special emphasis on the need for training in an organization so that the employees can handle their delegated responsibilities well. Training can be seen as a tool to support them in their tasks and responsibilities and to motivate them to perform outstandingly. The Organization Development Department is responsible directly for the training needs of the employees. They hire trainees and then Mr Janjua communicates the objectives of the training plan to the trainees. For example, should the training be provided in interpersonal skills or should it be provided in specific functional skills. He then helps in identifying and nominating a pool of people who can benefit and implement the training practically in the near future so that the benefits are maximized for the organization as a whole.

Ensuring Motivation & Communication with the Employees

After the line manger he is responsible for ensuring that the staff is motivated and committed to their work. He believes in keeping an interactive relation with the employees and to intervene anytime there is a conflict between two parties. He has also been involved in conducting road shows and meetings to encourage a spirit of participation and belongingness in the employees.

Nestl as a Global Entity

Nestl is a global organization so ensuring that the operations and objectives of Nestl Pakistan are in coordination with the global image is important. Mr. Janjua keeps this in mind while evaluating projects and plans before implementation. Like other training projects, he nominates people, for Nestls international training programmes.

Providing Guidance
His role also focuses on providing guidance to the employees when needed e.g. that when opinion surveys had to be filled out for all the employees; he provided them with an orientation to ensure there were no confusions as regards to the survey.

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 a 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 Managers job is a transitional one. He identifies different channels and shoppers (who ultimately purchase the product). Nestl 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) Bakeries Pharmacies Wholesalers Rural channels.

Sales Situation in Different Regions

Mr Saqib is responsible for the daily sales situations in different regions. By reviewing the daily sales situation in different regions of the country, he analyzes which regions are worthy of more effort, thus assisting in formulating tactics helpful for the companys growth. Moreover, a daily analysis also helps in evaluating whether the adopted strategy is able to achieve the desired results.

Market Research

Mr Saqibs 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 companys 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 organizations 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-Fatah 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 short shelve life of dairy products it becomes vital to distribute appropriate products to each channel, which meet the needs of each channels ultimate consumers.

Promotion Design
Moreover, the Category Manager also being responsible for analyzing the success of promotional activities has to evaluate the pre-promotion and the post-promotion scenario. This enables him to analyze the potential of a particular promotional activity and the impact it has on the sale of products, thus making certain that the promotional activity is not detrimental to the profitability of the product.

Determining Stock outs

The Category Manager makes sure that there is no instance of stock outs at each channel the product is being distributed because a stock out damages the companys reputation and sales. For instance, if a consumer doesnt find a Nestl Milkpak of 250 ml, he will buy Olpers or Haleeb. Thus, its pivotal for the companys profitability and success to ensure that no stock outs occur. Mr Saqib has to figure out the source of the problem.

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 mindthe fault can be at your own end too.

Penetration Data Analysis

This task requires Mr Saqib to pin-point lapses in different situation across different channels and get to the root cause of the problem.

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 Managers role as an organizer is essential. He needs to allocate human and nonhuman 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 doesnt really come into play. But still he has to guide people on how to analyze each area and how to collect the data relating to each region. The Category Managers role as a controller is vital. He makes certain that each activity being carried out is in conformance with the organizations requirements and standards. He has to ensure that efficient allocation of funds is being made. Moreover, he has to control human resources so that each individual is working in the best interest of the organization and for this purpose he provides guidelines to each employee.