Global Leadership And Organisational Behaviour Case Study

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Introduction

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Leadership is the process that includes influencing and motivating employees to work for achieving the firm’s objectives. Effective leadership helps in adequate communication among employees that leads to improving performance of the firm (Van Wart et al, 2019). In the dynamic business area, company can gain competitive edge over rivals only when it has highly skilled and motivated workforce. With the help of competent leadership style or approach business unit can introduce and implement change successfully. This report is based on the contemporary leadership style used in Nestle and how this helps company in achieving its goals. Nestle has been established at Vevey, Switzerland in 1866 and working successfully in providing various food products including milk, baby food & coffee. This report will also include the analysis of leadership function by aligning the same with Nestlé’s performance. To analysis the leadership function various models have been used that helps in getting better insight about the leadership strategies of Nestle. This report will include 4 sources of leadership power and discuss on the role of employees in sustainable leadership within firm. This will also depict on various factors that has been impacting the effectiveness of leadership within the firm.

Overview of Nestle

Henri Nestle has established Nestle in Year 1866 with the motive of providing high quality foods and drinks product to consumer. It has been established in the Switzerland and is working effectively towards providing high quality food products. The vision of company is to provide healthcare and nutritious product to consumer that assist in keeping its entire stakeholder happy. The company has establishing over 150-year age and has been diversified its working to more than 188 countries all over the world. Maggie, Nespresso, Nescafe, KitKat are the famous brand established by the Nestle. The company is having dominant market share in the industry that amount to 52% in 2022 (Market share of Nestle, 2022). Nestle is having 344 factories in 77 countries of world and has an annual turnover of 94.4 billion at the end of 2022. There is a large number of employees associated with the company such as 275000 employee’s world-wide. Company is having more than 33% of its sales from North America and over 24% in UK. Product provided by company is targeting towards newborn babies to 45-year-old individuals. The pricing policy of company is aiming at attracting middle- and high-class people around world.

Evaluating contemporary leadership theories:

Leadership theories aims at describing traits and behaviour that individual should adopt to become an efficiency leader. This theory contains a description regarding how an individual could be an effective leader and various benefits of achieving such traits. Various leadership theories are as follows:

Contingency theory:

 Akpoviroro, Amos and Olalekan (2019) claimed that choice of leadership and management style is based on the situation in which individual is working. This leadership theory focuses on the fact that leader’s skills and capabilities can be clearly understand when they have been exposed to different situation and circumstances. This leadership style motivates leaders to adapt changing environment and use their skills and abilities optimally in overcoming issue. Nestle is targeting towards producing various food products, company face huge challenges in the maintaining the quality and guidelines of National institution of nutrition. Company has faced huge issue when the Maggie has been determined as harmful for health and its market share dropped drastically. It was the time when management of company faces issue in gaining confidence of its public consume product. At that time management needs to identify the best manner by which reputation and goodwill of firm could be enhancing again. Leaders have taken an effective decision that involves stopping the production units and sales of product within market. Management has focused on creating awareness and gaining confidence of customer regarding changes in production method and its benefit for consumer. Arun et al, (2021) described that this theory does not provide adequate courses of action that need to be followed. It is believed that leaders are having full knowledge regarding courses of action which is not feasible.

Behaviour theory:

Asadi, Azgomi and Entezari-Maleki (2019) claimed that behaviours & traits of leaders have been acquired through continuous interaction with surrounding and environment. To identify the effectiveness of leadership skills, leader’s actions should be examined rather than his qualities. This will help in gaining better knowledge regarding the abilities and capabilities of leaders. It has been believed that by observing the action and style of other leaders, one could develop the qualities of leadership that help in making better leader. The advantage of implementing behaviour theory is that it helps in enhancing learning & knowledge level of individuals. However, Ashok et al, (2021) believed that this theory of leadership general guideline has been provided to the leaders according to which they need to work but does not include guideline relating to the actions one need to undertake in particular situation. This theory has not been effectively used in Nestle as firm works in dynamic circumstance that leads to generation of different challenges.

Situational leadership:

This type of leadership aims at providing flexibility to leaders to mould their skills according to the situation or circumstances. Belinkov et al, (2020) assessed that this is the most effective leadership theory as it provides opportunity to the leader to use leadership style according to the needs and demand of environment. Nestle has been using this leadership theory to motivate leaders to apply different theories that results into promoting innovation within the firm. However, Belinkov et al (2020) described that this theory is not effective as it requires huge time and the leaders need to incur efforts towards changing form one leadership style to other. This results into decreasing in efficiency of work that has been carrying out within firm.

Transformation leadership:

Fournier (2022) presented that leadership style used by firm should be capable of fulfilling present needs and overcoming future uncertainties. This involves decision that will help in fulfilling expectation and the needs that could occur in the upcoming time. It has been identified that at the time of inflation within country, transformation leadership helps in taking decision in advance regarding various measures that should be undertaken at the time of economic or political crisis within country. Nestle has started online business this help firm in carrying out its operations at the time of the pandemic within company. This online business decision and home deliver has helps Nestle in long term as customer preference has changed over time. Online facilities help business in gaining more customers and are by the demand of future time. However, HARYONO and Sulistyo (2020) claimed that all the decision taken is on assumption which cannot provide positive result all time. It creates difficulty for leaders to estimate right course of action eventually results in unrealistic dependency.

Function of leadership and its influences on the performance of Nestle.

Goals and objective of the company can be achieved effectively by using various leadership theories, model and concept. Various types of models and theories used within firm are as follows:

1. Mintzberg’s 10 roles: According to Heidbrink (2019) a leader needs to face different type of circumstances and situation in their organization. This creates obligation for leader to play various types of roles that assist in reducing scope for conflicts within firm. Mintzberg has provided 10 roles that each leader should be effectively adapted to carrying out operations of organization. This includes the role of entrepreneur, spokesperson, disseminator, disturbance Handler, Figure head, liaison, leader and negotiator. This model focuses on the developing the quality that helps in taking effective decision and in reducing confusion within firm. As firms working in dynamic condition, it is necessary for manager to acquire all these qualities that assist in overcoming unforeseen situations. On the other hand Hernández-Betancur, Montoya-Restrepo and Montoya-Restrepo (2020) described that it is difficult for manager to acquire and implement this entire role effectively. This model did not contain clear information regarding measures by which such qualities could be acquired. It is most simple method that one can acquire for becoming an efficient leader but in today environment leader's role has become more complex that cannot adequately carry out through this model. Various types of training and development session has been conducted within Nestle that helps in gaining skills by which manager can apply this entire role. It has been identified that Nestle is most advance and innovating company in the food industry. Thai indicate efficiency of manager in carrying out effective entrepreneurial and leaders’ role.
2. Kotter theory of leadership: Hlavaty, Lizbetin and Fazik (2023) mentioned in their study that all business workers in dynamic condition and it is necessary for all individual to adapt to Changing environment. Kotter theory of leadership emphasis on motivating leaders and employees to formulate strategies that helps in adapting to changing surrounding. It includes 8 step processes that compromise of creating urgency, form a powerful coalition, creating vision, and communicating vision to employees, removing obstacle and present changes in organisational culture. This leadership model is generally adopted when the firm is planning to bring changes into their operations. However, Janićijević (2019) explained that this model does not promote employee’s inclusion that results into dissatisfaction among workers. This model requires huge time as managers needs to follow 8 steps before taking any decision. Nestle has effectively implemented this leadership function in their operation as firm is focusing towards introducing healthier and sustainable goods in their operation. This helps in fulfilling needs and preference of individual that helps in maintaining stability within industry.
3. Zaleznik model of leadership: According to Jensen, Potočnik and Chaudhry (2020) manager and leaders both have significant role in the success of company. He claims that leaders are one which initiates new approach within firm while manager stick to historical concept. It has been identified that company’s usually does not focussing on creating scenario where role of leaders could be flourish. This model is concentrated towards adopting new and innovative approach to resolve particular issue rather than following historical concept. However, Jia, Gong, and Brown (2019) claims that identifying new approach takes huge time and the effectiveness of such approach cannot be ensured. This model does not provided adequate guideline for overcoming long term issue rather focuses on short term measure by which issue could be ignored for some time. When Maggie faced huge set back form consumers, managements of company has identified new and innovative method to manufactures product. They have created heartier version of product and able to gain confidence of consumer. This indicates that company sir effectively using this leadership model in their operation.

From the graph it has been identified that nestle is able to attract large number of consumer. This indicates that company is able to adapt changes according to needs and wants of the market. Nestle is effectively using Mintzberg, kotter and Zaleznik theory of leadership that assist manager in effectively carrying out their operations. Company is using flexible approach in leadership that assist management in forming strategies that can creates competitive edge in market and improve overall position of firm.

Sources of leadership and employees’ contribution

Leadership power refers to capability of managers in managing events, resources and employees of firm (Sloof and von Siemens, 2021). In the food process industry, leaders have been following the legitimate, referent, coercive and rewards power. López-Cabarcos, Vázquez-Rodríguez and QuinoA-Pineiro (2022) ascertained the fact that legitimate power should be given to leader’s that helps in improving the satisfaction level of employees. This type of power refers to the right of particular individual based on their role in company. In this power both reality and perception has been included as employees believe that the particular individual has some power to control based on their position. They believed that this power will assist in controlling decorum and discipline within form. This will also assist in complain employees actions with rule and regulation of firm and help in improving performance of employees whereas Marshall et al (2019) describes that this model only creates pressure for employees to complete task. This results in increases in dissatisfaction and irrigation among employees because of continuous power and negatively impacting their performances. Nestle has been using this leadership power as there are complex operations been carried out company which needs to be effectively coordinated.

McLaren, van der Hoorn and Fein (2023) explained that for effectively carrying out the work of employees, leaders must use referent power which includes creating interpersonal relation with them. This will help in gaining employee’s confidence and improving loyalty of worker towards organization. It has been identified that such power could be gained by being authentic and competent in their behaviour. People who speak with confident and have good level of knowledge are always able to attract more people and influence their decision. It has been identified that company is having more than 8000 employees in UK and over 275000 employees worldwide. It indicates that company is able to attract large number of employees towards firm and referent power has been effectively used. The view of Minkov and Kaasa (2021) described that referent power should be used in adequate manner as individual with too much referent power usually become egoistic and opinionated. These results in the ignoring needs of employees and leads to reduction in satisfaction level of the workers. It has been identified that using referent power results in centralization of power as decisions are mainly taken by leaders that results in ignoring involvement of employees which negatively impact working environment of firm.

From the view point of Moonen (2019) it has been determine that rewards power should be exercised by leader within firm. This power is related to providing ability and right of manager in providing financial and non financial incentive to employees according to their performances. This type of power will help in improving motivation level of employees and eventually results in enhancing overall performance of workers. It ahs been identified that Nestle‘s employees‘s turnover rate has been decreasing over period of time. In previous year, turnover rate was less than 5% which indicate satisfaction level of work force within fir. Nestle provides employees with various benefits related to health, retirement saving plans, flexible working, disability endurance etc. Through research, it has been defined that firm is using adequate rewards strategies that help in attracting and retaining employees. Based on the critical point of view of Odiaga et al, (2021) explained that this power may negatively impact morality and ethic of individual. Employees may use illegal or unethical measures to complete work and focus may be transferred towards rewards.

Palalic and Ait Sidi Mhamed (2020) described that coercive power should be used under a certain limit within firm for efficiently achieving goals and objectives. This power should be used within form that assists in maintaining discipline and regulation within firm. It has been identified that nestle is having rigid code of conduct for the employees and define penalty and punishment for not compiling to any of them. This creates sense of fear and threats among employees that assist in effectively and efficiently completion of work by employees. However Ratnam, Palanisamy and Yang, (2020) described that use of this power results in decreasing innovation within company as employees lack confidence in determine new ways because of fear. This also results in decreasing motivation and satisfaction level of employees which leads to reducing productivity. Employees play a significant role in creating an effective leader as engagement of employees helps in determine pReferences of workers which can be used by leaders in forming appropriate strategies. Cooperation of employees and their feedback helps in improving performance of leaders that eventually result in their overall development.

Various factors impacting effectiveness of leadership

There are various factors and variables within nestle that are impacting the effectiveness of leadership within firm. Cultural and environment are two crucial factors that have effect on the effectiveness of leadership within firm. It has been determined that cultural of the workplace has a great influence on effectiveness of leadership. If the cultural of company is to provide freedom and promoting innovation within firm than democratic leadership style will be chosen and vice versa. To understand the impact of cultural impact on the leadership of nestle, Hofstede’s cultural model has been discussed below:

From the analysis it has been defined that leaders in company should focus towards implementing leadership style that helps in attaining cultural norms of Nestle. If culture of company is not effective then employees within firm will resist changes in the organization that will impact on the effectiveness of leadership. As Nestle has diverse workforce it is important for leaders to manage culture of organization as it may results in conflicts among employees which could impact leadership.

Environmental factors:

It has been determined that business environment has a huge influences on the effectiveness of the leadership ((Wilson, 2020). As company is working in industry of food, this makes it necessary for leaders to take decision in compiling with food authority. In current time, leaders should formulate strategies regarding CSR that helps in improving sales as customer preference has changed over time. There is large number of competitors available in food processing industry so leaders should take decisions that help in creative competitive edge (Jia, Gong and Brown, 2019). It has been identified that the profitability situation of nestle has been increasing over periods of time. This indicates that leadership model used by firm is efficient enough that assist in attracting more customers.

CONCLUSION

It has been identified from report that Nestle is implementing effective leadership model and theories that helps in improving overall performance of firm. It has been identified that contingency, behaviour, transformational and situation leadership models has been used in the Nestle that helps in overcoming various issue. This assists company in deciding on policies and strategies that will help in improving effectiveness of leadership styles. It has been depict form report that Metzger’s 10 role, kotter and Zaleznik model of leadership has been used that pays emphasis on roles and duties that a leaders need to acquires for increasing its efficiency. There are various powers which leaders should have that helps in influencing and satisfying employees of firm. Legitimate, referent m, rewards and coercion power has been used by nestle’ managers. It has been identified that to get effective results for this power, leaders should used power in an effective manner. It has been indentified that nestle is promoting a culture of collectivism, harmony, cooperation, indulgence and innovation. The company is working in a highly competitive market and the customer preferences towards has been changing over time. This made it necessary for leaders within firm to form strategies that can helps in overcoming environmental and cultural factors.

REFERENCES

Books and Journals

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