Accordingto the study, Nestle underwent both first as well as second orderchange. First orders change is firstly seen when Nestle started itsglobal expansion and began purchasing local subsidiaries in foreignmarkets. Nestle also acquired several American factories during theFirst World War. This change is as well seen when many executiveoffices offshore are transferred from Switzerland to the UnitedStates during the Second World War. The second-order change isdisplayed also in this case. This is experienced when Nestlediversified for the first time in 1974 outside the food industry inorder to promote growth. Nestle became a major shareholder in thecosmetic company L’Oreal. Nestle as well purchased a U.Smanufacturer of pharmaceutical and ophthalmic products known as AlconLaboratory Inc. nestle underwent second order change as well when theBrubeck-Letmathe initiated a complete overhaul of the executiveboard, replacing it with 10 new executives.
Itis true that Brubeck-Letmathe emphasizes the need for an incrementalapproach to change. Iagree that this is what he has done. Historically, Nestle wanted to change just for the sake of it.Firstly, when it diversified outside the food industry into cosmeticsand pharmaceuticals, there was no strategic plan in place to makesure that the company would expand as well as grow its revenues.Nestle overextended itself with this diversification. Perhaps it wasnot so ready for it. For instance, the same board of executives wasstill in place when the profits of the company were falling.Brubeck-Letmathe changed this by initiating a complete overhaul ofthe executive board, replacing them with 10 new ones. His view ofoverhauling the executive is similar to my view for change is as goodas rest. Brubeck-Letmathe view of radical change is same as my ownview. He holds the view that radical change is ideal for a crisis.The change that Nestle made in the past was unnecessary since thecompany was doing well.
Theimplications for change managers would apply to Nestle are radicalchange, growth, diversification, expansion and change of executives.For the radical change, the management would have taken it slow butsteady. For diversification, they would have ventured in the sameproducts but not various products at ago. Still, the management mayhave done a thorough research on other companies before going intopartnership with them.
Threeexamples of lessons from the front line that are evident in theNestle case are outlined below. One of them is lack of propermanagement and strategy. This is seen when the company decides todiversify into other fields without proper strategy in place. Thecompany became a major shareholder in L’Oreal which has so manydebts. This issue could have overcome by proper research and strategyby management on L’Oreal. The second lesson is doing just changefor the sake of changing so as to follow the trend. Nestle changedjust to follow the fad. Strategic management and proper planning arethe only way to overcome this issue. Implementation of new rules andregulations and market research is also a solution to overcome theissue of chance. The third lesson that is evident in Nestle case isshort-term goals and objectives for the company. Instead of havingshort-term goals, the company could solve this issue by having staffthat would choose to maintain the longevity of the organizationrather than improve its short-term operating profit.