Decentralized

Traditionally, Nestlé implemented decentralized strategy that allows local organization to

achieve its own business strategy according to the region.

Nestle is organized into seven dissimilar worldwide strategic business units (SBUs). These have
obligation for high-level strategic decisions and take part in overall strategic business
development containing acquisitions and market entry strategy. Equivalent to this structure, there
is a regional organization that divides the world into five major geographical zones, such as
Europe, North America, etc. The regional organizations are accountable for developing regional
strategies and assist in the overall strategy development process. However, neither SBU nor
regional managers get involved in local operating decisions.

In addition to how Nestle managers bring out their work as leaders is Nestlé practically outfits
the following organizational principles which are being as decentralized as possible to optimally
answer to the needs of consumers within the framework defined by their fundamental policies,
strategic directions and operational efficiencies. Moreover, it ensures partnership of all Nestlé
businesses and compliance with Nestlé principles, policies and standards by decentralized.
Besides, it also building and continuing a structure which guarantees operational speed, with a
solid focus on results and eliminating needless obstacles by decentralized. Furthermore nestle
launching flat and flexible organizations with minimal levels of management and wide-ranging
spans of control, which also enable people progress by decentralized. A team must always have a
leader who assumes complete responsibility

At the conclusion of the application of decentralization, this system shows efficiency working
healthy with the firm budgeting and data streams permitting Nestlé to make reserves in buy raw
material, to have information obtainable quicker and make improved decisions. Now, Nestlé
remains the leading food and beverage company in the word so its strategy is effective,
centralized system was a good choice.

Hierarchy of authority
Nestlé managers from all levels are powerfully dedicated to the company and are more interested
in continuous development of the company than relating formal authority. To attain this goal,
Nestlé is looking for people with high participation and is demanding to generate a common
mindset that would lead the employees in the direction of the same goal (Goal Congruence). As
the decentralized organizational structure contributes important responsibility in a manager’s
hands, it is critical to hire people who in addition to professional and practical skills own, which
refer to the size and the willingness to take initiatives as well as to preserve composure under
pressure. Furthermore the person which is hired must have capacity to motivate and to grow
people as well as a high level of interest in other cultures and lifestyles including assurance to
constant wisdom and improving.
Nestlé has recognized that its people are the most important motivation why the company is what
it is. It is important to have employees pleased by giving new chances to develop their
knowledge, achieve promotion and receive competitive salary to retain it up in the same level.

Employees are refreshed to upgrade their skills and develop accordingly to the dynamic world in
order to develop the company and the employees themselves, making them more independent in
conduct the job.