First of all it is very important to understand that an organization is meant for

creating a synergy of the efforts of different individuals in such a way that more
value is created compared to when these individuals are producing the same effort
separately. The organization is meant to contribute to the company’s goals.

An organization to exist as such needs to define what the decision centers and the
centers of competencies will be as well what the rules and standards which indicate
clearly what is expected from the workers. This is the organization as a structure.

An organization to attain its ultimate purpose which is to contribute to the success

of the company has to define how the departments will work together and ensure a
flawless execution. The organization also has to define control measures as well as
ways to keep the workers committed to the goals of the company. This is the
organization as a process.

Even though these 2 components of the organization, structure and process work
together for the achievement of the organization’s objectives, it is clear that when it
comes to making organizational choices one component has the predominance over
the other. Before discussing the type of organization which is predominant in the
company I work with, I would like to highlight the differences between an
organization as a structure and an organization as a process.

The first difference between the organization as a structure and the organization as
a process is that as a structure, it is seen as the backbone or frame as it gives the
shape of the company whilst as a process, it is seen as the coordination creating the
synergy between the different groups defined in the frame.

The organization as a structure keeps a tall hierarchy whilst as a process it keeps it

flat to allow direct interactions and better integrations. Also in the organization
focusing more on the structure, centralization and specialization are high and as
highlighted by John Child, “people in these jobs are expected to work strictly to
instructions laid down by managers”. On the other hand, in the organization
focusing on the process, authority is more decentralized and people can decide on
their goals and how to achieve them and at the end achieve the goals of the
company.

Nestlé falls clearly in the category where the organization is more seen or arranged
as a process. To support that choice Nestle has started introducing and
implementing in 2002 its program “Nestle on the move”. With this program, the
company was to move from a hierarchical structure to a flat structure where
“managers have more direct reports, who then must act more independently” as
explained by Professor Robert Hooijberg in the article ‘Nestle on the move’ co-
written with Paul Broeckx, former Senior Vice President of Corporate Human
Resources division . Authority has been decentralized, allowing more speed in
decision making, and direct contact with the centers of competences. All this was so
designed to allow the company to increase its speed to market and satisfy as fast
and as best as possible the demands of the customers.

I would like to share a more concrete example which is the arrangement of

activities in my own department: Demand and Supply planning. The department is
composed of Category Demand and Supply Planning Managers all having one leg in
the Planning department (belonging to the Supply Chain Direction) and another leg
in the Category Business. Reporting lines are double and both the Planning
department and the Category Business which could be Soluble Coffees or Culinary
have a say when defining the objectives, rating the competences and evaluating
the performances of the Category Demand and Supply Manager.

Another factor making the predominance of the organization as a process obvious

when it comes to Nestlé’s organization is the integration and the key decisions
made around it. Nestle focuses more on direct horizontal communication,
relationship building and networking rather than top downs.

Reference list:

Child, J. (2005) ‘Introduction to Organization’, in Blackwell Publishing Ltd,

Organization: contemporary principles and practice, pp. 3 - 23

Hooijberg, R. & Broeckx, P. (2008) ‘Nestle on the move’, Perspective for Manager,
issue 156, April [Online]. Available at:
http://www.imd.org/research/publications/upload/PFM156-LR_Broeckx-Hooijberg.pdf
(accessed: 30 January 2011)

Hooijberg, R (2007) ‘Breaking out the pyramid, Getting the most from your
workplace’, Tomorrow’s challenges, June [Online]. Available at:
http://www.imd.org/research/challenges/TC056-07.cfm (accessed: 30 January 2011)