Nestlé is the world’s most extensive food company that operates on the principles of nutrition and healthy living. For more than a hundred years of its existence, it has gained worldwide recognition as a manufacturer of high-quality food. It has created a reputation as a decent and reliable partner. This corporation is a decentralized organization that is coordinated according to the matrix structure.
It means that several chains of command and separate divisions are engaged in the manufacturing of certain products. For example, the management of Nestle is divided into three types: top-level, middle-level, and low-level (Kee et al., 2021). Although senior executives are considering more strategic aspects of the company’s operation with further development, distinct departments of the corporation also have a high level of independence.
Geographically, Nestlé operates in four main areas: Europe; the Americas; Asia, Oceania, and Africa. These zones work closely with the local markets, and their primary role as business enablers is the liaison between the market and the business centers. As mentioned earlier, this model of administration involves the responsibility of field managers to deal with daily operations, while corporate governance makes decisions considering the organization’s strategy. This variety of structure is typical, especially for companies with highly developed international operations, which are not dominated by any country or region (Victoria & Dipak, 2014).
It is also effective because a large workload is removed from the owners with such a management organization. Instead, the management decision-making processes are entrusted to those who lead the separate areas.
Such a divisional structure is characterized by a combination of centralized coordination with decentralized operational management. Divisions are a virtually autonomous business unit of the parent firm. They are characterized by their regional, product, or project areas and can operate both within the autonomous sectors of the company and as a separate legal entity (Patel, 2015). Nestlé’s global matrix organizational construction enables the firm to operate efficiently and effectively based on the above facts. This is appropriately seen when product standardization and geographical localization are balanced and when effective coordination of resource allocation is achieved.
References
Kee, D. M., Syakirah, N. H., Najihah, N., Aliya, N. A., & Sikumbang, N. Z. (2021). How Nestle succeeds in the food industry: A consumer perspective. International Journal of Tourism and hospitality in Asia Pacific, 4(2), 84-97.
Patel, T. (2015). Crossing disciplinary, epistemological and conceptual boundaries in search of better cultural sense-making tools. Journal of Organizational Change Management, 28(5), 728-748.
Victoria, M., & Dipak, B. (2014). The evolving relationship between the parent and subsidiaries in multinational companies. Advances in Management, 7(2), 1-15.