Magdi Batato at Nestle Malaysia (A): Introducing Team-Based Production Harvard Case Solution & Analysis

Magdi Batato at Nestle Malaysia (A): Introducing Team-Based Production Case Study Solution

Organization Alignment Model and Potential Problems

Environment: The country achieved a GDP growth rate of 4.7% in 2018 and the major revenue generating sectors were service and industry.(Global Edge, 2019) Malaysia is a religiously diversified country comprising of 62% Muslims and religious & cultural differences have always been used for creating political unrest in the country. (Ewelina U.Ochab, 2019)

Performance: Out of seven Nestle factories in Malaysia five factories performed smoothly and achieved their KPI targets of 75%-90% whereas two factories were closed down due to production constraints.

Strategy: Nestlé’s strategy is to improve the quality of life and promote healthier culture. It is implementing its strategy by innovating products, following differentiation strategy and improving operational efficiency (Nestle, 2019). Magdi’s strategic goal is to ensure the long term Sustainability of Nestlé’s operations.

Organizational Culture: Nestle Malaysia follows Hierarchy Culture as the work environment is structured and controlled, proper hierarchy exists between supervisors and subordinates. Authority is not delegated as employees have to wait for their supervisor’s orders before making any decision.

System: Magdi wants to implement the strategy of working in semi-autonomous teams in Nestle Malaysia factories. He wants to promote the idea of collaborative working and giving soft rewards in order to improve operational efficiency and working towards the long term sustainability of Nestle.

Task and People: The Malaysian society comprises of people from various religions, cultures and strongly believes in collectivism. The rural population is said to be conservative and almost every citizen follow the Malaysian traditions due to strong rural roots.

Alignment: Despite issues being witnesses by Magdi during his factory visits, the production committee members were against the idea of implementing SAWTs. The lack of authority delegation to subordinates lead to these issues as they had to wait for the supervisor’s approval. If the subordinates had the authority to make decisions, these issues would have been resolved on time.

Implementation Plan

There is a visible need of creating semi-autonomous teams in all factories as during factory visits, Magdi identified two simmering issues and two of the factories were facing operational problems. Top management support is not provided as all the production committee members are against creating SAWTs as it may lead to differences due to the multi-religious environment and existence of proper hierarchies. Magdi has the required skills as he already implemented this strategy in the Estcourt factory, he is also motivated to implement it due to the strategy’s success in Estcourt and he does not have the power to implement it alone due to resistance by production committee members. SAWTs strategy has to be implemented in the two factories facing capacity constraints and the members have already agreed with it. However, the full range of target group is not yet identified as the committee members are still against implementing SAWTs in the four factories as they are working smoothly. This strategy can be implemented in all seven factories as Magdi has the knowledge and skills to implement it and all the factories have the required resources. It is likely that this strategy will not be implemented due to cultural differences between the employees.

Currently Magdi has not prepared any communication and educational plan to implement this strategy in the factories at Malaysia. Although he implemented this strategy in Estcourt factory previously, he cannot use the same plans for implementing SAWTs due to massive differences in the working environment. Magdi has the ability to train the employees to adopt the change and select working in semi-autonomous teams.

Magdi has no plot project and realignment plans for implementing the SAWTs strategy in factories at Malaysia…………..

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