2. BACKGROUND
Swiss based manufacturer of
coffee ,chocolate and
confectionery. Market leader in
confectionery across EEC.
19 autonomous BU catering to
local market, each producing the
entire basket of product customized
according to local demands.
Flat organizational structure.
Entrepreneurial culture “people are
the structure.”
3. Structure and Functions
Coordination among BU managers and GMs was chaotic,
Jacquesson had to form steering committee.
GBS needs clashed with GM needs (package size, language,
adverts, payments)
For GBS having GM roles, workload was excessive(Pohl).
Getting GMs to agree over anything took lot of time.
GBS would lose credibility if they lose function as GM
4. Structure Prior to Globalization
Confectionery
General
Managers
Consumer
Marketing
Trade
Marketing
Manufacturing
5. Manufacturing
Restructuring decentralized company into a centralized
structure.
Introduction of IMCs into decentralized structure not favourable.
19 business units: which to close down.
Standardization of processes in different factories.
Standardization of products.
Reduction of SKUs and their inventory.
6. Finance
GMs fought IMCs if their profits affected.
No clear financial structure led to issues over who pays for
what.
Compensation of IMCs and how to charge GMs.
GMs had no financial incentive to contribute to globalization of
products
7. Sales & Marketing
Due to cultural differences, standardized packaging was
difficult (language, sizes).
Different countries required different coffee blends.
5 major brands to be marketed both as local and global.
GMs fighting against standardization in order to maintain
appeal in their local market.
9. ISENMANN TASK FORCE
MERITS
Global Brand Sponsor carried the
same risks as did a General
Manager.
DEMERITS
Conflict in objectives of a Brand
Sponsor and a General Manager.
Too much workload on a Brand
Sponsor.
Indirect dependence of IMC
Manager on General Manager.
10. HARVARD AND MANAGING
CHANGE
Recommendations:
1. Each global brand – clear cut profit centre
Direct reporting to EVP confectionary.
2. Business units turned into Sales unit
Direct reporting to EVP Confectionary
Performance parameter- total volume + volume per brand
3. Independent core factories to be established
Direct reporting to one Manufacturing executive.
11. HARVARD AND MANAGING CHANGE:
Confectionery
Global Brand
Sponsors
Consumer
Marketing
Sales
Manager
General
Manager
Sales
Manufacturing
Manager
IMC Managers
Proposed Organization Structure
12. HARVARD AND MANAGING CHANGE
MERITS
Will relieve GBS from excessive workload
GBS responsible for profit as well i.e.
GBS would also bear the consequences
associated with the product launch.
The direct line of responsibilities clearly
defined.
GBS-cum-GM will no longer have to
balance the conflicting aim of global sales
and local sales.
DEMERITS
Separate GBS – no credibility with the
GMs Example – LILA PAUSE
GM- measured on local sales & no
incentive to contribute to globalization
projects.
Will lead to centralization and inhibit the
company’s philosophy of “enterprise for
entrepreneurs”.
Discontent among GMs at losing
functions, most would resign without profit
responsibility.
14. CONCLUSION
Complete separation of roles and centralization as
suggested by the Harvard report would not be
productive
The role of brand sponsor and GM should be
integrated as stated by ITF because he understands
the intricacies of local market as well.
The GMs who aren’t brand sponsors should be given
some incentive like profits accrued from their local
brand that goes global.
