Answer to Question #156565 in Economics for juwita

Question

Senior management of Nestlé, a large multinational corporation, is planning to restructure the organization due to the pandemic. Currently, Nestlé is decentralized around geographic areas. Therefore, the executive responsible for each area has considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives responsible for different product groups; the executives responsible for each geographic area will no longer be responsible for manufacturing in their area but will retain control over sales activities.

1. According to the information provided, what is Nestlé’s new organizational structure?
2. Based on question 1, describe TWO (2) advantages and TWO (2) disadvantages of the implementation of the new structure to Nestle.
3. Referring to question 1, discuss in detail TWO (2) types of resistance senior management might encounter from this organizational change.

Answer 1

According to the information provided, Nestlé’s will use not geographical, but product organizational structure.

Based on question 1, the advantages are specialization and possible decrease in production costs, disadvantages are lower importance of geographical features and demands, lower autonomy.

Referring to question 1, senior management might encounter resistance from this organizational change through low communication level with new product executives.