Nestle’s HR structure and why is it so? so ? From an organizational design perspective, Nestle is a mat rix organization. It splits the globe into three zones with respective reporting hierarchies: Zone AOA – Africa Oceania and Asia; Zone Americas – North and South America; Zone Europe – Western, Central and Eastern Europe. Whilst majority of its businesses are organized within this structure, it also has a number of businesses with global mandates and structure such as Nestle Water and Nestle Nutrition. Moving to Nestle HR organization, at a macro level, it looks like a classic three -box model. However, in order to take into ac count the complexity of business structure, and the c omplexity added by operating within the global footprint of 84 countries, the HR organization in operation has a series of t hree-box models within a macro three-box model. The structure is explained below: Three Boxes at Nestle Shared services or centers of scale Some of the Nestle’s shared services operate globally within a structure called Nestle Business Service (NBS). Payroll would be a good example for this. Other se rvices operate at zone level or local (market)
level, such as personnel administration. Centers of Expertise
The centers tend to be organized at a local or regional level, but they are c oordinated globally. Operational HR
HR business partners are organized locally, but t hey are coordinated throughout hierarchy, and so are coordinated zonally or globally, dependent on the organization. Corporate HR Operational Management
Centers of Expertise
NBS
3rd Party
Employee Services Operational Management
Centers of Expertise
Local Shared Service
Nestle in the market HR This model may seem complex, but it is based on some very specific design principles to ensure that t his model can be implemented in a flexible manner, dependent upon each Market’s size, complexity and
structure. Operating this design maintains a lean and efficient HR organization. The key design principles are: 1. To be consistent and simple, where there is no competitive advantage in being different and complex. 2. People management must be a managerial responsibility 3. The maximum amount of information must be available at the lowest possible level. 4. Local HR technique sits with operational HR administrators, and is to be created in conjunction with the pertinent components of Corporate Strategy and Market/Business HR 5. Business/Operational Unit Heads and factory/DC managers do not necessarily need to have a dedicated HR Manager. The decision on the nature and organization of these resources should be taken according to the size, complexity, and geographic location of the concerned units and sites. 6. Employee services and HR centers of e xpertise are centralized and provide services to all businesses operating in a Market – unless by exception it makes sense for them to be localized. 7. Where NBS organization operates, it is independent from any particular business in the market, and must offer competitive advantage with reg ard to alternative providers. Underpinning these global design principles, there are global development programs that e nsure consistent level of HR capability. The HR structure that Nestle has followed is Hybrid. It is a blend of brought together centralized authority and local empowerment. In the hybrid system, the worldwide official positions and worldwide director positions are completely integrated—drawing upon all locations. It needs a strong system of training and promotion to ensure that managers from all out locations would have the opportunity to rise through their local ranks to m ove into the integrated manager and exe cutive ranks. Global integration and local optimization are two goals that are attainable through global technology platforms, and proper role and process definition. Global consistency and standards ensure efficiency and scale; local flexibility drives agility, growth, and employee engageme nt. Both global consistency and local flexibility are necessary to develop an HR organization that is globally “fit for purpose.” Why is it so?
A common global technology platform supports the global HR organization and offer e asy-to-use self-service capabilities to managers and employees. Establishes a core set of services for HR administration and talent communities of expertise. Encourages communities of expertise to learn from local business partners to determine leading practices in the field. Once global processes, roles, and expectations are created, expand the team to include communities of expertise and let local HR leaders create, customize, and deliver local programs. They leverage the corporate infrastructure and standards to optimize talent strategies and HR programs in each business and geography, driving impact at the country level. Reduces the need for HR generalists and move them into the role of HR specialists, focused on recruiting, organizational development, employee relations, and compensation. These
specialists are located in or assigned to the business and operate as a “network of expertise,” sharing skills with each other.
Each member knows how to use all tools and data and feels connected to t he larger community of leading practices and new ideas in the m arketplace. Deep expertise belongs in HR no less than in other functions.
