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Cadbury Schweppes– Understanding Organization ‐ Assignment
Teesside University of UK Hong Kong Institute of Technology
MAR1036-N Understanding Organizations Assessment Report
LAU HIU FUNG Donald Lau
11830049 V8188813 MAR1036-N
Understanding Organizations
1
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Cadbury Schweppes– Understanding Organization ‐ Assignment
Assessment Report TABLE OF CONTENTS
INTRODUCTION
.....................................................................................................................
3
CHAPTER
1. ORGANIZATION ANALYSIS
.......................................................................................
4
Condensed Environment
..............................................................................................
4
Political
.........................................................................................................................
5
Economic
......................................................................................................................
6
Social
............................................................................................................................
7
Technological
................................................................................................................
7
Legal
.............................................................................................................................
8
Ecological
.....................................................................................................................
9
2. CULTURAL DIFFERENCES IN MANAGEMENT
....................................................... 10
Implications of cultural change on Cadbury and Kraft
................................................ 11
2
Comparison of Kraft’s and Cadbury’s culture
.............................................................
12
Benefit of management in new organization
..............................................................
12
3. THE FACTORS HOW TO IMPLEMENT AND CULTURAL CHANGE
....................... 13
Strategy Plan and Implementation of change
....................................................... 13-14
CONCLUSION AND RECOMMEDATIONS
..........................................................................
20
EFERENCE
........................................................................................................................
21
Organizational structure
........................................................................................
15-18
Strategic as practice
...................................................................................................
19
R
APPENDIX
............................................................................................................................
22
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Cadbury Schweppes– Understanding Organization ‐ Assignment
3
troduction: Early history of Cadbury’s Quaker origins to
Cadbury’s KraftHeinz since
650. The company of Cadbury was founded by pacifist George Fox
in 1650. bury, formerly Cadbury's and Cadbury Schweppes, is a
Briti
lez
ily
Oxford and Cam
in the
Richard and George they were developed in the busi
her
xcellent for selli
nd of th
nse of civic duty. Cadbury’s aimed to build ided
In
1In the past of Cad
sh multinational chocolate company. Since 2010, The Company of
Kraft Foods Group, Inc. had purchased to Cadbury’s KraftHeinz.
According to the original company of Kraft Foods Group which in
turn was renamed MondeInternational. It is the second-largest
chocolate brand in the world after Mars. Cadbury is Multinational
Corporation in Uxbridge, West London, and operates in more than 50
countries worldwide. In the famous of product, its Dairy Milk
chocolate, the Cream Egg and Roses selection box, and many
otherChocolate products. One of the famous of British brands, in
2013 The DaNews named Cadbury among Britain's most successful
exports.
In the previous name of Quaker, this pioneers believed ‘your
soul lived or perished according to its use of the gift of
life. They inspired the ‘men of America’ such as Hershey and
Mars. Quakers were banned from
bridge. Quakers were not allowed to join the armed services
or to stand as members of Parliament. They turned to the world of
business but withSociety of Friends strict guidelines. Quakers
viewed themselves as principled capitalists in the society.
Cadbury was developed in Birmingham of British in 1824, in this
period of sold tea, coffee and drinking chocolate that is developed
by John. His brother of Benjamin and his sons
ness. One of his son, George developed the garden and village
designed to provide the company's workers improved living
conditions.
Since 1905, they are designed the Daily Milk Chocolate and used
a higproportion of milk within the cuisine compared with competitor
of products.
Approached to1914, the chocolate was the corporation of eng in
the product. Cadbury, combine with Rowntree's and Fry, were the
Great three British chocolate manufacturers which were from
beginning to ee nineteenth and twentieth century. The Cadbury
family built 300 houses for its workforce away from the
Birmingham ‘slums’. They are Philanthropists which have the
sense of civic duty. Philanthropists were guided by a se
a pleasant peaceful estate with a sense of belonging. They were
provthe schools & leisure facilities. Also, they provide the
class in the evening formen and women. Cadbury’s family which
employed doctors and dentists to look after their families. They
provided the external activity for country and
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Cadbury Schweppes– Understanding Organization ‐ Assignment
summer camp. They are made in the first of pension provision in
the UK for employees. Recently, employees are still allowed
the time of rest for community work and 80% of the workforces are
active.
Ch pter 1 a
4
Organization Analysis in Condensed Environment: of organization
in Cadbury Schweppes which divide into six pt to describe the
business environment and process. The six
A PESTLE analysis is a strategic business tool used by
organizations to discover, evaluate, organize, and track
macro-economic factors which can impact on their business now and
in the future. The framework examines
anization.
We are analysiscriteria of concecriteria as shown below: There
are differences to have political, economic, social, technological,
legal, and ecological.
opportunities and threats due to Political, Economic, Social,
and Technological, Ecological and Legal forces. Outputs from the
analysis inform strategic planning processes and contribute to
market research. It provides an overview of all the crucial
external influences on the org
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Cadbury Schweppes– Understanding Organization ‐ Assignment
Political in the organization analysis: This is according to the
political problem in the marketing of Cadbury
5
chweppes since 1915. Cadbury's Milk Tray was first produced in
1915 and er of the First World War.
Withe
or use
e
ass
lds to plant crops. As chocolate was regarded as
hen the government banned manufacturers from using fresh
milk.
Scontinued in production throughout the remaind
in the period of the First World War, there have more than 2,000
of Cadbury's male employees joined the British Armed Forces, and to
support thBritish war effort, Cadbury provided chocolate, books and
clothing to the military troops. George Cadbury built up two
company-owned buildings fas hospitals – "The Beeches" and
"Fircroft", and the management of both hospitals earned the War
Office's highest award. Factory girls, dubbed 'ThCadbury Angels',
volunteered to do the laundry of injured soldiers recovering in the
hospitals. After the war, the Bournville factory was redeveloped
and mproduction began in earnest. In 1918, Cadbury opened their
first overseas factory in Hobart, Tasmania. The parts of the
Bournville factory were turned over to war work, producing milling
machines and seats for British fighter aircraft. Workers ploughed
football fiean essential food, it was placed under government
supervision for the entirewar. During the War, rationing of
articles for daily use was enforced and raw materials were in short
supply. Cadbury Dairy Milk came off the shelves in 1941 wInstead
there was Ration Chocolate, made with dried skimmed milk
Post war product launches
1947 – Milk Tray bar is launched
1948 – Cadbury Fudge is launched
1955 – First TV ad is aired
ed
th Swcheppes
d
1960 – Skippy is launched
1967 – Aztec Bar is launched
1967 – Toffee Buttons is launch
1969 – Cadbury merged wi
1970 – Curly Wurly is launche
1971 – Old Jamaica is launched
1971 – Cadbury’s Crème Egg is launched
https://en.wikipedia.org/wiki/Milk_Trayhttps://en.wikipedia.org/wiki/British_Armed_Forceshttps://en.wikipedia.org/wiki/George_Cadburyhttps://en.wikipedia.org/wiki/Bournvillehttps://en.wikipedia.org/wiki/Hobart
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Cadbury Schweppes– Understanding Organization ‐ Assignment
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conomic in the organization analysis: The external environment
of economic in which is being the factors of the arketing change in
environment. The factors that influence the consumers
onsider and monitor by four
geogt.
keting of tic
invell
cial
is
E mbuying power and marketing strategies. This can ccriteria
which can influence the economic. The four criteria consist of
inflation, deflation, unemployment and income. There are more
important reasons affecting the economic, such as discretionary
income and resource availability.
Since 2010, it had greater expansion of business after the
purchased of Cadbury by Kraft co. The growth of business in
economic is influenced byexternal environment of condensed
conditions. When there have no
raphical boundaries in business development, it cans growth and
expansion of differences cultural in involving that multinational
managemen
There are stages of business cycle which can influence the
marCadbury. A business cycle is a cycle of fluctuation in the Gross
DomesProduct (GDP) Formula consists of consumption, government
spending,
stments, and net export. We break down the GDP formula into
steps in this guide. Gross Domestic Product is the monetary value,
in local currency, of afinal economic goods and services produced
within a country during a speperiod of time (GDP) around its
long-term natural growth rate. It explains the expansion and
contraction in economic activity Marketing Economic Market economy
definition – a pure market economy is an economic system where
there are no regulations and players are free to trade as they
please that an economy experiences over time. A business cycle is
completed when it goesthrough a single boom and a single
contraction in sequence. The time periodto complete this sequence
is called the length of the business cycle. A boom characterized by
a period of rapid economic growth whereas a period of relatively
stagnated economic growth is a recession These are measured in
terms of growth of the real GDP, which is inflation Fiscal Policy
refers to the budgetary policy of the government.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
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Social in the organization analysis: After merger of Cadbury and
Kraft co., the new management is control by
America. Today, corporate responsibility has expanded to cover
the entire societal framework in the America and throughout the
world.
There are new orientation of marketing philosophies, policies,
procedures, and actions that have the enhancement of society’s
welfare as a primary objective.
The social responsibilities while traditionally of sense in
concerned anager’s relationships with customers, employees, and
stockholders. The
e meaning of extend to relations with
ends and lifestyle pref
opulation of people that affecting in quantities of Cadbury
mar
and the technique in which is
ent I
anizations can ride on the data to reveal insights that lead to
etter decisions and strategic business moves.
y which automates the t
llows computers
e
msocial value in the business organization is th
government and the general public. These factors were influenced
to the new management of Kraft co. with Cadbury. There are factors
occurs of the terrorism, demographic tr
erence in which affecting the population growth and decrease. As
terrorism of the war this will decrease the people in demographic
statistics. These factors of p
keting. Technologies that affect the organization: Recently,
there are new technology that affecting the research of marketing
in Cadbury. The results of research divide into two methods of Big
Data and Machine Learning. The term Big Data refers to the large
volume of data (both structured and unstructured) that affecting a
business day-to-day. It is used to IT equipm(Ipad) to collect the
user data and then user data will be analyzed by Amachine. Orgb
Machine Learning is a data analysis methodologbuilding of
analytical model. It is a branch of artificial intelligence
thamachines should be able to learn and adapt through experience.
Using algorithms that iteratively learn from data, machine learning
ato find hidden insights without being explicitly programmed where
to focus. So that, it used to the two methods for generate the
results and then madbetter decisions and strategic business in the
Cadbury and Kraft co. Thistechnology can collect to external
condition of environment.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
8
ire
ent. adly prohibits
nticompetitive agreements and unilateral conduct that
monopolizes or ttempts to monopolize the relevant market. It
identifies a competitive arketing system as national policy
goals.
Act who enacted at the restriction tha er
rice
dire
at investigate the business
prats
36
d to protect small reta rice for
ate
w to
ties an operator has to protect children's
y are Clayton Antitrust Act and Clayton Act who’s made the laws.
Reg
Legal in the organization analysis: The external environment of
Legal in which it is includes of laws and
interpretation of laws. This is component of marketing
environment that requcompany to protect the competitor and consumer
right. The Laws in organization it affects the marketing and
maintains a competitive environm
According to reference in 1890, Sherman Antitrust Act broaam
More reference in 1914, Clayton Antitrustt was a part of United
States antitrust law with the goal of adding furth
substance to the U.S. antitrust law regime; the Clayton Act
sought to prevent anticompetitive practices in their incipiency.
The practices it such as pdiscrimination, exclusive dealing, typing
contracts, and interlocking boards of
ctors where effecting monopolize the relevant market. In
addition to reference in1914, the Federal Trade Commission Act,
prohibits the unfair methods of competition, establish the
Federal TradeCommission Act, an administrative agency th
ctices and enforce the FTC Act. The Act, signed into law by
Woodrow Wilson in 1914, outlaws unfair methods of competition and
outlaws unfair acor practices that affect commerce. The laws in
organization it regulate the competition, the reference in 19the
Robinson Patman Act who codified that prohibits anticompetitive
practicesby producers, specifically price discrimination. It was
designe
il shops against competition from chain stores by fixing a
minimum pretail products. It also prohibits selling at unreasonably
low price to elimincompetition.
Another external environment as it is affecting the marketing
that it hoprotect the consumers. We can reference in 1998 of the
Children’s online Privacy Protection Act, it responsibiliprivacy
and safety online including restrictions on the marketing of those
under 13. It identified the products of chocolates in Cadbury that
affecting the growth of children.
Protecting competitive of the aim is used to maintain
competitive environment. This can reduce the trend toward
monopolies. Founding in reference, the
ulating competitive of marketing environment this can to protect
independent merchants against competition from larger chain
stores.
https://en.wikipedia.org/wiki/United_States_antitrust_lawhttps://en.wikipedia.org/wiki/United_States_antitrust_lawhttps://en.wikipedia.org/wiki/United_States_antitrust_law
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Cadbury Schweppes– Understanding Organization ‐ Assignment
9
four miles from Birmingham. The move to the countryside of mod
siness
xic to make the hazard
prevention and noise pollution.
d
ham
.9 ha) of nal,
lle and opened the Bournville factory the following year.
00
Ecological in the organizational analysis:
In 1878, Cadbury’s factory decided to build new business
premises in countryside
el village was unprecedented in business. The garden style of
bupremises in countryside, which made the comfortable and
convenience perception with their workers. This is no concerning in
environment problem in garden style of business offices and
premises. That is protecting the countryside and shoreline. They
made the measure to reducing the toemission, pollution, spills.
They enacted at regulation
Better transport access for milk that was inward shipped by
canal, ancocoa that was brought in by rail from London, Southampton
and Liverpool docks was taken into consideration. With the
development of the BirmingWest Suburban Railway along the path of
the Worcester and Birmingham Canal, they acquired the Bournbrook
estate, comprising 14.5 acres (5countryside 5 miles (8.0 km) south
of the outskirts of Birmingham. Locatednext to the Stirchley Street
railway station, which itself was opposite the cathey renamed the
estate Bournvi
In 1893, George Cadbury bought 120 acres (49 ha) of land close
to the works and planned, at his own expense, a model village of
garden which would 'alleviate the evils of modern more cramped
living conditions'. By 19the estate included 314 cottages and
houses set on 330 acres (130 ha) of land.As the Cadbury families
were Quakers there were no pubs of beer in the estate.
https://en.wikipedia.org/wiki/Canalhttps://en.wikipedia.org/wiki/Birmingham_West_Suburban_Railwayhttps://en.wikipedia.org/wiki/Worcester_and_Birmingham_Canal
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Cadbury Schweppes– Understanding Organization ‐ Assignment
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hapter 2
ultural Differences in management: Cultural diversity appears
while it is in the organization of products and
laces of location in development with many countries. The
business rganization of cultural diversity when it is has great
impact in global economy. hen there have no geographical boundaries
in business development, it ns growth and expansion of differences
cultural in involving that ultinational management. This can meet
the objective of requirement in mmon culture. Therefore, the point
of view cultural diversity becomes the
anizations going globally international. erger of Cadbury and
Kraft co., there are contribution of
ansion of any business
ent of
y, is base on
, or
selling that is involving ns,
ifferences are significant impact. However, Alder said that
h of behaviors in family and
ing
C
C poWcamconeed for the org After the mCultural Diversity towards
development and exporganization. We are further to explain the
theory of cultural Diversity and discussion on how cultural
Diversity will be significant to the developmglobal business.
Culture is something of impact that is being carry forwarded from
historand it is related to behaviour patterns, beliefs etc.
Diversity Culturalethnic, gender, racial, and social economic
variety in a situation, institutiongroup; the coexistence of
different ethnic, gender, racial, and socioeconomicgroups within
one social unit. The variety of products in the totality of
socially transmitted behavior patterns, arts, beliefs,
institutioand all other products of human work and thought. Adler
(2008) explained the stress of cultural diversity on
multinationalsand global firms, beginning that now a day it becomes
very obvious that national cultural dcomparative impacts depend on
the stage of the growth of firm, industry and world economy.
Therefore, we understand the importance of cultural diversity at
geographical location it is very important to understand the
organizational culture first. The cultural of the family and
particular community that order how each members of the family or
community will behave and act to each other and witoutside of the
home or community. The performancecommunity while it impact from
the past of history in rituals. The value of cultural organization
in minds that through the rituals, practices and keepthe common
behaviors. In here indicate that the organization cultural is not
differences with normal cultural as well as it impact by common
perception from the organization’s members.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
11
. ence that the workers from different cultures reflect
different
There are important and significance of diversity cultural in
the workplaceThis can influlearning styles and bring different
preferred working styles to their jobs.
Implications of cultural change on Cadbury and Kraft:
Implications on Kraft Implication on Cadbury Strengthened Brand
Damaged Heritage Drives higher performance leading to high
Lower moral and performance er revenue
Better control of the organization Staff burn-out Better
reputation Risk of losing benefits schemes to
American procedures Efficiencies through alignment of Trust
Issues procedures and processes Alignment of goals Weakened
Brand
ltural change on Cadbury and it became new .
e de-motivated leading to low morale and performance, and
loss
rger and acquisitions tion resulting from change of process and
p
o wea graceful attitude, it may
conflicted with each other that leading to pressure and tress,
so that it increases the emotion of the staffs.
A depend on
The impact of cuorganization of Kraft Foods Group, Inc
Staff would b
then it reduced of productivity and of revenue. Before the me of
both company, the risk of resigna
rocedure. There are lacks of trust leads t
reduce communication. k loyalty and
There are staffs s
ll people of the staffs they feelings of insecurity and
uncertaintycareer in the future.
There are problem in relation to the risk of diminishing
Cadbury’s brand.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
Comparison of Kraft’s and Cadbury’s culture: Type of Culture
Characteristic Cadbury Kraft
Networked
Participation
Friendship & Networking
Networking throughout the organization
Helping others
√
√
√
√
Mercenary
Performance and effectiveness
Hard work
Material reward
√
√
√
√
√
√ Destroying competition
Fragmented People w
colleagues
rganization
orking alone
Few links with
Aiming for goals outside o
Communal lity
Family atmosphere
lue in work
Deep friendships
Shared value of sociabi
A passion for business
Sense of va
√
√
√
√
√
√
√
Benefit of management in new organization:
te new organization, competitive advantage is define value for
its customers. This can make the great , it can superior to that of
it te, it can enable em to the best com
After merg Kraft co., there are ng terms expand the multina
tries in the market . When there have o geographical boundaries in
business development, it cans growth and xpansion of differences
cultural in involving that multinational management.
Culture crea competitive benefit ind as how a business creates
er than the costs of supplying them. Moreovers competitors. Ultima
th
petition. er of Cadbury and lo to tional of many coun ing
ne
12
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Cadbury Schweppes– Understanding Organization ‐ Assignment
Chapter 3
The factors how to implement and cultural change:
13
Strategy Plan and Implementation of change: Establish in sense
of urgency:
Examine the limitations of the existing culture and its impact
on perfor cation to Senior Management the need for the change.
Forming a powerful guiding coalition:
Assemble a group from senior management and Union members to
champion the change ain momentum. Seek internal and external
support, e.g. Government to aid the transition.
reating a vision Senior management to develop a new mission
statement which of
ies to execute the
Com
nels such as TV, emails, documentation, bulle
ge. aints and resource issues for the change to be
implemented
and ange.
Strong leadership Good support From team
Empathy and respect for acquired company
Government Interventions
Bad press by the made
Employee resistance Unions
Brand loyalty e.g. Consumer nication of change
Good strategy and paln
Cultural
Change
Good commu
boycotting brand Resources
e.g. human and finance
Adapted from Kurt Lewin(1943) Force Field
mance. Communi
. Use press coverage to maint
C
incorporates the new culture and develop effective
strategvision.
municating the vision: It is necessary to communicated new
vision throughout the organization and to consumers using different
chan
tins, etc. It provides constant two feedbacks during transition.
Empowering others to act on the vision: Create the right
environment to empower staff to act on the chanIdentify any
constr
removed obstacles. Ensure staffs have the time to commit to the
ch
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Cadbury Schweppes– Understanding Organization ‐ Assignment
14
a corporate away day for Cadbury and Kraft staff to bond, whilst
ge and the benefits. Inter-company positions
change: d
nd he new
Plan for and create short term wins: Plandriving the message of
chanchanges to help merge culture. Motivate employees involving in
the improvement through rewards. Negotiate new realistic terms and
conditions, e.g. wages and pension. Consolidating gains and
producing more Use the new synergies derived from the short term
wins to spring boarlong term change, i.e. those yet to be
confronted, such as tackling Union resistance and consumer loyalty.
Institutionalize new approaches: Articulate to the organization the
connection between new norms, behaviors and the organization
performance. Document the new culture aorganizations polices. Make
sure leaders that come on board adopt tculture straight away.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
15
rganizational structure: We can work in effective and efficiency
of organization structure while
makes possible the application of the process of management. It
also creates framework of order and command through which the
activities can be lanned, organized, directed and controlled.
Moreover, it defines task, sponsibilities, work roles,
relationships and channels of communication.
O itapre
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Cadbury Schweppes– Understanding Organization ‐ Assignment
Structure by division of work
16
t
• By major purpose - grouping according to specialism (dept or
skill)
• By product or service – integrated into semi autonomous units
with collective responsibility for business process (e.g.
A&E)
• Common timescales – different tasks are undertaken at
– allocation of duties according to
to fferent requirements
• Location – geographical boundaries (e.g. LA services) • N ch
as local
co entral depts.)
ature of work – a special common feature sunditions needing
first hand knowledge (e.g. c
different times (e.g. shift working) • Staff employed
experience, skill or qualification (e.g. doctors or nurses) •
Customers or clients to be served – separate groups
deal with di(e.g. trade and retail)
Peter Dr e:
ance. ut poor rformance impossible, no atter how goo ers may be.
To improve organisation ructure will therefore always improve
performance.”
ucker (1989), explained the theory of organisational
structur“Good organisation structure does not itself produce good
perform
organisation structure makes good peBm d the individual manags
…
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Cadbury Schweppes– Understanding Organization ‐ Assignment
17
Impact of Technology on Organisational Structure
• Scale – impact on the number of jobs
provided, a means of compartmentalisation to manage human
activity
• Function – produces a need to accommodate
• Integration – influences existing structures, e.g. integration
of production, logistics and marketing
new jobs or functions within a structure
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Cadbury Schweppes– Understanding Organization ‐ Assignment
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Cadbury Schweppes– Understanding Organization ‐ Assignment
19
Strategic as practice:
What
Where
When
How
Why
Who
To ensure the organisation serves its basic purpose – efficient
production of goods or services
To take charge of
strategy making and adapt the organisation in a controlled way
to changes in its environment
To design and maintain the stability of the organisation
To ensure the organisation serves the ends of those people who
control it
To serve as the key informational link between the organisation
and its environment
As a formal authority to operate the organisations status
system
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Cadbury Schweppes– Understanding Organization ‐ Assignment
20
onclusion: The primary reasons for mergers and acquisitions are
revenue gain.
owever this approach rarely takes account of culture differences
which may hibit successful adaption.
The analysis shows that Kraft needs to change the culture of
Cadbury to ke better control of the organization and strengthen its
brand. However, to chieve this it will require strong leadership,
good communication and a well ought out strategic and plan.
One of the most complex and difficult problem to overcome will
be staff sistance, but a long term impact of the change could be
more profound to
onsumer brand loyalty.
ecommendations:
Early identification and involvement of stakeholders is pivotal
It would be advisable to do a culture assessment of the
organization prior
to purchase. Cultivate cultural change, do not forcefully exert
a new culture, rather
organically over time.
C
Hin
taath
rec R
allow it growConstant communication and feedback is key, this
cannot be over emphasized.
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Cadbury Schweppes– Understanding Organization ‐ Assignment
21
ternational Dimensions of Organizational Behavior. Ohio,
.youtube.com/watch?v=bA7VtOdxJRA •
http://www.mondelezinternational.com/about-us/~/media/MondelezCor
porate/uploads/downloads/mondelez_intl_fact_sheet.pdf •
http://www.mondelezinternational.com/investors/corporate-governance
#ourBoard
Reference: Adler, N. (2008). InThomson Higher Education.
• http://www.kraftheinzcompany.com/ • https://www
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22
Appendix: