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Background of Cadbury

Cadbury is a multinational confectionery company, currently owned by the Kraft foods since 2010. The Establishment of the Cadbury was in Birmingham in 1824 by the Cadbury John who was selling drinking chocolate, coffee and tea. There was a development of the Cadbury under the John and his brother Benjamin. The development of the Bournville by Benjamin’s son; George made the workers improve their living conditions. The introduction of the dairy chocolate in 1905 by the Cadbury was a competitive advantage since the chocolate had a high proportion of milk as its constituents.  The Cadbury was best-selling confectionery Product Company over the other companies such as Fry and Rowntree’s in 1914 (Wiggins 2010). There was granting of the Royal Warrant in 1854 from Queen Victoria. J.S Fry & Sons and Schweppes merged with Cadbury in 1919 and 1969 respectively. Cadbury was integral of London Stock Exchange and FTSE from 1984 up to 2010 when American Kraft Foods took control of Cadbury (Wiggins 2010.

The acquisition is external growth process where a company takes the ownership of another firm (Bragg and Bragg 2005). Some of the reasons of Kraft pursuing the property of the Cadbury are the eradication of the competition in the existing market, external growth, acquiring the strong brand, improving profitability and revenues, economies of the scale, exploitation of the Cadbury’s capabilities and expertise, and managerial desire of the Rosenfeld. In order to know the cornerstone of organization change of Cadbury to Kraft foods, this essay will focus on the motivation factors, leadership style, and theories and hopefully understand the position of the Kraft foods in the managing change.

The style of leadership in the management of the organization depends on the types of the manager. Kraft uses the directive leadership style. Rosenfeld, the leader of the Kraft, is persistence, courageous, creative, innovative and risk takers who show the effectiveness in the leadership behaviors. Although Rosenfeld set the vision of acquiring the Cadbury, she is not persuasive when dealing with Cadbury shareholders and senior management. She misses some factors such as empathy, communication, motivating and self-awareness.

Rosenfeld focuses on the task rather than developing the individuals or building the team. Hence, the Rosenfeld uses directive leadership style rather than the democratic or facilitative. Instructive method is necessary in the acquisition of the Cadbury due to lower numbers of the followers. The Kraft should take precaution because of usage of the directive style when there is underdevelopment of the employees or the high skilled employees which will lead to micro-management.

Acquisition by Kraft

However, the Cadbury has been using the democratic styles of the leadership. (Nohria and Khurana 2013). The management listens to the ideas and suggestions of the employees, and therefore the staff members work together as a team. The approach is critical since they listen and care about the views of the employee. Thus, Kraft manager should know how to integrate the two leadership style and culture so as to come up with an effective style of management.

Managers lead according to the policies or procedures. Leaders have a tendency of enforcing rules or taking complicated matters to higher levels (Nohria and Khurana 2013). For instance, the Kraft food, the managers should use new policies apart from the one of the Cadbury so as to help the employee familiarize with new company policies (Moeller 2012).

Managers make decisions without involving subordinators. As a result, the decisions and opinions lead to personally managed business. (Nohria and Khurana 2013). It happens in the Cadbury acquisition such that they are no consultation with the workers, unions, and stakeholders which create fear of the change (Wolde 2016, p.122).

Manager includes subordinators when making decisions. The style is highly advantageous since it makes employees to participate leading to a lower turnover. Communication occurs downward from top management to employees, and there is an appreciation of the feedback (Lok and Crawford 2004, p.324). Managers of the Kraft should consider using paternalistic leadership style since the workers need to know the changes happening to their company and how it will benefit them at long-term.

Management gives guidelines to employees and takes back seat. Employees have freedom to exercise their ideas and expertise in their areas of specialization. Manager acts more of a mentor to them than a leader (Nohria and Khurana 2013). The Cadbury has been creative since the formation, Kraft managers should continue giving a chance to the employee to express their ideas and skills, and this will increase productivity.

The theory emphasizes on the physiological, safety, social, esteem and self-actualization (Kremer and Hammond 2013). Kraft should continue the culture of catering the needs of the employees and senior management team. The employees will feel the sense of belonging, and the morale will raise, hence increase the productivity.

States that people are motivated is more than pay and condition (Hayes 2014). The need for recognition and a sense of belonging are crucial. Finally, the group influences people to attitude towards work. Motivation is important factors as the Kraft tries to stabilize its management style.

Leadership Styles of Kraft and Cadbury

McGregor’s theory x and theory y

Managers take their employees as lazy and less intelligent, and staff is coerced to perform. During the acquisition of the Cadbury, the managers can compel the employees to do the task due to the fewer numbers of the followers on the Cadbury acquisition by the Kraft.

Managers believe that employees are self-motivated and work in the company to better themselves without a direct reward. They take full responsibility for their work and even without close supervision, create a quality and higher standard product. After the alignment of the communication and culture, management can decide another method of the leadership skill such as democratic.

  Cadbury emphasizes a lot on the corporate culture. Coaching, two-way communications are vital aspects of the Cadbury culture because of the value and people based. The business emphasizes on the hygiene’s factors such as occupation, health, fitness facilities and working environment and motivation factors. Kraft is a capitalistic organization with less discernible corporate culture. Kraft focuses on the product development and external growth.  Over the years, the Kraft has undertaken divestments, mergers and acquisition with no mentioning of the people's values.

According to the Herzberg, there are job factors that prevent the job dissatisfaction while others which result in the job satisfaction (Jone 2010, p.58). Hygiene factors include company policies, company’s policies and administration, physical working conditions, employee’s status, interpersonal relation and job security. Kraft should concentrate on the both the factors those prevent job dissatisfactions and those result in the job satisfaction, however, the latter is more important.

Contingency approach suggests that the most efficient style of the management is one not rigid and single and thus management should depend on the context of the situation. Managers pay close attention to the own management style and situation and make the dynamic interaction between the position and forms. During the acquisition, the directors of the Kraft use the directive styles, and after the alignment of the culture and streamlining of communication, then the management style can change.

Continuous improvement is a strategy in the manufacturing process where the workers at all level of the company work together to achieve a regular and incremental in the productivity (Wilson and Gilligan 2012). Kraft can use the following stages in the management; the planning stage involves the development of the hypothesis. Do stages is the running of the experiment, checking is the evaluations of the results and act is the refining of the experiment.

Motivation Factors in Managing Change

According to the Feigenbaum, Total quality management is the process of quality development integration, quality improvement effort and maintenance of the quality so as to enable the productions and delivery of the services in an economical way. After the Kraft resolves the uncertainties in the workforce, then cost reduction is necessary by improving the quality of the product further so as to create more customer segment.

Unfreezing stage; prepare the company to accept the change by breaking down the quo status. (Barton et al. 2016).  Kraft manager can deliver messages such as customer’s satisfaction, declining sales, and poor financial results.

Change; after the unfreezing uncertainties, change stage enables to resolve new things and difficulties. Therefore, Kraft manager should make Cadbury workers understand the benefits of change to themselves and the company.

Freezing: embracing of the new changes by employees and taking the shape of the changes, then the managers can freeze the organization (Anderson and Anderson 2010). Kraft should have consistent descriptions of the job and stable organization chart to stabilize the change.

The Kraft should do force-field analysis which would identify the restraining and driving forces. The Rosenfeld and seniors management, opportunities for the cost reduction, market and research development expenditure, supply chain development and synergistic comprises the driving forces. Restraining forces include Cadbury’s employees and managers, unions, cultures clash, natural resistance to change, United Kingdom government and poor compatibility with the systems.  In orders to overcome the restraining forces, making organization ready for the change is important and emphasizing the need for the modification.

Motivational factors include the recognition, responsibilities, growth and promotions and meaningfulness of the work. Kraft can adapt reward systems such as public recognition, service awards, and appreciation of the spouses of the employees and senior management of the Cadbury. Some of the motivation factors include; compensation, staff fund scheme, leadership plans, delegation and staff social gathering projects.

Leadership is necessary to consider in the Kraft-Cadbury takeover. Communication is also important because acquisition raises doubts in the Cadbury’s employees on its goals and vision, and their roles in the new company. Lower in productivity and morale will arise if the employees feel the uncertainties in the future.

  The culture of the Kraft is more of the performance driven because of the profit-driven mergers and demergers. In contrast, Cadbury was founded on the Quaker ethics of the John to build the compassionate social business. The philosophy of kindness helped the Cadbury to create a world-class brand image in the British nationals. It is vital for the Kraft to identify and value the differences in culture since it is a source of their efficiency and synergy. The core structure of the organization comprises the employee and management. How an organization function depends on the policies which are inherent in the personnel and behaviors. Thus, the Kraft should look for a way to integrate the staff from the both firms in case of the horizontal acquisition. Motivational approaches, management level conflict, and diverse working styles will have challenges in the Kraft operations.

Conclusion

Clearly, an involvement of the employees, union members, and the consumer was important in Kraft Foods to take over from Cadbury; change is a slow process, not an extreme one.  In the course of change in management, it is necessary to trains and development the skills employees so as to gain know-how in tackling the change.  During the process of the Cadbury acquisition, Kraft should design effective leadership so as to direct the change platform. The Kraft can use democratic leadership styles so as to meet the area of the need sufficiently. Kraft should explore the techniques and underscores to address the possible problem and challenges as result the differences in the culture. Kraft can set management directions so as to realign the ways for working to fit organization’s vision. For the team spirit and harmonious relationship, human resource management is the solution.

 References

Anderson, D. and Anderson, L.A., 2010. Beyond change management: How to achieve breakthrough results through conscious change leadership. John Wiley & Sons.

Barton, D., Kipping, M. and Horváth, D., 2016. Re-Imagining Capitalism: Building a Responsible Long-Term Model. Oxford University Press.

Bragg, A. and Bragg, M., 2005. Developing new business ideas: A step-by-step guide to creating new business ideas worth backing. Pearson Education.

Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.

Jones, B., 2010. Corporate social irresponsibility: The role of government and ideology. In Reframing corporate social responsibility: Lessons from the global financial crisis (pp. 57-75). Emerald Group Publishing Limited.

Kremer, W.K. and Hammond, C., 2013. Abraham Maslow and the pyramid that beguiled business. BBC news magazine.

Lok, P. and Crawford, J., 2004. The effect of organisational culture and leadership style on job satisfaction and organisational commitment: A cross-national comparison. Journal of management development, 23(4), pp.321-338.

Moeller, S., 2012. Case study: Kraft’s takeover of Cadbury. The Financial Times

Nohria, N. and Khurana, R. eds., 2013. Handbook of leadership theory and practice: An HBS centennial colloquium on advancing leadership. Harvard Business Press.

Wiggins, J., 2010. The inside story of the Cadbury takeover. Financial Times Magazine.

Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.

Wolde, T., 2016. Brand Awareness and Brand Preference for Carbonated Soft Drinks: Evidence from Cadbury Schweppes Ethiopia Research Evidence from Life Experience. International Journal of Marketing Studies, 8(3), p.122.

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