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Overview of Nestle

Question :

My topis is control issues where need to compare and contrast two control models as viewed by theorists.( see Academic literature on Course Outline – Recommended Reading List).

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Begin by selecting two models from the Schermerhorn textbook, then read a selection from the Recommended Reading texts to enrich your research.
Choose an organization with which you are familiar, either as a customer or as an employee, and outline how that organization makes use of the control systems which you have chosen to discuss/analyse.

Nestle is said to be facing various control issues related to child labour, raw material, ethical and boycott issue, restructuring of organization and many other issues. For handling these control issues, various control systems should be used by an organization. Employee discipline system help the organization in controlling the employees or human resources of the organization. This process is basically performed by human resource managers along with the inventory control system help the organization in balancing demand and supply of raw material as well as production of goods.

This is a case study of Nestle Organization. This report will describe the control models used by Nestle in handling their control issues. A description of the overview of Nestle along with control issues related to it, and how employee discipline system and inventory control system helps Nestle in handling the related control issues, is provided in this report.  

Nestle was founded in 1866 by Henry Nestle, in Switzerland. Nestle deals in different food products. Nestlé’s tagline “good food, good health” tells the strategy of the organization. Nestle captures the market by providing the good quality and healthy food products to its customers.  The managers of Nestle organization are responsible for all the management activities like Quality management, Process management, and control management.  Due to its control management policy, Nestle is the Leading brand in food products even after so much control issues (Nestle, 2014).

The base of Nestle Organization is its quality and safety. Policies related to quality of Nestle Product include the gaining trust of customers by meeting the customer’s expectations and preferences, providing defectless products with zero waste attitude.

There is various control issues related to the Nestle organization. Some main issues related to control are as follows:

  1. Issues related to child labour: The first and foremost issue of control in Nestle organization is recruiting the labour as child. Children are used in production of Cocoa. Children do this work due to poverty and lack of education which leads to the violation of the laws related to child labour. This issue comes under the child slaving. Some believes that it should be under the child trafficking also.
  2. Raw Material issues for Nestle Organisation: The other problem related is raw material control. This problem is related to the unexpected demands. Sometimes the demand may be high and can’t be fulfilled, many times raw materials get destroyed due to bad weather or disaster, or sometimes the inventory may remain in the stock.
  3. Ethical Issue: These types of issues related to boycott was faced by Nestle Corporation in 1970’s. Nestle products were boycotted by United States and other European countries. This happened in the last of 1970s.
  4. Restructuring of Organization: Defining the employee and management structure of the organization is also a critical control issue which comes under the employee control issue (Lemath, 2013).

The above points define the control issues related to the Nestle organizations.

Controlling in the Organization ensures the performance analysis and helps in taking the corrective actions. Feed forward controls are employed before activity begins, Concurrent control takes place during the feedback and process control takes place after the completion of work.

                                                                                 Figure: Control Process (Schermerhorn, 2008)

The diagram shown above is defining process related to control in which four steps are defined. First step establishes the performance objective and standards, second step is showing that how this can measure the actual performance of the control area, step three is to compare the real performance and the objective and standards and the next and last step defines the necessary actions.

Control Issues Faced by Nestle

The report, discusses about control models, which are as follows:

  1. System related to employee discipline: System related to employee discipline is an employee control tactic. This solves the various issues related to the organization. This system provides the control fairly, systematically and consistently. It includes the behaviour and attitude handling of employees, praising the employees on their performance and swaying employees to perform more work. This system also includes the legal issues related to the employees. These examples of these issues are child labour and. This system can help in managing the workforce that is mainly performed by the human resource managers (Stone, 1981).
  2. Control System related to inventory: control system related to inventory management helps in managing the goods management like demand and supply. This system helps an organization in numerous ways like execution and managing the request and according to that request, the goods are produced and fresh material is purchased. Control system related to inventory calculates an projected demand from the previous data and then the manufacturing process is processed. It assistances the organization by saving money, time and avoid the waste of goods and raw materials. It is the responsibility of the managers who manages the inventory control. It basically includes the two types of inventory control methods: ‘Time scheduling and economic order quantity (EOQ) (Schermerhorn, 2008).

The control systems that are discussed, are for two different purposes of an organization. Employees control system, as described earlier, is for controlling the human resource in an organization. Human resource of an organization is very necessary to control as human resource is the base of the growth for an organization, while the control system related to inventory is also a vital control system for an organization, as, if the lists of goods are not controlled properly, it may lead to a huge loss in terms of wastage of goods, raw material or not fulfilling of the demand in the market.  

If compared, in the above described control systems, the system related to discipline of employees includes the management of employees which covers the processes of rewarding the employees on their good performance in many terms like promotion, bonus etc., influencing them to work hard by various processes like motivation, rewarding program, providing attractive proposals etc.  Though the inventory control system includes the estimating of petition of products in the markets so that the raw substantial can be purchased, goods can be produced, and demand can be fulfilled effectively so that no substantial is unexploited and petition is also fulfilled (Stone, 1981).

These two types of systems related to control issues are done by two different types of managers which have the responsibility to achieve all the activities related to the controlling. These systems help the organization in many ways and create the steps in the direction of the growth by preventing waste, fulfilling mandate and improving employee presentation by legal activities.

We have discussed before about the issues of controlling in Nestle Organization related to controlling of employees and system related to controlling of inventory. Organization structure and child work are the issues which include in the Employees’ discipline system and Fresh substantial and boycott issue come under the system related top controlling of inventory.

As discussed before, system related to discipline of employees, Legal issues related to the employees come under this system. Thus, these types of systems can help Nestle Organization by introducing the code issued by the supplier which monitors the supply chain of all participants which help the company to track weather all the employees in the supply chain are qualified to work or not. Also, a special training from the Human Resource managers should be provided for child labour problem.

In the restructuring of an organization, the rights of each and every employee should be preserved. Each and every employee should be treated fairly and should get equal opportunity.

Raw material may become a control issue in three cases. First, when an unexpected demand by the customers or fresh material gets unexploited due to disasters by natural processes or the stock is not used. The related solution to these types of issues may be, the managers should build a strong relationship with the raw material suppliers. Various offers should be provided to attract the customer and the inventory management should be more modified according to the market situation.

Boycott issue was a serious problem faced by Nestle due to unethical marketing and bad product supply. Thus, the people of United States refuses to buy Nestle products. Inventory control management system includes the proper supply of products.


The above report is the result of various research and study. As defined in the report, it may be concluded that the systems related to control issues are a vital part of the management of an organization. The system for discipline of employees is related to the employee controlling. The system related to employee helps Nestle Organization in various ways. These can help in the issues related to child labour and the restructuring of the organization that helps it in making proper control on the employees. Control system of inventory helps Nestle Organization in controlling the fresh material for the production. Thus, these systems help the organization in its growth by saving money, time and creating excitement among the employees towards work. 


Lemath, Breback, (2013). Management of Change. [online]. 5 (12) pp. 5-15 Available at: [Accessed:  13th January 2015].

Nestle, (2014). Nestle Organization. [online]. Available at: [Accessed: 13th January 2015].

Schermerhorn, R. John, (2008). Exploring Management. 4th ed., London: Cram101

Bakker, Arnold B., (2006). The Job demands- Resources Model:  State of the Arts. [online]. Available at: [Accessed: 13th January 2015].

Stone, Ronald F. (1981). Managing Employees through Progressive Discipline. [online]. Available at: [Accessed: 13th January 2015].

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