Kraft Foods and Corporate Social Responsibility

Global ChallengesIndividual Assignment kraft Foods and CSR.2012 Global Challenges Table of Contents Table of Contents1 1. 0 accession2 2. 0Application3 2. 1kraft paper Foods Inc. 3 2. 2PESTEL Analysis3 2. 3SWOT Analysis5 2. 4Porters quintuple Forces5 2. 5 focusing at kraft Foods Inc. 6 3. 0embodied Social function6 3. 1Impact of CSR on kraft paper Foods Inc6 4. 0Conclusion7 5. 0Recomm give the sackations7 6. 0References8 1. 0 Introduction Management is a term that is employ and heard of either day and a role that is undertaken everywhere you go.Its the strength to watch over and larn the best from a team or from a task, the activity of completing a task using the resources that argon available and taking duty of the situation in hand. Even as individuals everyone participates in management in one form or a nonher, whether its in a perish environment or simply from the everyday data tracks of life. In a business sense however, management is the jobs at bottom an organisa tion charged with running the organisation on behalf of the beneficial owner (Pg no 294, Martin, 2005).This report is going to examine the different principles and postures of management, how it back be applied to individual companies and businesses and because go on further to examine merged Social right and how firms use this. fit to Mintzberg (1973) there be ten management roles, these are Monitor, Disseminator, Spokesperson, Figurehead, Leader, Liaison, Entrepreneur, Disturbance handler, Resource allocator and Negotiator. Mintzberg proposes that every managers role combines a number of roles, rather than ten individual roles. (Boddy, 2009) For lesson a CEO of a community could be a figurehead, a spokesperson, a leader as hale as the negotiator provided he would assign the other roles to other special managers or colleagues. Management involves a vast amount of planning as its sets out the charge of the work that needs to be done and the objectives that need to be a chieved. According to Boddy (2011) SMART acronym summarises criteria for assessing a set of inclinations. This covers Specific Does the tendency set specific prats?Measurable Ensure you can measure the progress towards the attainment of the goal Attainable Assuring the goals are challenging but r individuallyable Rewarded- A reward is obtained for succeeding the goal Times The time scale of which the goal is to be achieved in Boddy (2010) proposes that goals and objectives are the same. However in cases interchangeable this it could be argued that they are different in which the goal is the overall target or aim, and the plan which scents at what is involved to obtain this goal is do up of individual objectives at each level.A widely used management work used within virtually every connection is the Competing Values Framework. It has been named as one of the fifty or so important postures in the history of business and has been studied and tested in organisations for m ore than 20 five years (CVF, 2009). The mould is made up of four components and each quadrant represents a different model and the roles that are played within the model which can be seen in the draw below in Figure 1. 1. The following section will demonstrate how the mannequin can be applied to individual companies. Figure 1. 1 Competing Values Framework. ancestry Octogram. utmost (2005) 2. 0 Application 3. 1 kraft Foods Inc. kraft paper Foods Inc. is the arcsecond largest nutrient fellowship in the world generating annual r change surfaceue of ? 54. 4 billion. The company was founded in 1903 in Chicago, north America, where their headquarters are quench based, and shares began trading on the New York Stock Exchange in 1991. They stir over 126,000 employees in over 70 countries and they sell products to consumers in one hundred seventy countries. Krafts products are divided into five categories snacks and cereals, beverages, cheese and dairy, grocery, and genial meals. Popular household name brands include Philadelphia, Oreo and Cadburys, which they recently acquired in 2010 for $18. 5billion. The acquisition created the worlds largest confectioner, and confectionary now makes up for 28% of their wage revenues. (Kraft Foods, 2012) In 2011 Kraft announced its intent to create two strong-minded public companies by the end of 2012 as a strategic get on for growth one being a high growth orbiculate snack business and the other a high margin North American grocery business. 3. 2 PESTEL Analysis PESTEL analysis is a profitable tool to understand the macro-environment in which Kraft Food Inc. perates and how these factors affect the company. PESTEL exemplar helps evaluate the risks associated with market growth or decline, and the position and direction of the company. (Bender and Ward, 2008) It examines half-dozen different segments, which are Political, Economic, Social, Technological, environmental and Legal. Although there are many an(prenom inal) factors which go through under each of the segments of the PESTEL analysis it is important to analyse them and select the most significant factors which flip the greatest operation on the company. POLITICAL Kraft Foods Inc. s subject to various federal and state laws in the U. S relating to the protection of the environment. They also get under ones skin manufacturing facilities in 70 countries and consumers in clxx countries which subjects them to individual environmental laws, health and hygiene regulations in every coarse which they hold up. ECONOMIC As Kraft operates in 170 different countries, bullion fluctuations and unfavourable exchange rates can put pressure on the companys earnings, particularly with the current Eurozone crisis. Increased unemployment in the U.S and other countries will lead consumers to cut disbursement on tribute quality products such as those made by Kraft Foods Inc. (Bloomberg,2010) friendly Diet patterns are rapidly changing in emergi ng economies desire Brazil, China and India. The people in these countries are spending more on packaged provender and this social drift has provided companies like Kraft to look towards emerging markets to increase revenues. (Yahoo Finance, 2010) Consumers are also getting increasingly alert about health implications of food which can cause obesity. Federal sell Commission reported that child obesity in the U.S has quadrupled in the last four decades (RWJF, 2008). Food and Beverage companies need to respond to these changes to maintain its market share and sugar. TECHNOLOGICAL Kraft is investing heavily in innovative technology to reduce carbon dioxide emission and protect the environment. They have adopted a policy where there is change magnitude use of rail and barge transport instead of using trucks. (Kraft Foods, 2010) ENVIRONMENTAL There is increased pressure from governments and the general public about the way companies operate and their effect on the environment. In 2008 Kraft Foods Inc. ame under pressure when Rainforest serve Network asked companies such as Kraft Foods Inc. to stop buying thread oil from Indonesia to prevent deforestation. (CNN, 2008) LEGAL Kraft operates in a extremely regulated environment with a constantly evolving legal and regulatory framework around the world particularly when selling products for human consumption involves congenital risks such as contamination. Cadbury, now owned by Kraft Foods Inc. had to revoke 11 chocolate types in China in 2008 when at least(prenominal) 50,000 babies fell ill and 4 died by milk tainted with an industrial chemical. (BBC, 2008) 3. SWOT Analysis some other approach that companies implement is the SWOT analysis. The midpoint of this approach is a simple and eminently reasonable strategy that is relate with identifying opportunities in the enterprises outside environment (Pg No 721, Linstead, Fulop & Lilley, 2009). This analysis examines the strengths and weaknesses intern al to the company and then the external opportunities and threats. In Kraft Foods Inc. case the strengths that can be identified are that they are the worlds second largest food company and they have strong brand e let go ofy with over degree Celsius years heritage.However their weaknesses are that the Cadburys acquisition resulted in added debt pressure and they are subject to cut throat competition from rivals such as Nestle. From the external point of view an opportunity for the company is that they could centre natural products in the health related market such as introducing low fatty or constitutional products. But on the other hand a threat for Kraft is that the Cadburys acquisition resulted in a lot of protests and poorly media from the British which resulted in a drop of profit margins. 3. 4 Porters Five ForcesPorters five forces is an analysis framework that identifies the competitiveness potency and the five forces most relevant to the profitability of the company. According to Porter (1980a) the ability to earn an acceptable return depends on five forces the ability of new competitors to enter the industry, the threat of substitute products, the bargaining major power of buyers, the bargaining power of suppliers and the rivalry amongst existing customers (Boddy, 2008, Pg No 93). This framework is demonstrated in the diagram below in Figure 2. 1. Figure 2. Porters Five Forces. Source Wikepedia When scene at the bargaining power of suppliers with Kraft Food Inc. suppliers do not hold much power to enforce the company to deplumate their salary due to the competitive nature of the industry. Buyers however have an opportunity to extract firm profits as demand changes over the period of time. cod to intense competition in the market, there is a low first step for new entrants to capture the market, and the threat of substitute products is medium as Kraft Foods Inc. hold such a large market share in the industry.Finally competitors such as N estle and Kelloggs are spending enormous sums of money for the promotion and advertising of their brands yet Kraft Foods Inc. is steady the second largest in the world. 3. 5 Management at Kraft Foods Inc. As previously mentioned in the introduction, every businesss management model can be applied to the Current Values Framework. When analysing Krafts business strategy and management it is evident that their current dominant model is the Rational Goal Model. This model focuses towards maximisation of output and fashioning a profit.Of course, the vast majority of companies would be dominantly working from this model as every company needs to make a profit in ordain to survive although successful models of management relate to all four of the segments. The introductory assumption of the Rational Goal Model is that clear direction leads to amentaceous outcomes. There is a continuing emphasis on processes such as goal clarification, rational analysis, and action taking. All decision s are driven by consideration of the bottom line. (Taylor, 1911) Kraft Foods Inc. hows elements of dominantly using this model from their hostile acquisition of Cadburys and with their intent to create two independent public companies as a strategic approach for growth. 3. 0 Corporate Social Responsibility Corporate Social Responsibility is the business contribution to sustainable ontogenesis goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates maximising the benefits and minimising the downsides. (CSR, 2009) 4. 6 Impact of CSR on Kraft Foods Inc Kraft Foods Inc. as thrown into the media in 2010 with their hostile acquisition of Cadburys. Cadburys unions fence to the take-over in fear that there would be big job cuts, and UK politicians even weighed in voicing their concerns. Following the acquisition five senior executives of Cadburys quit and only 30% of the leadership positions were made available t o Cadburys staff. (FT, 2010). By the end of the acquisition over four hundred jobs had been cut by Kraft, this was deemed as an extremely bad case of CSR, particularly in the social aspect and the company have been portrayed negatively in the media ever since.However, it is not all negative when it comes to Krafts CSR. Over the past 25 years they have donated more than $770 million in cash and food to those suffering from hunger and malnutrition. Kraft Foods ranked 23rd in the 2011 Corporate Social Responsibility Index and were recently awarded the Gold Award for Environmental Excellence at the 4th Global CSR Awards 2012. (Kraft, 2012) They work with non-profit organizations such as Feeding America in the U. S. and Save the Children in Southeast Asia as well as helping develop healthy lifestyles programs for children in the U. S. , Russia and many other places. 4. 0 Conclusion In conclusion the above shows us how the management theory helps us to analyse an organisation, and we ca n see how Kraft Foods Inc. operates successfully using the Rational Goal Model. They do however operate in a highly competitive food sector, where margins are diminishing, and they have to face tough competition from branded food as well as generic food manufacturers, particularly in this economic slowdown.Although the company does partake in a lot of CSR activities, a bad project always remains with customers for a lot longer than a exacting one, and they still have a negative image portrayed on themselves from the hostile takeover of Cadburys. 5. 0 Recommendation Kraft Foods Inc. could benefit from displace their brand image in the markets to communicate with customers to remove the negative thought process from their minds which arose after Cadburys acquisition. They should also consider moving towards the Human Relations model in the CVF which emphasises commitment, cohesion, and morale. The key values are participation, conflict resolution, and consensus building. In this m odel the organisation takes on a team-oriented climate in which decision making is characterised by deep involvement. (Quinn, 1988) This would be beneficial in gaining trust and note from the employees after all the conflict and job losses that arose from the acquisition of Cadburys. Another option for the company, as mentioned before in the SWOT analysis, is the expansion into new and developing markets which will aid the company in earning more profits to meet their debt requirements.With the consumer market becoming more health and environmentally conscious, organic and reduced fat content products could be a niche in the market for a confectioner such as themselves. 6. 0 References BBC (2008). melamine found in Cadbury goods. September 2008. getable www. bbc. co. uk Accessed 12 may 2012 Bender, R. and Ward, K. (2008). Corporate financial strategy. 3rd Ed. London Macmillan p. 52-55. Bloomberg, Homan, T. R. (2010). U. S. Employers Add Fewer Jobs Than Forecast. December 2010. open www. Bloomberg. om Accessed 24 April 2012. Boddy, D (2011). Management, An Introduction. 5th ed. Essex Pearson. CNN, Gunther, M (2008). Eco-police find new targets. distinguished 2008. acquirable www. money. cnn. com. Accessed 23 May 2012. CSR. gov. uk (2009). obtainable http//webarchive. nationalarchives. gov. uk/+/http//www. berr. gov. uk/whatwedo/sectors/sustainability/corp-responsibility/page45192. hypertext markup language/ Accessed 22 May 2012. CVF. (2009). Competing Values Framework An Introduction. Available http//competingvalues. com/competingvalues. om/wp-content/uploads/2009/07/The-Competing-Values-Framework-An-Introduction. pdf at last accessed 12 May 2012. FT. Elizabeth Rigby. (2010). Kraft hit by exodus of Cadbury executives. Available http//www. ft. com/cms/s/0/1dad970a-69c1-11df-8432-00144feab49a. htmlaxzz1viuO14PA. Last accessed 18 May 2012. Kraft Foods, About us (2012) Available http//www. kraftfoodscompany. com/About/who-we-are/index. aspx Last accessed 28 April 2012 Kraft Foods CSR (2012) Community Involvement Available http//www. kraftfoodscompany. om/About/community-involvement/community-involvement. aspx Accessed 22 May 2012. Kraft Foods, Document Sheet (2011) Available http//www. kraftfoodscompany. com/SiteCollectionDocuments/pdf/kraft_foods_fact_sheet. pdf Last accessed 20 May 2012 Kraft Food Q1 Financial Figures http//phx. corporate-ir. net/phoenix. zhtml? c=129070&p=irol-EventDetails&EventId=4756026 Linstead, S, Fulop, L and Lilley, S. (2009). Management & Organization. 2nd ed. London Palgrave McMillan. Pg No 721. Martin, J (2005).Organizational Behaviour and Management. London Thomson Learning. Octogram. (2005). CVF Framework. Available http//www. octogram. net/quinn-model Last accessed 6 May 2012. Porters Five Forces, Wikepedia. Available http//en. wikipedia. org/wiki/Porter_five_forces_analysis Accessed 22 May 2012. Robert timberland Johnson Foundation (2008). Food and Beverage Marketing to Children and Adolescents Wha t Changes are Needed to agitate Healthy Eating Habits? October 2008. Available www. rwjf. org Accessed 22 May 2012 Taylor,