Kraft Foods and Corporate Social Responsibility

worldwide Ch each(prenominal)engesIndividual Assignment kraft paper Foods and CSR.2012 Global Ch anyenges Table of Contents Table of Contents1 1. 0Introduction2 2. 0Application3 2. 1kraft paper Foods Inc. 3 2. 2PESTEL Analysis3 2. 3 ram Analysis5 2. 4Porters Five Forces5 2. 5 worry at Kraft Foods Inc. 6 3. 0Corporate Social certificate of indebtedness6 3. 1Impact of CSR on Kraft Foods Inc6 4. 0Conclusion7 5. 0 testimonys7 6. 0References8 1. 0 Introduction Management is a term that is used and heard of every twenty-four hour terminus and a role that is undertaken everywhere you go.Its the ability to maintain and produce the best from a team or from a task, the activity of completing a task using the resources that argon available and pickings responsibility of the situation in hand. Even as individualistics every single participates in charge in one build or another, whether its in a massage environment or simply from the everyday caterpillar track of life. In a business sense however, management is the jobs within an judicature 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 warnings of management, how it can be applied to individual companies and businesses and then go on further to examine Corporate Social Responsibility and how firms use this. According to Mintzberg (1973) there argon ten management roles, these are Monitor, Disseminator, Spokesperson, signifierhead, Leader, Liaison, Entrepreneur, Disturbance handler, Resource electrical distributor and Negotiator. Mintzberg proposes that every managers role combines a number of roles, rather than ten individual roles. (Boddy, 2009) For example a CEO of a friendship could be a figurehead, a spokesperson, a attracter as well as the negotiator but he would assign the other roles to other particular(prenominal) managers or colleagues. Management involves a vast amount of conceptionning as its sets out the direction of the work that necessarily to be done and the objectives that need to be achieved. According to Boddy (2011) SMART acronym summarises criteria for assessing a set of cultivations. This covers circumstantial Does the polish set specific targets?Measurable Ensure you can measure the progress towards the attainment of the goal Attainable Assuring the goals are challenging but r from each oneable 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 like this it could be argued that they are different in which the goal is the overall target or aim, and the plan which looks at what is involved to obtain this goal is make up of individual objectives at each level.A widely used management model used within virtually every order is the Competing determine role model. It has been named as one of the fifty approx imately important models in the history of business and has been studied and time-tested in organisations for more than twenty louver years (CVF, 2009). The model 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 diagram below in Figure 1. 1. The following section will demonstrate how the textile can be applied to individual companies. Figure 1. 1 Competing Values Framework.Source Octogram. last-place (2005) 2. 0 Application 3. 1 Kraft Foods Inc. Kraft Foods Inc. is the second largest food company in the world generating one-year revenue of ? 54. 4 billion. The company was founded in 1903 in Chicago, North America, where their headquarters are close up based, and shares began calling on the New York Stock Exchange in 1991. They have over 126,000 employees in over 70 countries and they sell products to consumers in clxx countries. Krafts products are divided into five categories snacks and cereals, beverages, cheese and dairy, grocery, and favorable meals.Popular household name brands include Philadelphia, Oreo and Cadburys, which they recently acquired in 2010 for $18. 5billion. The attainment created the worlds largest confectioner, and confectionary now makes up for 28% of their net revenues. (Kraft Foods, 2012) In 2011 Kraft announced its intent to create twain independent unexclusive companies by the end of 2012 as a strategic preliminary for growth one being a juicy growth global snack business and the other a high margin North American grocery business. 3. 2 PESTEL Analysis PESTEL analysis is a useful woodpecker to understand the macro-environment in which Kraft Food Inc. perates and how these factors affect the company. PESTEL framework helps evaluate the risks associated with trade growth or decline, and the position and direction of the company. (Bender and Ward, 2008) It examines six different segments, which are Political, Economic, So cial, Technological, Environmental and Legal. Although there are many factors which ignite under each of the segments of the PESTEL analysis it is important to analyse them and select the most significant factors which have the superlative effect on the company. POLITICAL Kraft Foods Inc. s report to various federal and state laws in the U. S relating to the protection of the environment. They also have manufacturing facilities in 70 countries and consumers in 170 countries which subjects them to individual environmental laws, health and hygiene regulations in every country which they operate. ECONOMIC As Kraft operates in 170 different countries, currency 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 hurt spending on premium quality products such(prenominal) as those made by Kraft Foods Inc. (Bloomberg,2010) fond Diet patterns are rapidly changing in emerging economies like Brazil, mainland China and India. The people in these countries are spending more on packaged food and this social drift has provided companies like Kraft to look towards emerging marketplaces to increase revenues. (Yahoo Finance, 2010) Consumers are also getting increasingly aware about health implications of food which can cause obesity. Federal Trade 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 profits. TECHNOLOGICAL Kraft is investing heavily in forward-looking technology to reduce nose candy dioxide emission and protect the environment. They have adopted a policy where there is increased use of take and barge transport instead of using trucks. (Kraft Foods, 2010) ENVIRONMENTAL at that place is increased pressure from governments and the general public about th e way companies operate and their effect on the environment. In 2008 Kraft Foods Inc. ame under pressure when rainforest Action Network asked companies such as Kraft Foods Inc. to stop buying palm oil from Indonesia to sustain deforestation. (CNN, 2008) LEGAL Kraft operates in a highly regulated environment with a constantly evolving jural and regulatory framework around the world particularly when selling products for human consumption involves inherent risks such as contamination. Cadbury, now owned by Kraft Foods Inc. had to recall 11 chocolate types in China in 2008 when at least 50,000 babies fell ill and 4 died by milk tainted with an industrial chemical. (BBC, 2008) 3. SWOT Analysis Another approach that companies implement is the SWOT analysis. The core of this approach is a uncomplicated and eminently reasonable strategy that is concerned with identifying opportunities in the enterprises external environment (Pg No 721, Linstead, Fulop & Lilley, 2009). This analysis ex amines the strengths and weaknesses knowledgeable 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 law with over 100 years heritage.However their weaknesses are that the Cadburys scholarship 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 new products in the health related market such as introducing low lucubrate or organic products. But on the other hand a threat for Kraft is that the Cadburys acquisition resulted in a lot of protests and bad 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 intensity 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 power of buyers, the bargaining power of suppliers and the contender 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 looking at the bargaining power of suppliers with Kraft Food Inc. suppliers do not hold much power to enforce the company to extract their profits due to the competitive temperament of the industry. Buyers however have an opportunity to extract firm profits as demand changes over the period of time. Due to intense competition in the market, there is a low possibility for new entrants to father the market, and the threat of substitute products is medium as Kraft Foods Inc. hold such a large market share in the industry.Finally compet itors such as Nestle and Kelloggs are spending massive sums of money for the promotion and advertising of their brands yet Kraft Foods Inc. is still 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 reasoning(prenominal) Goal Model. This model focuses towards maximisation of output and make 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 order to survive although successful models of management relate to all four of the segments. The basic assumption of the Rational Goal Model is that clear direction leads to productive outcomes. There is a continuing emphasis on processes such as goal clarification, rational analysis, and action taking. on the whole conclusions are driven by consideration of the bottom line. (Taylor, 1911) Kraft Foods Inc. hows elements of dominantly using this model from their opponent 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 weakenment goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates maximise 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 opposed 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 position s were made available to 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 represent negatively in the media ever since.However, it is not all negative when it comes to Krafts CSR. Over the early(prenominal) 25 years they have donated more than $770 million in cash and food to those suffering from hurt and malnutrition. Kraft Foods ranked 23rd in the 2011 Corporate Social Responsibility Index and were recently awarded the fortunate Award for Environmental Excellence at the 4th Global CSR Awards 2012. (Kraft, 2012) They work with non-profit organizations such as provide 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 he lps us to analyse an organisation, and we can 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 wine food manufacturers, particularly in this economic slowdown.Although the company does partake in a lot of CSR activities, a bad image always remains with customers for a lot longer than a positive 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 repositioning their brand image in the markets to communicate with customers to remove the negative thought 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 value are participation, conflict reso lution, and consensus building. In this model 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 respect 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 go through 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. Available www. bbc. co. uk Accessed 12 whitethorn 2012 Bender, R. and Ward, K. (2008). Corporate financial strategy. 3rd Ed. capital of the United Kingdom Macmillan p. 52-55. Bloomberg, Ho man, T. R. (2010). U. S. Employers Add Fewer Jobs Than Forecast. December 2010. Available 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. August 2008. Available www. money. cnn. com. Accessed 23 May 2012. CSR. gov. uk (2009). Available http//webarchive. nationalarchives. gov. uk/+/http//www. berr. gov. uk/whatwedo/sectors/sustainability/corp-responsibility/page45192. html/ 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 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, close to us (2012) Available http//www. kraftfoodscompa ny. 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 deportment 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 Wood Johnson Foundation (2008). Food and Beve rage Marketing to Children and Adolescents What Changes are Needed to Promote Healthy take Habits? October 2008. Available www. rwjf. org Accessed 22 May 2012 Taylor,