M4A1: Case Study – Problems at Perrier
To begin this assignment, from your textbook, review the Case Study: Problems at Perrier. Then, review the Case Analysis Rubric for information on how to write this case study analysis in addition to what points you should include.
M4A1: Case Study – Problems at Perrier
The Case Study of the problems Perrier followed the company’s strategy towards the reaction of the reports of traces of benzene were found in its bottled water. The incident that occurred in 1990 followed Ronald Davis – Perrier Group president ordering a complete recall of all bottles in North America to the company’s distribution centers. In the following days, Source Perrier S.A, the French parent, also expanded the recall of the bottled water to the rest of the world. The move appeared to be an overacting strategy to the situation leading to an escalation of the problem. The problems of Perrier Group followed a successful trend in the previous years’ whereby, in a duration of 10-year tenure, President Ronald Davis had managed to grow the company’s retail sales from $40 million to more than $800 million.
The strategy to recall the entire 70-million-bottle in the U.S. inventory preceded by the worldwide recall proved to be a poor strategy for the company to respond in such severe measure. This followed especially after the health officials in both the U.S. and France had cleared that the benzene levels found in Perrier bottled water did not pose any significant health risk after all (Curtin et al., 2005). The company’s president Ronald Davis as well agreed it was rather a rushed decision that caused the company hard times in the company years. As the company became more floated by competitors’ products such as Evian, it was hard for Perrier to come back and remain competitive enough.
The case study involving Perrier problems serves as an excellent example of how management of an organization responds to issues triggering a series of events to occur affecting the company’s performance. The problems of Perrier escalated to influence change in the business that required effective measures and strategies to plan for change geared towards improving the company’s competitiveness. As the president Ronald Davis was ambitious and hopeful for the company’s comeback, the process proved to be hard than earlier anticipated. The lesson offered in the case analysis shows the essence of a company’s ability to identify key elements of employee resistance to change in order to achieve the expected results and on a timely basis.
The cases analysis of the scenario above marked the beginning of troubles for a company that was performing so well in the market. The high profits led to increased payments to the employees and high wages making it one of the best employers. However, after the troubles that manifested by the late 1989 and early 1990s, the company fell to the point that proved hard to recover. In 1992, Nestle – the world’s largest food company bought Perrier for $2.7 billion. With new management and change put in place in the functioning of the company, most of the employees appeared to be resistant to change. The relations between the workers and the management proved to be unproductive especially with almost 93% of Perrier’s employees being members of CGT. The CGT union is shown by the new management under Nestle as a stabling block resisting Nestle’s attempts to improve Perrier’s financial performance.
The new management led by Nestle CEO Peter Brabek-Letmathe, argues that the company is under threat to impose change successfully with the existence of CGT stubbornness and encouraging employee’s resistance to change. Such measures introduced by the take-over including cutting 15% of employees led to more resistance among Perrier workers (Kotter, 1996). Similarly, the introduction of a new product under the label Badoit Rouge was another change strategy that was highly resisted by Perrier’s employees forcing the company to be a head-to-head battle for a niche of the market. The resistance was so profound that at one instance, one of Perrier’s truck drive led the truck to the factory’s director and dumped bottles at the door-step that he could not get into his office.
The process of easing resistance to change is essential for the success of a company to undergo a transition efficiently. Therefore, the application of Kotter and Schlesinger change approaches provides an opportunity to minimize and ease resistance to organizational changes (Kotter & Schlesinger, 2008). For example, communication is a critical aspect of resulting in the understanding of what is expected of the employees in the new strategy. As well, communication allows the management to understand the employees’ feelings and their views as they adjust to the new scenarios rather than forcing too much and in a hard way on the employees. This only culminates into more resistance, in turn, damaging the company’s strides to effect change.
The process of implementing change, managers ought to act as change agents. In turn, they catalyze the process by motivating the employees to put their best self into the tasks ahead. A contrary approach only undermines the credibility of the management influencing resistance to change. Any form of misunderstanding must be eliminated by any chance by bringing employees on board to lead to a collaborative venture of implementing change. The managers must support and facilitate the employees in the change process through negotiations that shows their participation and involvement in the process rather than forcing workforce reduction as witnessed the case study above.
Curtin, T., Hayman, D., & Husein, N. (2005). Why Managing a Crisis Matters: In Managing a Crisis (pp. 28-32). Palgrave Macmillan UK.
Kotter, J. P. (1996). Leading change. Harvard Business Press.
Kotter, J. P., & Schlesinger, L. A. (2008). Choosing strategies for change (pp. pp-106). Harvard Business Review, 86(7/8), 130.