Danone – Key Issues
Danone – Key Issues

Danone – Key Issues

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  • Published: October 24, 2017
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DANONE – INDIVIDUAL CASE STUDY ANALYSIS Dax Foley – 10520701 Groupe Danone is a world leader in the production of diary products being one of the largest dairy food and water produces in the world. With 90,000 employees in 120 countries of the world the company is very much knowledge-intensive and innovation-driven. Growing to become one of the most successful food and beverage companies in the world has not been without its challenges, primarily for Danone this has been successful knowledge management through all levels of the business.Danone’s success lies in the company’s innovativeness when it comes to new and creative ways of transferring knowledge throughout the company coupled with a clear strategy for future growth.

Frank Mougin, executive vice president of human resources, and Benedikt Benenati, organisational development manager, were given the task of developing a means of sharing knowledge between employees from around the world in a company with a highly decentralised business structure with little horizontal communication among divisions (Edmondson, Moingeon, Dessain, Jensen 2008, p6).Creating a successful way of sharing knowledge to ensure long term sustainability of the company was Danone’s key issue. Groupe Danone’s mission is to bring health through food to a maximum number of people in an effort to create sustainable development. Danone realised that most company’s these days target only a small percentage of the world’s population when marketing their products. In order for the company to succeed in such a competitive industry, it was necessary to ensure sustainable development.

As such, in 2001, the company launched the Danone Way, as a “practical and sustainable approach to building socially

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responsible corporate values into the company’s policies and aspirations” (Edmondson et al 2008 p. 4). Through this initiative, Danone took responsibility for and assured excellence throughout the product lifecycle, from the guarantee of quality raw materials to the protection of water reserves in production.In order for the company to remain profitable, whilst servicing the entire population, including those living in poverty, the company had to be extremely efficient and this meant effective communication and knowledge sharing across the company. “Knowledge involves the ability to exercise judgement and draw distinctions, and requires knowing how to apply knowledge in new contexts” (Soo, 2008).

“At Danone, we don’t have a lot of quantified organisational expertise. The expertise that we have is the sum of our individual knowledge” stated Fabien Razac (Marketing Director) (Edmondson et al 2008 p. ). Thus in order for the company to survive, networking amongst employees is extremely important. If the company fails to network efficiently, the company will struggle to transfer knowledge across employees and will fail to become a learning organisation that is “skilled at creating, acquiring and transferring knowledge and at modifying its behaviour to reflect new knowledge and insights” (Soo, 2008).

The company’s primary challenge lies in developing a sustainable method of transferring knowledge across the company and over the past decade numerous approaches have been trialled.One of Danone’s first attempts at knowledge management was to leverage company talent without centralised governance. The company developed the Growth Program and looked for good performers in areas such as renovation, innovation, proximity an

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affordability. The company believed that by bringing all of these ingredients into one basket, they would be able to outperform their competitors. This program initially proved successful increasing growth to a steady 5% (Edmondson et al, 2008 p.

6).In 2001, Danone launched a group wide SAP business software program called THEMIS which contained a list of 144 formalised best practises for varying operations. The company soon began to realise that this system was not suited to the organisations decentralised nature and was countercultural, as the company was not process driven, being far more entrepreneurial. Employees did not take well to a formalised structure of routines on how to perform their tasks, and as a result the program proved difficult to implement.

This system had been trialled and proven in numerous other multi-national firms, however it was not the best way for Danone to operate. Danone employees did not use portals to share information and felt most comfortable talking to each other. “Systems and processes slowed down the business” (Edmondson et al, 2008 p. 8) Each company has its own culture, consisting of shared beliefs, values, ideologies and norms, that is shaped around the company’s strategy, structure and internal and external environments (Soo, 2008).It is critical for management to understand the company’s culture in order to successfully develop a system of knowledge sharing, especially in a company that operates in 120 different countries. It was vital for Danone to develop a framework through which the sharing of knowledge was enjoyed and beneficial to the company’s long term growth prospects.

Sharing knowledge is ever so important in the increasingly competitive environment that multinational firms operate in. These days it is common for employees to change jobs and work for new companies in search of new and exciting projects.The top level staff at Danone will not be around for ever, thus it is vital for them to share the knowledge they have gained from working in the industry with their colleagues. Without a sufficient knowledge management system the company will fail to expand and grow, and will soon be overtaken by its competitors. Danone understood that in a group of 90,000 employees, the solutions to the problem of one team are likely to exist partly or in whole elsewhere (Edmondson et al, 2008 p. 8) and in order to ensure efficiency it was vital that this knowledge be communicated across the company.

The Networking Attitude program was launched by Danone in 2002, as a way to circulate good practises and make people in units far from each other share knowledge”. The program consisted of numerous creative social tools to stimulate sharing and use of knowledge (Edmondson et al, 2008 p. 8). The largest of these tools was a program run during Danone conferences across the world, called a Marketplace. Facilitators arranged and ran marketplaces and contacted 5 to 10 colleagues about three weeks in advance to mobilise them to act as givers – offering good practises, or solutions to problems.

The rest of the participants were to act as takers; managers with problems or issues to resolve. Each participant in the marketplace would dress up in

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