Danone Case Analysis Essay
Groupe Danone is a French consumer-goods company headquartered in Paris. The multinational operates in all five continents, 120 countries, employing 90,000 people in four business lines: Fresh Dairy Products, Water and Beverages, Baby Food, and Clinical Nutrition. Its revenues in 2006 were 14 billion euros making it the third largest company in the sector only after Kraft and Nestle. The organizational structure at Groupe Danone is highly decentralized.
The country Managing Directors are empowered with entrepreneurial autonomy to undertake business decisions and are responsible for profit and loss outcomes. The company has a unique Knowledge Management system leveraging the “Networking Attitude” to share good practices within Country Business Units (CBU’s). The executive vice president of HR at Groupe Dannone, Franck Mougin, and organizational development director, Benedikt Benenati identifies the groups Knowledge sharing system as its key comparative advantage, and has placed numerous techniques to foster growth through Knowledge sharing.
Informal, yet highly structured knowledge management techniques such as the “Marketplace”, the “Message-in-a-bottle”, the “T-shirt”, the “Who’s Who” and the “Communities” approaches have been incorporated to build the human connection at Donone. While the abovementioned approaches focus on transfer of good practices within the organization, its suppliers and buyers, the newly placed “co-building ” networking approach interconnect departments to build or innovate new products.
The numerous strategies to build the Danone corporate culture form a robust platform for knowledge management. In addition to extending the networking attitude “deeper” involving more employees, and “wider” involving partners, suppliers, customers and consumers, several small and simple strategies could be used to promote communication and exchange of good practices. For instance, opening subsidized in-house cafeteria. This would foster casual luncheon conversations and exchange of ideas. The emphasis on the Danone style during recruitment is an important factor.
The importance of networking and the ways of a collectivist society has to be incepted and nurtured in the minds of the new recruits form the very beginning to safeguard Danone’s comparative advantage of Knowledge Management. The culture at Danone could be articulated to encourage the ways of collectivism where employees would like to hangout even after work. This could be achieved by coupon giveaways for dinner, vacations etc. To bring the CBU’s closer rotational programs and family get-togethers can be arranged bridging cross-cultural and language barriers through share of knowledge over time.
In 2001, an ERP (enterprise resource planning tool) THEMIS was Danone’s group-wide SAP (business software) system. The role of IT proved to be countercultural at Danone largely because the company is not process driven and headquarters cannot impose a tool on managers and hold them responsible for P&L outcomes. The use of IT at Danone is a hinder to the Human Connection. People are more comfortable to share ideas and ask for help when they are is an informal setting like that of a “Marketplace” or “Message-in-a-bottle” setting then via technology.
The “Who’s Who” mechanism at Danone has been unpopular for the same reason as managers have to track down someone with expertise in the relevant field as opposed to when in a “Marketplace” there is role-playing, a fun environment allowing to open up, and eventually the critical share of good practices within the company. Not only the use of IT is expensive, hectic and countercultural, the system could also be hard to understand and use. Nevertheless, the use of a group-wide IT system would ensure more structure in operations, greater documentation of practices, and faster and wider communications transcending geographical barriers.
The key to the success of IT at Danone is whether there would be greater participation or not. If employees could be encouraged and motivated to participate more actively in the ERP there is a high likelihood that company good practices would flow wider and faster. Yet, there still would remain the question of whether managers would prefer to trust and implement the IT transferred good practices or stick to the tradition of human connection sharing.