MGT530:  Principles
of Management


17th January 2018


Individual Essay


Tutor: Ash Malhotra


Managing Fonterra: Its Culture and Environment


Student Name: Shiny Peter John
Student Number: 13487423
Word Count: ______   
Number of Pages:  ______



Fonterra: Its Culture and Environment





The managers are
always restricted to its firm’s culture and environment visibly or invisibly.
This assignment describes the relevance of management and how the culture and
environment is being managed in an organisation.


Objective and Context:

The following
are the key objectives of this report:

Ø  To
understand key features of management and assess their relevance in NZ business

Ø  To
understand the impact of culture and cultural variations that effect business

Ø  To
evaluate how the changing, multi-faceted environment affects organisations
& influences efforts.


This given case
study explains the production, marketing and future vision of Fonterra
Co-operative Group Limited, one of the biggest dairy co-operative in New
Zealand. It also describes how the Fonterra team effectively manages the business
when variations happened on cultural and external environment.


Limitations and Assumptions:

The exact culture
and organisational environment followd by Fonterra can only be analysed by interacting
with the managers or employees over there and arranging such sessions in a
short span of time is quite expensive.


When Fonterra
encountered business troubles, they are willing to embrace the new
environmental changes to satisfy their customer needs with high quality value
added products. If they keep doing so, in future their business will grow
vastly which results economy development for their dependant farmers as well as










This section
summarises the key features of management, the impact of cultural variations on
business and how the environmental factors affect the organisation.


1) To understand the key features of management and
assess their relevance in the NZ business context.

As we are living
in a competitive world, the managers play a significant role in the smooth
running of a business which
inturn help the growth of nation’s economy.
The important features of a management are as below.


Achieveing Goal:

Managers are
always focused to accomplish their target. If an organisation has a goal, the
managers have to plan accordingly, allocate the resources and motivate their
staffs to meet the target within the specified time.


Multidimensional Task:

Managers have to
perorm multitasks for the success of an organisation. The three major tasks of
manager are work management, people management and operation management. Work
management means after setting a goal, managers have to deal with the entire
process from start to end. People management deals with the welfare of
individual or as a team as they are the backbone of an organisation. Operation
management refers to managing work with managing people such as the list of
works to do, how it will be done and who will do each task etc.


Continuous Process:

process never ends. Managers are always involved in planning, organizing,
directing and controlling activities for the growth of a firm.


Team Work:

activities are performed as a group, not as a single one. Each person in the
management team has to execute his/her duties without any fail and the results
will affect the entire concern.


Dynamic Function:

Managers are
capable of changing their firm culture, goals etc in accordance with the
changes in the external environment such as political, technical, social &
economic environment etc.



Management functions
are not visible but we can feel its presensce by seeing the co-ordination and
orderliness of the organisation.


Efficiency & Effectiveness:

means achieving targets and objectives on time where as Efficiency refers to
optimum or best utilisation of resources”. Managers are capable of balancing
both efficiency and effectiveness simultaneously for managing the works as well
as delivering the final product to customers before the dead line.


2) To understand the impact of culture and cultural
variations that effect business effectiveness.

culture is the way of doing things in a firm which should be followed from the
bottom line employees to the top level managers of that concern. Each
organization has its own culture. Various dimensions of organizational culture
are attention to detail, outcome orientation, people orientation, team
orientation, aggressiveness, stability, innovation and risk taking.


The basic culture
of an organisation can be classified into different types as follows.


Visible Culture:

The visible
components of organisational culture are dress code, office layouts, behaviour,
routine process, technology, products, ceremonies etc.


Invisibe Culture:

culture is defined as “how the company and employees communicate with one
another; the values of the company; the employees that make up the company and
thus, represent it on a daily basis”.

Strong Culture:

The employees in
strong cultural organisation stick on the rules and regulations of that firm and
they hold the key values of the concern.


Weak Culture:

The employees in
weak cultural organisation should not follow the policies of that firm which
may even affect the overall productivity of the concern.


Now we can
analyse how the corporate culture impact the effectiveness of business.

Impact of corporate culture on business:

According to the
Houston Chronicle, “Culture refers to the values and attitudes of employees in
the business or organization. In a business with an unhealthy culture,
employees act as individuals, performing their duties to meet their own needs,
such as a paycheck or health benefits.”


The three ways
of corporate culture which impact the business are as follows.


Greater Efficiency:

The success of
an organisation depends on the efficient employees on that firm. If a company
has good cultural values, it will positively affect the efficiency of an employee
which will automatically increase their productivity.


For example,
Hubspot and Netflix companies provide ‘no vacation’ policy where employees are
able to take leave as many they want. These companies measure the employee
performance by their productivity, not by the time they spent in office.


Increased Retention:

Employers should
focus to select and retain good employees in the firm. Managers should listen
to employee’s concerns, take necessary actions, motivate them and make employees
to work in an enthusiastic way.


Cohesive Vision:

Managers should
communicate the visions and missions of an organisation with the employees and
ask them suggestions to develop the business. By doing so, everyone in the
organisation is aware of what is going on in that concern. “It will be
impossible to achieve the goals you have set for your company if your employees
don’t see or understand the bigger picture”.









3) To evaluate how the changing, multi-faceted
environment affects organisations & influences efforts.

According to
Wendy Stewart, “An organisational environment is composed of forces or institutions
surrounding an organisation that affect performance, operations, and resources”.


environment can be classified into two types – Specific & General


Specific Environment:

The environment
having direct interaction on the firm to achieve organisational goals is
referred as ‘Specific’ environment. It includes customers, suppliers,
competitors, regulators, strategic partners, interest groups, employees, labour
markets and unions.


General Environment:

The environment
having less direct influence on the firm is referred as ‘General’ environment.
It includes political/legal, global, sociocultural, economic and technological.


The various
dimensions of ‘General’ environment are as follows.


Political / Legal:

The major
factors affecting political/legal dimensions are statbility of the political
system, government regulations, allocation of government funds etc.



The events happened
in foreign countries, any developments having global impact etc. influence the
global dimension of ‘General’ environment.



The factors
affecting sociocultural dimensions are cultural characteristics such as
customs, values etc. in the society and demographic conditions such as gender,
age, education level etc.



The economic
dimensions are influenced by the type of economic system –
capitalist/socialist, economic conditions – interest rate, inflation level etc.
and economic cycles – speed of growth, decline cycles etc.




technological dimension consists of knowledge, tools and methods which are used
to convert resources into products and services.


Now let’s
analyse how the changing environment affect an organistion.


Impacts of changing environment on organisation:

The following
are the external environmental factors that change the mode of operation of the



When new
competitors emerged, the managers are forced to change the marketing strategy
of their products to highlight them as number one.



New innovations
make the managers to change the business technology uptodate for increasing the
efficiency and to maintain customer satisfaction.


For example,
Nokia was the most domainat mobile-phone maker years ago. But when Apple
launched iPhone with smartphone technology at 2007, Nokia didn’t accept the new
technological changes as such. Later Microsoft absorbs Nokia as they could not
meet the customer expectations.


Desire for Growth:

that desire for growth constantly update their method of operation to get more
customer attention.

Need to Improve Processes:

In business,
managers have to introduce new production processes for maximising the
efficiency and minimising the operation costs. This will automatically increases
the company profit rate.


Government Regulations:

When government
regulation changes, the managers have to implement safer work environment and add
high quality measures for customer safety by altering its production processes.







Fonterra Culture
and how they are using their environment.





































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