Principles Of Management - Learning and Experiences

Hershey - Company profile and Management Principles

The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey's, is the largest chocolate manufacturer in North America.Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey's Chocolate World.

History :

It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey's products are sold in about sixty countries worldwide. Hershey is one of the oldest chocolate companies in the United States, and an American icon for its chocolate bar. It is one of a group of companies established by Milton Hershey. Other Milton Hershey-established companies include Hershey Trust Company, and Hershey Entertainment and Resorts Company, which runs Hersheypark, a chocolate-themed amusement park, the Hershey Bears minor professional hockey team, Hersheypark Stadium and the GIANT Center. Most of the employees for the factory come from the surrounding counties, towns, and boroughs, such as Lebanon County, Hummelstown, South Hanover, and Harrisburg.

Milestones:

1893 visits World’s Columbian Exposition in Chicago and learns about chocolate machinery

1894 aware of the growing demand for chocolate, he started the Hershey Chocolate Company.

1900 sells his caramel company for $1 million, and devotes his attention to making chocolate.

1900 Hershey introduces the original HERSHEY’S milk chocolate bar.

1905 Hershey introduces the HERSHEY'S kiss

1908 Hershey introduces HERSHEY’S milk chocolate with almonds bar.

1971 Hershey introduces HERSHEY’S SPECIAL DARK chocolate bar.

1980 Hershey introduces Big Block/King Size versions of HERSHEY’S chocolate bars

1980 Hershey introduces HERSHEY’S SPECIAL DARK chocolate bars.

1994 Hershey introduces HERSHEY’S COOKIES ‘N’ CRÈME bar.

2004 Hershey introduces Limited Edition bars in HERSHEY’S white chocolate with almonds

Products :

Mission and Values :

Mission - Undisputed Marketplace Leadership
Vision - Great People Building Great Brands

Market share of products -

Market value (3/25/2011) 12,356.1 $ millions
Hershey Foods has 42.5% of the US chocolate market.Hershey sells products in 50 countries under 60 brand names including, Hershey's, Reese's, and Kisses In 2010, the company's net revenues were $5.67 billion with net income of $510 million. Additionally, Hershey maintains the right to manufacture and sell competitors' products, such as Kit-Kat bars, through licensing agreements with foreign Nestle (NSRGY) and the former Cadbury Schweppes (now part of Kraft Foods (KFT)).

Capacity of products -
Hershey's Production capacity
•       33 million Hershey’s kisses per day
•       Total production capacity stands at 12 billion per year

Manufacturing plants -
The first plant outside Hershey, Pennsylvania opened on June 15, 1963 in Smiths Falls, Ontario, Canada and the third opened on May 22, 1965 in Oakdale, California.In February and April 2007 Hershey's announced that their Smiths Falls and Oakdale plants would close in 2008, being replaced in part by a new facility in Monterrey, Mexico. The Oakdale factory closed on February 1, 2008.Hershey chocolate factory in São Roque, Brazil was opened in August 2002.
Hershey also has plants in Stuarts Draft, Virginia; Lancaster, Pennsylvania; Hazleton, Pennsylvania; Memphis, Tennessee; Robinson, Illinois and Guadalajara, Mexico.
Visitors to Hershey, Pennsylvania can experience Hershey's Chocolate World visitors center and its simulated tour ride. Public tours were once operated in the Pennsylvania and California factories, which ended in Pennsylvania in 1973 as soon as Hershey's Chocolate World opened, and later in California following the September 11, 2001 attacks, due to security concerns.

Key People –

Chief Executive Officer

John P. Bilbrey

President and Chief Executive Officer

Global Leadership Team

Humberto P. Alfonso	Executive Vice President, Chief Financial Officer and Chief Administrative Officer
Michele G. Buck	Senior Vice President, Chief Growth Officer
Thaddeus J. Jastrzebski	Senior Vice President, President, Americas
Terence L. O'Day	Senior Vice President, Global Operations
Peter F. Smit	Senior Vice President, President, Asia, Middle East & Africa
Burton H. Snyder	Senior Vice President, General Counsel and Secretary
E. Daniel Vucovich, Jr.	Senior Vice President, President, United States
Kevin R. Walling	Senior Vice President, Chief Human Resources Officer
D. Michael Wege	Senior Vice President, Chief Commercial Officer

Future plans –

The Future plans include ongoing updates to support process changes and to take advantage of enhanced functionality in each new AR System release.The IS
staff is expanding its use of root cause analysis to pin-point the causes of recurring problems and take action to eliminate them.The staff also plans to extend the service request application to provide a single point for requesting all IS services. Finally,
Hershey Foods is beginning to roll out Remedy-based applications outside of IS.

On January 30, Hershey announced plans to put $10 million towards solving child labor problems on West African cocoa farms by 2017. The money should also help farmers access educational programs and improve their cocoa yield.

SWOT Analysis –

Strengths :

-         Extensive Global Market Base;Spread across more than 60 countries

-         Largest Distribution Network across North American territory

-         Enjoys government support and has major role in policy-making

Weaknesses :

-         Criticism for changes in chocolate making processes as part of cost-cutting.

-         Lead time for Operations much greater than its competitors.

Opportunities :

-         Tapping into South-east Asian and Eastern European markets.Recently,Hershey announced that it would be entering Indian Market independently.

-         Exploring the packaged foods and drinks market segment by acquistions in Europe and america regions.

Threats :

-         Competitors like Cadbury,Nestle have already established markets in South east asia

-         Packaged foods and drinks market provides lesser revenue generation opportunities as profit margin is very less.

Valley Crossing exercise

Let me show you something innovative which happened in our college.

 A video showing the Valley Crossing exercise which happened in NITIE below - 

Hope you enjoyed watching this video.

Let me simplify this and Explain of valley crossing through this picture:

Every manager knows the power of Teamwork. In fact the very existence of a manager can be attributed to creation of  Teams.  The Valley Crossing exercise purely focussed on  Teamwork.

Learnings from this exercise:

1) Concept of Super Teams & Self Manager Teams: Super Teams or High performance teams is a concept which has been successfully adopted by many big corporations like GE, Krafts food, Boeing etc. It can be defined as a group of 3 to 30 workers drawn from different areas of a corporation to solve problems faced daily. The valley crossing exercise had many characteristics of a super team like:

• Participative leadership – different from the tradition approach of a authoritarian team leader.

• Open and clear communication – Communication is the key to crossing valley effectively.

• Mutual trust – Every person needed to trust each other completely especially when their feet was off the ground.

• Managing conflict – dealing with conflict openly and transparently and not allowing grudges to build up and destroy team morale

• Clear goals – The goals were clear, defined and each member in the team fully understood the gravity of the problem.

• Defined roles and responsibilities – each team member understands what they must do (and what they must not do) to demonstrate their commitment to the team and to support team success. Furthermore the roles and  responsibilities keep on changing depending on the situation. 

• Coordinative relationship – the bonds between the team members allow them to seamlessly coordinate their work to achieve both efficiency and effectiveness

• Positive atmosphere – an overall team culture that is open, transparent, positive, future-focused and able to deliver success.

2) Task Interdependence - It is the extent to which a group's work requires its members to interact with one another. We see that in the valley crossing exercise it is of utmost importance to be interdependent on each other so as to mitigate the risk and achieve the task at hand. This also has brings lot of perspectives to the Team performance in reality. What I have observed is that the interdependence increases as we go higher up the corporate ladder. As a worker or low level employee, we can usually get away with completing the task without much interdependence (even though effectively using the team's collective strength may increase productivity). But as we go to strategic level, it is almost impossible to go about a task without the expertise/skill/opinion of your team mates.  Thus Interdependence and its effective usage is crucial for a manager.

3) The Flip side: Quite often we come across people who get their tasks done by their team mates. One of the flip side of team work is that our efforts may go unrecognised or even worse credited to the wrong person. In a competitive and performance oriented environment like ours, it is important to see through these ploys. Some of the good work practises that I have found in good team players in my previous organization includes:

• Pro actively helping members in need.
• Properly communicating the work done to superiors.
• Pro actively using the teams strength for overcoming problems.
• Effective participation in meetings and team events etc.

These are some of the learnings from this exercise.

Digital Media - Leveraging for Managers

For those of us that use the net during work time, there are two types of networking sites, those that can aid learning, productivity and build business relationships and those that can slow or even stop work in its tracks. In this article, We explore the risks to individuals and businesses in the growing use of personal contact sites.

Personality types
For some of us, personal messages from people they know (or don’t know) causes excitement and fun. The feeling is almost addictive. What am I talking about? Well do you have your Gtalk or Yahoo messenger running while at work? Ready for people you know to chat to you? Do you feel compelled to talk when someone you know appears online? At best, this is a distraction; at its worst, it can disable some individuals from doing any work at all. But this is not the worst of it. With people we know our feelings and reaction to people we know is more often or not within reasonable control.

Are you ‘addicted’ to instant messaging?
Checking your email once or twice a day is one thing, but being permanently connected is quite another.

How can you tell if you are addicted to messaging? For some this can be quite easy. It is about how far you go to get your ‘fix’ of chatting with people you know.

If you work for a company that has blocked your favourite messaging site, then you use search engines to find alternatives – you use one of the ‘framed’ or java based sites, as the chances are your IT department has not blocked that yet… One of the better known MSN/ Yahoo replacements is ebuddy. This is a great site which allows you to access your instant messaging site and avoid the block on some company firewalls. When your company stops one you happily spend time searching for another.

Where are we spending our time?
Research has shown that the sites with us spending the most time on are: Myspace, Yahoo, Msn, ebay (being the top 4) with an adult dating site in the top 20. Sites like Myspace , Facebook and Youtube have little/ no legitimate place in the world of professional networking. As for dating or chat room sites…well that goes without saying. Yes, all of these can be great places to spend our hobby or down time, but as business tools – no.

Networking –v- Social Contact sites

Here let us make the distinction between the two types of networking sites. Networking sites tend to have forums and ways of finding people that have skills or experiences we are looking for. The forums tend to me places where people can share thoughts, questions and solutions, but they do so in a way that does not encourage a ‘conversation’. These sites include HRZone,TrainingZone, CIPD, TrainerBase, Linkedin etc.. Sites that can help us solve a business problem have a legitimate place in our ‘toolkit’ of solutions and organisations should encourage their use to help remain competitive and cost effective.

Are Blogs – social networking sites?
Yes and no. For me there are two types of blog – those that use social networking sites, and those that are on an individual’s professional website. For me that latter is a professional too, the former is not. In this day and age of personal networking, we need to be careful about our image. 

What happens if we go for a job and someone ‘Google’s’ our name – and all they find is a blog with not very business like language on it?.

Organization Structure

What is organization Structure ? What does it consists of ?

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. 

How anyone can learn Organizational Structure?

The definition mentioned above may soun intimidating to some.Also,People have a notion that such structures are only found in organizations.Contrary to this popular belief,we learnt this concept by a unique approach in class.

We were asked to bring different kinds of plant saplings available in campus.By analyzing these saplings we were able to understand  the various organizational structures and their aspects.

What are the 4 basic elements of Organization Structure ?

a) Span of Control: Number of people directly reporting to the next level in the hierarchy.

b) Centralization: Degree to which formal decision authority is held be a small group of people, typically those at the top of the organizational hierarchy.

c) Formalization: Degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms.

d) Departmentalization: Organizational charts that specifies how employees and their activities are grouped together.

How does the Organizational Structure affect the organization ?

Organizational structure affects organizational action in two big ways. 

a) Provides the foundation on which standard operating procedures and routines rest. 

b) Determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions.

TYPES OF ORGANIZATIONAL STRUCTURES

a) Functional Organization

This type of organizational structure:

·                      - Brings together in one department everyone engaged in one activity or several related activities that are called FUNCTIONS. 

·                       - This leads to operational efficiencies within that group. However it could also lead to a lack of communication between the functional groups within an organization, making the organization slow and inflexible.

·                      - Mainly used by the smaller firms that offer a limited line of products.

·                      - Makes supervision easier as each manager must be expert in only a narrow range of skills. It also helps to group a particular set of people with the specialized kind of skill set.

·                      Disadvantages :

·                        i) As each department functional managers need to report to central headquarters (President), it can be difficult to make quick decisions.

·                        ii) Harder to judge performance because which department to blame when a new product fails.

·                        iii) Difficult to coordinate the functions of members of the entire organization as each department may have difficulty working with other departments in a unified way to achieve organizational goals.

b) Product/Market/Divisional Organization

  - Brings together in one work unit all those involved in the production and marketing of a product or a related group of products, all those in a certain geographic area, or all those dealing with a certain type of customer.

  - Can follow three patterns as described above:

    i) DIVISION BY PRODUCT

ii) DIVISION BY GEOGRAPHY

iii) DIVISION BY CUSTOMER 

c ) Matrix Organization/ Multiple Command System

- Employees have in effect 2 bosses ie. 2 chains of command. One chain of command is functional or divisional and the second is a horizontal overlay that combines people from various divisions or functional departments into a project or business team led by a project or group manager who is an expert in the team's assigned area of specialization. For example, many large companies have a corporate human resources division, with individual HR representatives stationed at local facilities. At the local level, the HR representative may report to the operations manager charged with responsibility for that facility. 

 - Bring together the diverse specialized skills required to solve a complex problem.

- Problems of coordination are minimized here because the most important personnel for a project work together as a group. They come to understand the demands faced by those who have different areas of responsibility.

- Gives the organization a great deal of cost-saving flexibility because each project is assigned only to the required people and unnecessary duplication is avoided.

- To be effective, team members must have good interpersonal skills and flexibility and cooperation.

Disadvantages :

·                     Everyone fails to adapt

·                     Without proper outlining of hierarchy it will not function