Case Study : Nestle Tries for an All-for-One Global Strategy

2) Nestle allowed each local organization to conduct business as it saw fit, taking into account the local conditions and business cultures. To support this decentralized strategy, it had 80 different information technology units that ran nearly 900 IBM AS/400 midrange computers, 15 mainframes, and 200 Unix systems, enabling observers to describe its infrastructure as a veritable Tower of Babel. This strategy was not appropriate for Nestle’s business model.
3) Nestle’s management found that allowing these local differences created inefficiencies and extra costs that could prevent the company from competing effectively in electronic commerce. GLOBE was formed to standardize Nestle’s business practices. The greatest challenge to GLOBE was personal, not technical. Managers resisted the idea of giving up control over their business process to participate in a centralized solution. The resistance was fortified by the fact that each country’s operations would have to spend its own money to pay for the project.
4) To help with these problems, Johnson asked each country to name a GLOBE manager who would facilitate the adoption of the system. These managers also provided value to each other by exchanging their experiences with the system and the solutions they employed for specific challenges. Johnson also established a steering committee at company headquarters to schedule and manage the rollouts. The steering committee oversaw the reduction of company data centers form 100 to four, including the center in Vevey, which stored the GLOBE templates, Best Practices Library, and central functions.