Free Essay: International Organization Concepts in the Example of Henkel Company

Henkel Company creates sustainable value for its customers, shareholders, and the general public through its employees who focus on transforming this objective into reality by putting in pride, passion, and enthusiasm in their work. Henkel operates in 14 nationalities across the globe. This proves that the organization believes in diversity and inclusion. The workplace concept exhibited by Henkel's global supply chain shows the high premium the company puts on inclusivity and diversity as its corporate culture. Besides, inclusivity and diversity, the company also relies heavily on the culture of speed and leadership considering the ever-changing nature of the business landscape to empower its team to manage change, innovate and make decisions that pose significant and far-reaching implications on the company's bottom line.

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The company has diverse functional areas, products, and technologies. Some of the functional areas include controlling, research and development, supply chain management, sales and marketing, and audit. The company's strength emanates from a critical focus on innovation and sustainable strategy. The corporation orientates its employees and management organs across the globe to its vision, mission, and values to consistently align their daily activities to the principles that govern sustainable development. Moreover, Henkel is committed to transacting all businesses activities in a legal environment that is ethically irreproachable. As a result, the company's management continually issues standards and guidelines that govern the actions, behaviors, and conducts of all employees.

Corporate Culture

The company has a clear-cut and long-term strategic framework which assists the management to make better choices, focus on strategic priorities and pursue its vision. The company's culture consists of critical factors which enhance strategy execution. Henkel has four strategic priorities; simplify, globalize, inspire and outperform. These provide employees with the intrinsic motivation, improving their productivity and deepening their commitment to achieving excellent service. The company's strategy focuses on beating its competitors as a global firm with an adequately inspired team carrying out simplified operations. The culture is enforced through a strong leader with critical organizational values that are easily understandable by managers and employees. Henkel's corporate culture is performance oriented. As a result, it values best employees who can perform tasks with efficacy and effectiveness to enable the organization to achieve its set objectives, mission, and vision. To enhance the capability of their staff members, Henkel offers training to enhance employees improve their skills and make them accountable for the activities they carry out. In essence, this has been at the core of excellent performance of the organization. Similarly, the culture of Henkel reveres creativity and innovation. In this sense, the organization usually allows its employees' latitude to come up with new strategies and ways of producing better products.

Previously, there was a range of factors that characterized organizational culture at Henkel such as politicized, change-resistant and inward-focused aspects. However, the company was able to overcome resistance to change through embracing financial incentives and stretch goals, which increased employees' performance. The company also struggled with the new system of transparency and accountability, which bred tension - the politicized factor. Nonetheless, the staff remained committed, dedicated, and loyal to the organization. On the other hand, the inward-focus factor implies that managers and employers provided incentives and constructive feedback to encourage behavior change among employees and enable them to learn from their mistakes. The alterations done by the organization on its culture has been producing critical results on its performance and profitability. Therefore, these are implications that the company has been able to establish the "Winning Culture" through successful execution of new strategy.

The organization adopted a new strategy in 2008 which consequently changed its value system, vision, and mission. Initially, the organization's value system was 'A Brand Like a Friend,' however, this changed when the company appointed Kasper Rorsted as its new CEO in 2008 to 'Winners in Every Market Segment We Compete.' Kasper adopted a face-to-face management approach to communicate his strategy instead of mediated communication. However, the style deluded most employees to think of a group-think mentality. There was also other mixed reactions with other section of employees thinking that the new strategy demanded a hundred percent buy-in with anyone opposed to it having to leave. As a result, most staff members voluntarily resigned while others are simply departing because they failed to embrace the new strategy.

Nonetheless, the organization continuously promoted the new strategy within the first two years - 2008 and 2009. The new CEO worked consistently with other managers to promote the new strategic priorities, which has hitherto enabled Henkel to attract and retain top talents across the globe. Besides, the company's reward and compensation system is quite attractive and is linked to an individual's performance. Henkel's objective is to have the most diversified employee base to improve flexibility across the regions it operates. Consequently, these are significant policies that support Henkel's strategy through the development of essential leadership responsibilities that are relevant to executing the organization's strategic goals. Besides, the organization's strategy focuses heavily on brands and regions where they lead to enable them to achieve sustainable growth and maximum profitability. The company was also able to introduced austerity measures in its procurement and administration through standardization and automation of processes besides increasing capacity utilization across their production sites. Thus, the company's strategy enabled it to record impress growth in sales and profits margins.

Quality Management Systems

Henkel operates in an environment guarded by legal and ethical regulations and rules. Quality management is the foremost priority of the company. As a result, Henkel introduced "Lioscan," a contactless, inline non-destructive coating technique for assuring quality. The quality system is designed primarily for polyurethane, reactive adhesive coatings, and systems. The system is capable of retrofitting in nearly all laminating machines. It critically enhances the reliability of the process and increases the efficiency of production while reducing wastage of material and improving quality at the same time. Henkel completely changed quality control routine through the introduction of Lioscan. Initially, the operates could either stop the machine to conduct quality checks on the produced laminate or wait until the converting process was complete then measure the coating weight. Consequently, they would cut out and delaminate samples in the laboratory to check if the adhesives had been applied correctly. In case the system failed to meet customer's quality requirements accurately, the operators would dispose of the entire reel and repeat the production process. Nonetheless, even in cases where the quality checks had been met, the operators would spend considerable time in the method of quality control.

Latest reports show that Henkel is the only company that provides its customers with an integrated quality management solution that meets required levels of accuracy from the source. The system also has critical sustainability benefits beyond global operational excellence in maximum reduction of material wastage.

Bibliography

Bosten, Astrid. "Adding Value Through Appreciation: Reflecting the Case of Henkel." In Corporate Social Responsibility and Diversity Management, pp. 229-238. Springer, Cham, 2017.

Hayag, Hans, Lutz Henkel, and Hanspeter Sollner-tripp. "Adhesive preparation for mandibular prostheses." U.S. Patent 9,662,277, issued May 30, 2017.

Henkel Corporation. Functional Areas. 2018. https://www.henkel.de/karriere/warum-henkel/funktionsbereiche.

Henkel. Corporate Governance at Henkel AG & Co. KGaA. May 2010. http://www.henkel-adhesives.com/com/content_data/176933_2010.05_Corporate_Governance_Henkel_en.pdf

Henkel. Henkel's Lioscan application weight measurement system. September 21, 2017. https://www.henkel.com/press-and-media/press-releases-and-kits/2017-09-21-assuring-quality-on-the-run/797920.

Olejniczak, Katarzyna, and Katarzyna Lukasik. "Building Ecological Organisational Culture in the Modern Enterprise-the Case of Henkel." International Journal of Contemporary Management 2016, no. Numer 15 (1) (2016): 33-47.

Stockholm School of Economics. Henkel: A global leader in brands and technologies. 2016. https://www.hhs.se/en/outreach/cems-annual-events-2016/sponsors/henkel/.