Flaws Company Ordinance 1984.docx

Abstract The corporate sector in Pakistan was governed by the Companies Ordinance 1984 which was promulgated on 8 October 1984 and repealed the Companies Act, 1913. It is now replaced by Companies Ordnance 2016. .The Companies Ordinance 1984 is a broad piece of Pakistani legislation that, according to its own preamble, is "An Ordinance to consolidate and amend the law relating to companies and certain other associations". It encompasses all legal rules and regulations for businesses registered with Security and Exchange Commission of Pakistan (SECP) and is enforced by that agency. After completing first section I write practical study which is based on Nestle Pakistan. Introduction of Nestle Pakistan and its operations in Pakistan and company registered in Pakistan according to ordinance act 1984. Then did SWOT analysis, Conclusions, and recommendations.

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Table of Contents Introduction .................................................................................................................................................. 3 Main Point of difference between Public and Private Company ............................................................... 3 Associated companies" ................................................................................................................................ 4 Body corporate" or "corporation“ ............................................................................................................... 4 "Book and paper", "book or paper" or "books of accounts" include ........................................................ 4 Company ....................................................................................................................................................... 5 Court, Debenture and Director .................................................................................................................... 5 Document and Existing Company ................................................................................................................ 5 Listed Company and Member ...................................................................................................................... 6 Flaws in Ordinance ....................................................................................................................................... 7 Practical Study on Organization............................................................................................................. 10 Nestle Pakistan ....................................................................................................................................... 10 INTRODUCTION OF NESTLE: ................................................................................................................... 11 Mission.................................................................................................................................................... 12 Vision ...................................................................................................................................................... 12 KEY FACTORS OF SHRM PROCESS .......................................................................................................... 13 VISUAL DEPICTION OF THE SHRM PROCESS .......................................................................................... 13 STAGES OF STRATEGIC HRM PLANNING PROCESS ................................................................................ 13 STRATEGIC HRM AT NESTLE ................................................................................................................... 15 HR PRACTICES ......................................................................................................................................... 16 The recruitment process at Nestle is clearly defined............................................................................ 16 PERFORMANCE MANAGEMENT: ........................................................................................................... 16 Nestle management and leadership principles..................................................................................... 17 TRAINING: ............................................................................................................................................... 17 Nestle provides the following-............................................................................................................... 17 Auditors’ Report to the Members ......................................................................................................... 17 SWOT Analysis: ....................................................................................................................................... 19 CONCLUSIONS ........................................................................................................................................ 21 RECOMMENDATIONS ............................................................................................................................. 22 References .............................................................................................................................................. 22

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The corporate sector in Pakistan was governed by the Companies Ordinance 1984 which was promulgated on 8 October 1984 and repealed the Companies Act, 1913. It is now replaced by Companies Ordnance 2016. .The Companies Ordinance 1984 is a broad piece of Pakistani legislation that, according to its own preamble, is "An Ordinance to consolidate and amend the law relating to companies and certain other associations". It encompasses all legal rules and regulations for businesses registered with Security and Exchange Commission of Pakistan (SECP) and is enforced by that agency.

Introduction A company is a corporation. In the eye of law, it is a person which is different from its members. As company is person in the eye of law, it can own property. It can have rights and it can also be subject to the liabilities. A company is not agent of its members. The company cannot sue the members in case of liabilities and members of the company cannot sue it to enforce rights.

Main Point of difference between Public and Private Company PRIVATE COMPANY -Private company has following restriction while these restrictions does not apply to other companies.(1) It cannot have members more than 50 excluding those are the employees of the company (2) It cannot invite the general public to subscribe the share of the company (3) It restricts freely transfer of share PUBLIC COMPANY - Companies Ordinance define the public company as a company that is not a private company. It means every company that is registered in Pakistan either it is a private company or a public company.

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Associated companies" A company whose 20 % or more shares (up to 50%) are held by another company shall be considered an associated company of that company.

Body corporate" or "corporation“ It means a setup having separate existence distinct from its member. In includes company incorporated in Pakistan and outside Pakistan, but does not include the following A corporation sole; or A co-operative society registered under any law relating to such societies; or Any other body corporate, other than a company defined in this Ordinance, which the Federal Government may, by notification in the official Gazette, specify for this purpose.

"Book and paper", "book or paper" or "books of accounts" include Accounts, deeds, vouchers, Registers, writings and documents maintained on paper or computer network, floppy, magnetic cartridge tape, CD, rom or any other computer readable media. chief executive, in relation to a company means an individual who, subject to the control and directions of the directors, is entrusted with the whole, or substantially the whole, of the powers of management of the affairs of the company, and includes a director or any other person occupying the position of a chief executive, by whatever name called, and whether under a contract of service or otherwise; Commission, means the Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997);] 4

Company Company" means a company formed and registered under this Ordinance or an existing company; "Company limited by shares" means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them; "company limited by guarantee" means a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its winding up;

Court, Debenture and Director The Court" means the Court having jurisdiction under this Ordinance "Debenture" includes debenture stock, bonds, 2[term finance certificate] and any other securities, other than a share, of a company, whether constituting a charge of the assets of the company or not; "Director" includes any person occupying the position of a director, by whatever name called:

Document and Existing Company Document" includes summons, notice, requisition, order, other legal process, voucher and register; "Existing company" means a company formed and registered under any previous Companies Act;

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Listed Company and Member "Listed" in relation to securities, means securities which have been allowed to be traded on a stock exchange; "Listed company", means a company or a body corporate or other body whose securities are listed; "member" means, in relation to a company having share capital, a subscriber to the memorandum of the company and every person to whom is allotted, or who becomes the holder of, any share, scrip or other security which gives him a voting right in the company and whose name is entered in the register of members, and, in relation to a company not having a share capital, any person who has agreed to become a member of the company and whose name is so entered; Security Security" means Any share, Scrip, Debenture, Participation term certificate, Modaraba certificate, Musharika certificate,

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Term finance certificate bond, Pre-organization certificate or such other instrument as the Federal Government may, by notification in the official Gazette, specify for the purpose.

Flaws in Ordinance The Securities and Exchange Commission of Pakistan (SECP) has observed that the Board of Directors of companies has been empowered by virtue of section 86 of the Companies Ordinance 1984 to issue right shares. An order issued by the SECP in the matter of a rayon mill revealed that the Companies Ordinance also provides the responsibility of the directors of a company to prepare and present true and fair view of the affairs of the company before the shareholders. SECP would also emphasize that investors rely on representation of Board of Director and look for clarity, information and viability in all company reports and information. For an investor, letter of right and Circular under Section 86(3) of the Ordinance are the primary document providing glimpse of the proposed scheme of right and for availing the right issue announced by Board. The directors did not perform their responsibilities diligently and subsequently failed to grasp the gravity of issue by omitting material fact directly related to the subject right issue. However, keeping in view the fact that subsequently the stock exchange was informed regarding its intention to convert liability of directors into shares, receipt and conversion of loan from directors was disclosed in their respective accounts, the SECP hereby concluded the proceedings with a stem warning to the respondents (board of directions of company) to be careful in future and ensure compliance of law in its true letter and spirit.

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The order has disposed of the proceedings pertaining to contravention of the provisions of Section 492 read with Section 476 of the Companies Ordinance, 1984 ("the Ordinance"), which has arisen out of the aforementioned show cause notice served on the Board of Directors (also referred as "respondents") of the company. Keeping in view the facts enumerated above, a show cause notice under Section 492 read with Section 476 of the Ordinance dated December 31, 2015 was issued to the Board of Directors, advising them to show cause within 14 days of the date of the notice as why penal action may not be taken against them for failing to disclose material information to the shareholders for making informed decision regarding the said right issue. Generally, information is considered to be material if there is a substantial likelihood that information would be considered important or significant by a reasonable investor. Materiality has been defined by the United States Supreme Court as "a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ''total mix'' of information made available." Whether the investor changes the decision based on disclosure of material information is ancillary and at the discretion of investor only. Companies need to understand that information disclosure is not just a legal game and defining all scenarios of information to be material through law is not possible. Efforts are consistently being made by Commission to encourage and in some cases mandate disclosure of certain information through laws I regulations and underlying formats. All these efforts are aimed at facilitating investors. Hence it is also important for companies that the perspective of investor must also be considered for determining extent of disclosure.

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Needless to say that failure to disclose important information on a timely basis can also harm a company’s reputation. At the outset, it is unambiguous that conversion of directors'' loan was directly impacting right issue hence cannot be ignored as trivial issue or immaterial information. Although express provision requiring disclosure of conversion of loan against liability of directors is not provided in Ordinance or formats of letter of right or Circular under Section 86 (3) of the Ordinance. However, for an investor, receiving the letter of right and said circular, stating acceptance mode solely through payment to bankers to the issue and expressing stating nil against material disclosures impacting right issue implied fresh injection of funds. There was no information that could draw attention of investor towards the intent of Board of Directors to convert their loan against the right offer. The disclosure is even more vital as the directors were direct beneficiary of the subject transaction. As for unlimited power of directors under Section 86(7) of the Ordinance, the same would have been valid had the Company disclosed its intention to convert directors'' liability and then exercised its powers under Section 86 (7) of the Ordinance, that too, for allocating unsubscribed portion of right issue. Omitting a material fact and then finding refuge in exercise of powers under Section 86 (7) is flawed application of law. The company had informed its intention to convert liability of directors against right issue hence mala fide intention of the respondents was apparently not demonstrated. The fact however remains that the transaction of conversion of directors'' liability against right shares was directly impacting the right issue and was material information mandating disclosure, the SECP order added.

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Practical Study on Organization Nestle Pakistan

Nestle is a multinational corporation, headquarter in Switzerland, is one of the largest food company in the world measured by revenues. Though various controversies revolves around this multinational company, one of the most confusing and prolonged one is the “Breast milk substitute infant formula”. This controversy has turned up the heads of millions of people all around the world, as several infants died in developing countries after using Nestlé’s breast substitute milk for infants. Babies died because their mothers were not literate enough to use the product. They didn’t even have the proper means of making that infant formula because of shortage of various basic necessities in developing countries such as clean water, electricity, fuel and etc. Leading organizations all around the world took part in the boycott of Nestlé’s products during the late 1970’s. Nestle admitted its mistake of doing aggressive marketing in developing countries and obeyed to follow the code of conducts in its marketing practices, recommended by World Health organization. The boycott was first initiated by USA, which gain its momentum worldwide. Also in Pakistan this controversy gained ground when one of the employee of Nestle, accused the company that it uses malpractices to promote its infant formula. Several pamphlets named as “Baby Killers” were distributed in UK and Nestle sued the publisher of German-language translation and after two year trials court advocated in favor of Nestle because they could not be held responsible for the infant deaths in terms of criminal law. The controversy did exist even after the company accepted the codes of WHO. Some organizations condemned Nestle that it has been selling free samples to the mothers of new 10

born children while they are in hospital, and the family has to purchase new packets from the market because the initial dose of it has made their children addictive to it. However Nestle denied such allegations. The International Nestlé Boycott Committee, the secretariat for which is the UK GROUP Baby Milk Action, currently coordinates the Nestlé boycott. Company practices are monitored by the International Baby Food Action Network (IBFAN), which consists of more than 200 groups in over 100 countries. Though this controversy had badly impacted the image of Nestle, but still Nestle is one of the leading multinational corporation and has its huge market share all over the world. INTRODUCTION OF NESTLE: Nestle is the world's leading nutrition, health and wellness company. "Good Food, Good Life" is the promise we commit to everyday, everywhere – to enhance lives, throughout life, with good food and beverages. Nestle is a Swiss multinational nutritional and health-related consumer goods company headquartered in Vevey, Switzerland. It is the largest food company in the world measured by revenues. In 1866, the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. In Vevey, Switzerland, our founder Henri Nestlé, a German pharmacist, launched his Farine lactée, a combination of cow’s milk, wheat flour and sugar, saving the life of a neighbor’s child. Nutrition has been the cornerstone of our company ever since. “Henri Nestlé, himself an immigrant from Germany, was instrumental in turning his Company towards international expansion from the very start. We owe more than our name, our logo and our first infant-food product to our founder. Henri Nestlé embodied many of the key attitudes and values that form part and parcel of our corporate culture: pragmatism, flexibility, the willingness to learn an open mind and respect for other people and cultures.” Peter Brabeck-Letmathe, Nestlé Chairman 11

Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactee Henri Nestle, founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988 and Gerber in 2007. Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market Index. It has a secondary listing on Euro next. Nestlé's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods and snacks. 29 of Nestlé's brands have annual sales of over 1 billion Swiss francs (about $ 1.1 billion), Nestlé has around 450 factories, operates in 86 countries, and employs around 328,000 people. ;2It is one of the main shareholders of L’Oreal, the world's largest cosmetics company. Mission Nestlé’s mission, in the words of our founder Henri Nestlé, is to: “...positively influence the social environment in which we operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations which improve quality of life.” -- Henri Nestlé, 1857. Vision To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen preferred employer, preferred supplier selling preferred products. Nestlé Pakistan subscribes fully to this vision of being the number one Nutrition, Health, and Wellness Company in Pakistan. In particular, we envision to; • Lead a dynamic, passionate and professional workforce – proud of our heritage and positive about the future. 12

• Meet the nutrition needs of consumers of all ages – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality. • Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic, and environmental sectors of Pakistan.

KEY FACTORS OF SHRM PROCESS - The outcomes of the SHRM process - which should be evaluated both qualitatively as well as quantitatively. - The business strategy - it alter and is altered by the SHRM process and which provide the business a good thought of direction. - The external environment - which is flexible and dynamic in the present global business scenario. - The internal environment - The general culture and the organizational context which is prevalent in the organization.

VISUAL DEPICTION OF THE SHRM PROCESS STAGES OF STRATEGIC HRM PLANNING PROCESS Strategic human resource management is the process by which managers design the mechanisms of an HRM system to be reliable with each other, with the organization's plans and goals and with other essentials of organizational architecture. The main role of strategic HRM is the improvement of an HRM system that increases an organization's awareness, worth, invention, and productivity to customers. Strategic human resource planning (SHRP) involves four distinct stages: - Situational analysis/environmental scanning. - Estimating demand for human resources. 13

- Analyzing the supply of human resources. - Developing action plans to close any gap between human resource demand and supply. The first stage of HR planning is the point at which strategic planning and HRM interact. HR planners anticipate sources of threats and identify and should drive the organization's strategic planning and opportunities with the help of Environmental scanning. The strategic ideas or plan implement to environmental circumstances, and HR planning is the mechanisms that an organization can use to accomplish this adaptation process. The second stage, forecasting demand, requires estimating not only how many but also what kinds of employees will be needed by the organization. The demand for employees should be closely tied to the strategic direction of the organization. Forecasting yields advance estimates of the organization's staffing requirements. This is a difficult task, especially for organizations in rapidly changing environments. Four forecasting techniques include expert estimates, trend projections, statistical modeling, and unit-demand forecasting. Estimate by no of expert, a group of experienced or expert provides the organization with demand estimates based on subjective assessments of available economic, intuition, prior experience, and labor force indicators. Trend projection involves forecasting which is based on a previous relationship between the employment and a factor related to employment (e.g. sales levels). Statistical modeling techniques (e.g. regression analysis or Markov analysis) are more quantitative forecasting and sophisticated techniques. Unit-demand forecasting requires the unit managers (e.g. department head, project team leader) to analyze the present and future job-by-job, people-by-people needs. The third phase involves studying the number and types of current employees in terms of the training and skills necessary for the future and also the supply of capable workers in the outside labor market. The skills inventory is a major tool used to assess the internal supply of employees. A skills inventory is a list of names, skills and characteristics of the people currently working for the organization. The list of skills coded into the skills inventory should be tailored to the needs for the organization, but might include such factors as level and field of education, knowledge of a foreign language, professional qualification or certification, or licenses held. The 14

organized inventory provides a way to acquire these data and makes them available as needed in an efficient manner. Also important is the need to maintain the inventory so that information is kept current. With regard to the external labor market, the entire country (or world) may be the relevant labor market for highly skilled jobs. For unskilled jobs the relevant labor market is usually the local community. After the HR planning system has analyzed both the supply of and the demand for future workers, the two forecasts are compared to determine what, if any, actions are necessary. If a discrepancy exists between the two estimates, the organization needs to choose an appropriate course of action designed to eliminate the gap. The organization has a number of options available when the demand for workers is greater than the supply of workers. The organization might elect to use overtime work with current employees, increase training and promotions of current employees, or recruit new employees. In tight labor markets, the availability of labor is limited (i.e. demand exceeds supply), driving up the price of those employees who are hired, and limiting the extent to which the organization can be selective in its hiring procedures. In a loose labor market, qualified employees are abundant. When the supply of workers exceeds demand, alternative solutions include attrition, early retirements, demotions, layoffs, and terminations.

STRATEGIC HRM AT NESTLE Nestlé aims to increase the business, list of customers, profits and sales but, at the same time, to improve the Standard of living everywhere it is active and the quality of life for everyone. Nestlé is also convinced that nestle employees is the strength of the Company and it is impossible to achieved without their energy and their commitment, which makes people its most important asset. Involvement of people and also showing their interest at all levels starts with the basic and appropriate information on the Company's activities and also on the specific aspects of their work. Through shared their views, ideas and communication and focused vision, everyone is invited to share and contribute their opinions and views to improvements enhancing Company personal development and results.

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HR PRACTICES RECRUITMENT: Recruitment is the process of developing and maintaining adequate manpower resources. Recruitment refers to the attempt of getting interested applicants and creating a pool of prospective employees so that the management can select the right person for the right job from this pool.

The recruitment process at Nestle is clearly defined. - People with qualities like dynamism, realism, loyalty, pragmatism, hard work, honesty and reliable. - Match between candidate's values & company's culture. - Recruitment for management levels takes place in the head office and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies. People management policies, basic values & principles elaborated in- Nestle management & leadership principles- The Nestlé Management and Leadership Principles describe the management style and the corporate values of the Nestlé Group, specifically in the area of interpersonal relations. - Nestle human resources policy- This policy encompasses those guidelines which constitute a sound basis for efficient and effective HR Management in the Nestlé Group around the world. Nestle people development review- this policy throws light on Nestlé's culture and core values, different training programs and life of employees after work.

PERFORMANCE MANAGEMENT: Performance management includes all standard procedures used to appraise contributions, potentials and personalities of group members in a working organization. It is a process which is important for making accurate and impartial decisions on employees for secure information. At Nestle performance appraisals of Employees are done in order to understand each employee's abilities, competencies and relative merit. 16

- Formal assessment by Line Managers and HR once a year with feedback. - Subordinate can question an unfair evaluation. - Specific Key Performance Indicators have been enlisted by the HR department. - One of the important key performance indicators is achievement following the

Nestle management and leadership principles. - Remuneration structure and promotion criteria take into account individual.

TRAINING: Training is a major and also an important part of organized activity for increasing the skills and knowledge of people and also to understand the deep knowledge of task that what they have to perform or for a definite purpose. It involves systematic procedures for imparting technical know-how to the employees so as to increase their knowledge and skills for doing specific jobs with proficiency. From the Company floor to the upper management, training at Nestlé is continuous. Nestlé people provide this training and it is constantly appropriate to the professional life.

Nestle provides the following- Literacy training-to upgrade essential literacy skills, especially for workers who operate new equipment ('Mission-directed Work Team Approach'). Employees are also sent abroad to study markets, consumer tastes etc.

Auditors’ Report to the Members We have audited the annexed balance sheet of Nestlé Pakistan Limited (the Company) as at 31 December 2017 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. 17

It is the responsibility of the Company’s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: a) In our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984; (b) In our opinion: i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied, except for the change as indicated in note 2.3.1 to the financial statements with which we concur; (ii) The expenditure incurred during the year was for the purpose of the Company’s business; and (iii) The business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company; c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof 18

conform with approved accounting standards as applicable in Pakistan, and, given the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at 31 December 2017 and of the profit, its comprehensive income, its cash flows and changes in equity for the year then ended; and (d) In our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

SWOT Analysis: Strength: Brand Image. Marketing strategies established by the company are innovative Financial, marketing and sales strategies are formulated by gauging the periodic research carried out to judge market trends. It is a large scale organization, with abundant funds and has the capability of acquiring weaker firms by throwing them out of competition. Growing Sales and profits. Major shareholder in the food industry of Pakistan. Aggressive Marketing. Efficient Distribution networks throughout the country. Quality Products. Environment Friendly. Skilled labor. Educated staff.

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Large number of offerings. Pre purchase virtual display. Good background of the company. Easy to approach outlets. Strong supply chain network Strong research and development department. WEAKNESSES: The target market of Nestle products is upper middle and high class because lower middle and poor class cannot afford to buy Nestle products due to its premium price compare to other companies like Shezan etc. It is a main weakness of Nestle products that there are different companies which provide substitutes of Nestle products but the name of Nestle products is always stand in the last because of low advertising and marketing. Opportunities: Nestle have opportunity to expand their product line like tea etc. Company can open separate stores for eliminating retailers. Integration of new acquisitions in growth markets. Growth in international & emerging markets. Transition to a "Nutrition and well-being" company. Continuous growth in the Pakistan coffee market. Ethical business activities and support in community. Nestle can make itself as social company. Fair Trade agreements for cocoa and other products produced in third world countries. 20

In today's health conscious societies, they can introduce more health-based products, and because they are a market leader, they would likely be more successful. It should regularly indulge with candy and chocolates

Threats: Price fluctuations due to rupee devaluation as raw material are imported. The uncertainty of economic conditions poses a great threat as the major funds invested in the country come from outside Pakistan. The present economic crisis in the world, led to the withdrawal of foreign management from the company and the investment has come to a halt. Competition with Nestlé’s owns smuggled brands. Effect of Seasonality’s upon sales. Imported raw material, in some of the company’s products. Major Player may enter target market Legal and ethical issues. Market segment growth could attract new entrants. Economic slowdown can reduce demand. Main competitors Shezan, Olfrut, Maza and Haleeb are main threat for Nestle juices Especially the Shezan is growing very fast. Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day. Taste of consumer has already developed which is hard to change.

CONCLUSIONS The Model employed by Nestle is one of High Performance, High involvement and high commitment. Nestle is unique in the sense that it has been able to successfully inculcate its 21

business objective as well as its core values, consistently in its employees day-to-day activities starting from recruitment till continuous performance appraisals. Like, open and flexible culture is ensured by way of providing training programs to employees at all the levels. This kind of culture is also supported by decentralized structure of Nestle. Transparent performance appraisal systems and the freedom given to them to question their seniors benefit not only the employees but even the organization as a whole. Nestlé’s emphasis on individual achievement is evident from the kind of pay structure HR has designed for its employees.

RECOMMENDATIONS Need to develop consultation/awareness program to assist the employees for their better understanding of the policies. More incentives should be offered to the employees who provide services to the organization for more than two years continuously. Nestlé, over its long historical development from a small village operation to the world's leading food Company, has demonstrated an enviable capability to adjust to an ever changing external environment, without losing its fundamental beliefs and core values, so important for longterm success. Over the years to come, this capability of using HR as a strategic partner in implementation of company's activities will continue to be challenged even more as Nestlé is growing in size and complexity up to a dimension which demands a continuous evolution of its organization and of the way in which it is run. Its motivation based on willingness to learn and to question what it is doing and why it is doing it, combined with its long standing respect for Nestlé values, will assure its success.

References www.google.com www.Nestle.com www.education.com www.slideshare.com

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