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Danone & Unimilk

Danone & Unimilk. Intragroup Conflict in working methods & corporate culture. Introduction. Danone : French food products corporation Unimilk : Russian diary giant Merged in 2010 Highly different working methods and corporate culture ( Danone Russia, 2012). Introduction.

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Danone & Unimilk

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  1. Danone & Unimilk Intragroup Conflict in working methods & corporate culture

  2. Introduction • Danone: French food products corporation • Unimilk: Russian diary giant • Merged in 2010 • Highly different working methods and corporate culture (Danone Russia, 2012)

  3. Introduction • Conflict: incompatibilities & discrepant views • Cause: complexity and interdependence of organizational life • Effect: both positive and negative (Boulding,1963, as cited in Jehn, 1995).

  4. Introduction • Incompatibilities and discrepant views in the Group of Danone-Unimilk: • Internal standard reporting • Efficiency of the measures for equipment performance improvement • Analysis for Operational delays analysis, planning and optimization of the lines load • (Massy-Beresford, 2010; DanoneRussia, 2012) • Cause: • Complexities of working methods & discrepant organizational culture • Effect: • Negative: • Reduced productivity and satisfaction in groups • Lost trust for each other • Positive: • Promoting interpersonal communication to solve intragroup conflict. • (Massy-Beresford, 2010; Danone, 2010; Danone, 2012)

  5. Intra-and inter-group conflicts • Key Terminology • Intra group conflict - Select individuals a part of the same group clash with one another • Inter group conflict - Distinct groups of individuals at odds with one another

  6. Case: Danoneand Unmilk Group • Intragroup conflict initially • Intergroup conflict that may emerge as potential consequence

  7. Intragroup conflicts • Task conflicts: disagreement for meeting shared goals • Process conflicts: disagreement for decisional processes and responsibilities • Personal conflicts: disagreement for value, believes and behaviour

  8. Case: Danone and Unmilk Group • Task conflicts: • Danone: regressive expansion into Russia market • Unmilk: local milk suppliers for a huge amount of community • Process conflicts: disagreement for decisional processes and responsibilities • Danone: advanced management for multinational business with formal reporting system • Unmilk: less formal process but more experience in milk processing and distribution in Russia market • Personal conflicts: disagreement for value, believes and behaviour • Danone: French culture and multinational management value • Unmilk: Russian culture with loyalty for the community and inferior feeling as the employees from the takeover target company.

  9. Intergroup conflicts • Two sources for intergroup conflicts: • Realistic conflict theory: Competition for valued scarce resources • Relative deprivation theory: Competition for social rewards

  10. Building trust for conflict solving • Trust is the key to improve the world and create change • Building trust through openness to diversity and full disclosure • Building trust through developing interpersonal communication skills

  11. The 7 C’s to build trust (Kaul, 2000)

  12. Solutions in Danone and Unmilk Case • Key: to enhance communication for complementary geographical presence, product ranges and distribution networks of Danone and Unmilk. (Massy-Beresford, 2010) • Three key tasks of Danone and Unmilk Group: • To create a shared management structure through strong teamwork – 350 management teams • To harmonize the production and logistics chains over 100 major dairies • To integrate IT systems (Danone, 2012)

  13. Building trust in Danone and Unmilk Case • Three key tasks of Danone and Unmilk Group: 1. To create a shared management structure through strong teamwork – 350 management teams -openness to diversity, connection, capacity, commitment and capability; creating change 2. To harmonize the production and logistics chains over 100 major dairies -consistency in strong tracking record 3. To integrate IT systems -connection, consistency and change from communication channel (Kaul, 2000)

  14. Beneficial results of effective communication & teamwork • Contribution from Danone: quality standards for production, management marketing and superstore skills. • Contribution from Unmilk: nationwide production resources and familiarity with traditional distribution (Massy-Beresford, 2010; Danone, 2012)

  15. Reference • Jehn, KA 1995, “A Multimethod Examination of the Benefits and Detriments of Intragroup Conflict”, Administrative Science Quarterly, Vol. 40, No. 2, pp. 256-282 • Danone 2010, Danoneand Unimilk join complementary strengths to found a high-profile dairy leader in Russia and the CIS, Viewed Aug 11, 2013 <http://phx.corporate-ir.net/phoenix.zhtml?c=95168&p=irol-newsArticle&ID=1439635> • Danone 2012, Unimilk A Powerful Lever for Growth, Viewed Aug 11, 2013<http://www.danone.com/en/what-s-new/unimilk.html> • Kaul A 2000, “Effective Business Communication”, Prentice Hall, New Delhi • Massy-Beresford H 2010, “Danonesecures Russia expansion with Unimilkdeal”, Reuters, Viewed Aug 11, 2013 <http://www.reuters.com/article/2010/06/18/us-danone-unimilk-idUSTRE65H27A20100618>

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