Kraft operates in decentralization organizational structure where daily operations and decision-making responsibilities are delegated down to middle and lower-level managers allowing leaders to focus on major tasks. This structure supports the strategic goals of Kraft.
Key Strategic Control Systems
Kraft has many moving parts; therefore Kraft has several key strategic control systems in place such as, Traditional Control System and Contemporary Control System. Both of which are key to the success of Kraft.
Technology advancements, outsourcing HR, policies, and workplace diversity all play an important part in the success Kraft has seen in recent years.
Cultural Factors The leadership of Kraft understands the link between culture, innovative thinking and fresh ideas. Therefore, Kraft will continue to thrive in the food industry.
As the CEO, the following areas should be addressed:
The use of social media as an advertising platform
Expansion into developing markets like China, India, and Brazil
Offering more hygienic and quality food items meeting healthy requirements
Kraft Foods Group's Organizational Design
Decentralization is a type of organizational structure in which daily operations and decision-making responsibilities are delegated by top management to middle and lower-level mangers within the organization, allowing top management to focus more on major decisions (The Advantages of a decentralized Organizational Structure, 2015). Kraft Foods is operating as a decentralized structure with each business unit maintaining full profit-and-loss responsibility. According to Cathy Ludwig, “The company sets the strategy, but it is the responsibility of each business unit to decide how to achieve their goals” (North American Food Service RD&Q Packaging, 2009).
Organizational Design Effects Implementation of Strategies
Kraft is driven to become a more nimble and non-hierarchical entity by splitting into two publicly traded companies (Kraft Announces Split, 18 Months after Cadbury Buy, 2011). Kraft’s new global structure was designed to group their three organizational dimensions in order to better serve and leverage Kraft’s global scale. The new global structure is as follows:
1. Kraft developed a new global marketing and category development group, which was designed to assist with growth and global expansion (Kraft Foods Announces New Global Organizational Structure, 2014).
2. Geographic-based commercial units will be responsible for driving strong results country by country with the best programs and execution for local consumers and customers (Kraft Foods Announces New Global Organizational Structure, 2014).
3. Key functions will now be worldwide in scope, to increase effectiveness and drive cost savings across our business system (Kraft Foods Announces New Global Organizational Structure, 2014).
These groups work well together in order to align Kraft’s five global consumer sectors, which are Beverages, Snacks, Cheese and Dairy, Convenient Meals, and Grocery.
Key Strategic Control Systems
Strategic controls are significant components of the implementation process. Because Kraft is such a large company in terms of size, and has contains several moving parts, Kraft is forced to have several strategic controls in place working with their decentralized organizational structure; however, below are two key control systems:
Traditional Control System – Based on the feedback approach
Contemporary Control System – Continually monitoring the environments
Key Strategic Control Systems Affects Implementation of Strategies
The traditional control system that Kraft uses is based on the feedback approach, which is gathered after a predetermined period of time. This control system simply compares actual performance to the strategic goal that was predetermined. Performance is measured during the traditional