Corporate Culture and Practices: A Case of Kraft Heinz - Management Assignment Help

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Corporate Culture & Practices: A Case of Kraft Heinz

The merger of Kraft and Heinz which took place in 2015 lead the key shareholder 3G Capital to appoint the cost-cutting CEO Bernardo Hees to take the wheel in hopes of monetizing their investment. However, Hees brutal strategy of major job and expense cutting worked for a short time, delivering over 20 per cent margins, but appears to have fatigued the organization. 

“A lot is expected from the employees, making work/life balance challenging.”

“No work-life balance (11 hour days have become the norm)” or “Toxic environment” sums up the culture at Kraft Heinz.

The year 2019 turned out to be brutal for the company. Kraft Heinz experienced a weakening financial performance and declines in its stock price. Also, Kraft Heinz reported following a call from the Securities and Exchange Commission, that it discovered employee misconduct in procurement. The investigation further discovered weaknesses in its accounting practices specific to its procurement contracts dating back to the year 2016. However, only a few employees were reprimanded in the case and no senior executives were questioned. However, the investigation raised numerous questions.

Also, several former employees, executives, and suppliers pointed their fingers at the company’s bonus structure that heavily relies on making annual targets. At Kraft Heinz, the risk of such an incentive structure is intensified by speedy promotions of often inexperienced employees. Each year, executives must ensure that Kraft Heinz as a company meets a target for earnings before interest, taxes, and depreciation to get their bonuses. In 2017, nearly no one got a bonus, say, former executives. Moreover, the company is said to be quick in cutting costs, and to achieve its targets of securing $1.7 billion in saving, the company fired thousands of employees including those with years of experience in the consumer goods industry. Hence, employee turnover is high and engagement is low, and the company’s toxic culture is a red alert for any individual considering working for this company. 

Likewise, in 2017, Kraft Heinz promoted 29-year-old David Knopf to be its chief financial officer. While the Princeton graduate is widely described as intelligent by his co-workers, he does not have the years of experience required for a CFO at such a high-profile company. 

Read the case study above, and answer the questions:

1. What is Kraft Heinz? Write a short overview of this company

2. Why do you think its corporate culture is weak? What flaws have you identified?

3. What corporate culture in your opinion would best work for this organization? Why? Please refer to the OCP framework

4. What Recommendations do you have for Kraft Heinz? Prepare an Action Plan

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