The Case of Heineken Inc. Essay

Table of Contents

Changing distribution system and opposition from people

Benefits of changing the distribution system

Possible effects of opposing change

References

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Managing organizational change in a business has become one of the most important pillars supporting business productivity bearing in mind that through change, the performance of a business is enhanced, workers are motivated and new methods of innovation are introduced. Studies indicate that change management is an imperative structured approach that managers apply to transit organizations as well as employees to desired outcome.

Many individuals in organizations are quite often opposed to the process of change. They rather prefer status quo. Beugelsdjk and Slangen (2001) posit that by overcoming forces restraining change, organizations can make tremendous developments in terms of growth, sales and productivity. This paper examines organizational change in the distribution system at Heineken Inc. and its impact on the business.

Heineken’s distribution system has been considered to be one of the best among beer distributors in the world since its inception. Besides exporting its products, Heineken also sold its beers via agents to small and big pubs which were linked to consumers in the beer market.

After the Second World War, Freddy Heineken, the CEO at Heineken foresaw the forthcoming developments in technology where machines such as televisions and refrigerators would be introduced and revolutionize the market. On that front, he felt the need to radically abolish the traditional distribution system and initiate changes in distribution that would meet the expected changes in marketing patterns.

Changing distribution system and opposition from people

In 1947, the traditional distribution pattern at Heineken was changed from pubs to wholesalers and supermarkets where more people frequented after television and refrigerators were introduced.

However, as indicated earlier in the paper, the move to create a change encountered massive resistance from other leaders of the organization who felt that by shifting from the traditional system of distribution via pubs, chances were that they would lose their crucial distribution channel.

Besides, change would interfere with the normal routine the business had of distribution by opening up to professionals from wholesaler groups and supermarkets.

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Benefits of changing the distribution system

Mary Jo Hatch posits that change in the culture and normal practice of a business plays a pivotal role of enhancing performance and raising sales levels (Frimpon, 2011). The decision to change the distribution system at Heineken increased sales of beer by 35 litres per https://technofaq.org/posts/2017/06/5-of-the-greatest-engineers-from-the-united-kingdom/ person in 1968 from the previous 10 litres in 1949. In addition, reports indicate that its market share also rose by 18% from a low of 21 to a high of 39% (Beugelsdjk & Slangen, 2001).

Frimpon (2011) posits that the importance of an organizational change is that it introduces and implements strategies at organizational and individual levels to respond to opportunities, threats and changes in the environment. Understanding the future changes in the business environmental as well as anticipated developments are key drivers that brought about change which has seen products from Heineken distributed effectively and efficiently.

Possible effects of opposing change

The move by Heineken CEO to create a radical distribution change has been criticized by many management analysts as classical and scientific management practices that give no room for consultation with other key stakeholders.

Pryor et al. (2011) indicate that since organizational change involves transitioning a business from one state to another, proper planning and involvement of other relevant parties is crucial to avoid resistance and opposition while maximizing effectiveness. Even so, inasmuch as Pryor et al view carry much weight, adopting the change was a move that saved the business loss of customers and opportunities to expand had it continued with the traditional distribution system.

To sum up, the discussion in the paper has been based on the thesis statement that “managing organizational change in a business has become one of the most important pillars supporting business productivity.” From the discussion, it is evident that change is an important parameter for an organization which seeks to experience improved performance.

In Heineken, adopting change in its distributing system has seen it grow its distribution processes and achieve massive profits. As the paper has concluded, failure to adopt the change would have resulted into massive loss of marketing opportunities for Heineken products.

References

Beugelsdjk, S. & Slangen, A. (2001) Shapes of organizational change: the case of Heineken Inc. Journal of Organizational Change management , 15(3), 311-326.

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Frimpon, M. F. (2011). A re-structuring of the enterprise resource planning implementation process. International Journal of Business and Social Science: Special Issue , 2(24), 231-235.

Pryor, M., Toombs, L., Taneja, S., & Odom, R. (2011). Goofing off is in the eye of the beholder: A case of trust, culture, and change. Journal of Business Cases and Applications , 4, 1-12.