Robert Mondavi

Summary:

Perrier, an international mineral water company, has experienced many resistances to changes that affected the development and growth due of the stubbornness of the CGT union, which represents the employees, according the CEO of Perrier, Peter Brabeck-Letmathe.

Analysis:

Perrier, a mineral water company, can be traced back to a local Dr. Louis-Euge`ne Perrier, who bought the mineral water source near Verge`ze, France. Perrier was the leader of the mineral water industry, world wide. The little green bottle made its way to North America, to open the first office in New York in 1976. After many years of continued growth the company reached its peak in the 80's, but by the early 90's it almost collapsed when a trace of benzene was found in a bottle.

Perrier struggled to regain growth especially after it was purchased by Nestle` in the 1992. One of the biggest struggles was the resistance to change from the employees' union, CGT. The union was viewed by management as consistently resisting Nestlй's attempts to improve Perrier's' financial performance. Jean-Paul Franc, head of CGT, on the other hand, refused Nestlй's proposed lay-off of 15% of the work force, protesting that "Nestlй's can't do whatever it likes", stating "Morally, the water and gas underground is owned by the region".

Resistance to change may take many forms. Hultman draws a distinction between active and passive resistance to change and identifies a range of symptoms associated with each. (Hultman 1998). Some of the symbols of active resistance that affected Perrier are:

Using fact selectively; appealing to fear; intimidating or threatening; blocking; starting rumor and undermining.

Some of the symptoms identified with passive resistance are:

Failing to implement; standing by and allowing change to fail and procrastinating.

According to the Palmer, et, al, the union believed that the proposed changes would have a negative effect on the interest of the members. Nestle` wants to reduce staff and increase production at the same time, even though the resources are owned the region. Reducing staff is likely to affect the employees' status, salary, culture, autonomy and security. The employees may find it easier to be supportive of changes that they see as not threatening to such interests and may resist those that are seen as damaging to these interests.

The head of the union feels that if the water and gas is owned by the region, Nestle` has no rights is reducing staff because the people should also benefit from the region's resources. According to Karp, one of the reasons people resist changes is the belief that the specific change being proposed is inappropriate. In this regard, the union might be right; the proposed change may not be the great idea that Nestle` assumes. The change may be seen as inappropriate because of a fundamental difference of "vision". Change, as a part of the enactment of strategy, is therefore highly likely to be an arena of organizational life where divergent views over appropriate strategic direction will be manifest.

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