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COMPARATIVE CASE STUDIES
The following sections present the approach four organizations have taken to
consolidate and utilize knowledge resources. There are identifiable similarities in knowl-
edge practices along with differences in each organization’s approach to organizational
learning. The first case demonstrates the effect of standardizing information between
business units. The second case discusses integration as a means of migrating from
dozens of dissimilar legacy systems and applications to a single data model. The third
case provides a KM solution that helps employees share local knowledge around the
world. The final case describes the integration of technology and learning processes
necessitated by a corporate merger. Consideration of all the cases in total could lead to
prescriptive models for implementing organizational learning policies and practices.
Nestlé USA
Nestlé USA is the United States subsidiary of Swiss-based Nestlé SA. The $8.1-
billion-a-year company is located in Glendale, California. The company is comprised of
seven business divisions including beverage, confections and snacks, food services,
foreign trade, nutrition, prepared foods, and sales. Popular product brands include
Carnation Instant Breakfast, Stouffer’s Lean Cuisine, PowerBar, Baby Ruth, Taster’s
Choice, and Alpo.
Prior to 1991, Nestlé was a collection of independently operating brands owned by
Nestlé SA (Worthen, 2002). In 1991, the brands were unified and reorganized into Nestlé
USA. However, the new company continued to function as a group of independent
organizations, each making its own business decisions. The only real change was in the
way each unit reported to corporate Nestlé USA executives in Glendale, California, rather
than to executives in Vevey, Switzerland. The new company was trying to introduce
economies of scale and common practices, but years of independent operation made the
transaction difficult.
In 1997, a team examining the various systems across the company found that Nestlé
USA brands were paying 29 different prices for vanilla to the same vendor. This problem
stemmed from each individual plant contracting for vanilla from a single vendor. The
vendor was able to charge whatever it thought it could get from each plant. Nestlé USA
did not detect the dysfunctional practice because every division and factory had the
liberty of naming vanilla according to plant-specific coding guidelines. For example, one
plant coded vanilla “1234” while another used “7778.” Such practices made comparison
difficult. Along with multiple purchasing systems, the company had no idea how much
volume it was doing with a particular vendor because every factory set up its own vendor
masters and purchased on its own. In addition to the vanilla trouble, many other
redundancies were uncovered. The team also found nine different general ledgers and
28 points of customer entry.
Managers at Nestlé USA initiated an ERP project using SAP to address redundan-
cies and inconsistencies within the organization. The project, code named Business
Excellence thorough Systems Technology (BEST), was implemented to transform the
firm’s separate brands into a more tightly integrated company. The vice president and
CIO of Nestlé USA joined with executives in charge of finance, supply chain, distribution,
and purchasing to form a key stakeholders team. The team conducted an audit of