Evaluation of Carlsberg’s Business Strategy In Relation To Management of People and Innovation

Human Resource management and innovation

Sustainable strategy

Carlsberg’s corporate strategy embeds sustainability as an objective way of generating an appealing philosophy within the organization. It is the organization’s goal to participate in bettering the immediate community, which consume their products (Evans et.al, 2017, 598). In 2017, Carlsberg revised their sustainability priorities and realigned their long-term goals. In order to serve the community where they sell their beer Carlsberg needed to utilize human resource management and innovation for the sake of having an effective outreach.

In 2016, the firm conducted a materiality evaluation in conjunction with Business for social responsibility in order to define the roles of human resource department, threats facing human resource management sections (Prajogo 2016, 213). The findings from the evaluation along with universal trends such as global warming water shortage lie at the center of the new sustainability strategy and innovation.

More so, Carlsberg frequently involves stakeholders in handling issues in order to gains new perspectives and gauge whether they are in the right direction or not. Yearly, reputation surveys carried out in main Carlsberg market areas with customers, workers and the entire public as the main participants lends a helping hand in decision making and shaping human resource skills (Souto, 2015, 146). In other words, stakeholder involvement introduces a third party, which helps rectify any mistake made by human resource personnel.

            As mentioned earlier, Carlsberg’s corporate strategy comprises four other strategies in its sustainability package: reduction that is, weight of manufactured items, recycling and reusing and innovation. The first two strategies are ecological ideologies hence aimed at reducing the impact of their products on the natural environment and the other principles focus on sustainable packaging (Cortimiglia, Ghezzi, and Frank, 2016, 429). All of the above require innovation and good human management skills. The idea of possessing a constant circle of resources, which cater to the needs of both the workers and consumers such, motivates good organizational culture. According to renowned scholars, sustainable growth, efficient packaging meets the functional necessities such as effective utilization of resources by the firm, preservation of electricity and water during its lifecycle which safeguard the public and natural surrounding from harm. In addition, the firm applies a holistic approach to environmental challenges facing it, that is, assessing the eco-friendly performance of items, which then motivates investors to improve the item based on its impact on the natural surroundings. Moreover, Carlsberg’s sustainable strategy operates under a fully tried and tested item design sustainable methodology, which evaluates consumer preferences, worker’s occupation satisfaction among other aspects.

 Human resource management

The capability of an organization to sustain and possess a market share within its line of specialization requires some sort of innovation and relevant skills from its human resource departments (Ghezzi, Cortimiglia, and Frank, 2015, 350). In a summarized manner, Carlsberg all through its years of operation has been able to endure and exist in an ever changing corporate surrounding based on its tactic to administrative decision making. In the end, the Carlsberg made profits without putting the finances of its workers, community and operating surrounding in jeopardy (Noe et.al, 2017, 78). Therefore, the achievement of a company relies on the manner in which the organization, in this case Carlsberg handles the needs of the stakeholders and employees. To emphasis further, the extent to which workers engage or commit to their duties determines the success of the entire firm hence giving the firm its success.

  Carlsberg’s success, as economic experts claim, relies on the hands-on roles of workers in the manufacturing sector. Since integrating, the concept of tactical human resource management goes hand in hand with a good working atmosphere while at the same time joining agendas of Carlsberg’s competitive plan with human resource administration norms (Guo, Su, and Ahlstrom, 2016, 538). Hence making use of balanced of workers’ reactions and market conditions improves the performance of the company. In the end, the business strategy links the workforce with human management skills. For the sake of improving the business results.

Human resource management’s success hinges on how well it fits within the firm’s development and goals. As the company enlarges, human resource management activities and operations must alter at the same pace as the development rate. Carlsberg’s ensured a persistency between its corporate strategy and development rate (Haigh, Walker, Bacq, and Kickul , 2015, 8). Human resource management becomes more complicated as the firm grows and passes through various organizational stages. Each stages depend on the initial stage. For this reason, Carlsberg prioritized basic human resource management concepts such as recruitment, compensating and training of staff members. As an end outcome, the company formed an official personnel subdivision and delegated some sub functions of human resource tasks to the subdivision. More so, workers attached to the subdivision formulated their own financial plan and then helped other sectors uplift the entire company up. This led to an increased growth rate, as the subdivision would take note of nitty gritty details, improvise, and correct certain factors.

 One of the factors that enabled Carlsberg’s sustainability was controlled growth, proper planning, specialized administration or supervision and proper management of limited resources. The proper management of the firm enabled future prospects and better investment strategies. Thus, Carlsberg regulated its growth for the sake of sustainable expansion (Carayannis, Sindakis, and Walter, 2015, 98). In fact, measurement and regulation of a company’s development facilitates and accommodates the increasing diversity among workers, streamlines communication, motivates investment in technological equipment for human resource management hence increases productivity and cost efficiency.

Selling beer is not a hobby for Carlsberg but a serious business, which coordinates human resource management while integrating functions such compensation, training, and recruitment to its staff members (Vrontis, Bresciani, and Giacosa, 2016, 1883). The focus should be on minimizing duplication and increasing synchronization among various department within the organization. Integrative curriculums such as productivity upgrades, progression preparation, and performance administration emerge to push up sales (Leiponen, 2012, 1256). At the end of it all, the human resource department controls and improves the firm’s operations through the business strategy and proper establishment of the organization.

            There is a substantial similarity in the possibility of logical resource supervision and information organization. However, primary variances between their efforts and perceptions hence logical resource supervision concentrates on shaping and directing logical resources from strategized and innovation management (Sengupta, 2018, 136). Generally, human resource management functions as department that safeguards intellectual capital of the organization. More so, knowledge management through the human resource is a tactical and operational way of bringing the opinions of other people on board and executing the ideas in a holistic manner. Information management is complex in nature and eases administration of information regarding tasks such as generation, transportation, and utilization of the firm. Its roles are planning, execution, operation, and supervision of all the information regarding the firm’s schedules for the sake of overall performance of the company (Chan, 2013, 1891). In summary, workers offer skills and in return, the human resource department has to manage both internal and external data that passes through its business entity for better analysis and performance of the entire business.

It is vital to note that Human resource is not about counting heads but ensuring a consistent flow of information, which help the firm improve its output, efficiency, and productivity (Binder, and Mantovani, 2017, 123). Therefore, human resource department is part of the management system of the firm and regulates various vital aspects such as goals alignment.

 All in all, the performance of Carlsberg is entirely in the hands of its workers as they are the executors of the business strategy hence the human resource management creates ways of integrating the business strategy with the duties of the workers in order to attain the short and long term goals of the organization with ease and relevant skills (Carlsberg, 2018, 8).

 Innovation

Carlsberg just like any other beer brewing company concentrates its marketing strategy on adjusting its upmarket. This approach encompasses the environmental development of its international exceptional products, increasing the upmarket placing for resilient local products and investing in high value products’ innovation (Carlsberg, 2018, 7). More so, with the thought-provoking situations dominant in essential European marketplaces, Carlsberg is doing its level best to enlarge its presence in the growing market within Asia pacific continent. The organization built a rationally reliable policy through which it can take advantage of its projected robust performance in the Indian and Vietnam markets.

 Currently, the popular beer market is facing substantial shifts in customer demand. The preferences especially among youthful clients are gradually shifting and variating strongly. On the other hand, interest in the craft and product is tremendously rising throughout the years and the categories are experiencing extreme competition from other rival beer companies (IR Corporate Presentation 2018, 5). Carlsberg is aiming at developing beer-crafting styles to counter competition and venture into beer free drinks. In other words, updating crafting styles needs innovation some changing in the management style hence tailoring every innovation based on the needs of the company.

            Carlsberg’s reputation of creating products successfully tailored to the likings of the target market such as Asia Pacific strengthens the name and market presence of the brand (Sustainability Report, 2017, 8). When Carlsberg commenced its beer brewing industry in a foreign market in Myanmar 2015 and released its first local brand in Tuborg hence expanding its market preference and bringing new venues for making profits.

The second largest beer market for Carlsberg is Russia and it gradually declines as the federal government tries to reduce beer intake due to the hard-hitting economic times (Pudelko, Reiche, and Carr, 2015, 181). Subsequently, Carlsberg pursues to put a limit on the effect Russia’s policies have on its products by upgrading the supply chain systems to focus more on value addition than volume.

 Situated in Copenhagen, Carlsberg is the third leading brewing company in terms of volume (Chan, 2018, 8). The organization’s market share is huge in Western Europe and Eastern Europe and the two regions account for an estimated 62% of the international beer capacities sold and produced in 2017.

Nevertheless, Carlsberg is facing a barricade of challenges in its key regions hence forcing it to move and concur new territories in emerging markets such as Asia Pacific. Certainly, Asia Pacific will succeed Western Europe as the second key market region. The organization also acquired new Chinese breweries such as Chongqing brewery (Liket, and Simaens, 2015, 286). Furthermore, Carlsberg continued its enlargement into new Asian territories in 2015and gained complete control of most beer groups in China.

 Carlsberg’s procedures permit selling of different kind of beer but its geographical regions strategy centers on participating in offering the consumers high-end items hence beer makes the company 99% of its profits (Bertrand et.al, 2018, 89). Carlsberg also seeks to diversify its items by tapping into the cider market, which is growing at a tremendous rate hence to invest.

The figure above shows the alcoholic beverages Carlsberg sold all over the world in the year 2017 (IR Corporate Presentation 2018, 10). In addition, Carlsberg accounts for 5% of the total amount of beer sold internationally in terms of volume. In 2017, Carlsberg realized a decline in beer sells from 2012-2017 according to its annual reports especially in key markets such as Russia.

Carlsberg has a variety of products within its brand’s portfolio that encompasses all kinds of beer as well as some cider related items. The graph above demonstrates the beer and cider products sold by Carlsberg in the year 2017.

            In 2015, Carlsberg underwent an interior assessment and restructured its procedures (sail 22) based on the findings. Carlsberg aims at retreating the unsatisfactory economic performance experienced recently and change its goals for the sake of improving upcoming development and net worth. One of the main regions of concentration is renewal of the brewery’s essential beer brands inclusive of several international local brands (Liket, and Simaens, 2015, 99). More so, focusing on Asia pacific minimizes dependence on the shaky European region. Immediately Carlsberg looked into new horizons. Eastern and western sections of Europe together brought in an estimated 78% of Carlsberg total sales in terms of volume. However, in 2017, the dropped to 62% due to its reduced presence in Eastern and Western Europe. Most markets within these regions were hard to crack due to the nature of their macroeconomics circumstances, market development, governmental policies to minimize consumption of alcohol and the firm encountering steep competition from various rival beer producing companies.

            In order to counter stiff competition from various beer-producing firms, Carlsberg adopted a local perspective to international trends (Vrellas, and Tsiotras, 2015, 47). Presently, with craft style alcoholic beverages influencing the beer industry and directing advancement of new products tailored according to the consumers’ specific needs, Carlsberg introduced Brew masters collection, which specializes in making crafted beer such as steam beer. In this manner, the different beer companies endorse Carlsberg products in various market, which in turn increases their market share (Goodale et.al, 2011, 117). For instance in Finland, an Irish brand endorses a California brand hence the market becomes more receptive toward the California beer brand.

Corporate philanthropy

Carlsberg foundation incorporates corporate philanthropy through its main functions such as value generation and philanthropy to the local community (Besenbacher, 2018, 2). In terms of philanthropy, the organization funds researches pertaining humanities and social studies. While funding researches, they are able to come up with sustainable solutions that benefit the local communities.

In order to establish a reference point and ensure their operation depend on philanthropic ideals, Carlsberg Foundation holds the following values: pursue excellence, passionate duties, science and innovation, societal accountability and a holistic approach toward its immediate communities (Besenbacher, 2018, 3). All of the above values founded and embed in the fabric of the foundation facilitates and initiates philanthropic works all through the Carlsberg foundation and onto the community. Furthermore, the values help steer the company toward philanthropic deeds such as creation of employment and grants. In the end, the profits generated by the company shape the entire society. In short, the Carlsberg Foundation has two objectives: participating in decision making and supporting scientific researches leading to sustainable solutions.

            According to the remarks of the chairman of Carlsberg foundation, Lemming Besenbacher, the foundation influences decisions of the parent company: the foundation has 30% shares and 70% of the vote cast on anything (Castello, 2018, n.p). The objective is to give room for scientific research which most of the times goes into helping the communities who consume their beer and other products. More so, the researchers’ exposes climatic iss3ues and some of the measures global leaders can take

 A stated earlier, the universe wants cooperative action while facing intricate sustainability problems such as global warming, accessibility to resources and societal medical issues (Gautier, and Pache, 2015, 58). According, to sustainable development goals and climate treaties assisting to fight off climate change and increasing government obligation; businesses should conduct their operations in ways that preserve and protect the community. Conservation of the natural environment needs a joint effort for it to succeed.

            Sustainability is at the center of Carlsberg resolution of brewing beer in a justifiable manner. Manufacturing using ecofriendly methods ensures preservation of resources and water for future productions (Gardberg, 2017, 23). This is the main reason Carlsberg introduced ‘Together Toward Zero’ program for raising awareness and laying the foundation for harnessing conservation efforts of the company. ‘Together Toward Zero’ is Carlsberg input to global issue affecting the earth as a whole. It is vital to note that the ‘Together Toward Zero’ program initiates new industrial principles for scientific-founded collaborations toward sustainability. In addition, the company believes that a sustainability approach toward manufacturing is the best way of keeping the planet safe from the gradual destruction and slowing down depletion of resources (Bell, Bryman, and Harley, 2018, 108). In the end, a conducive environment is beneficial to both the business and the community. Furthermore, these programs will enable an increase in efficiency, decrease hazards, harbor flexibility in the supply chain system while at the same time relating with consumers through the sustainable efforts of the company hence increasing consciousness toward conservation efforts of the company.

 In 2017, Carlsberg recognized the four sections with the highest significance for both the business entity and the community as a whole: carbon, power, marine resources accountable for formation of rainfall and safety of the environment. ‘Together Toward Zero’ contains the company’s aspirations in each and every of the four areas: Zero emission of carbon dioxide, zero water wastage, zero reckless consumption of alcohol and zero drinking while driving incidences or accidents and promotion  of responsible drinking for the business(Lasserre, 2017, 102). Underneath each aspiration, Carlsberg the company has certain short-term goals attainable between 2022 and 2030. The reason for setting such a high standards is to ensure safety during brewing, distribution, and innovation of some of the items. The goals are only achievable if the company joins hands with other business entities since people share and utilize the same environment (Weske, 2012, 339). Therefore, it is sensible to join hands then let everybody play their part carefully. In other words, partnership is vital for the success of any sustainability program.

 Climate leaders enterprise fueled through the world economic forum continued its pursuit for sustainability partnerships and negotiating for proper information systems. Through Carlsberg sustainability report, the company informs stakeholders on the progress made regarding its commitment, transparency, and accountability toward sustainability. Nevertheless, in the year 2017 was for developing and designing schedules which will monitor progress and improve on the overall sustainability programs of the company. It is always good to make strides and tangible progress within and outside the company operations. For example, Carlsberg breweries minimized water consumption by 3% and carbondioxiode emissions by 6% in 2017. The figures were lower compared to previous years. Frankenberg brewery situated in Sweden is an example of a company, which utilizes clean energy, which is an impressive progress in terms of sustainability and attaining vision 2030 (Szőcs, 2016, 377). In terms of raising awareness and campaigns, the company was able to reach many people and impact lives through the drinking campaigns. Within the medical and safety department, the company saw it fit to reduce the number of road accidents caused by drank driving. Nevertheless, a single individual died in one of Carlsberg’s breweries in India (Bogers, & West, 2012). This served as a wakeup call for the company to tighten efforts toward reducing irresponsible drinking and educating the public on issues affecting the community. Sustainability policies woven with the corporate strategy ensures a continuous circle of proper conducting of business activities and meeting various objectives. The community needs to feel the effects of the business as the business takes a personal and humanitarian initiative to improve the conditions of the people living within the community.

 Social responsibility

 In the current corporate environment, social accountability and sustainability are tremendously important for determining a company’s competitiveness in the market (Jeston, 2014, 29). Corporate social responsibility is a key administration tool and Carlsberg assimilates societal and conservational alarms within its commercial actions and connections with the stakeholders. Corporate social responsibility is usually a comprehensive way of striking a balance between financial, conservational, and public requirements while at the same time elaborate on the stakeholders’ and investors’ expectations for the company. In terms of definition, corporate social responsibility refers to extra or supplementary measures an organization engages in for the betterment of the society (Lasserre, 2017, 78). Presently, Carlsberg functions in 150 commercial markets within three areas: Western, Eastern Europe, and some sections of Asia. According to information retrieved from Carlsberg’s reports and websites without taking into consideration workers’ perspectives, the company. To reiterate further, according to experts’ point of view, social responsibility is made up of commercial activities and duties. The first responsibility is generation of profit, the second is adhering to the rules and regulations; the third duty is being ethical while conducting their business operations. The forth duty is philanthropic duties toward the community. Carlsberg achieved all the four phases’ social responsibility.

 In summary, Carlsberg revised their sustainability priorities and realigned their long-term goals. In order to serve the community where they sell their beer Carlsberg needed to utilize human resource management and innovation for the sake of having an effective outreach. Carlsberg revised its beer producing schemes and made it more environmental friendly to the natural surroundings. Integrating business strategy and human resource management assists uplift the entire company.

 

 

 

 

 

 

References

Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.

Binder, C. and Mantovani, A., 2017, September. Managing Innovation in an Unstable World: Challenges of Global Competition for European Innovative and Proactive Firms. In 2017 ENTRENOVA Conference Proceedings.

Carayannis, E.G., Sindakis, S. and Walter, C., 2015. Business model innovation as lever of organizational sustainability. The Journal of Technology Transfer, 40(1), pp.85-104.

Carlsberg A/S in Beer (world) (August 2018). Passport report. PDF

Carlsberg AS. (2018). Carlsberg AS (CARL B). Financial and strategic SWOT Analysis Review. Global data

Chan, T.J., Sathasevam, T., Noor, P.N.M., Khiruddin, A.M. and Hasan, N.A.M., 2018. Application of Selected Facets of RepTrak™ Reputation Model on Carlsberg Malaysia as One of the Companies in Tobacco, Gambling, Alcohol and Pornography (TGAP) Industry. International Journal of Academic Research in Business and Social Sciences, 8(1).

Cortimiglia, M.N., Ghezzi, A. and Frank, A.G., 2016. Business model innovation and strategy making nexus: evidence from a cross‐industry mixed‐methods study. R&D Management, 46(3), pp.414-432.

Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E.A. and Barlow, C.Y., 2017. Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models. Business Strategy and the Environment, 26(5), pp.597-608.

Gardberg, N.A., Zyglidopoulos, S.C., Symeou, P.C. and Schepers, D.H., 2017. The impact of corporate philanthropy on reputation for corporate social performance. Business & society, p.0007650317694856.

Gautier, A. and Pache, A.C., 2015. Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), pp.343-369.

Ghezzi, A., Cortimiglia, M.N. and Frank, A.G., 2015. Strategy and business model design in dynamic telecommunications industries: A study on Italian mobile network operators. Technological Forecasting and Social Change, 90, pp.346-354.

Guo, H., Su, Z. and Ahlstrom, D., 2016. Business model innovation: The effects of exploratory orientation, opportunity recognition, and entrepreneurial bricolage in an emerging economy. Asia Pacific Journal of Management, 33(2), pp.533-549.

Haigh, N., Walker, J., Bacq, S. and Kickul, J., 2015. Hybrid organizations: origins, strategies, impacts, and implications. California Management Review, 57(3), pp.5-12.

IR Corporate Presentation 2018.Carlsberg .PDF

Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.

Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in delivering business performance. International Journal of Production Economics, 171, pp.241-249.

Pudelko, M., Reiche, B.S. and Carr, C., 2015. Recent developments and emerging challenges in international human resource management.

Sengupta, K., 2018. Managerial decisions for innovation strategy of firms: implications for country level innovation. International Journal of Business Innovation and Research, 16(2), pp.135-154.

Souto, J.E., 2015. Business model innovation and business concept innovation as the context of incremental innovation and radical innovation. Tourism Management, 51, pp.142-155.

Sustainability Report (2017).PDF

Szőcs, I., Schlegelmilch, B.B., Rusch, T. and Shamma, H.M., 2016. Linking cause assessment, corporate philanthropy, and corporate reputation. Journal of the Academy of Marketing Science, 44(3), pp.376-396.

Vrellas, C.G. and Tsiotras, G., 2015. Quality management in the global brewing industry. International Journal of Quality & Reliability Management, 32(1), pp.42-52.

Vrontis, D., Bresciani, S. and Giacosa, E., 2016. Tradition and innovation in Italian wine family businesses. British Food Journal, 118(8), pp.1883-1897.

Bertrand, M., Bombardini, M., Fisman, R. and Trebbi, F., 2018. Tax-exempt lobbying: Corporate philanthropy as a tool for political influence (No. w24451). National Bureau of Economic Research.

Liket, K. and Simaens, A., 2015. Battling the devolution in the research on corporate philanthropy. Journal of Business Ethics, 126(2), pp.285-308.

Simone Castello (2018). Brewing Philanthropy: an interview with D.Sc. Flemming Besenbacher, Chairman of the Carlsberg Foundation. Fondazione Lan Italia

Flemming Besenbacher (2018).The Danish Model For Industrial Foundations: Business and Philanthropy Hand in Hand

Chan, C.M., 2013, January. From open data to open innovation strategies: Creating e-services using open government data. In 2013 46th Hawaii International Conference on System Sciences (pp. 1890-1899). IEEE.

Leiponen, A., 2012. The benefits of R&D and breadth in innovation strategies: a comparison of Finnish service and manufacturing firms. Industrial and Corporate Change, 21(5), pp.1255-1281.

Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

Weske, M., 2012. Business process management architectures. In Business Process Management (pp. 333-371). Springer, Berlin, Heidelberg.

Jeston, J., 2014. Business process management. Routledge.

Bogers, M., & West, J. (2012). Managing distributed innovation: Strategic utilization of open and user innovation. Creativity and innovation management, 21(1), 61-75.

Goodale, J.C., Kuratko, D.F., Hornsby, J.S. and Covin, J.G., 2011. Operations management and corporate entrepreneurship: The moderating effect of operations control on the antecedents of corporate entrepreneurial activity in relation to innovation performance. Journal of operations management, 29(1-2), pp.116-127.