Problems at Perrier, Case Study Example

The Perrier Company is facing two elements of resistance contributing to its fall. First, the inter-relationships between its workers and management are not good. About 93% of 1650, Perrier’s workers are members of CGT. This union resists Nestlé’s attempts to develop the financial performance of Perrier. Second, the company has refused to cut its workforce by 15% to reduce its expenditure. The head of Perrier is CGT, Jean-Paul Franc, argues that Nestle should control its dominance over Perrier. On basis of morality, he argues that the men and women working for Perrier rely on their salaries to sustain themselves.

A change management strategy that is most appropriate for the company is downsizing. This refers to reduction in company’s personnel. A variety of strategies can be used in downsizing, for instance, transfers, retirement incentives, outplacement, layoffs, buoyancy, and attrition. These strategies should be applied in the production functions of the company. This is attributed to the lower productivity of Perrier workers as compared to Nestle worker; an average Perrier worker produces 600,000 bottles a year while a Nestle worker produces 1.1 million bottles in the same period. The most appropriate approach to manage the resistance is the ‘situational’ or ‘contingency’ approach. The low performance of the company is dependent on situational variables such as bad inter-relationships and low workforce performance. These variables change from one company to another, and, as a result, the responses and strategies for change by the managers will vary. This approach relies on relative comparisons with other companies with higher performance than the company under consideration does. It does not compromise on the state of workers or on the morality, but rather on the performance of a company.