Problems at Perrier

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Problems at Perrier: A Case Study |

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Wendy Kendall |

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Introduction

David Foote states that one of the nastiest, most debilitating workplace cancers is resistance to change, and that there isn't a more potent, paradoxical or equal-opportunity killer of progress and good intentions. (Foote, 2001) This statement is nowhere more evident than at Nestlé’s subsidiary, Perrier. There are many signs of resistance of change, including one’s attachment to established culture and the perceived negative effects on one’s own interests. The purpose of this paper is to review the case, Problems at Perrier, by first investigating the roots of the problem and then offering suggestions as to strategies to overcome the problem.

History

Perrier reached its peak in the late 1980’s as bottled water became the fashionable drink and was championed by groups such as the Wall Street yuppies. (Palmer, Dunford, & Akin, 2009) During this prosperous time, Perrier employees had it made. Because of the high profits, employees received consistent pay raises and other perks. Unfortunately, in 1990, small amounts of benzene, a cancer causing carcinogen, were found in their bottled water. Although studies showed that the low levels of benzene did not pose an immediate hazard, Perrier voluntarily pulled their entire inventory from store shelves throughout the United States. (James, 1990) Although this voluntary recall showed Perrier to be a responsible corporate citizen, and analysts doubted that the withdrawal would have any long-term effect on Perrier's sales and financial health, it did. In 1992, close to bankruptcy, Perrier was purchased by Nestlé.

The Need for Change

Ten years after Nestlé purchased Perrier, Perrier was still struggling to turn a profit. Production, which had drastically faltered after the benzene incident, was still lagging behind Nestlé’s two other international water brands. Nestlé needed to find a way to return production levels to...