Food maker Cargill controls every step in the food production process, from farming to transport to storage to processing, yet over diversification and lack of synergy have plagued the conglomerate for years. CEO Warren Staley is looking to change all that. From its founding in 1865 an a grain storage business, Cargill has grown and diversified. Today, the agricultural division of Cargill is a leader in seed and fertilizer for cottoh. soybeans, other crops. They make livestock feed, operate feediots, and research bioengineered crops The firm controls 18 percent of the world's turkeys, 22 percent of American beef production, and 25 percent of grain exports.

Cargill used its agricultural expertise to expand into food processing. That division produces oils, flavorings, sweeteners, flours, malts, cocoas salt, nuts, fruits, and juices, as well as prepared meats, poultry, and fish. From processing. Cargill progressed to manufacturing other commodities, such as steel, ethanol, paints, and more. Once Cargill was firmly established as a producer, it then became a merchant. Its trading unit transports products around the world, trades on worldwide commodities markets, and sells excess cargo capacity on Cargil's trains and ships. The firm's experience in trading enabled the development of a Financial Markets group, which trades options and futures on international financial and commodities markets.

Cargill added capabilities one at a time before venturing into a new business that was logically related to previous ones. The result is a firm that allows each diverse business to run autonomously, with little oversight from corporate headquarters and little coordination between divisions The firm has market power Cargill is the nineteenth-largest company in the United States and has 90,000 employees in fifty-nine countries

CEO Staley has shaken up the sleeping giant, a process he calls "keeping things bubbling." He sold $2 billion in unprofitable businesses and then used that cash to consolidate in more profitable segments, through acquisitions. "To grow our opportunities we have to shrink our sandbox." Staley claims. Stunnjng longtime managers, he adds, "That means telling our businesses, We won't starve you, but we may shoot you " in a move that industry experts call "classic Cargill," the firm is investing most heavily. in slumping markets, buying when the price is right. For example, Cargill bought a large grain seller at the bottom of a ten-year price decline. Staley claims, "The more complex the things we do for our customers, the more they're willing to pay us." A key piece of the company's strategic change is exiting commodities, which carry low profit margins, and entering high-margin "solutions," such as processed foods.

Staley passed out T-shirts to his staff that read *1 am not a

commodity." as a humorous reminder of the firm's plans. Staff at Cargill are developing new and more convenient products and building closer relationships with buyers, which include brewers, restaurants, and cereal makers.

Staley has also increased Cargil's participation in joint ventures, to aid in updating the firm's products and skills. in some cases, Cargil is using joint ventures as a way to build market share or to eliminate rivals. Cargil's R&D scientists are developing innovative products, such as the processed oil thal cuts fat by 48 percent which they developed for McDonald's. Cargill managers, however, are changing slowly and reluctantly Previously, each manager's rewards were based on the profitability of one of Cargill's ninety individual businesses. Under the new system however, managers overseeing cocoa, sweeteners, and flavors must cooperate to provide processed chocolate to bakeries. Vice President John Geisier remembers the days when each manager defended his business "no matter what, and if that meant blood on the streets, so be It" Geisier sums up the difficulties in reducing competition between units with the quip "This is not a camel built for collaboration. " Staley replaced managers who failed to implement the company's goals; some units have incurred losses of up to 70 percent

The founding family still owns 88 percent of privately held Cargill, 12 percent is part of an employee stock ownership plan. They are confident that Staley's moves are taking their company in the right direction. With their backing, the continuation of Staley's plan is assured But will the change be a success? Staley thinks so.

A. What are the reasons for resistance to change at Cargill? What can Cargill managers do to overcome this resistance? (10 marks)

B. What is the role of HR manager in facilitating the successful implementation of change in any organization?

(5 marks)

Go through the followng two case siudies and answer the subsequent questions. Each case has two questons a. CASE 5 TUDY 1 food maker Cargin controts every step in the food production process, from farming to transport fo storage fo pracessirg yet ofer evers sofion and lack of synerty have plagued the conglomerate for years. CEO Warren Stabey is looking to change an mat from is lourdicg n ass af a grain slorage business, Cargili has grown and diversitied. Today, the agricultural division of Cargit is a kesser in seed and latheer ar cen? soybeans, other cops. They make livestock feed, operate feediots, and tesearch bioengineered crops. The frm coraus io pecsit ar the wonds s tukeys, 22 peroent of American beef production, and 25 percent of grain exports cominodites, such as steel, einanot, paints, and more Once Cargat was fismly estabished as a procuces at thea secame a roctare as radry unit sanspoins products around the woid, trades on wondwide commodiles mankets and sets croess carge cipacth an Carg fs taims ave finasciar and cornmodities maukes andncua ana commoaines mackis. The trm has manet power Cargilitis the nineteenthigest company in the Unded States and has 90.000 engloyers in any one courtics. then used If af cash to consobdate in more prohtable sepments, through acqueatoro "To grow our coporturbes ae nae a shirs aur anders