Danone & Unimilk

1. Danone & Unimilk Intragroup Conflict in working methods & corporate culture

2. Introduction • Danone: French food products corporation • Unimilk: Russian diary giant • Merged in 2010 • Highly different working methods and corporate culture (Danone Russia, 2012)

3. Introduction • Conflict: incompatibilities & discrepant views • Cause: complexity and interdependence of organizational life • Effect: both positive and negative (Boulding,1963, as cited in Jehn, 1995).

4. Introduction • Incompatibilities and discrepant views in Group of companies Danone-Unimilk: • Internal standard reporting • Efficiency of the measures for equipment performance improvement • Analysis for Operational delays analysis, planning and optimization of the lines load • Cause: • Complexities of working methods & discrepant organizational culture • Effect: • Negative: • Reduced productivity and satisfaction in groups • Lost trust for each other • Positive: • Promoting interpersonal communication to solve intragroup conflict.

5. Intra-and inter-group conflicts • Key Terminology • Intra group conflict - Select individuals a part of the same group clash with one another • Inter group conflict - Distinct groups of individuals at odds with one another

6. Case: Danoneand Unmilk Group • Intragroup conflict initially • Intergroup conflict that may emerge as potential consequence

7. Intragroup conflicts • Task conflicts: disagreement for meeting shared goals • Process conflicts: disagreement for decisional processes and responsibilities • Personal conflicts: disagreement for value, believes and behaviour

8. Case: Danone and Unmilk Group • Task conflicts: • Danone: regressive expansion into Russia market • Unmilk: local milk suppliers for a huge amount of community • Process conflicts: disagreement for decisional processes and responsibilities • Danone: advanced management for multinational business with formal reporting system • Unmilk: less formal process but more experience in milk processing and distribution in Russia market • Personal conflicts: disagreement for value, believes and behaviour • Danone: French culture and multinational management value • Unmilk: Russian culture with loyalty for the community and inferior feeling as the employees from the takeover target company.

9. Intergroup conflicts • Two sources for intergroup conflicts: • Realistic conflict theory: Competition for valued scarce resources • Relative deprivation theory: Competition for social rewards

10. Solutions in Danone and Unmilk Case • Three key tasks of Danone and Unmilk Group: • To create a shared management structure through strong teamwork – 350 management teams • To harmonize the production and logistics chains over 100 major dairies • To integrate IT systems (Danone Russia, 2012)

11. Description of the topic/context and explanation of its relevance

12. Description of the topic/context and explanation of its relevance

13. Reference • Jehn, KA 1995, “A Multimethod Examination of the Benefits and Detriments of Intragroup Conflict”, Administrative Science Quarterly, Vol. 40, No. 2, pp. 256-282 • Danone Russia 2012, Unimilk A Powerful Lever for Growth, Viewed Aug 11, 2013<http://www.danone.com/en/what-s-new/unimilk.html> • Massy-Beresford H 2010, “Danonesecures Russia expansion with Unimilkdeal”, Reuters, Viewed Aug 11, 2013 <http://www.reuters.com/article/2010/06/18/us-danone-unimilk-idUSTRE65H27A20100618>