Subject: MGT_401 Principles of Management
Name: Pramod Dube
Batch: 44
Reg. No. : 2021EPGD12ASB112
1. Explain with reasons was it external environmental change that caused the problems for Maggi or was
there some internal environmental issues?
Answer: There were multiple factors which cased this problem for Maggi, both external and internal.
External factors are beyond organization control such as Social media influencers, Political view etc.,
however Internal factors are something which organization can control.
According to punctuated equilibrium theory companies go through long periods of stability during which
incremental changes occur followed by short complex period of dynamic change with return to stability.
The internal factors issues include the lack of hygiene and un-favorable ingredients that enhance the taste
of Maggi. While considering the external environmental facts, the Maggi ban was due to the lack of skilled
people who could understand the issue and work on crisis management. (Resource Scarcity) FSSAI
discovered excessive levels of lead and monosodium glutamate in Maggi. People all over social media
started the hash tag #ban Maggi. (Product Boycott). But they got auto tweets and retweets by Maggie as
response which agitated them. Learning and research from past crisis by other organizations or groups
could have helped.
2. Explain whether adequate plans beforehand could have helped Maggi to anticipate the problem. Justify
your answer.
Answer: They could have kept themselves updated about the market condition and learnings from the
past crisis faced by other organizations. Adequate media management could have added to avoid such
crisis. Regular interactions with the customers could have been an advantage.
According to me, Nestle could have planned beforehand in the following ways:-
1. Acknowledge the issue- Nestle could have acknowledge the issue as soon as it appeared in the news
and social media and shown that they believe in their product.
2. Invest in the Consumer
Since the writing on the wall is clear, they could have done a temporary stop-sale of the product till it is
proven that the product is safe to preserve 30 years of goodwill and future sales.
3. Root cause analysis
Deep dive into the issue and finding route cause could have helped. They could have run the lab test
themselves by an independent body to prove their side.
