The internal environment
The organizational culture of the Heineken Holding N.V. is fundamentally defined in their “HEINEKEN Code of Business Conduct”, also called the “HeiCode”. This document that defines the behavioral principles of each employee shows Heineken’s dominant culture and is categorized into four different main points being:
1. Respect People and the Planet
3. Safeguard the Company’s assets.
Regarding the first aspect “Respect People and The Planet”, the organization includes four main points. First, each and every employee should be assured that health and safety should always be ensured. Secondly, they put a high value on non-discrimination and doing business with respect to human rights. This shows, that their culture emphasizes Integration. Finally, each employee should “strive to consistently reduce the impact he makes on the planet” and should look for ways to implement own ideas into his way of working, as well as presenting ideas of improvement in this matter, which shows the support of management and the incentive to own initiatives. This is also reflected in Heineken’s “Brewing a better world” concept.
Moving to the aspect of Competition, the Heineken Holding N.V. points out the importance of competition to the organization but also stresses the restrictions and rules on how to compete. Each employee should “strive to win, but … always compete in compliance with competition laws” and “with integrity and fairness”. Those laws, as well as all other key aspects of their culture, is deepened further in various policy documents. Another competition restriction is bribery. Every employee is assigned to actively prevent bribery and report the involvement if witnessed. This shows control not only through higher level management but also the working-core for instance. Another detail of the organizational culture is the promotion for the enjoyment of life. This includes rituals, such as events, business meals etc. in which every employee is invited to partake. Furthermore, the organization wants to prevent money laundering. To reach this goal, it is said to be necessary for every agent to know the company’s various stakeholders. Additionally, Heineken encourages their staff members to be transparent about concerns and communicate with other operators or higher positioned employees/ managers. This and the rituals show that the Heineken Holding N.V. supports openness and comradeship. Lastly, apart from complying with laws and policies from the company’s point of view, every employee should also be concerned about the business partners and suppliers legalism.
Lastly, everyone working for the company or in the name of the company is required to handle information discreetly and confidentially. Apart from the demand to handle companies resources “carefully and professionally for their intended business purpose only” the employees are required to handle every kind of information, be it personal or business related data confidentially and for the purpose it is meant to be used. This includes not only the mentioned personal data but also every data concerning third parties, business partners or inside information, such as “budget and audit reports, product recipes, designs, business plans, strategies” and so forth. This information, in general, should just be shared on a need-to-know basis to reduce the risk of disclosure of this confidential information to third parties, media or others. Lastly, one should behave as a “HEINEKEN ambassador” in every communication on behalf of the joint-stock company. This shows that the communication patterns of the company are clearly defined and limited.
A concept related to the aspects stated in the discussed document is the so-called “Speak up”-system. It is a way to share concerns about any of the above-mentioned aspects not only by company internals but also external stakeholders and the public in general. This concept shows the attempt to reduce conflicts since the concerns/ reports appear anonymously and the company states that one does not have to be concerned since “any form of retaliation against you for speaking up will not be tolerated”, giving a feeling of security and strengthen the courage to speak up.
The Heineken Holdings N.V. introduced a new knowledge management solution in 2011. This platform, called “One2Share”, was created to: “Create and manage an environment that enables and stimulates our people to connect, create, share and apply knowledge as part of normal working behavior, to add value to our business”, as stated in a presentation on the SharePoint Conference in 2014 that was held by Tony Wegewijs, a manager of Knowledge Management. The goal of this is to increase the organizations performance on a global scale by increasing the problem-solving capacity, the knowledge in general, organizational learning as well as decreasing the time to find expertise. Those goals are subsumed as: “Think and act as ONE HEINEKEN”. The solution is an online platform for interns in which they can share their knowledge and best practices across the geographically dispersed sites as well as cross-functional where they can be easily accessed.
Heineken faces numerous threats and risks brought about by their external environment. Those lead to the need of high managerial skills and on point strategic decision-making.
The first general environment in the case of Heineken are governments. Since the Heineken Holding N.V. is present in numerous different countries, it has to manage different laws and rules concerning alcoholic beverages, as for example legal drinking age, which differs from country to country (Germany: Beer from 16 years of age, while drinking is legal from 18 years of age in the Netherlands). Additionally since alcoholic beverages became so popular, governments try to profit as much as possible from sales in this division and therefore apply heavy taxes to alcoholic beverages. Heineken has to cope with that by analyzing each market thoroughly and decide which market would be the most profitable to start operations ins and how to get the favor of the host country’s government. Furthermore they have to analyze the competitors that would be found in every market and decide, whether the company could penetrate the market successfully or would fail in the attempt to gain shares in the market.
Another major aspect of Heineken’s external environment are the changes in social culture. While beer was mainly for men and one of the main alcoholic beverages, in today’s world this has changed. Especially the younger generations prefer spirits over beer and mainly to be consumed in private rather than in bars. This shift in social culture will affect Heineken and their products heavily if the company does not try to find ways to cope with the above-mentioned. As a company, whose main selling point is beer, the shift on consumption means a drastic loss in sales volume and market share. Introducing “Desperados”, a mix of beer and tequila can be seen as an attempt to adapt the product to changing demands.
Next, since Heineken Holding N.V. has operations in a variety of different countries with different currencies, fluctuations heavily affect the companies financial performance. To reduce the risk of this matter, the organization introduced clear policies on transactions to reduce the impact of fluctuations between different currencies.
Lastly, the continuously increasing importance of technology and its ongoing advancements affects every division/ department of the organization. This opens a huge opportunity to Heineken to increase its presence in markets and gives access to customers and populations worldwide.
The internal environment