Kellogg’s Development and Future Plans

by Jason Shaw


Kellogg is a global grocery firm specialised in producing cereals and other fast snacks such as crackers, baking products, toasters, bars, waffles, etc. (Kellogg’s, “Our Brands”). The brand includes regular cornflakes, frosted flakes, Special K, Rice Krispies, Coco Pops, Pringles, Nutri Grain and Pop Tarts (Kellogg’s, “Bringing Our Best to the World”).  The vision of the company is to offer customers healthy and tasty snacks which cater to their needs and also suit their taste buds (Kellogg’s, “About Kellogg Company”). One of the company’s key goals is the promotion of nutritious foods for culture and the environment (Kellogg’s, Our contribution to education in nutrition). Kellogg’s grain is grown in more than 20 countries and distributed in more than 180 countries worldwide (Kellogg’s, “Our Location”). W.K. was founded by Kellogg’s. In 1906, Kellogg is. Kellogg’s staff is dynamic and specialises in fostering a safe workplace climate to excel in meeting and reaching targets (Kellogg’s, 2013d). The company won several awards for its excellent results and high-quality goods such as the Computer World “Top 50 Diversity Company Inc. and “100 Best Places to Operate” from Kellogg. While the company was competitive in the selling of different commodities, it earned the bulk of its sales from the core commodity

Historical Performance

Environmental degradation has become a growing concern for the society, government and community. The major cause of environmental degradation has occurred due to the impact of the business activities and process.  The major alterations in the biodiversity have interacted in the most complex ways within the environment. The environmental issues in developing and developed countries have propelled the demand for restructuring the environmental reform. The environmental issues have compelled the government of various nations to develop knowledge of environmental imperatives, regulations and rules. The government of varied nations is trying to manage the situational crisis by implementing measures for environment protection.  Environment protection measures developed by the government have helped in creating awareness about environment and societal protection. The basic and fundamental problems of environmental degradation would be solved with the assistance of the multinational corporations.  The assistance from multinational corporations is required for reducing the carbon emissions, toxic elements, hazardous waste, etc. The government of varied nations has implemented several measures and guidelines for the corporate organizations to abide by.

Kellogg's Development and Future Plans

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1(a) The different types of environmental protection measures developed by Kellogg’s during the tenure 2007 to 2013 are as follows:

Year Environmental issues & Sustainability Technology
2007 The company implemented a global energy management program which promotes energy conservation, manage energy usage and develops energy saving opportunity by including alternatives like renewable energy and fuel. The management for the product focused on packaging efficiency by serving products which are fresh for consumption process. The main focus of the company was improving its packaging process by developing efficient packaging system which focuses on reducing the linear weight and paper board quantity in manufacturing products (Kellogg’s,  “Annual Report 2007”).
2008 The company developed the Kellogg Environmental System (KEMS) which ensures the improvement in environmental aspects by conforming to the environmental policy. Three environmental programs of Kellogg’s have obtained ISO 14001 certification which signifies its efficiency to comply with environmental standards. The company focused on efficient use of resources and emission of green houses which contribute to the anthropogenic climate change (Kellogg’s, “CSR Reports 2008”). The company laid emphasis on technology drive advertising techniques which could help in marketing programs by developing cost effective programs and targeting specific programs

(Kellogg’s, “Annual Report 2008”).



2009 Kellogg’s has aligned with WHO to develop global strategies on diet, physical and health fitness. The company also developed change tours which focused on improvement of diet and well being of the common people (Kellogg’s, “Annual Report 2009). The company used digital marketing technology for online advertisement campaigns (Kellogg’s, “CSR Reports 2009”).
2010 The company’s key goal was to minimise sodium and sugar content and also to include the ingredient of fiber in almost all the food products globally. The company was successful in reducing the wastes in landfill by 20 percent per metric tons of food produced. They also launched a global water risk assessment (Kellogg’s, “CSR Reports 2010”). Kellogg’s had focused on improving the supply chain and logistic system through advanced technology. Advanced technology permitted the company to focus on food innovation and develop several innovative food brands in Holland, Sweden, Canada, France etc (Kellogg’s, “Annual Report 2010”).
2011 The management of the company focused on improving the quality of products by manufacturing product with less sodium and high nutrients (Kellogg’s, “Our Commitment to Nutrition Education”). The focus of the company was to develop innovative products and market it successfully in further 18 countries on a large scale (Kellogg’s, “Annual Report 2011”).
2012 The company’s primary emphasis was on decrease obesity among people by spreading awareness about proper diet programs by including gold medal winner swimmer Rebecca Soni, gymnast Aly Raisman and beach volleyball player Kerri Walsh as their sponsors. Advanced information technology helped in the successful integration of systems and activities within the workplace. It also helped the employees in providing a congenial work environment which is successfully equipped with advanced information technology.
2013 The company’s key focus is electricity, water conservation, reducing the environmental and hazardous waste (Kellogg’s, “Quarterly Results 2013”). The main focus of the company would be reduction of landfills, energy and water conservation, reducing the usage of water in the production system (Kellogg’s, “Annual Report 2013”).

1(b) Managing the future requires an overhauling of the existing paradigms of management thinking, given the context of human affairs (Velamoor 249-251).These contexts are characterized by following shifts in human affairs which are as follows:

  • Globalization in the political, socio cultural and economic domain that are blurring views about the identities, ethics and about the reaming nation states (Yadav, Prabhu and Chandy 84-101).
  • The revolutionary advances in the field of genetics and information technology

It can be observed from the above environmental assessment during the tenure 2007 to 2013, that Kellogg’s has maintained good sustainability practices with the sole intention of the betterment of the society and community. The main objective of the company was to conduct sustainable development and environmental practices with means of innovation and reduction of costs. The company laid emphasis on marketing activities along with sustainable development. The company had made immense contribution by providing charitable donations, arrangement of charitable organizations and implementing the diversity and inclusion strategy. The global leadership team imparted training to employees which focused on hiring employees belonging to diversified nations and opportunity to explore the differences. The management of the company tried to develop a rewarding system which would act as a motivator.  The company arranged for several nutrition programs which focused on involving employees for wellness programs and product dissemination. Advanced technology has helped the company in laying emphasis on food innovation and developing high quality products of diverse range. The management of the company ensures that advanced technology would facilitate the supply of food for the world’s growing population and also efficient use of scarce natural resources. Kellogg’s focused on performance of aspects like environment, water usage, green house emissions, etc. However, Kellogg’s also faced its own share of shortcomings like its energy and water conservation projects were not that successful (Reframe or break it into 2 sentences) The Australian Water Footprint launched by the company could not help in internal water footprint assessment. However, the program could not be successful in providing water to several areas. Although, the company has laid emphasis on food innovation and the development of several food products it has been observed that apart from the core product most of the products manufactured by the company have high sugar and sodium content.

1(c) It is observed from the above environmental assessment of Kellogg’s during the tenure 2007 to 2013 that the company laid sole focus on environmental and sustainable practices for the benefit of the company, community, society and company. It is observed throughout the tenure that Kellogg’s focused on improvement of its social and environmental performance. Kellogg’s also laid emphasis on environmental reporting by implementing advanced technologies which would ensure transparent accounting procedure. It is observed that being a cereal manufacturer the company laid emphasis on the food innovation capabilities and development of highly nutritious food. The company’s business activities almost resembled to the Agency Theory. Agency Theory helps in contributing significantly to the environment and providing an insight into the information systems, incentives and outcome uncertainty, risk and incentives (Fama 288-307). The Agency theory focused on the positive relationship development between two parties namely shareholders and the management (Fama 288-307).The main problem occurs when the two parties have different interests and both parties cannot act according to each other’s interests. The principal agent relationship is almost similar to the lawyer- client, buyer-supplier relationship etc. The focus of the principal agent relationship is determining the optimal contract, organizational outcome, and risk aversion. Agency theory is similar to the information processing approaches with the contingency theory. These are efficient theories which are concerned with the optimal structure of reporting relationships and decision making relationship. The theory is concerned with the optimal restructuring of control relationships resulting from environmental reporting and decision making responsibilities. The increased importance in managing quality in the supply chain has led to emergence of supply chain quality management to identify the various critical themes in supply chain area (Zu and Kaynak 423-446).  Agency theory does not only help in resolving relationships between principal and agents, where agents are more risk averse than the principal. The efficiency is the effectiveness criterion, which helps in the accomplishment of goals and objectives of the organization. The two potential problems which stem out of assumptions rise from the agency theory and the risk sharing problems. Apart from the different mutual interests potential conflict also arises when agents have delegated their work by reducing the moral hazard and it is expensive to reconcile the differences. There were two formal prescriptions of the ideal types of management mechanism which helped in governing their relationships. Firstly, outcome based management mechanism are helpful for both principal and agents. The outcome based results are helpful in understanding the mechanism and how the agents would achieve them. The behaviour based management mechanism emphasizes on tasks and the activities in supply chain. The Agency theory lays emphasis on the improvement in the supply chain and logistic system of the Company. Managing supply chain would require frequent and continuous interactions between buying companies and their suppliers in handling various issues as negotiation of contractual provisions related to the quality requirements and standards. This Agency theory has enabled Kellogg’s to manage various situational crises especially in supply chain management system. The supply of cereals to various parts of the countries has been executed smoothly. Kellogg’s has maintained a smooth distribution and logistics systems which help in the timely and prompt delivery of cereals.

Scenario Development

(a) Scenario Planning

Scenario planning acts as a strategic management tool which helps in devising long term and short term plans. Transformative scenario planning is useful to three kinds of people firstly, people who find situation unacceptable (Mason 25-28).Secondly, people who cannot transform the entire situation on their own. Thirdly, people who cannot transform their situation directly and they need to work together to make transformation too polarized and be able to work this approach head on (Mason 25-28). Transformative scenario planning would help in gaining understanding, building and trusting relationship, changing intentions and planning alternative solutions (Kahane 19-23). Transformative scenario planning is a composite social technology which is insightful and influential (Mason 25-28).These actors are strategic contributors and act as a microcosm of the systems as a whole and they are considered as fundamental basis for formulating strategies (Wallman 485-499). It helps in changing the scenario planning which would enable the future collaborative transformation and adapt to a particular situation. It involves planning and engaging itself in a disciplined process of thinking ahead together and altering the decisions accordingly. The five major steps in constructing transformative scenario planning would be as follows:

  1. To convene a team across the whole system
  2. To observe what is happening
  3. Constructing stories about what could happen possibly
  4. Discovering the possible ways of what can be done and must be done
  5. Acting to transform the system

Scenario Planning involves aspects like system thinking and is instrumental in evaluating uncertain future. The focus of this method is to help the management in evaluating the uncertain future. Scenario Planning would enable the company to understand and develop long term and short term goals. A scenario planning of Kellogg’s would be conducted during the tenure 2018 to 2020 to understand the future strategic position of the company and analyze the impact of marketing activities on society and community.

The various objectives of Kellogg’s would be as follows:

  • To constantly monitor whether the manufacturing of food products is according to the national health and food guidelines
  • To monitor whether the company is adhering to the established environmental standards or not
  • To check whether the environmental and sustainable development practices are implemented or not

The scenario planning would include stakeholders, senior management team, trustees and the management. Scenario planning would require the collaboration of financial and marketing analyst to analyze the various resources required for resource allocation and in the future. The resource allocation would be done keeping the future requirements of Kellogg’s in consideration. Firstly, the various types of scenario planning would be evaluated and developed for understanding the future financial performance of the company. In this situation transformative scenario planning would involve the management of situational crisis and addressing to the immediate problems. Transformative scenario planning would enable Kellogg’s to focus on the manufacturing process and transform their understanding, relationship and intentions by executing their actions.  Firstly, a team of four to five needs to be built to who would convene a situation and understand the importance of the different roles played by the different factors. In this context actors are referred to those employees who would be significant contributors in maintaining a diversity and smooth supplier system. Usually, convening teams would be larger but in this case the scenario planning would require only 3 to 4 members for context specific design and resign of development plans. The different employees chosen should belong to the diversified backgrounds and perspectives which include sectoral, geographical, professional etc. This will enable the management to develop various kinds of scenarios or situations that will help them the system to emerge on the whole. Various kinds of positions and connections considered by the employees would be able to influence the system on the whole. The managers have a vital role to play and they need to articulate their rationale and objectives, who would lead, guide and control the actions of the employees. Secondly, it would require to bring across leaders from varies nations to conduct a training program to be imparted to the employees and it would also bring in fresh perspectives for product development process.

  • To practice accurate environmental reporting and planning measures on regular basis

Apart from these perspectives and process the managers need to focus on developing various situations and provide remedial solutions accordingly. The most important challenge would be bringing together all the employees and leaders of diversified nations for an unprecedented change. The convening team would bring about positive results and change that would lead to the benefit to the entire organizational system on the whole. A diverse group of actors would bring about positive results and changes that would lead to the possibility of Kellogg’s becoming a unique cereal manufacturer of the world. A scenario planning process would be required by the management of Kellogg’s to understand and evaluate the management system of the entire organization.

A scenario planning process would be conducted to understand the best possible remedies in managing various situational crises in Kellogg’s

  • The management needs to assess and scan the various marketing elements that have the possibility of affecting the position of the company presently and in the future
  • The convening would be assigned the task of developing and forecasting various situations by using various quantitative and qualitative measures
  • To identify the impacts of the business activities on the society, environmental and community and formulate strategic and operational responses to each and every scenario
  • The most realistic and feasible responses would be decided to each and every scenario and develop plans accordingly
  • After the necessary resource allocation is done the chosen strategy needs to be implemented effectively with accurate manpower planning ability and capability of employees
Usage of Scenario Planning Types of Scenario Planning
Predictive Scenario The predictive scenario would help in forecasting and speculating the “what if” situation. This would require the development of mathematical models and equations that are the interpretation of the system.
Normative Scenario Normative scenario will help in distinguishing between the structured and unstructured system. Transforming scenario would help in reaching the target.
Explorative Scenario They respond to the question “What can happen” and distinguish between external and strategic scenario. They help in exploring development programs that the intended target group in one way or another.
Event Driven Scenario These are known as operational scenario which helps the management of the company to undertake various forms of activities without external assistance. These help in making strategic decisions and development of technology.

There are various other techniques which help in understanding the use of panels. Panels, Delphi methods and workshops are some of the popular techniques which help in understanding the value and position of the company in the present market and society. The assignment of probability based scenario is a hybrid form of scenario planning which helps in the development of quantitative models.   The probability based scenario help in assigning variables to each and every scenario and the highest scoring scenario is considered to be the most likely future decision. It would be advisable if the management considers it to be event driven scenario which helps in formulating strategic management decisions which are permuted on the macro level basis. However, it is advisable to understand the pros and cons of the situation and look at the uncertainties and ambiguities of the business environment. It would be an added advantage that helps in understanding the critical growth of success. They are suitable strategic management tools which help in arrangement of investment planning techniques. A magnified approach to the development of scenario would help in providing solution to various kinds of managerial situations.

Scenario planning is a continuous process and would require initiatives by the various teams to be familiar with the process at bolt and strategic levels. The senior strategic partners are likely to control the various processes in many large entities and operational management which helps in adding depth.  A scenario analysis is an established strategic business risk management tool that has focused on ensuring the smooth execution of the business process. Scenario planning would also help in the improvement of corporate governance techniques and other strategic management approaches. Firstly, identification of various legal requirements would be prerequisite for the company to operate on a larger scale.   Compliance with the regulatory and legal requirements is necessary for stress testing and risk assessment. To develop the short and long term plans and objectives, the company can use the Monte Carlo techniques which helps in modelling techniques, which have the potentiality of revealing the outcome in case of basic uncertainties. Uncertainties like loss of historical and computer data due to fire, flood, drought, etc can be easily detected by this method and would also require in analyzing the impact of the business activities by estimating the financial loss. It is considered that the environmental degradation would be higher as the year increases from 2018 to 2020 and there would also be advancement in technology during this tenure.

Kellogg's Development and Future Plans

Source: (Author’s Creation)

2018 (Low) During this phase it would be observed that there would be slight alteration in the environment and the government has laid emphasis on implementation of the environment protection measures. Advanced technology has permitted Kellogg’s to understand the various market dynamics and perform marketing activities accordingly. The assessment of the organizational environment requires immediate attention and the usage of strategic scenario variable should be of utmost importance.
2019 (High) The auditors are ensuring that the company adheres to the legal and regulatory requirements. The management of the company ensures there is prompt and timely implementation of the CRS tools along with accurate sustainable practices. Sustainable development practices should comply with the environmental standards. Kellogg’s is determined to develop environmental agenda annually and also think of abiding by those environmental standards stringently.
2020 (Very High ) In this phase it is considered that there is a high level of depletion of resources and the environmental degradation is extremely high. The government intervention is high and there is collaboration of the government with the multinational corporations for the development of sustainable practices. There is constant monitoring of the various manufacturing phases at Kellogg’s to develop high quality and nutritious food products. Adequate Corporate Social Responsibility (CSR) tools will be implemented and it will be ensured that proper sustainable practices would lead to the betterment of the company. 

Requirements in Scenario Planning & Development

System complexity occurs in various forms and is usually characterized by high levels of interdependency among the various elements that constitutes of capability but the ambiguous structure of the organizational system is not the only hindrance in the path of the management (Pandza et al.1010-1032). The capabilities emerge in various forms signifies that the complexity exist in various forms. There would be little ambiguity in understanding the directions of how market uncertainties can be solved and the management needs to identify the various capabilities and resources, which should be integrated to understand the market value of the company (Pandza et al.1010-1032). Theoretical models like value chain analysis and resource capability theory would be required to assess the existing resources of the company.   Optimum utilization of resources through advanced technology and environmental practice would require the guidance of a strong theoretical model. Theoretical models like Agency Theory would help in serving the purpose of the guide to solve the conflicts between the shareholders and the management (Seal 389-408).  Agency theory would be purposeful in utilization of resource and capabilities (Seal 389-408).  Resource and capabilities evaluation and utilization would be done after thorough research by the management to understand the utility of the theories. By implementation of the Agency Theory the companies can establish cooperative relationships between various departments. Agency theory will serve purposeful in keeping a quality check on internal process control movement and also integration of the various systems and activities (Eisenhardt 57-74). The theory would also serve purposeful in optimization of resources and also choose the perfect internal capabilities that would solve the various complexities. The different government modes would help in choosing the internal capabilities and widening the supplier network system. The theory would help in building in house capacities and support a particular mode of system that would help in lowering down of the costs and increasing the expenditure. Both the parties would agree willingly to enhance the efficiency levels of the supplier system by getting both parties to resolve the differences. Agency theory would also help in accurate sustainable development practices by implementing proper CSR tools and also adhering to the environmental standards. However, the management of Kellogg’s should signify the efficient organization with low risk bearing costs. If the management is able to follow the guidelines of the theory stringently then there would be emergence of partial goal conflicts among the employees. There is also information asymmetry between the principal and agent. Kellogg’s should utilize the concepts of Agency theory to develop a smooth manufacturing process which is directly responsible with the organizational performance. Food innovation process and operation management system need to be strengthened in Kellogg’s, through the utilization of Agency theory and other useful methods.  

Analysis of Environment, Sustainability Practices & Technological Environment

It has been observed that information technology (IT) accounts more than 50 percent of the total capital investments made by the existing US corporations (Chen and Ong 669-682). The link between the advancement in technology and performance of the company is strong. The sustainability practices and information technology practices totally synchronize with each other only if there are efficient corporate practices (Chen and Ong 669-682). Even sustainable development practice requires the efficient use of information technology for the utilization of resources as per the requirements of the company. It is believed that the IT technology would be advanced in the near future and the companies would require sufficient manpower planning for technological up gradation and maintenance from time to time. It is regarded that in the future IT would be regarded as an important strategic resource tool which would require making financial investment decisions for the future. Technological advancement would also require in addressing the future environmental scanning and developing foresighted activities (HuaIen, Cheng and Lin 54-73). The foresighted activities have become very much popular all over the world and the proliferation of foresighted activities among all sorts of economies can be observed. The fore-sighting activities have changed have changed from the explorative forecasting to the more strategic oriented (HuaIen, Cheng and Lin 54-73). Competitive advantage would be gained by the companies through utilization of advanced technology and by developing a taxonomy framework which helps in understanding the impact of environmental degradation and quantify it accordingly. Mapping of resource depletion and measuring the impact of environmental degradation would help the management to understand its effect in terms of quantity.  Thus, we can observe that with the advancement of technology there would be high levels of environmental degradation. However, if the companies utilize technology effectively it would be able to yield profits and also maintain sustainable development practices.

(3) Analysis of Future Performance

Competence Requirements
The main focus of Kellogg’s was to maintain good environmental practices by complying with the environmental standards and implementing CSR tools.  The main focus of the company during the tenure 2007 to 2013 was energy, water conservation, zero landfill. The company also laid emphasis on matters like reduction of environmental and hazardous wastes to a large extent. However, the sole focus of the company was continuous product development by catering to the needs and wants of the customers. Kellogg’ wanted to serve a healthy and nutritional meal.  Apart from resolving the conflicts between shareholders and the management agency and stakeholder theory would serve purposeful in enhancing the manufacturing process of the company. The enhancement of the manufacturing process is prerequisite in Kellogg’s because it would improve the productivity of the company.

We can observe from the above comparison analysis that Kellogg’s is one of the most profitable cereal manufacturing companies in the world. The company has developed several environment protection initiatives which have led to the betterment of the environment, society and community. It is observed that the main focus of environmental initiative taken by the company is enhancement of cereal manufacturing process, zero landfills, water and energy conservation etc. However, it is observed that the immediate requirements of the company do not fit with the suggestion given by the author of the study. Agency theory would help in resolving the conflicts between the shareholder and the management and improvement in the quality of managerial decision making. Quality management decisions would help in improvement of the existing process and also lead to the enhancement of the products.


Thus, we can observe that proper sustainable practices would lead to an increase in the organizational outcome and a sense of organizational commitment among the employees. Implementation of CSR tools and equipments would lead to the betterment of the society, community and environment. The agency theory would enable the practice of transparent and accurate financial reporting. Accurate environmental and financial reporting would enable the betterment of the company as well as the society. Proper sustainable development practices would enable the smooth execution of activities and also help in improvement of the supply chain management of the company. It can therefore be said with the help of advanced technology in the future Kellogg’s would be able to yield profits and also able to maintain balance in the society and environment.

Works Cited
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