Page 5 - AB INBEV 2018 Model Answer 2

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B. DETAILED REPORT

3. DETAILED FINDINGS AND RECOMMENDATIONS

st
1 Organisational Structure and Change Leadership

This is mainly a strategic weakness in our SWOT (Appendix 1); our current global structure was
developed before the SABMiller acquisition. As ‘structure follows strategy’, it is imperative to overhaul

our group structure in line with the new 5 year strategy and plans to integrate SABMiller’s operations
in each geography (Europe, Africa, South America, North America etc.). Our proposed structure and
leadership changes, due for implementation in just 3 months, has leaked before we are ready go
public -and it contains sensitive changes and critical stakeholder concerns that must be urgently
addressed:

1. How Do We Respond To The Leak? Whilst it may be imperative to investigate how the leak
occurred (as it may in itself be an ethical/confidentiality breach), it is best to issue a press

statement, formally publishing the new organizational structure and leadership changes. Doing
nothing will create more uncertainty for key stakeholders and possibly impact on envisaged
synergies. Going public will allow us shift focus towards securing the requisite stakeholder buy-in;

a full assessment of their power, interest and needs is attached in Appendix 2.

2. How Do We Lead The Change Effort? The first dilemma is the ‘type of change’ needed:
adaptation, reconstruction, revolutionary or evolutionary (in terms Balogun and Hailey). Clearly,

this is a game-changing acquisition with a transformative impact; and we must integrate the two
entities quickly, for 2 reasons: (1) our blue print has already leaked; and (2) M/As is our foremost
strategic capability (and source of competitive advantage): we came into this with market concerns

that the deal is far too large and complex to execute. This is our forte -so we must prove them
wrong, by ‘Rising to the Occasion.’ Therefore, we need a revolutionary change! The second
dilemma is to recognize marked difference in culture between the two entities –but also to
recognize that different sub-cultures may exist in different geographies. A close review of the
article: ‘Culture Clash: AB InBev vs SABMiller’ as well as ‘Culture & Doing Business in Africa,’

reveals 2 contrasting cultures and leadership styles (see per Goold and Campbell) that will need
to be carefully managed. In essence, AB InBev appears to prefer a relatively more top-down and
tight strategy execution culture -with stricter cost control, using Zero-based Budgeting (ZBB).

Recommendations: There is no single way to implement change successfully; but based on the
potential to resist our plans -following the leak, we could apply Kotter and Schlesinger 6-Step model:

Step 1: Education and communication: Let’s decide which top SABMiller executives we are
retaining -and immediately start engaging them on the new vision and focus, enlisting their support to

Developed by The CharterQuest Institute for 'The CFO Case Study Competition 2018'
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