Analysis of the Coca Cola Companys Organizational Behaviour

This document contains a broad analysis of The Coca-Cola Company and addresses several Organizational Behaviour and Human Resources issues. Recommendations are anticipated based on the findings and the problems that were discovered within the study. The goals of the recommendations are to address several issues that The Coca cola Company are facing in their Organization Stucture, Leadership and Management issues, their Organization Culture, Human resources issues and Communication skills of the organization and also align company decision-making with the structure of the organization.

Contents

Abstract i

Contents ii

List of Abbreviations ii

CHAPTER ONE 4

INTRODUCTION AND BACKGROUND INFORMATION. 4

1.0. Organizational History 4

1.1. The Coca Cola Company 5

Meet Our Company 5

Who we are 5

What we Do 5

Why is our role Important 5

1.2. Mission, Vision & Values 6

Our Mission 6

2.0.Organization structure and Span of Control 8

Mechanistic vs Organic structures 8

2.2. Span of Control 9

3.0.Human Resource and Management Practise 10

3.1. Human Resource Planning 10

3.2. Resourcing 10

Outsourcing 10

3.3. Training and Development 10

3.4. Performance and Motivation 11

3.5. Management System and Policies 11

3.6. Team working 12

3.7. Management of Change 12

Types of change 12

Strategic change 12

Operational change 13

List of Abbreviations

HFCS High Fructose Corn Syrup

CEO Chief Executive Officer

CAO Chief Administrative Officer

CFO Chief Financial Officer.

CHAPTER ONE

INTRODUCTION AND BACKGROUND INFORMATION.

Organizational History

It was 1886, and in New York Harbor, workers were constructing the Statue of Liberty. Eight hundred miles away, another great American symbol was about to be unveiled.

Like many people who change history, John Pemberton, an Atlanta pharmacist, was inspired by simple curiosity. One afternoon, he stirred up a fragrant, caramel-colored liquid and, when it was done, he carried it a few doors down to Jacobs’ Pharmacy. Here, the mixture was combined with carbonated water and sampled by customers who all agreed — this new drink was something special. So Jacobs’ Pharmacy put it on sale for five cents a glass.  

Pemberton’s bookkeeper, Frank Robinson, named the mixture Coca-Cola®, and wrote it out in his distinct script. To this day, Coca-Cola is written the same way. In the first year, Pemberton sold just 9 glasses of Coca-Cola a day.  

A century later, The Coca-Cola Company has produced more than 10 billion gallons of syrup. Unfortunately for Pemberton, he died in 1888 without realizing the success of the beverage he had created.  

Over the course of three years, 1888-1891, Atlanta businessman Asa Griggs Candler secured rights to the business for a total of about $2,300. Candler would become the Company’s first president, and the first to bring real vision to the business and the brand. (The Coca cola Company website)

Its popularity would not stay within the United States for long, though, because in the year of 1906, Coca Cola was bottled in Cuba and in Panama. Bottling operations were soon started in Hawaii the next year, then in the Philippines, France, Belgium, Bermuda, Colombia, the Honduras, Italy, Mexico, Haiti, and Burma in later years. By the year of 1940, the famous soft drink was bottled in forty countries.

Advertising for the cola has included many product slogans including, “The Pause That Refreshes”, which was used in 1929, “Have a Coke and a Smile,” which was used in 1979, and “Always Coca Cola” which was used in 1993 when sales from this soft drink exceeded ten billion cases worldwide. (Essortment Articles)

1.1. The Coca Cola Company

Meet Our Company

The coca cola company i the worlds largest beverage company. We operate in more than 200 countries and market a portfolioof more than 3000 beverages products including sparkling drinks and still beverages such as waters,juices and juice drinks and still beverages such as waters, juice and juice drinks, teas, coffees, sports drinks and energy drinks.

Who we are

Headquarted in Atlanta, Georgia, we employ approximately 92,400 associates across our six operating groups-Eurasia & Africa,Europe,Latin America, North America, Pacific and bottling Investment in addition to Corporate.

What we Do

Our Company manufacturee the concentrates, beverage bases and syrups thats make our brand unique, and sells them to bottling operations. We oown our Licence the Brands adn, to connect our brands to our customers, we focus on marketing activities including print and television advertising, online programs retail store displys, sponsorship, contests and package design.

Why is our role Important

Our focus on beverage creation and marketing enables us to understand and meet the diverse and ever-changing beverage needs and desires of our consumers around the world.

We are a global business that operates on a local scale, in every community where we do business. We are able to create global reach with local focus because of the strength of the Coca-Cola system, which comprises our Company and our more than 300 bottling partners worldwide.

While many view our Company as simply “Coca-Cola,” our system operates through multiple local channels. Our Company manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives. Our bottling partners manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell our products to consumers.

All bottling partners work closely with customers — grocery stores, restaurants, street vendors, convenience stores, movie theaters and amusement parks, among many others — to execute localized strategies developed in partnership with our Company. Customers then sell our products to consumers at a rate of 1.6 billion servings a day. (The Coca cola company website)

1.2. Mission, Vision & Values

The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what’s to come. We must get ready for tomorrow today. That’s what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a “Roadmap” for winning together with our bottling partners.

Our Mission

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.

To refresh the world…

To inspire moments of optimism and happiness…

To create value and make a difference.

Our Vision

Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.

People: Be a great place to work where people are inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.

(The Coca cola Company website)

Organization structure and Span of Control

All organizations have some form of more or less formalized structure that is the framework

for getting things done.

Structure is the pattern of realtionships among position in the organization and among members of the organization. Structure makes possible the application of the process of management and creates a framework and creates a frame work of order and command through which the activities of the organization can be planned, organised directed and controlled. (Mullins 2005)

According to (Amstrong 2009:365)Organizations vary in their complexity, but it is necessary to divide the overall management task into a variety of activities, to allocate these activities to the different parts of the organization and to establish means of controlling, coordinating and integrating them. The structure of an organization consists of units, functions, divisions, departments and formally constituted work teams into which activities related to particular processes, projects, products, markets, customers, geographical areas or professional disciplines are grouped together. The structure indicates who is accountable for directing, coordinating and carrying out these activities and defi nes management hierarchies – the ‘chain of command’ – thus spelling out, broadly, who is responsible to whom for what at each level in the organization.

Mechanistic vs Organic structures

Mechanistic

Organic

High formalisation

Low formalisation

Narrow span of control

Wide span of control

High centralisation

Low centralisation

Hard change

Easier to changeEasier

We can say Coca-Cola Company’s structure is a tall structure, a hybrid of both mechanistic and organic models. The organization has a more centralized structure, however in recent years there has been a movement towards decentralization for easy managemant in regions. The central point of The Coca-Cola Company is on responsiveness. The complex integrating mechanisms are characteristic of an organic structure. The surveys and interviews used by the company allowed information to flow from the bottom-up, and the intranet allows for information to be exchanged laterally. According to surveys done it have make the Company to pursue simplification and standardization (The Coca-cola Company Website). Centralization and high standardization are associated with a mechanistic structure.

2.2. Span of Control

Span of Control arises in line authoority and refers too the number of subordinates who report directly to a given manager or supervisor. (Mullins 2005)

If the span of control is too wide,its difficult to supervise the subordinates effectively and this places more on the manager.

The Coca-Cola Company currently employs approximately 92,800 employees up to december 2009. According to a general details obtained from the company’s website, there are at least 5 hierarchical levels at the corporate level. Eg there is aboard of Directors, Operating group leadership and Functions leadership.

This span of control seems slim for the CEO of such a large organization. The CEO is also a member of the Senior Leadership Team. This team consists of each head of the eight operating groups abovementioned, and also has other top executives in areas like innovation and technology and marketing. Although there are only six people that answer directly to the CEO, the CEO is able to receive input from a wide variety of divisions because of this leadership team. Since the team is comprised of members from various divisions, the CEO will be able to obtain a wide variety of information. The move to decentralization has caused structural changes for the Company.

Generally, The Coca-Cola Company does a good job of managing its hierarchy of authority. Considering they have a tall structure, they are still able to keep to some extent more organic style of management, allowing them to be more flexible to changing conditions. The CEO and CFO both have six people that report to them.

Human Resource and Management Practise

In this chapter we are going to discuss the Human Resource planning, recruitment and selection, Human Resource development and Training.

3.1. Human Resource Planning

Human Resource planning is the process of systematically forecasting the future demand and supply for employees and the deployment of their skills within the strategic objectives of the organization. (Bratton and Gold, 2007)

3.2. Resourcing

Recruitment is a process of getting a pool of capable people to apply fro employment to any organization. It can also be referred to as searching for and obtain potential qualified candidate for a required position.

Recruitment of employees in Coca Cola Company follows their rules and regulations to ensure they have got the right candidate who will fulfil the mission and vision of the company.

The company advertise the post in the Newspapers and on their website and shortlist the candidate who meet the requirements. The Management team interview the candidates and select the qualified candidate.

Also the company promotes the individual whose performance is good according to his skills and experiences.

Outsourcing

Sometime Coca Cola Company is using some other recruitment agent/organization to advertise and Interview the candidates for them.

3.3. Training and Development

Cocacola employees are set through a formal training program in different aspect. Most of it their training involves diversity education. In this they focus on minimizing differences and amplifying, valuing each other and respecting to help get better results. The Coca-Cola Company believes that this training helps to creates a work environment that values diversity and power employee commitment, and improves productivity.

The Company also uses a lot of team training. This team training allows new employees learn how to respond to certain situations and to get to know one another. The organization also provides all new hires with guidelines on conduct and employee involvement in the political process in the business code of conduct. This code is communicated through orientation of new-hires to ensure all employees will conduct themselves with high degree of honesty and integrity that governs the company’s culture.

3.4. Performance and Motivation

Performance Management refers to the set of interconnected practices which are designed to ensure that a person’s overall capabilities and potential are appraised, so that relevant goals can be set for work and development and through assessment, data on work behaviour and performance can be collected and reviewed. (Bratton and Gold, 2007)

By training employees and to get the workers engaged and feellike they are the part of the company. Salesmen are getting percentages of their sales which make them work hard to ensure they are getting more.

3.5. Management System and Policies

Management system refers to what the organization does or a proven framework to manage its processes, or activities, so that its products or services meet the objectives it has set itself, such as satisfying the customer’s quality requirements, complyin with regulations, or meeting environmental objectives.

Governmental Regulation

Our Company is required to comply, and it is our policy to comply, with applicable laws in the numerous countries throughout the world in which we do business. In many jurisdictions, compliance with competition laws is of special importance to us, and our operations may come under special scrutiny by competition law authorities due to our competitive position in those jurisdictions. (Annual Report 2010)

The Coca cola company follow the rules and regulations of all countries which its operates.

3.6. Team working

Coca cola company people are working as a team. They are saying their people are working as a global Team

Our company is built around two core assets, its brands and its people. That’s what makes working here so special. We believe that work is more than a place you go every day. It should be a place of exploration, creativity, professional growth and interpersonal relationships. It’s about being inspired and motivated to achieve extraordinary things. We want our people to take pride in their work and in building brands others love. After all, it’s the combined talents, skills, knowledge, experience and passion of our people that make us who we are.

Our 92,800 associates around the world live and work in the markets we serve — more than 87 percent of them outside the U.S. In this geographically diverse environment, we learn from each market and share those learning’s quickly. As a result, our Company culture is ever more collaborative. From beverage concept and development to merchandising, our associates are sharing ideas across departments and markets in new ways. Consequently, our associates are increasingly enthusiastic about their work and inspired to turn plans into action. (The Coca cola Company Website)

3.7. Management of Change

Change management is defined as the process of achieving the smooth implementation of change by planning and introducing it systematically, taking into account the likelihood of it being resisted. (Amstrong 2009:424)

Types of change

There are three types of change: strategic, operational and transformational.

Strategic change

Strategic change is concerned with broad, long-term and organization-wide issues involving change. It is about moving to a future state that has been defi ned generally in terms of strategic vision and scope. It will cover the purpose and mission of the organization, its corporate philosophy on such matters as growth, quality, innovation and values concerning employees andmcustomers, competitive positioning and strategic goals for achieving and maintaining competitivemadvantage and for product-market development. These goals are supported by policies concerning marketing, sales, manufacturing, product and process development, fi nance and human resource management.

Strategic change takes place within the context of the external competitive, economic and social environment, and the organization’s internal resources, capabilities, culture, structure and systems. Its successful implementation requires thorough analysis and understanding of these factors in the formulation and planning stages. (Amstrong 2009:424)

The coca cola Company are as other many comapanies always forced to change due to competition from their competitors like pepsi, also some environmental issue make the company to change their way of Manufacturing and changing they bottle printing method which were claimed to destroy the environment.

Operational change

Operational change relates to new systems, procedures, structures or technology that will have an immediate effect on working arrangements within a part of the organization. But its impact on people can be more significant than broader strategic change and it has to be handled just as carefully. (Amstrong 2009:424)

Cocacola companies always changes the systems, procedure and Technology soas to satisfy its customers need.Like changing their bottle type, addition of more product etc.

Transformational change

Transformational change takes place when there are fundamental and comprehensive changes in structures, processes and behaviours that have a dramatic effect on the ways in which the organization functions. (Amstrong 2009:424)

This happen when there is a change in country policy and reguations which force some structure change.

Some other management of change issues is Coca-Cola decentralised its organisational structure by cutting half of the staff at its Atlanta headquarters and moving the regional chieftains closer to their local markets. In India, decision making has been moved further down to different areas of that diverse country.

Other is Company uses the incremental method in decision making. Especially in the last 20 years or so, the board was extremely conservative and looking to avoid any drastic changes. However, recently they used the unstructured decisionmaking model. This was demonstrated in 2004 through the process that CEO Isdell used when creating the company’s Manifesto for Growth when the company show the sign of decline. Rather than modifying what the company has been doing, the company surveyed about 400 of their top managers what they thought was problematic in the company. Based on information in the surveys done, 150 leaders in the company met to create solutions for the problems. The alternatives were analyzed thoroughly and all final decisions were made by groups.