Case Study of Strategic Management in the Coca-Cola Company
Coca-Cola has been founded since 1886 in Atlanta, United State. The Coca-Cola Company has produced more than 10 billion gallons of syrup. But Pemberton, he died in 1888 without realize the achievement of the beverage he had created. In year 1888-1891, Asa Griggs Candler protected rights to the production for a total of about $2,300.
Asa G. Candler, a natural born salesman, transformed Coca-Cola from an invention into a business. He gave away coupons for complimentary first tastes of Coca-Cola, and outfitted distributing pharmacists with clocks, urns, calendars and apothecary scales bearing the Coca-Cola brand. By 1895, Candler had expanded the product into Chicago, Dallas and Los Angeles. In year 1894, a Mississippi businessman name Joseph Biedenharn became the first to fill Coca-Cola in bottles. He didn't realize then that the future of Coca-Cola would be with handy, bottled beverages customers could take anywhere. In five years, two Chattanooga lawyers, Benjamin F. Thomas and Joseph B. Whitehead, secured restricted rights from Candler to bottle and sell the Coca-Cola.
In 1886, Coca-Cola® brings refreshment to patrons of a small Atlanta pharmacy. Now well into its second century, the Company's goal is to present magic every time someone drinks one of its more than 500 brands. Coca-Cola has fans from Boston to Budapest to Bahrain, drinking brands such as Ambasa, Vegitabeta and Frescolita. In the furthest comers of the globe, you can still found Coca-Cola. Coca-Cola is dedicated to local markets, paying notice to what people from special cultures and backgrounds like to drink, and where and how they want to drink it. With its bottling partners, the Company reaches out to the local communities it serves, believing that Coca-Cola exists to benefit and refresh everyone it touches.
Vision and Mission
Cola-Cola Company Roadmap starts with their mission, which is long-term. It declares their function as a company and serves as the standard against which their weight of action and decisions. The mission of Coca-Cola Company is to refresh the world, to inspire moments of optimism and happiness, to create value and make a difference.
Vision serves as the framework for Coca-Cola Company Roadmap and guides every part of the business by describing what they need to achieve in order to continue achieving sustainable quality growth. People, be a large place to work where people are encouraged to be the best they can be. Portfolio, bring to the world a portfolio of excellence beverage brands that expect and persuade people’s desires and needs. Partners, nurture a winning network of customers and suppliers, together they create communal, enduring value. Plane, be a responsible resident that makes a special by helping build and support sustainable communities. Profit, maximize long-term return to shareholder while being aware of their general responsibilities. Productivity, be a highly successful, bend and fast moving organisation.
Coca-Cola companies have a very narrow products range which are Coca-cola, Sprite and Fanta. Those products are sold in the market with a difference size of bottles which are 250ml, 300ml, 1liter and 1.5liter pet.
Working as a Global Team
Coca-Cola companies built around two core assets, its brands and its people. That's what makes working at Coca-Cola so special. They believe that work is a place that the employer need 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. They want 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.
Coca-Cola Company has 92,800 associates around the world live and works in the markets. They serve more than 87 percent of them outside the United State. In the geographically diverse environment, they learn from each market and share those learns quickly. As a result, Coca-Cola Company culture is ever more collaborative. From beverage concept and development to merchandising, Coca-Cola associates are sharing concept across departments and markets in new ways. Consequently, Coca-Cola associates are increasing enthusiastic about their work and inspired to turn plans into action.
With a portfolio of more than 3,300 list of product, from diet and regular sparkling beverages to still beverages such as 100 percent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages, Coca-Cola Company variety spans the globe.
Planning is the process of setting goals, developing strategic, outlining tasks and then deciding how best to accomplish them. As a result of the planning process, everyone in the organization knows what should be done, who should do it, and how it should be done. It is a detailed programmed regarding future course of action. Plan also a blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals. It defining goals and then determining the activities and resources required to achieve them. Planning can be difference of type, an organisation can classify some of the important types of plans which are the financial and non financial plans, formal and informal plans, specific and routine plans, strategic and functional plans, long range and short range plans and the last administrative and operational plans. Planning function is important to the managers, managers need to plan so that the worker’ activities are consistent with the organisation goals and the correct type and amount of resources also can be acquired. A planning function requires information, judgment and decision making.
According to Yehezkel Dror, 1974, he says that planning is the process of preparing a set of decision for action in future, directed at achieving goals.
According to Professor James Stoner, 1997, he says that planning is of establishing objectives and appropriate courses of action before taking action.
According to Archibugi, 2008, say that planning is a method of making rational decision; a method that is, to some extent, common to many areas.
For a Coca-Cola company, planning is very important to them because according to Joel Ross and Michael Kami theory, they think that an organisation without the strategy planning is like a ship without a rudder, going around the circle. It’s like a tramp that is no place to go to. Strategic planning, implementation and formulation are the core management function. One of the biggest factors for determining whether the organisation performs up to its potential or not is the extent to which the management team performs, the strategy making and strategic implementing function. Coca-Cola organisation thinks that only the good strategic and good implementations are the most trustworthy proof of good management. A strategic plan is the bridge of the future, which an organisation uses to lead from what it is to what it envisions it can become.
Planning also can be a future course of action. Planning is concerning itself with look forward into the future and determining the vision, mission and objective of the project or program. Vision is that provides the overall frame of reference within which mission statements are written and goals selected. It also is the desired future state of organization. According to Peter F. Drucker, objectives are essential in all the key areas where performance and results directly contribute to the growth and survival of a business. The vision of the Coca-Cola organisation is to become the best and the biggest anchor bottler in the world. They mission are to refresh the world, to create value and make a difference everywhere they engage. In the Coca-Cola organisation, most of the goals setting and planning activities are handling by the top management. The top manager had set three objectives for the Coca-Cola organisation. The objectives of this company can be classified as the strategic goals, tactical goals and operational goals. Strategic goals are statements of what an organisation wish to achieve over the period of the strategic plan likes over the next years, next five years. The strategic goals are considered when company is thinking of the long-term objectives. This strategic goal is decided by the top management with consultation by the parent company head quartered at Singapore. The top managers set this goal to make sure that they are in line with the changing environment, every year they have to review in the annual meeting. They have to make sure the company continue provide the quality products to the valuable customers, to project an outstanding corporate and try to satisfy the customer through extra ordinary service and an excellent service along with the complete tactical and operational support. The managers also need to select and retain in professional people for the organisation. Another, the tactical goals which are define the outcomes that major divisions and departments must achieve for organization to reach its overall goals. The top managers of the Coca-Cola Company on an annual basis devise these goals together with the consultation of the lower level employees. After that, each departmental director have to subdivide the annual tasks on the quarterly or monthly basis to have a proper check to make sure that these objectives are achieved mainly through the marketing after the annual tasks is given. For this year, managers need to ensure that Coca-Cola goals have to increase the revenue by 20% of the compared last year and increase the total retail customer around 10%. Coca-Cola also has to increase the market share by 5% and 30% of the reactivate the discounts of customers. Last, the operational goals which is that the managers set to ensure that each employees can assigned its goals and told what are expected of him or her and then he or she is evaluated on the basis of certain rules and regulations followed evenly by the company. This operational goals may arise some issue which is some fresh salesman cannot reach their goals so the managers need to ensure that the salesmen can find the new customer, retain existing one and bring back the discontinued accounts by giving them some training.
In addition, planning is vital in making management decisions. Decision making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker and it is the process of sufficiently reducing uncertainty and doubt about alternatives to allow a reasonable choice to be made from among them. A bad decision making will have a bad result so a good manager must good in decision making, they have to must sure that every decision they make is good for the organisation. The decision making process in the Coca-Cola company is centralized. There are six step in the decision making of the Coca-Cola company which are recognize need to make decision, generate alternatives, assess the alternatives, choose among alternatives, implement choose and last the learn from feedback. In Coca-Cola company, decision which always takes by the top manager can related to the packaging positioning, trade discounts, advertisement, price reductions and distribution.
So as a conclusion of planning, planning is the first tool of the four functions in the management process. It is rightly said “Well plan is half done”. Compare to the theory and real practice, both of them are concerning with the future action which is how to achieve the organisation’s goals with those objectives that are making. The difference between a successful and unsuccessful manager lies within the planning procedure. So for me, a successful manager should have a planning skill for achieve the organisation’s goals.
Organising is one of the four managerial functions which focus on allocating and arranging human and non-human resources so that the plans can be carried out successfully. It also means constructing an organisational structure that is compatible for the accomplishment of the agreed purposes, lines of authority, and responsibility defined, and a system of rules and procedures which lead the performance of subordinates lay down. Organising is how the plan will be carried out so the goal is achieve. Once a plan is planned, the next step in the progression is to agree on which individuals will need to be include, who will be in charge, who will keep individuals held responsible, and what resources will be necessitate, who will be in charge for getting those resources, who will keep an eye on the progress? Those phases are all part of the organising process in the project. Hence, organising is next to planning because once the plan is planned, the next natural move in the progressions is to get organised so the plan comes to fruition. Organising is also the talent of receiving people who do not work for you to realise things. As a conclusion, organising refers to the categorising of activities and possessions in a reasonable way.
According to Stephen P. Robbins and Mary Coulter, ‘organizing’ is “determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made. Thus, organising refers to critical dynamic feature such as what tasks are to be carry out, who has to carry out them, on what basis the tasks are to be grouped, who has to report to whom and who should have the authority to make the decisions.
L.A. Allen defined organizing as “the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.” Thus, organising is a management function relating in assigning duties, grouping tasks, delegating authority and responsibility and allocating resources to accomplish a specific plan in a competent manner.
According to Chester Barnard, “Organizing is a function by which the concern is able to define the role positions, the jobs related and the co- ordination between authority and responsibility.
Base on the basis functional approach, Coca-Cola Company is divided into different departments in the real practice. Individuals who possess the same on the basis of common skills and work activities are grouped together. This method helps the company in attaining the economies of scale through high excellence of problem solving and lesser needs of guidance of the subordinates. Coca-Cola Company is leaded by the General Manager. There are a total of five mainly departments at Coca-Cola Company which are Production department, Industrial Relation department, Sales and Marketing department, Human Resources department, and Finance and Accounting department. Each department has their own functions and responsibility toward the company. Production department is in charge for the overall production of the Coca-Cola Company. Industrial Relations department is in charge for handling with problems connected to the operational surroundings of the staff and the matter linked to the labor unions. Sales and Marketing department is accountable for the producing the goods obtainable in the market and to deal with the problems associated to the advertisements of the goods. Human Resources department is in charge for looking the proficient pool of workers, choosing the professionals and make them pleased so that they should remain faithful to the company. Finance department deals with overall costing and pricing of the goods. They also deal with the trade in correlated concern of the company. Accounting department lend a hand to the sales department in making bill of lading and payroll entries.
Example hierarchy of Decentralisation for Coca-Cola Company:
Figure : The departments under the General Manager of Coca-Cola Company.
2. Work Specialisation
Coca-Cola Company each executive is made in charge for only a specific role that he or she expertise as the work specialisation is important. Each salesman is encountering different type of individuals as there is no tediousness or repetitiveness. The job is tough and promotions are based on performance.
Authority and Responsibility
The executive of Coca-Cola Company receives report from the Salesman. These Sales Managers are in charge for the performances of the salesmen which they need to provide them timely comment. Assistances are requiring to be provided by Sales Manager at any time and it is a problem connected to the performance of the staff. The administrators keep an eye on an on-going basis toward these salesmen which serves as an efficient managing mechanism. The staffs have a lot of power, liability and information relative to the job that they are responsibility Nevertheless, every part of the information and authority relative to the work is provided by their individual supervisors. These procedures are the similar in the other subdivisions as well.
Delegation and Accountability
Coca-Cola Company each executive is made held responsible for the actions of his or her underlings. An accurate advices and assistance is given at time to time to attain the purpose by the particular executives. Every supervisor is responsible for motivating their juniors so as to increase the effectiveness and efficiency of the staffs apart from the delegation. Human Resources department lend a hand staff so they could recognise their potential and uses various technique to encourage them. In return, they offer the most excellent to their supervisor. Thus boost their performance, excellence of work and consumer satisfaction.
Span of Control
The span of control is the amount of staff who report directly to a prearranged Coca-Cola Company supervisor. It is most excellent to have a minimum of 3 staff and a maximum of 5 staff reporting to their supervisor. This low pattern is as a result of the actuality that the organisation is a perpendicular and there are various individuals having different works to do so. When there are more than 5 individuals, it is hard to be managed. Hence when there is an utmost of 5 people, the possessions and staffs still can be supervise in an effective manner.
To the extent that resources allocation is concerned, the executives of each department in the Coca-Cola Company have the power to exploit the organisational assets whenever the assets are required for the purposes of their department. Special permission has to be approved by other superintendents if these assets belong to other superintendent. These resources may be capital, work force or other.
Organising the Human Resources
When there are required positions in Coca-Cola Company and not on reserve basis, employment will be performed. The employment begins whenever a superintendent wants a salesperson. Foremost, it will send to be agreed by the General Manager of Coca-Cola Company before sending it to Human Resource department, HR.
Example of the recruitment process:
Human Resources department will verify from their Ex-Employers about the behavior and the cause of leaving.
If the candidate is selected
Education requirements and
PersonnelAvailable job are make public within Coca-Cola Company
Human Resources department look for its data bank
Selection is based on several decisive factors for various titles
Example, for salesman
Candidate is asked to turn up for an interview
Candidate is asked for any references, which can make.
If no suitable candidates for a specific profession
If no suitable candidates, then publicise in the newspaper
If pass the aptitude test
Carried out by the sales and Human Resources department
Easy mathematics and common knowledge is tested. Familiar with how of English is also essential
As a conclusion for organising, an organising is the second function in the managerial functions. When the organization is well organised, it can be said that it is in the best conditions. Compare to the theory and real practice, both of them are linked to allocating and arranging human and non-human resources so that plans can be carried out successfully. The difference between a successful and unsuccessful organisation lies within the manager of the company. So as for me, to be a successful organization, proper organising is essential.
Leading means the process of influencing others to engage in work behaviors that would lead to the achievement of goals. It can be said, it is the third function in management. This function has a unique characteristic as compared to other functions, employing the humanistic perspective but require less systematic process for analysis as other functions. A leader must lead his subordinates to achieve goals more efficiency. Due to business environment, leaders are constantly on the change. Today, a manager must be able to make a quick and more accurate decision, either in consensus building or teamwork environment. Leadership is a complex process in which a person influences others to accomplish a mission, task, and objective and directs the organization in a way that makes it more cohesive and coherent. Leadership also can be defined as the ability to influence a group towards the achievement of goals. To lead subordinates successfully, the manager must provide directions and leadership to his staffs, to perform the essential task within the required time frame, and with the most efficient use of resources. Leadership theory are include trait theory (leadership idea that try to identify characteristic that differentiated from non- leaders), behavioral theory (identified behaviors that differentiated effective leaders from ineffective leaders) and contingency theory (leaders should be flexible and adjust to change in the environment). In behavioral theory, it include autocratic, democratic and laissez- faire.
According to Alan Keith, 2002, Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.
According to Tom De Marco, Leadership needs to be distinguished from posturing.
In Coca-Cola Company, other than the three of management functions, leading is important. The organization places the general manager on the top of the hierarchy. The general manager takes the responsibility of deciding major administrative decisions in accordance to the company’s policy and operations. He will not be involved in the operations aspect directly. Departmental managers are tasked with leading and paving the direction for their subordinates. These leaders concentrate on two main parts of the operations. First, being co-ordination with each other in the operations, so as to increase the business volume. Second, employees are encouraged to give new ideas on increasing customer satisfaction. According to Herbert Spencer , that the time times produce the person and not the other way around. Coca-Cola believes they are practicing a democratic and laissez- faire style of leadership which are behavioral theory, through delegation and participation of employees. Since the sales and marketing team are dependent on one another, the team management concept is applied.
The managers are very supportive of the practice of having subordinates treated in a fair and good manner. Employees are treated as part of the family. By encouraging them to participate in group discussions, using open communication system, employees are not left out in decision makings. So it can let employees always relax whether they are in work and also let them feeling that they are not just employees only come for work. They will feel comfortable as they are friend or a member of family either with superior or workmate. There have an highly open environment. Subordinates can show their opinion and feeling to the manager. Managers also will encourage employees participate to the decision- making so they will become participative so can make use for the group discussion. According to Victor Vroom, in collaboration with Phillip Yetton(1973) and later with Arthur Jago(1988) developed a taxonomy for describing leadership situation, taxonomy that wan use in a normative decision model where leadership styles were connected to situational variables, defining which approach was more suitable to which situation. Monetary and non-monetary rewards are used to entice a higher participation, especially from the lower level employees. The company gives high priority to motivate employees, adopting the policy of promoting employees within the company, based on performance, rather than recruiting a new staff. Achievable objectives and targets are set, which enables most employees to achieve and perform well. Paying wages that are higher than the industry’s standard is also a part of the motivation plan. There are also various in-house campaigns and competition to stir up employees’ motivation. Motivated employees, gives important and timely feedbacks, like job or personal problems, which managers could help to solve. To further motivate employees, the company places importance to the working environment and goals achieved. The employees will get the commission if they sell the products in bulk. The commission is base on the performance basis of subordinated. So, subordinates not only will get the salary but also commission. This can support and motivate employees to work hard and achieve the goals successfully more efficiency. This way is very objective and are perceives achievable by most of employees. Beside that the competition between employees can motivate them, other than this compensation plan also is a motivating factor as paying more than the industry average. A good working environment and a challenging milestone are a most important factor in employee’s motivation. Managers play a vital role to solve any problems of subordinates whether is is job related or personal problem. According to Robert Blake and Jane Mouton in 1941, the five different leadership style of managerial grid model is based on the leader’s concern for people and their concern for goal achievement. They also will give employees timely feedback about their unsatisfied. In the function of leading, communication is a major factor in human relationship. With the contingency theory, the manager will be flexible and adjust to change according to situation.
Information sharing among employees is highly encouraged. Top management seeks input and feedback from lower ranking employees, before implementing new company policies. The general manager is accessible to all employees at any time, if they have any grievances or suggestions. Communications between departments can be done formally or informally. The company uses grapevine to get employees view about the management.
At Coca-Cola, the top management ensures the culture of the organization, which has its values formally documented and communicated to all employees, is adhered to. To ensure the successful implementation of the rules and values, the top management adopts the lead by example approach, when administering the policies. Employees’ behavior is reviewed periodically.
So, as conclusion for leading, leadership is "organizing a group of people to achieve a common goal". To achieve the goal, leadership of manager are important to leading subordinates to exert high level effort for successful.
Every manager whether in small or big firm needs managerial skills to lead the company. The important managerial skills have four important skills which is planning, organizing, leading and controlling or managing. All these skills are related to each other. Without this four skills manager are not being able to lead the employees in order to achieve organization vision, mission and goal. Controlling is once of the important as the organization will not substined without it. Manager need controlling to encourages others employee to be creative, innovative and aware toward their jobs, beside that managers identify any opportunities for change and development to upgrade the quality of employees and also their product, before it drives change the manager scopes and plan it carefully. Other than that manager used controlling to manages other employees through the change process to make sure it run smoothly, manager also must takes account of all stakeholder issues that happen to them to make a clear understanding and try to avoid from occurs problem.
Controlling is one of the activities involve in management, controlling also one of the managerial skills. Controlling is the process of regulating activities to achieve organizational goals.
According to EFL Breach, ‘Control is checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance.’ Other than EPL breach, other opinion according to Henri Fayol in 1916 Control consists of verifying whether everything occurs in conformity with the plan adopted, the instructions issued, and principles established. Its object is to point out weaknesses and errors in order to rectify them and prevent recurrence.
According to Harold Koontz, Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished. As for Stafford Beer, management is the profession of control.
Controlling is done through the evaluation, which is based on the very objective basis. Some criteria are fixed in advance, if these criteria are not met when the employees are asked and evaluated for the reasons and corrective actions are taken by the respective managers. All this is control by manager to make the process run without problem. Different departments have different criteria, different reporting and controlling systems. The reporting, evaluation and control system of sales departments is Sales Person’s reporting system and Sales Person’s Evaluation System. Controlling is important to manager because manager used it to check the error and made a correction so the deviation standard can be achieved. This managerial skills is been using by the well known beverage soft drink which is the Coca-cola company.
Sales Person’s reporting system is where the employees give a daily report of his done activities to market developer of his area, sales person also are free to ask for any kind of assistance from the market developer to help him doing the activities. Every sales person will be giving a punch card which will record his arrival and departure time. They also will be given a route card which he must fill out to make sure the details about the time spent of visit the outlet, times during the traveling and it include the names of the loaders and salesperson time in and out of the vehicle. This will make the progress running smoothly and managers are able to control. Apart from this the manager also will inform about the next days order to be loaded in the truck to be deliver, this also will tell the manager the sum of sales by the sales person according to the brand and the size of the product.
Sales person evaluation system is which the company help to promote their employees to the higher level of the firm. The evaluation also help to increase salesperson motivation to work hard and get the promotion or the monetary rewards which is given not only to the best seller but it also has been given to the best market developer and also the best sales manager of the year. Performance is measured on the basis of the achievement of the target which is set and communicated at the beginning of the year to each of sales manager, quarter to every each market developer and to each sales person on every month. This performance is evaluated according to the basis of performance development plan, it also development plan to the sales person on the call slips, route call, call completion, effective and productive call, attendance, growth in sales, market development and the punctuality of the salesman.
As for the coca-cola company, the manager do organizational performance appraisal on the process which generate valid information about employee work effectiveness for the purpose of making informed human resource decisions. Organization must evaluate employee performance for a number of reasons. First, the employees need to understand the behavioral requirement of the job. Other than that employees work is evaluated for its contributions to company goals. Employees also need to know where they stand with the organization in terms of their performance, they also motivate to do a good job is increased by the performance appraisal system. Valid information about performance levels of employees should be used to make decisions about salary increased, bonuses and training needs. Beside that employees need a clear understanding of what the firm expects from them in terms of performance. The Coca-Cola Company realizes that a good appraisal system makes organizational processes more effective because managers can use the performance appraisal system as a motivational tool. An effective appraisal system creates many opportunity for managers to interact with their subordinates’ about team performance measures, cycle times, company goals, service quality, and employees career aspiration. If there is no formal and objective performance appraisal system, employees may believe that the firm is unconcerned with treating them fairly, this is why the managerial skills is much important to manager to lead the company and it would not be complete if the manager do not practice all the skills indeed for the company future.
Few managers would question the firms need to assess the performance behaviour of its employee. The process must be produce result which are fair, timely and accurate. The coca-cola management hopes that actual performance and measured performance are the same, but when the focus of measurement is counting the output from operation such as productivity and product, the correlation between actual performance and measured performance is strong. Measuring managerial performance is much more difficult for manager because the results of managerial works are harder to quality. A successful manager is the backbone for the organization to have bright future.
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