The Human Resource Issues Faced By Coca Cola
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Published: Mon, 5 Dec 2016
This assignment will give you an overall idea about human resource issues because Coca-Cola brought 10,000 employees, and thus doubling its workforce. In such conditions, as stated, Coca-cola faced complexity with unnecessary employees and, resignations and sacks. Under these circumstances HR management needed to conduct staff appraisal to setup objectives to achieve company’s goals.
1a) Critically appraise varied human resource management perspectives and their impacts on the development of business strategy.
Three varied human management perspectives are Universalist approach, fit or contingency approach and resource-based approach.
Positive impacts of the Universalist approach are: not dependent on competitive strategy of organization, based on four HR policy goals (strategic integration, commitment, flexibility and equality), clarify organisational goals, considers stakeholder’s influence on employee’s performance. The negative impacts are: the goals are often unachievable, internal consistency difficult due to contradictions, some elements lead to confusion.
Positive impacts of the fit or contingency approach are: provides a simple framework showing how selection, appraisal, development and rewards can be mutually geared to produce required employee performance. Negative impacts of this approach are: does not address what to do if unable to produce required employee behavior and performance, assumes employees will behave as requested.
Positive impacts of the resource-based approach are: it’s concerned with the relationships between internal (HR) resources, strategy and firm performance, focuses on achieving competitive advantage using human capital, focus on behavior, skills, knowledge, attitudes and competencies, involves measuring, reporting and managing human capital, organisation can ‘loan’ human capital. Negative impacts are: requires coherent framework in order to decide on the measures, and refers to people as ‘human capital’.
1b) What are the current situations/difficulties regarding these issues in Coca-Cola and Dabur companies?
Coca-Cola changed their pay rate in line with other Indian companies, thus meaning it was dependent on their competitive strategy. This does not follow the Universalist approach as it contradicts their decision. Coca-Cola instead adapted the resource-based approach; they focused on achieving competitive advantage by investing in developing human capital. The fact they concentrated significantly on human resource development satisfied several criteria of this approach.
Dabur to some degree maintained the universalist approach as it provided clarity of goals (the three-fold recommendations), and it recognized the majority stakeholders’ (the Burman family) influence in creating a ‘family-oriented’ working environment for its employees. Dabur met the criteria of the fit or contingency approach by aiming for consistency across workforce; recognizing it had to give rewards to junior sales officers and representatives for achieving target, they allowed certain employees to club their leaves and enjoy a vacation.
1c) How can they improve this situation?
The best way for Coca-Cola and Dabur to improve their situation was to meet more criteria for any certain approach. E.g. Coca-Cola should concentrate on the resource-based approach as it has already met some of its criteria, whereas Dabur should concentrate on the fit or contingency approach as it has already met a lot of its criteria. By maintaining and meeting the criteria of any one approach both companies can hope to be in a better situation.
2a) Critically analyse the importance of alignment between an organizations corporate strategy and objectives, and its human resource strategy.
Each of the five steps to the alignment of an organisation’s corporate strategy and objectives, and its human resource strategy, contribute and are of significant importance:
1. separation – no relationship at this stage, thus unimportant.
2. fit -recognises importance of people in achieving organizational strategy.
3. dialogue – recognises need for two-way communication and some debate.
4. holistic – recognises people as the key to competitive advantage rather than a way of implementing organisational strategy.
5. HR Driven – places HR strategy in prime position.
2b) Then by considering the case study compare real activities about alignment between an organizations corporate strategy and objectives in Coca Cola and Dabur with best practice (theoretical view) to identify what the difficulties are regarding this issue in these companies?
Coca-Cola began by recognising human resource’s significance in the restricting process. This led to appointment of managers in the six regions, and an area general. They then recognised the importance of two communications by ensuring the Regional General Managers report to the VP, who in turn report to the CEO. Coca-Cola then took the fourth step by recognising their employees as the key to competitive advantage by bringing together employees from different work cultures and value systems. Their final step was to put the employees in prime position by taking a strategic level decision to turn itself into people-driven company.
Dabur used HR strategy as an important part of its restructuring process. It started by recognising the importance of people in achieving the organisational strategy by introducing employee friendly initiatives like annual sales conferences. It then recognised two-way communication by introducing an interactive newsletter. It further recognised employees as key to competitive advantage by commissioning consultants to formulate an employee stock Option Plan. To put HR in prime position they decided to extend the scheme.
2c). How can you solve these problems?
Coca-cola’s problems were the number of employees leaving the company. By better control of the unrest among employees, and by other means such as not downgrading the centres, would have allowed Coca-Cola to avoid this crisis. Problem was Dabur didn’t use HR strategy as significantly. If HR strategy played a bigger role in the organisational strategy it would have been more beneficial to the Dabur.
3a). Judge the required processes of assessing the effectiveness of a given human resource strategy and its impact on overall corporate strategy.
In assessing the effectiveness of a HR strategy we use the below issues: the HR approach by reaching the corporate strategy objectives. We evaluated the impact of human resource (HR) managers’ capabilities on HR management effectiveness and the latter’s impact on corporate strategy. Effectiveness is associated with capabilities and attributes of HR staff. We also found relationships between HR management effectiveness and productivity, cash flow, and market value. Findings were consistent across market and accounting measures of performance and with corrections for biases.
3b). What are the existing condition/difficulties regarding this issue in these companies?
Coca-Cola HR carefully revised plan to achieve goals, or developing/carrying-out planned strategies. Coca-cola decreased payment and additional facilities for the employees. Virtually they compact the needless extra facilites. At the first phase Coca-Cola HR strategy could not develop leadership and management released a flow of records which led the company to loss with extra outlay.
Darbur has a people-leaning work culture, therefore has no proper HR development to target. The evaluation of companionship earnings and expenses is not vigorously monitored it was a stride following its competitors. From the case study we could not find any loot system from the Dabur before restricting. According to information given Dabur is a family business so the relation between family members are okay but the relation between employees and higher management might be problematic.
3c) How can these companies improve their situation regarding this issue?
The companies need to reform their organization and make sure that changes need to be accepted by people. The concern is Coca-cola need a stable leader. Because need of business chiefs will affect company’s direction and profits. The rewards are incentives, oversee operation etc. Also, employee encouragement needed for better outcome.
4a) Argue the appropriate human resource strategies for organizations facing mergers, acquisitions, strategic alliances and joint ventures.
Mergers and acquisitions (M&A) and corporate restructuring are a big part of the corporate finance world. We have little information regarding these events. To understand and study the authors mainly developed a connectional framework. HR management gives a border process of leaning model. This model represents similarities and complements of merging companies. The HR strategies are different for each company, and also depend on circumstances. The merger, acquisition, strategies and joint venture take place because of four motives. Those are enlargement and synergy. Actually human resources management will study both motives of these companies. They will decide whether they will merge or acquisition a company for faster growth synergy, if these companies rapidly increase. We can say using the change in technique. In some company merger or acquisition planning, we need to understand what we are getting into (Do I go ahead? Adjust the price? Walk away?). This is your one shot in understanding the business before closing the deal. You also want to reduce any post-acquisition surprises (what will we need to work on after acquisition; integration issues, personnel issues, obsolete equipment requiring replacement, warranty exposures, major contracts, and customer’s base). An important key to remember is “It’s not only the numbers!”
4b). After that by relying on the given information in the case study compare current situation of HR strategies in the occasions of mergers, acquisitions, strategic alliances and joint ventures in Coca Cola and Dabur with best practice (theoretical views) to detect possible difficulties regarding this issue in these companies?
In the case study Coca-cola used the HR management strategy. Coca-Cola merged with four bottling companies. Coca-cola used growth and synergy for these merges. This means harder HR issues because of merges, Coca-Cola brought 10000 employees, meaning doubled work force. In this condition Coca-cola faced complexity with unnecessary employees and, resignations and sacks. Under these circumstances HR management needed to decrease outlay. With too much labor they cannot be so, they discharge people so it threats an unstable situation.
4c). How these problems can be solved?
As of the company outlook, if they want to reduce employees, then they can do so, but from employee’s view these dismissals affect their families. So companies could consider the employee’s experience with them. By providing compensation for dismissal there is fairness (HR management has to balance both side).
5a) Appraise different methods of employees’ selection.
The different methods of employees’ selection are as follows:
Positive sides of interviews are: have the chance to see how the person dress, speak, communicate, behave, whether clean or not, and learn their personalities. Negatives are: stressful for interviewees, very subjective, ‘talking is not everything’, unable to explore technical skills, and personality clashes.
Positives are: candidates like them and generally predict job performance accurately. Negatives are: slow process, costly method and not always reliable.
Psychometric tests (test for normal or abnormal personality, ability or intelligence, interests or attitudes) are used along with assessment centres, as it gives a better evaluation than either used alone.
Candidates are put into small scale job situations.
Full Reference checks:
Consider the ‘reference letters’, contact people who recommended applicants, contact applicant’s manager or colleagues, get information from independent assessors.
Positive side: it’s a very good source of information regarding the applicant. But, negative side is that it is useful only if real and true.
Involves analyzing handwriting in relation to human psychology. Positive side: helps understand applicant’s personality. Negative side: based fully on psychological decisions.
5b) What are the current situations/difficulties regarding these issue in these companies?
Coca-cola appointed a new CEO, a VP (Operations), six Regional General Manager. They also appointed Arthur Anderson to inspect accounts in North India.
Dabur appointed a new CEO and 3 vice presidents.
5c) How can they improve this situation?
Coca-cola needs to ensure they hire trustworthy and uncorrupted employees in order to avoid scandals like the one they faced with the North India operations.
As it is the first time Dabur is taking such a step by reorganising their structure, it would be best to hire a professional external recruitment agency as they would have better experience and knowledge regarding hiring employees then Dabur would.
6a) Critically assess strategies for employee deployment, redeployment, poor performance and retention.
Employee Deployment is the number of employees required in each department, time period for which they are required and the skills required. Employee Redeployment is transferring employees from one department/position to another for effectiveness. Poor Performance is mainly due to Lack of Ability (lack of training or resources) and Low Motivation (lack of desire and commitment). Employee Retention is the policies and practices used by companies to stop valuable employees from leaving (mainly because they spend considerable time, effort and money to find, recruit and train employees).
6b) Then by considering the case study compare real activities about “employee development, performance and retention” in Coca Cola & Dabur with best practice (theoretical views) to identify what the difficulties are regarding these issues in these companies?
Coca-cola decided to employ new managers and senior officers, which required Employee Deployment, during their restructuring. They used Employee Redeployment in order to ensure the new 10,000 employees brought from merger were being used efficiently. They tried combating Poor Performance by introducing ‘talent development meetings’, training and foreign internship. But, couldn’t prevent Employee Retention as 40 managers and some senior personnel left.
Dabur used Employee Deployment to employ new senior officers (i.e. a CEO and three Vice Presidents) and restructure their business. Dabur tried to prevent Poor Performance by introducing newsletters for better employee communication. Dabur maintained Employee Retention as they successfully kept hold of employees.
6c) How can you solve these problems?
Coca-cola can solve this problem by preventing Employee Retention by putting in place policies and practices to stop employees leaving. Dabur could be more efficient by using Employee Redeployment.
7a). Assess the relative importance of the creation of the learning organization through self-managed learning, the promotion of intellectual capital and knowledge management.
Learning organization is the organization’s ability to use mental capacity of its members to create the processes that will improve its own. The technical view assumes that organizational learning is about the effective processing interpretation of, and response to, information both inside and outside the organization.
The points below will help understand why the learning organization is important to both companies, they are:
Awareness of new and different perspectives.
Personal growth and development.
Ability to see complexities in making decisions.
Awareness of new options and ability to create options
Companies to thinking about reduce to the work force, as they have double than required.
Sense of career directions.
The promotion of intellectual capital and knowledge management:
Intellectual capital is knowledge that can be exploited for money – making or other useful purpose. The term combines the idea of the intellect or brain power with the economic concept of capital, the saving of entitled benefits so that they can be invested in producing more goods and services.
Enhance productivity through improved creation, access and distribution of knowledge. Promoting changed organization to achieve more effective knowledge management. Coordinating technology and human resource development. The management of the intellectual capital in the knowledge intensive organization might also contribute positively to individual well being, as well argue.
Knowledge management is the first competency that an organization needs to develop for the management of intellectual capital. Knowledge management constitutes the ability of an organization to learn, to remember what it learned, and to leverage what it learned internally and externally. Internally by transferring it to different workers and department. Externally by sharing it with supplier’s distributor’s partners and customers.
7b). What are the existing condition/difficulties regarding this issue in these companies?
There were difficulties in Coca Cola and Dabur. They are: learning organization, intellectual capital, knowledge management.
Difficulties of learning organization: there is no problem with teaching workers presentation skills. Coca cola and Dabur’s scheme did not. Companies thought about reducing employees.
Intellectual capital is more difficult to put a value on, the extent to which it has loyal customers, how it is regarded in the local community and the extent to which it has long term satisfactory relationship with key external agencies. For company recruitment of pupils from the local catchments area might seem an obvious surrogate but it is not a good measure on its own as parents often have no choice.
Difficulties of knowledge management: reports about successful and failed knowledge management initiatives using various IT systems exist, it is important to analyse the reports before defining the requirement of a knowledge management. The following list shows the problems and they are;
Restructuring are a big part of both company, it has to resolve.
System not accepted. Lack of user uptake due to insufficient communication.
Information is not classified properly in knowledge management system.
Using theoretical knowledge for practical problem.
Lack of time and training.
The knowledge distribution system does not make sense.
Knowledge management not integrated into normal work procedures.
7c). How can these companies improve their situation regarding this issue?
Difficulties in Coca Cola and Dabur: negative media reports, heavy investment in India and Japan, accommodation and foreign trips for bottlers. Both companies think about reducing employees.
Hence, we believe the below discussions may help to improve their situation regarding the above mentioned issues:
We must be completely updated on current assignments and accomplishments of employees. If employees do not have own initiatives to work, then HR consultants need to review the situation with the employee to achieve more work progress and to reduce employees.
Specify problems with productivity, quality of work, interactions with co-workers, clients or any other problematic behaviour/incidents in the office. If there are specific complaints from supervisors, clients and customers we should read them and conduct necessary investigation to obtain full details and follow proper procedure regarding how we are handled Coca Cola and Dabur evaluation.
8a) Critically evaluate the role of performance review and strategies for management development.
The Appraisal Scheme aims to identify the management development needs of staff in order to improve the performance of individuals and of the organisation to achieve company’s key objectives.
We believe, it’ss responsible for the line manager to check and review each objectives every year. 6-monthly interim reviews are optional. Such as:
staffs need to know how they can contribute to organisational success
review past performance
develop potential and help improve current performance
maintain high performance
set up both companies objectives to achieve companies goals
assess learning and management development needs
Appraisal link assessment for future development with current performance. It provides a stronger role for line management in development. It gives the individual the opportunity to discuss his or her career intentions concerns and views with somebody else. It becomes a vehicle for mentoring where the manager is supported and provided with development opportunities.
Performance management is strategic in the sense it is concerned with the broader issues facing businesses if it’s to function effectively in its environment and with the general direction in which the business intends to go.
8b). After that by relying on the given information in the case study compare current situation of performance review and management development in Coca-cola and Dabur with best practice (theoretical views) to detect possible difficulties regarding this issue in these companies?
Both companies have difficulties with media reports, heavy investment in India and Japan, accommodation and foreign trips, we also believe both companies’ managers hasn’t conducted the staff performance review and haven’t given objectives to employees. They had other staff during that period and so was having financial looses.
As best practice management development is best described as the process from which managers learn and improve their skills, investment in management development can have economic benefits to the organization.
8c). How these problems can be solved?
Discussion below may help improve Coca Cola and Dabur’s problems:
leadership and motivation creates and maintains an effective/motivating environment where people strive for quality of service and is supportive of all staff; fosters a commitment for achieving companies goals
consultant managers will meet with employees at the end of the evaluation period to formally discuss, evaluate and develop company’s new goals.
requires promotion and advertising
talent managers have to setup objectives for the employees to achieve company’s goals for the coming years
identify and implement changes to improve performance to provide a clear understanding of how to be successful
provide feedback regarding employees’ performance and development
role-based performance metrics and look at training needs across a group
The company outlook to reduce employees, so companies could consider employees experience, provide compensation for dismissal.
Advertising and promotion required for both companies to achieve goals. Performance of employees is evaluated. We also found relationships between HR management effectiveness and productivity, cash flow, and market value.
The companies need reorganization with expert employees to overcome the issues faced.
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