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The company I wished to do my research for this particular module was The Coca Cola Company. Coca Cola is one of the most popular beverage company's in the world. It has come a long way since its incorporation since 1886. Over the years, the company has undergone a lot of changes from the management to values and their vision.
In the following part, I have discussed as to how the company came into existence and its journey since then. The company's mission, vision and objective statement has also being highlighted.
Since the company has undergone a couple of changes over the years in its management such as the CEO and COO, the company had undergone a lot of changes in its culture following that. Discussed below are also the company's present culture and the present organizational structure it follows. Since its undergone a couple of changes in its working corporate culture, the changes and the change process is also being highlighted.
After doing a detail analysis of the company's culture, I happen to find out that the company also could undergo a couple of changes which it hasn't incorporated. The recommendations for the same have also being highlighted followed by a concluding statement.
Coca cola is considered as one of the largest selling concentrated drink company in the world. It has an assortment of manufacturing and distributing close to 3000 non alcoholic diet and regular beverages under its trade mark name to a number of distributors, retailers and vendors including the vending machines to more than 200 countries in and around the world. Its beverages include a number of non-carbonated drinks, flavoured syrups, juices, teas, coffees and non-carbonated and non alcoholic energy drinks. Coca cola regular, Coke Zero , Diet coke, Limca, Sprite, Maaza, Georgia Tea, Minute Maid Light, Minutes Maid Active, Minutes Maid Premium, Nestea Cool, Play Energy drink, Powerade Balance and Kinley Mineral water are some of the famous beverages offered by The Coca Cola Company ( TCCC). Officially, TCCC has tie ups of serving drinks to America's Largest Fast Food Joint Mac Donald's.
Coca cola employees close to about 92,000 employees worldwide. It encourages its employees to share their skills, knowledge and experience in order to serve its customers and markets worldwide. TCCC provides a lot of benefit programs for the employees and their family and regularly access them from time to time.
To add it on, TCCC has also been the official sponsor for the FIFA world cup, NASCAR racing and National Basketball Association.
Over the years, the company safe guards to maintain superior relations with its customers, employees and bottling partners.
Coca Cola recipe originated from a drug store named Jacobs Pharmacy in Atlanta, U.S by John Pemberton in 1886.
In 1893, Chandler (who took over following Pemberton's death ) created a mark in the premature days of the company on the people/ customers by offering them complimentary coupons for a taste of the Coca Cola everywhere as a technique of its belligerent promotion.
In its early stages of development, Coca Cola's initial advertising focussed on customer to "Accept No Substitute".
In 1923, Robert Woodruff purchased the company from Asa Chandler. He brought about an impact on the company by introducing it to the Olympic Games in the year 1928 in Amsterdam, wherein the company gained in a lot of recognition around the globe. By the year end of 1941, Coca Cola enjoyed its benefits in close to about 120 countries around the globe which augmented to about 163 countries by 1960.
Finally after 70 years of its incorporation, Coca Cola finally came up with a couple of more flavours to add on to its trademark drink. It came up with its second beverage in Fanta in 1940 and Sprite in 1961 followed by its venture into juices such as Minutes Maid by the year 1980. Thereafter, the company found its existence in few more countries namely Macau, Turkey, Paraguay and more.
In the era of change and innovation in 1981, Robert Goizueta became the chairman of the Board of Directors and the CEO of TCCC. He went on to introduce Diet Coke a top low calorie drink for the fitness freaks and that point of time.
Beginning 1990 saw Coca Cola venturing into a number of tie ups and acquisitions around the globe with a couple of them being with Limca, Maaza, Thumps up in India etc and by 1997 it went on to serve close to 1 Billion servings a day to its customers.
Mission, Vision and Objective Statements
In the world of globalization, Coca Cola aims at maintaining its position as the top rated beverage company in the world. It aims at analysing the trends and bottlenecks the company may come across and to overcome them swiftly. It has a 2020 vision considered as a path way for its future business.
Their mission asserts their purpose of existence.
Firstly it aims at refreshing the world
Secondly to inspire moments of happiness and cheerfulness to satisfy the customers with their best
Lastly it intends to create value and make a difference in everything it engages in.
It aims at
Being the best workplace wherein the people are encouraged to contribute the best to the company.
Selling the best products in the market to satisfy the needs, wants and desire of the consumers.
Ensuring profit maximization and maximum return on investment for the investors and shareholders.
Be highly productive and effective in order to be dynamic organization.
Developing an appealing partnership with its customers and suppliers.
Organizational Structure refers to the demarcation of jobs and responsibilities in an organization. The purpose of having a well organized structure is to enable the employees accomplish the objectives of the organization in an effective manner. (Gordon, 7th Edition, p.398)
The above is the corporate organizational structure of TCCC. The head and the functional managers lead the operations of the company worldwide. Then the functions of each are divided into several groups such as marketing. HR, planning etc. As it is a brand oriented company it focuses more on the marketing functions so that it could be reached to a whole lot of customers and could satisfy their demand.
Therefore in a way the structure is a mixture of mechanism and organic model. The company should however maintain this balanced way of organizational structure in order to encourage free flow of information at every level. It also encourages the employees to communicate their ideas effectively. This kind of multi structure gives way to the top management to maintain a level of stability and they feel free to focus on long term planning. Though this structure may impede a working of the organization, TCCC follows it in order to maintain a co-ordination with its employees at all levels.
Source (Organizational Chart) :- http://www.authorstream.com/Presentation/tiuatech-209430-coca-cola-presentation-chapter-10-education-ppt-powerpoint/
Organizational culture refers to the values, ethics and tradition the internal organization of a company follows in order to communicate their ideas in the functioning of the organization. A specific culture also helps an organization to achieve its goals and face the challenges against the external forces. (Gordon p.g 374)
Culture followed at Coca Cola
There are lot of cultures followed by an organization in order to achieve their goals and objectives. But however, Coke follows two main cultures-
Functional Culture - One major culture followed at Coca cola is a functional culture. This culture focuses on top level hierarchy engaging in decision making and encouraging the specialization of individuals as well. Coke takes a lot of initiative in allowing the individuals to participate in decision making and thereby reduce downside risk.
Process driven Culture - Process driven culture aims at meeting the customer requirements and serving them with the best products in the market. Of late the company has moved to a decentralized structure in order to meet the changing needs of the customers.
Organizational changes refers to transforming or amending certain cultures, values and objectives for better functioning of an organization.
Reasons for Changes
PEST Analysis- External Factors Influencing Change
PEST Analysis refers to determining the Political, Economic, Social and Technological factors influencing changes in the organization.
There are a set of rules and regulations set by the government in order to manage the operations of the companies. Like most of the companies, Coca Cola also has to adhere to the rules and regulations set by the government. In the present world of globalisation wherein there is intense competition, many competitive firms and merging in order to influence the international market. Coke on the other hand has been observed to allure the suppliers in the market by restraining them to sell other brands by giving them additional incentives.
Economic factors are those that deal with the production of an industry. The non-alcoholic beverage industry especially coca-cola has been having a slow growth rate in its main market in U.S since the economy has been hit by recession and high inflation rate. Secondly, because of the high cost of commodities used in the production of the drink such as sugar and metal used in the production of the cans hinder the production rate of the company. On the other hand intense competition with its rival company 'Pepsi' has also triggered changes in the organization as the company is looking forward to formulate strategies.
Now-a-days consumers have started following a healthier lifestyle which in turn has brought about a change in the consumers behaviour. They have switched to Bottled water and other non-aerated and non-flavoured juices instead of Coke as they have become more health conscious and highly concerned about their longevity. This has in turn declined the growth of the product and its revenue. For e.g. in countries such as China and Taiwan, people switched over to Asian Tea and other mil drinks as the carbonated Cola drinks did not favour the consumers there.
Due to advent of technology, we get to see a set of new products in the market. Coca-cola had come up with a wide range of products from Fanta to Sprite to Maaza over the years. It also came up with a new product called Cherry Coke in 1985 which was not much appreciated by the consumers. They preferred to stick to their trademark Coca Cola beverage drink which was first introduced. On the other hand, as a result of technical advances, Coke had to come up with the concept of dispensing and vending machines.
In many a cases it becomes difficult to differentiate the internal factors from the external ones. However in the case of Coca Cola, the company did give rise to a few factors within the organization in influencing the change within its culture.
It has faced a number of internal problems over the years. In 2005, Over 130 workers were considered redundant at their Dublin bottling plant. This move was initiated because the company wanted the employees to contribute a certain portion for their health and insurance benefits.
Another problem that the company suffered was that they failed to attract top CEO's in the year 2004 despite putting up ads and bulletin boards. Eventually these have to be removed as they did not incur any positive response.
Change and Change Process at Coca Cola
Over the years, Coca Cola has gone through a tumultuous journey since its incorporation. Company weather small or big has to alter changes in their organization in order to deal with the possible risks they may come across in the near future.
In the year 2000, the senior management team of the company was altered or rather changed in order to improve the efficiency of the company. This move was also initiated in to order to help the company face challenges and treats in the culture and market.
The organizational structure followed at TCCC was more of a Centralized structure. Centralized structure is wherein the company's top management level is solely responsible for decision making.
But however in 2007, the company realized that it had to meet the changing demands of the consumer. So it shifted to a decentralized and encouraged the responsibility of decision making from the people at all levels of the organization. Furthermore, the company has also further come up with a few more operating groups in the Pacific, Africa and America. By allowing decision making from the people at the lower level, the company aims at quickly responding to the changing needs of the consumers. The shift to a decentralized economy has led the company to come with a number of new offices to assist in decision making.
Though the company gives the authority at the lower level to assist in decision making, certain decisions are made by the top hierarchy. For eg the decision of hosting the World Cup was done at the Corporate Level. But however, the top level management gave the freedom to the local divisions to assist in Advertising Designing. ("Country managers (2)," 2002)
The change in the CEO paved way for a number of changes within its culture. Before Neville Isdell took over the company as the CEO, the organization was facing a very slow growth rate. After his take over, he held face to face meetings with top level managers which brought about an entirely different work culture. Eventually, his changes brought saw the company experiencing high growth rates.
Because of a change in its strategic organizational culture, their sales have raised up a higher level because of which they are able to meet customer demands and bring about more innovation in their products.
According to Kurt Lewin, the change in an organization undergoes three stages-
Unfreezing:- Unfreezing refers to creating an awareness within an organization regarding the changes to take place and removing any kind of resistance to change. Like as in the case of Coca Cola, the employees and the share or the stockholders are well informed about the changes that are to be taking place within the organization. For e.g The Company was informed of the change at the management level about the change in the CEO from Isdell to Muhtar Kent in 2008.
Change:- Change refers to bring about amendments in the working of the organization. Over the years the company has brought about a lot of amendments since 2005. During that year the company was undergoing a lot of declining sales and other corporate problems. In order to tackle these, the company organized for a dialogues talk with its employees wherein they were told about how to get things done in a better manner in order enhance better results. Another set of example would be in case of Daft. The financial Head, who has wide knowledge of bringing about a change and tackling the problem of the Asian Financial Crises in 1997. Other set of changes undergone by the company have been noted in the above Page.
Re-Freezing and Change Management:- Re-freezing refers to stabilizing or managing the organization after the changes have taken place in the organization. The management has taken a lot of initiative to manage the organization following the change and have finally proved successful. This change has helped the employees be more focussed towards their responsibilities and achieve the targeted goals from time to time.
Organizational Development Techniques
Due to a number of changes in the organization, it is seeking a lot of organizational development techniques. One of the most important techniques taken up by coca cola was that of initiating a Global Campaign. It involved the participation of all employees in a dialogue involving the company's values, passion, goals, integrity etc. The main aim of this initiative was to motivate the employees to give the best towards the company. It also encouraged the employees to give their final view as to how they felt were the objective driven goals of the company.
In TCCC, there are a certain Employee Forum as well. These forums usually help the employees in the organization to connect with the other employees. In this way the employees can share their personal problems with each and other and enhance and encourage each other in performing their duties in a better manner for the company
There are also a team of people who monitor other employee and keep a check on their performance. In case if the performance is found to be depleting, then special training and development programs are held to enhance the performances.
The company also encourages performance measurement. This helps the employee to perform better and work in the most efficient manner.
In a whole the company follows as autocratic culture where by the managers and the top level executives manage the company decisions and disseminate the information to the lower level. But however the company has also adopted Quality culture in order to maintain and provide the consumers with quality services.
Coca Cola has come a long way now. Since it being a huge company on a globalised scale, it just has about 1-2 feasible suppliers for raw materials. In case of any possible disaster such as bankruptcy, the company can go into a soup. So it should expand and find more possible suppliers.
The company must also come up with a two way face to face workshops with its employees. Since it follows a decentralized structure, there's a lot of communication gap from the employees and various levels. They need to come up with strategies and technologies to shorten this gap.
They could also bring a change in its decision making process. They must encourage the employees to participate even in important decision making topics so that the goals of the company could be well achieved.
The company should also consider getting into a few joint ventures with the companies from whom they buy raw material such as the sweetener company's.
Moreover since the youth today is more inherited towards maintaining their physique and have become health conscious, the company must concentrate of bringing up more of health juices and drinks.
Coca Cola is one of the best examples of Organizational change not only in the United States but all over the world.
Because of the global campaign they undertook for sustaining a long term growth the company has grown a long way and the results show it all. Firstly there was a steady increase in their stock value after the year 2006. The performance management increased from 68% to 76%, leadership rose from 54% to 64%
The company aims at maintaining equal employment opportunities to all the employees working in the company. Furthermore, the company managers also see to it that there is no discrimination at any level of the organization and that all the employee needs are catered to. (Annual Review 2009)
Their 2020 vision aims at keeping their pace of business for over a longer period of time. Their aim is to maintain a good relation with all their bottling partners around the world in order to strive for a place in the world of globalization.