Background Information Of Coca Cola Company Commerce Essay


The Coca Cola Company deals in beverages. The company manufactures retails and markets non-alcoholic drinks across the globe. The pharmacist, John Stith Pemberton was the pioneer of the drink if his flagship of the product in 1886 is anything to go by. In 1889, Asa Candler bought the formula and the brand used in the production process (Kathleen, 2006). Apart from the definite coca cola, the company offers several other products, which sell by different brand names. Currently, the company offers more than five hundred brands across over two hundred countries in the world. It is approximated that the company extends service to about 1.6 billion people on a daily basis (Nirmala, 2003).

In 1894, the company acquired stock company status and at the same time altered its name to Pemberton Chemical Company. After three years, it was changed back to Pemberton Medicine Company to reflect a new founded partnership among, E. H. Bloodworth, Pemberton, A. O and J. C. Mayfield. From this point, the company has expanded to every corner of the world. In the most recent cases, the company has engaged in acquisitions, which has contributed immensely to the growth of the company (Kathleen,2006). Its latest bid to acquire Huiyuan Juice Group of China however failed miserably due to nationalistic tendencies in the country (Sundeep, 2009).

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The company is a key player in politics since it heavily works as an important lobby group especially in the United States. With particular reference to organizational change, it is worth noting that no company attains success without making necessary changes. The business environment is dynamic as attested to by the vast technological changes, which regularly influence how operations are carried out (Bewes,2007). As a result, it is important to find out how organizational changes emerge in regards to other changes based on modernism.

1.2 Organizational and theoretical categories


According to Giddens (1991), the modern world is a juggernaut, which is full of energy and power, which can be directed though such may also run out of control. In support of this view, the world keeps on changing swiftly in scope leading to profound changes (Giddens, 1991). Modernism is captured with particular reference to four institutions, Capitalism, Industrialism, Surveillance, and Control of means of violence by state. In reference to capitalism, the world is characterized by production in a competitive environment where labor is commoditized and private ownership of property encouraged (Bewes, 2007). In regards to industrialism, the usage of inanimate sources of power and machinery in the production process takes place. Surveillance has been used to refer to the activities of monitoring and supervision of workers in organizations in order to encourage a smooth flow of business engagements (Kathleen, 2006).

Disembodying mechanisms affect operations in modernism. First, symbolic tokens emerge as media of exchange enjoying a standardized value and remain interchangeable across pluralities of contexts (Giddens, 1991). As an illustration, the money economy is vastly sophisticated. Secondly, the deployment of technical knowledge has increasingly risen to prominence. Institutional reflexivity is also critical as reflected by changing environmental demands. As an illustration, global climate change has influenced how organizations operate. Modernism has led to creation of more opportunities. This holds because working space is more open (Rayasam and Renuka, 2007). This has however led to adverse effects as it has increased insecurity levels. This may be viewed in reference to job creating and job insecurity in organizations (Nirmala, 2003).

1.2.2 Post Modernism

Post modernity captures the period characterized by disparity arising based on the former period of modernity. It is understood that modernity has led to certain changes. Such changes span from social to economic effects. Put in specific terms, post modernity is an approach that seeks to atone for the mistakes or shortcomings attributable to modernity (Bewes, 2007). Post modernity is critical in helping in the identification of institutional developments that generate a sense of fragmentation and dispersion (Nirmala, 2003). The theory perceives daily life as a conglomeration of complex reactions in response to abstract systems. This extends to a reflection on loss due to appropriation of resources. The coordination of events among different institutions indicates the need to focus a common ground in checking the adverse effects. This is especially shown in the coming together to ameliorate the negative effects of modernity (Nirmala, 2003).

1.3 Methodological Differences

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Modernism is understood as the pursuit of success while post modernity looks at the process of modernism and its effects. Whereas constant change underscores the theory of modernism, post modernity views such progress as outdated. In a more illustrative manner, modernism theory is concerned with the adoption of new ways or approaches used in doing things at the organizational level (Bellis and Mary. 2007). However, the post-modernist view concentrates on looking at what such a move of adopting new approaches has on organizations. As a result, modernism encourages change whereas; post modernity focuses on the need to adopt only the approaches, which guarantee positive, change. Modernism attempts to construct a coherent world-view whereas postmodernism attempts to remove the difference between high and low. Modernist thinking asserts that mankind progresses by using science and reason while postmodernist thinking believes that progress is an only way to justify the European domination on culture (Nirmala, 2003).

Modernist thinking believes in learning from past experiences and trusts the texts that recount the past. Conversely postmodernist thinking challenges any truth in the text that relates the past and makes it of no use in the present times. Modernist historians have a faith in extent. They believe in going deep into a matter to entirely analyze it (Sundeep, 2009). This is not the occurrence to the postmodernist thinkers. They believe in going by the shallow appearances, they believe in playing on surfaces and show no interest towards the depth of matter. Modernism considers the original mechanism as authentic whereas postmodernist thinkers base their opinion on hyper-reality; they get extremely prejudiced by things proliferated. Through media (Sundeep, 2009)

1.4 Variables Contributing to Organizational Effectiveness

Organizational effectiveness is a reflection on how well an organization is performing. Performance is used in reference to the extent to which a business goes towards realizing its goals as stated in both the mission and the vision statements (Bellis and Mary. 2007). As a result, such variables as, employee security, employee output, total production, individual production, employee benefits such as salaries and wages, working conditions and overall work satisfaction are some of the variables which interests a study. In reference to modernism, variables like adoption of technology and commoditization of labor will be put into perspective. On the other hand, in reference to postmodernist, variables such as employee satisfaction, employee benefits shall take precedence (Sundeep, 2009).

1.5 Organizational Effectiveness capacity

What permits an organization to continue to operate for over 125 years, and along the way, become one of the most globally recognizable brand names? The capacity to adapt and find new markets has helped Coca-Cola© become an icon of the American culture. Coca-Cola© was invented in 1885 and since The Coca-Cola Company's incorporation in 1892 (Coca-Cola, 2007), a strong focus on growth and marketing has existed. Besides traditional advertisements in the local newspaper, the company's founder, Asa Candler, distributed thousands of coupons for free glasses of Coca-Cola© so that many more people would be inclined to taste the product (

He also distributed countless souvenirs that depicted the Coca-Cola© trademark logo. By 1900, the organization, already, had operations in the United States and Canada (Blumenstyk and Goldie.2006). This focus on aggressive marketing is, still, the cornerstone for The Coca-Cola Company's strategy and culture. The Coca-Cola Company was eager to take advantage of new markets, and expansion efforts quickly led to Cuba, Puerto Rico, Guam, and the Philippines ( Before long, Coca-Cola© was being sold in Europe. When The United States entered World War II, Coca-Cola© was being sold to both sides(Sundeep,2009). The Coca-Cola Company turned what many would view as a threat, into an enormous opportunity (Rayasam and Renuka,2007).

According to the analysis of the company, there are six factors effecting organizational effectiveness:(1) leadership styles, (2) organizational culture, (3) working environment, (4) model of organizational operation, (5) flexibility, (6) organizational commitment The current objective of the organization is to use our formidable assets brands, financial strength, unrivalled distribution system, global reach, and a strong commitment by our management and employees world wide-to achieve long-term sustainable growth The Company is globally present and must adjust to the different laws of the different companies (Blumenstyk and Goldie.2006). The Coca-Cola Company's structure has characteristics of both organic and mechanistic models.

1.6 Conflict of Interests among Stakeholders

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This is depicted as a sign of conflict between the pro modernism and pro post modernism. Each group of stakeholders has a different goal, hence conflicts arise (Bogomolny and Laura.2004). The shareowners are concerned with earning a profit, while local communities care deeply about environmental issues and labor standards. Suppliers want to charge as much as possible to create more revenues, and The Coca-Cola Company wants to get the lowest prices to decrease costs. Management wants to keep labor costs down, while employees want raises and increased benefits (Blumenstyk and Goldie.2006).

1.7 Organizational design

The company promotes decentralization this is a form of embracing modernism. Hence the organization has two main operating groups that are: Bottling Investments and the Corporate. In addition, the operating groups split by different regions such as: Africa, Eurasia, European Union, Latin America, North America, and Pacific. As a result each of these divisions is further divided into geographic regions (Plasketes and George, 2004).

The Company and its auxiliaries employ more than 31,000 people all over the world which is hailed as a positive postmodernism where there is creation of lively hood. Syrups, the concentrates and beverages bases for Coca-Cola, the Companies flagship brand, and over 230 many other Company soft-drink brands are produced and sold by the Coca-Cola Company and its other small outlets in almost 200 countries all over the world the world. The company's operating management structure is made up of five geographic groups in addition to The Minute Maid Company. The North America Group also is made up of the United States and Canada.

The Latin America Group comprises of the Company's operations across Central and South America, from Mexico to the end of Argentina. The Greater Europe Group moves along from Greenland to Russia's Far East, adding in some of the most developed markets in Western Europe and the rapidly developing nations of Eastern and Central Europe. The Africa and Middle East Group comprises of the Middle East and the whole continent of Africa. The Asia Pacific Group has operations starting from India across the Pacific region encompassing China, Japan, and Australia (Blumenstyk and Goldie, 2006).

As from the above observations of geographic groups, everyone around the world has access to Coca-Cola. Therefore it is a global industry, one significant fact that is necessary to pinpoint is that Coca-Cola does not just deal with the soft drink coke (Bogomolny and Laura, 2004). But it also owns the Minute Maid Company. This is its juice branch, which is situated out of Houston, Texas, and is also the world's number one marketer of juices and juice drinks. The Minute Maid Company's products are made up of Minute Maid Premium Orange Juice with calcium, Minute Maid Premium Lemonade Iced Tea, Minute Maid Coolers, Hi-C Blast and the Five Alive (Bogomolny and Laura.2004).

One of the Coca-Cola Company's major strengths is in its ability to do business on a global scale and at the same time maintaining a local approach. At the core of this approach is the bottler system. The company is able to put at equilibrium standardization and mutual adjustment.

1.8 Organisational structure

The Coca-Cola Company's structure is a malgam of both mechanistic and organic models. The most area of concern in The Coca-Cola Company is on responsiveness (Dawson,et al,2009). The complex integrating mechanisms ealier discussed are characteristic of an organic structure (Bogomolny and Laura.2004). Centralization and high standardization are associated with a mechanistic structure., stability Flexibility, Mechanistic Organic Focus Efficiency, High Low Standardization, responsiveness Specialization, High Low Integrating Mechanisms Simple Complex Centralization, High Low Communication , and Top-down Network (Dawson,et al,2009) .The puting together of both types of structures appears to be ideal for the organization. Flexibility is crucial when trying to appeal to such a wide number of independent markets, nevertheless, high standardization is vital to continue being efficient in production. The employment of complex integrating mechanisms ennables for clear coordination for the global company. Centralization keeps organizational choices aligned with organization's goals.

The information in the company is moving smoothly in almost all directions, upper-management is able to have access to information more quickly than before this modernistic advantage, adding to the organization's flexibility and responsiveness. The modern changing towards a thorough decentralized and organic structure do correspond with the instability of the organization's environment.The strategic structural dynamics that the organization has been through in the most recent years have developed a much required positive influence on the company. Sales elevation increased and employees more satisfied (Bogomolny and Laura.2004).

The organization is trying to develope a more creative tradition by rejuvinating towards decentralization. It however sems as if the company is disatisfied with following trends in the beverage industry, although it is aiming to be on the leader of new and thrilling products.

1.9 Organizational Strategy

The main competences that enable the organization its greatest competitive advantages are its strong brand name and its large network of bottlers and distributors (Bellis and Mary. 2007). In addition to its marketing capacity and capabilities, and broad portfolio of products, The CocaCola Company has major competences which are highly difficult, and also imposible to duplicate. The strong Coca-Cola© brand name provides the company with a great deal of bargaining power and leverage due to its ablity to embrace on the modernism business theory. In 1999, PepsiCo and The Coca-Cola Company were commpiting to suit as the supplier of beverages for the Wendy's restaurant chain. Wendy's however opted to partner with The Coca-Cola Company albeit PepsiCo was offering much more money (Deogun & Gibson, 1999). The brand name recognition that the company benefit from is a powerful bargaining tool.

The business-level strategy of the Coca-Cola Company is one of differentiation. The Coca-Cola Company is known for creative marketing that increasingly promotes their brand names and protects their domains away from competitors. By involving extensive market research and developing more local offices, the company is always developing new ways to continue serving new customers (Donovan, Karen. 2006).

1.10 Organizational Technology

Currently, output processes are the highest source of uncertainty for the organization. As earlier stated, The Coca-Cola Company does not manufacture the end product. Distributors and bottlers mix other ingredients (which is mainly carbonated water) with syrups and concentrates as the end product and then sell the products. The Coca-Cola© brand name is on the end product, without consideration of who bottles it. The company has to push on the bottlers to maintain high quality outputs, or it could end up having negative consequences for The Coca-Cola Company as a whole. There exists no information about the production of the Coca-Cola© syrup. Even at The World of Coca-Cola©, which is a museum for the company, there is not a hint of how the syrup is developed (Friedman, 1992).

Based on assumptions, and some of available information, the company has a moderately high level of complexity this is due to the fact that it utilises mass production. Task variability that is exhibited in production is often low because it is highly mechanized and routine this is one of the negative modernism. consequently, task analyzability is high. When a dificulty occurs, it is not difficult to find solutions(Fisher and Richard. 2007).

The production of Dasani©, the company's bottled water, is highly mechanized, and it is reasonable to suppose that the production of every Coca-Cola© product is the same ( This mass production and high mechanization leads to a very high level of technical complexity. Classification Level of Technical Complexity is as follows: Small-Batch and Unit Production, Low to Medium Large-Batch ,and Mass Production Medium to High Continuous Process or the Flow Production High (Friedman and Ted,1992).

The characteristic structure of a manufacturing company that employ mass production is a mechanistic structure, where efficient production is the preferred end (Fisher and Richard. 2007). The Coca-Cola Company's structure is exclusive becouse it has a lot of the characteristics of an organic structure. This is brought about by its focus on marketing and local appeal. The structural divergence means that production in the company may not be as efficient as possible; nonetheless, the benefits of the company's structure overshadow the consequences (Fisher and Richard. 2007)..

1.11 Organizational Transformations

The Coca-Cola Company was establish in 1888 to take advantage of the already fashionable Coca-Cola© name. analised in the four life cycle stages (birth, growth, decline, death), after more than 120 years, the company is constatly in the growth stage because the company's value creation formation skills continue to evolve (Adrienne 2007). The multinational has faced a range of internal problems over the years. A continous struggle in any organization has always been in trying to meet employees' demands and on the other hand trying to keep labor costs low Arendt. In 2005, workers downed their tools because management wanted introduce a policy where employees were pay a greater portion of their health benefits this was seen as a negative approach on modernism (Business Insurance, 2005).

If the organization happens to go through any work stoppage, the company may be in a dificult position to meet customer demand and lose out alot of revenue. Another internal problem that could take place within the company is that the board effect a great deal of power and influence. the company was un able to attract its top choices for CEO in 2004, and the board has gone ahead and even pulled ads due to the thought that the commercials did not correspond to the company's image (MacArthur, 2004).

Uncertainty in the environment has bring about various external problems for the company, varying from uncertainty some of its suppliers and distributors to the political and societal pressures this is as a result of modernism.The Coca-Cola Company also experienced an irresistible growth in its early years. As earlier stated, Coca-Cola© was being sold in Canada just eight years after the organization was it was progressing through each stage in Greiner's Model of Organizational Growth, The Coca-Cola Company went through a myriad of problems (Fisher and Richard. 2007).

1.12 Managing Conflict, Power, and Politics

Conflicts can sometimes be a healthy way for an company to improve the way decision making progresses, and develope innovative ways for looking at problems. Conflicts can also be an important source of trouble for a company when they lead to production declines or inhibiting important decisions from being made. (Friedman and Ted,1992). When the company sought for a new CEO in 2004, their top choices declined because the prospects realised that the board had excess power (Ghemawat and Pankaj. 2007).

This type of conflict can in a large way affect the company's ability to change and acclimatize quickly,which is a necessity in the company's exceedingly uncertain environment. This example also depicts that it can inhibit the company from getting significant human resources. The marketing department is said to be the most powerful subunit in thewhole company (Ghemawat and Pankaj. 2007). The profits derived from the power allocated to the marketing function highly overshadow any negative consequence. By providing the department enough resources, the company is able to conduct greater market research (McKay, et al,2007).

1.13 Prognosis

The Coca-Cola Company faces various problems. In the United States, consumers are becoming more health conscious and thus due to lack of appropriate modernism by the company on the peoples health, which has adversly baffected the sales of addition, due to The Coca-Cola Company's global presence, the company must also deal with various political challenges. They have been criticized for causing a great deal of pollution,by postmodernists, spoiling town's water supplies, and have also been extremely criticized for its suspected anti-union actions. Coca-Cola also faces amplified competition from well established global companies, and local organizations as well (Annual Report, 2006).

The Coca-Cola Company also experiencing challenges with its supply of raw materials. The prices for most of its raw materials vary based on market a result when these prices rise, the production costs also rise. A number of the raw materials are available only from a number of limited suppliers (Annual Report, 2006). Coca-Cola has more of a decentralized structure,which is separated by region. Given that the majority of the company's amin problems are based geographically, the decentralized structure is very ideal. As the case each region has unique regulations, with unique consumer needs, and different problems to deal with (McKay, et al,2007). Therefore with a decentralized structure, problems can be solved quickly and effectively. Some of the functions remain centrally located, such as marketing and innovation. This permits the company to come up with one global message, but also enable that message to be tailored at the local level (McKay, et al,2007).

1.14 Discussion and recommendations

The Coca-Cola Company has a very high level of uncertainty when it comes to the issue of the raw materials. For a few of the ingredients, the company only has one or two viable and reliable suppliers. This could be highly problematic becouse of various reasons. The Coca-Cola Company has less bargaining power if there is little vaible suppliers. Another problem could arise if a supplier also experiences an event that is economically devastating addition to if a supplier goes bankrupt, or is in some type of natural disaster that can prevent the suppliers role to be effected, The Coca- Cola Company would suffer highly as well (McLellan and Hilary,2006).

The Coca-Cola Company is able to improve and secure relationships with suppliers using a few tactics such as strategic alliances. The largely optimal method would be to utilize the backward vertical integration and purchase a supplier. The end results of such a strategy would give way the company to keep profits that used to be made by the supplier, save on costs, and have a vaible source of supplies.

Besides the real purchase of thecompany , another costly aspect of vertical integration is high level bureaucracy costs ((McLellan and Hilary,2006)). The Coca-Cola Company should move at buying the some or all following companies: The Ajinomoto Co., Inc., Nutrinova Nutrition Specialties & Food Ingredients GmbH, NutraSweet Company, These companies are the main suppliers for important raw materials (Annual Report, 2006). Eventhough the company has not fallen into significant problems, future events are always unpredictable.

The most safe way to control suppliers for a company is mainly through ownership. Whereas ownership of a sugar/sweetener company is outright out of the company's domain, the move would make their main business more profitable. The Coca-Cola Company is able to purchase one of these companies mainly through financing. The company has a high credit rating and, therefore, it can raise money for the acquisition at a low cost.

The Coca-Cola Company's decision making process does match into its structure or mission, vision, and values. Their decision making process is highly centralized, and when compared to all the things that go on at The Coca-Cola Company, it does not match. The Coca-Cola Company has a highly organic structure and their amain mission and values advertises creativity and employee involvement. However they would improve their decision making and enforce their organic structure by mostly implementing a strategy for organizational learning. They can start by shaking things up more often by shifting managers for different departments on a periodical basis. This will make the managers to think outside the box when making (McLellan and Hilary,2006). It will also impose a learning organization and instill the organic culture intoall the peoples mind frame.cosequently, The Coca-Cola Company will have the ability to solve many problems more quickly and emerge a powerful community as a result.

Another way The Coca-Cola Company could match their decision making skills to their functioning structure is by affirming that employees do get involved. They should implement an open door policy where by employee can go to their manager and make suggest ideas for solving various problems (McLellan and Hilary,2006). This will make the management to become more aware of small problems before they enlarge.therfore by changing their decision making process, it is posible to become more accustomed to their recently acquired mission, vision, and values. Consequently they will inspire optimism in all involved by making decisions in a timelier manner (Morris and Betsy.2007). This will show stakeholders that The Coca-Cola Company has a higher position for the future since problems will be like less of a hinderencefor them. By adding more, lower level employees in their decision making process, they are ennabling leadership and inspiring collaboration and highly innovativeness (Morris and Betsy.2007).

The Coca-Cola Company has become extremely criticized for the duties of its bottling partners in Colombia. The bottling company is said to have killed employees due to their ties with a certain union, and even while The Coca-Cola Company does not own that said plant, The Coca-Cola Company has been the target of many boycotts and lawsuits. Even if The Coca-Cola Company was not aware and uninvolved in what took place, their name is attached to the product (Phillips and Sandra,2004).

Therefore, In order to make the situation better, The CocaCola Company should buy the bottling partners in Colombia (Phillips and Sandra,2004). The company can use its resources to develope stable bottling plants. Managers would need to work with union leaders to create an agreement that was reasonable for both sides. While taking over and functions of the plants would cost the organization money, the company would have wholen control over the activities of its managers. This raising accountability and dedication to correcting any wrong doings would garner alot of positive publicity for the company's operations, and provide the benefit of having a stable distribution channel in that region (Phillips and Sandra,2004).

However,the organization does not own most of their bottling plants, adopting the Colombian bottlers would provide The Coca-Cola Company with the ability to nuture better relationships with the citizens of the country. This acquisition would cost the company money in the short-term, nevertheless,it could provide fruitful benefits in years to come.Coca Cola keeps acquainting itself with the changing environment and the demands of the modern world. However drastic changes take time to implement and produce the required results. These changes may include changes in the company culture. The changes that happen by using the unstructured decision making model created much greater results for the company