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Change Management

Change Management

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Published by Gurpreet Singh

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Published by: Gurpreet Singh on Apr 24, 2012
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Change Management in Coca-Cola Corporation
 
Executive Summary
 
Coca- Cola is one of the leading manufacturers of carbonated drinks all over the world. Over the past decades, Coca-Cola remained on top ofthe industry. The company was able to withstand the World War II, and even took it as a business opportunity rather than a liability. It was able tosurpass the Asian Financial Crisis and even gained better access in markets that it was not able to fully enter. Coca-Cola exhibited the efficient changemanagement. Change management is the process in which it manages the change in the side of people. There individual change management andorganizational change management are the theories of change management. Aside form the theories there are also four strategies of changemanagement which are the Empirical-rational, normative-reeducative, power-coercive and environmental-adaptive.
 
This paper examines the various changes that occurred in Coca-cola. Moreover, this paper also discusses the management styles thatmanagers of Coca-cola have adopted. The first part of the paper talks about Change management and analysis will be given on Coca-cola. Thesecond part of the paper, a discussion on theories of change and change management will be given.
 
Introduction
 
Over the past years people, systems and the environment have evolved. Change is the only thing that is constant in this ever changingworld. From the physical attributes of individuals, up to the environment, change is very evident. Just like the environment and people, businesses alsoundergoes changes, it can be either massive or minimal. Often times, changes occur in the management of the corporation, in order to keep up withthe competition. According to (2000) the people who went home winners and on top have the common characteristics of effectively handling thechanges in the situation. Changes in management is a process that any organization must undergo, a business will not be complete if it neverexperienced change.
 
Prior to discussing change management, the word change must be first defined. According to
(2001) “change is the significantdifference in what was before.” In business it means accomplishing tasks in a new format, following new directions, ac
quiring new technologies, newmanagement procedures, acquisitions and merging and other important events in corporations.
 
Moreover, Davidson described the characteristics of change. According to him change is significant, prolonged and disruptive and change is acontinuous process of alignment.
 
Change is significant, prolonged and disruptive
 
In this attribute, change in an organization includes venturing into new areas of business, such as entering new products in the new market,facing an unexpected event such as economic crisis and redirection of the company.
 
Change is a continuous process of alignment
 
According to (), an aligned organisation must have a continuous synchronization of the important management levers such as strategy,operation, culture and reward. Moreover, discussed that in these management levers, the managers, chief executive officers and supervisors areresponsible for manipulating and rearranging both the human and non-human elements.
 
In addition, discussed that change is an important aspect in the business world especially in technology and innovation, from simpletechnologies and procedures up to more complex operating environments, nowadays technologies and products are coming together to achieve acommon conclusion or objective.
 
Organisations that resist changes will inevitably face wider exposure to risks and losses. There are a number of situations in which change isnecessary within the organisation such as technological advancement that is being utilised by different companies in order to cope up with thecompetition. Aside from what was mentioned earlier, there are still many issues and concerns that are necessary for change in the organisation,however the most substantial thing is that organisations acknowledge that changes happen constantly for different reasons and the management mustaddress these changes as soon as possible to prevent great losses.
 
 
Why an organisation does undergo changes? What are the factors and reasons for undertaking it? According to MacCalman and Parton themost influential factor in changes in organisations is the external environment which instigates reaction. Some of the examples given by MacCalmanand Parton in the external environment that triggers changes in the organisation are:
 
 
Changes in technology being utilised
 
 
Changes in the tastes and expectations of the consumers
 
 
Changes due to competition
 
 
Changes because of legislation by the government
 
 
Changes due to modifications in the economy whether locally or internationally
 
 
Changes in the communications media
 
 
Changes in the value systems of the society
 
 
Changes in the supply chain
 
 
Changes in the distribution chain
 
The second factor that initiates change in the organisation is the internal
 
changes which are the reactions of the organisation to the external changes. Aside from the responses there are also some factors that contribute tothe internal changes, an example of this is a new marketing strategy for existing and new products.
 
And finally, changes in organisation happen if they try to act in advance in order to deal with the expected risks and difficulty. An example iswhen an organisation anticipates the problems that may occur and creates and devises plans to combat and negate the impact of those problems.
 
Change Management
 
Nickols (2006) has four basic definitions of change management, according to him it is a task of managing changes, a field of professionalpractice, a body of knowledge and information and a control mechanism.
 
Task of Managing Change-
Nickols defined managing cha
nges as “the devising of transformation in a planned and systematic fashion.”
He stated that the main objective of managing change is to efficiently implement new techniques and methods within the organisation, moreover thechanges to be handled depends upon the control of the organisation. Aside from the definition mentioned earlier, Nickols also has a second definition
on managing changes and it is “the reactions to changes in which the organisation has no control. “
 
Area of Professional Practice-
in what way professional practice came into managing changes? Are there any relations between the two?Years ago, managing changes in a corporation is done by the management, supervisors, and CEO of the company, but nowadays with the constantchange in the concepts of business and evolution of new theories a number of people have developed firms that particularly addresses the issuesregarding managing changes. According to Nickols there are a number of individuals and consulting firms that declare they engaged in activities thatinvolves planned change and that the firm exercises change management practices.
 
A Body of Knowledge-
The body of knowledge in change management according to Nickols includes the following, models, methods andtechniques, tools and various forms of knowledge that constructs the change management practice. Moreover, Nickols discussed that the contentof change management is influence by sociology, psychology, business administration, industrial engineering, economics, systems engineering andhuman and organisational behaviour.
 
Control Mechanism-
over the past years groups and individuals handling the information systems of organisation have tried to control anddirect changes to the applications and systems of the company, however, in recent years people working in this particular area have referredthis mechanism
of control as “Change management.”
 
Perception regarding change management has evolved over the past years. Change management is utilised in new procedure, structures, andtechnologies in order to overpower the resistance to change, however as studies and ideas regarding change management evolved over the pastyears, the view on change management switched from a tool in overcoming resistance to developing strength and involvement in transformation. Dueto this change management is now regarded as leadership ability than a responsive instrument in handling resistance.
 
Coca-Cola Corporation
 
 
 
Coca-Cola was invented on May 8, 1886 by Dr. , a local pharmacist in Atl
anta, Georgia. It was first sold in Jacob’s pharmacy for five cents per 
glass. Initially Coca-cola was sold as a drug, Pemberton during that time considers Coca-cola as a cure for diseases such as dyspepsia, morphineaddiction, headache and impotence (2007).In the year 1887, Asa Griggs Candler obtained a stake in the company of
 
Pemberton and integrated it as the Coca-
Cola company. In order to obligate Candler’s competitors to be out of the business, he set out to claim legal
rights and exclusi
ve rights for the formula in 1888. However, issues and concerns regarding the legality of Candler’s claims have emerged. In s
pite of
the issues surrounding the legality of Candler’s ownership, he started to assertively advertise and market the product. In
Coca-
Cola’s 50
th
Anniversarythe product already attained the national status icon for the United States of America.
 
During the World War II, Coca-Cola became even more visible amidst the war. It even became a patriotic symbol during that time becauseCoca-Cola provided the soldiers of the United States free drinks, added to the fact that it is the only company that was allowed to enter the front linesas technical officers. As the United States and its allies win in the World War II so did the Coca-Cols company. The company benefited from thisadvancement because they were able to set-up franchise in various countries.
 
In the year 1985, due to the aggressive campaign of its rival Pepsi, the Coca-Cola Company reformulated the popular carbonated drinks to suitthe preference of the consumers which is sweeter soda. However, the New Coke became a commercial failure which leads to the adverse reaction ofthe public. Protests from different sectors of the society emerged. Due to these events the company return the original formula and named it Coca-ColaClassic. Despite returning the original formula, the company still received accusations from different groups.
 
In the year 2005 the company launched and announced their upcoming products which are the Diet Coke and Coca-Cola Zero.
 
Coca-cola Company is clearly one of the most popular companies in the world. Aside from the fact that it is also one of the oldest corporationsthat was able to withstand World War II and other changes in the economy over the past years. The fact still remains that it is one of the most famousbrands of Cola in the world.
 
The Coca-Cola Company was able to resist the hindrances that occurred; the company was able to utilised change management as efficientlyas possible to withstand the obstacles.As mentioned earlier, changes in management is caused by three different factors which are the external environment, internal changes andthe proactive reaction to possible threats and difficulties.
 
External Environment-
over the past decades, the Coca-Cola Company has faced a number of changes in the external environment that havetransformed the management of the company. One of the best examples is during the World War II. The company was able to maintain the status ofthe company, at the same time, was able to enter new markets despite the environment. Instead of lying-low because of the war, the company becamemore aggressive through providing free drinks for the GIs during the World War II. Through this the corporation was able to hit two birds at one stone.First, because the carbonated drinks sent by the company, it became a patriotic symbol by the United States soldiers in which led to consumer loyalty.Second, the company was able to take advantage of the situation and established the product in newly-occupied countries by the Ally forces andbecause of that the company established plants in various locations worldwide paving the way for its post-war expansion.
 
Another aspect in the external environment is the change of taste and expectations of the consumers. During the mid-1980s wherein theAmericans favoured the sweet taste of the rival product, the company created its counterpart but became a commercial failure; however instead ofbacking down, Coca-Cola changed its management strategy and returned the old formula, and just renamed it as Coca-Cola Classic. And with the riseof obesity in the United States and consumers became health conscious the company released new versions of Coke in order to address the needs ofthese type of consumers, such products include Diet Coke and Coca-Cola Zero.
 
In addition, according to Bool (2007) companies such as Coca-Cola are compulsory to transform due to trends that have a huge impact on theirbusiness, and one of these trends is the health and fitness. A number of people are noe investing more in their health, and in order to keep up with thetrend, Coca-Cola introduced their new product which is a calorie burning soft drink, the Enviga. Moreover, Coca-Cola is collaborating with the Swisscompany Nestle. Coca-Cola is dealing with innovation and change.
 
During the Asian Financial Crisis, Coca- Cola was also triggered to change its course of management in that particular region. The responsesand reactions of Coca-Cola with the external environment are its internal changes.
 

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