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Organizational Structure of the Coca-Cola Company

Organizational Structure of the Coca-Cola Company

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Organizational Structure of The Coca-Cola CompanyScribd Upload a Document Search Documents Explore DocumentsBooks - FictionBooks - Non-fictionHealth

& MedicineBrochures/CatalogsGovernment DocsHow-To Guides/ManualsMagazines/NewspapersRecipes/MenusSchool Work+ all categoriesFeaturedRecentPeopleAuthorsStudentsResearchersPublishersGovernment & NonprofitsBusinessesMusiciansArtists & DesignersTeachers+ all categoriesMost FollowedPopularSunita Rani We're using Facebook to personalize your experience.Learn More·DisableHomeMy DocumentsMy CollectionsMy ShelfView Public ProfileMessagesNotificationsSettingsHelpLog OutWelcome to Scribd - Where the world comes to read, discover, and share... We’re using Facebook to give you reading recommendations based on what your friends are sharing and the things you like. We ve also made it easy to connect with your friends: you are now following your Facebook friends who are on Scribd, and they are following you! In the future you can access your account using your Facebook login and password.Learn moreNo thanks 1First Page Previous Page Next Page / 25Sections not available Zoom Out Zoom In Fullscreen Exit FullscreenSelect View Mode View ModeSlideshowScroll Readcast Add a Comment Embed & Share Reading should be social! Post a message on your social networks to let others know what you re reading. Select the sites below and start sharing.Link accountReadcast this DocumentReadcast Complete!Click send to Readcast!edit preferencesSet your preferences for next time...Choose auto to readcast without being prompted.Sunita RaniSunita RaniLink accountAdvancedCancel Add a CommentSubmitshare:Characters: 400 Share & EmbedAdd to Collections Download this Document for FreeAuto-hide: on The Coca-Cola Company2010 Group O2:Harini ValluriSoman NahataAnkit JangalwaGandharv Raj Sethi1 The Coca-Cola Company2010Vishwajeet NarayanCONTENTSIntroduction..................................................... .......................................................3Coca cola’s Global coverage........................................................................ ............3History............................................................ .......................................................4Revenues................ ................................................................................ ...............4Products and Brands.......................................................................... .....................6Mission, Vision and Values.......................................................................... ............8Organizations and Organizational Effectiveness.....................................................10Stakeholders , Managers, and

 

 

 

 

 

 

invented by pharmacist John Stith Pemberton in 1886.......................... Pemberton stayed on as the superintendent.... The Coca-ColaCompany is headquartered in Atlanta...................................21Organizational Transformations...........................14Designing Organizational Structure: Authority & Control......................................... .. and J..... The new president was D.... The charter becameofficial on January 15.......... a co-partnership between Dr................ another co-partnership. .............. S&P 500 Index.................. the company wasagain changed to Pemberton Medicine Company......... S.Ethics................................. PembertonMedicine Company.......3 The Coca-Cola Company2010HISTORYThe Coca-Cola Company was originally established in 1891 as the J. H....000......... Finally in October 1888..... Georgia...... Power and Politics2 The Coca-Cola Company2010INTRODUCTIONThe Coca-Cola Company is a beverage company....23Managing Conflicts....... Its stock is listed on the NYSE and is partof DJIA.... Coca-Cola currently offersmore than 400 brands serves 1.........6 billion servingseach day. ..... Mayfield............. Three years later........20Creating & Managing Organizational Culture......... John Stith Pemberton and EdHolland...15Designing Organizational Structure: Specialization & Coordination.... C.. 1889.. Thecompany s factory was located at No.. Bloodworth........ The company was formed to sell three main products: Pemberton s French WineCola (later known as Coca-Cola)......................................... In 1884.. distribution system dating from 1889 syrup concentrate which is then sold in over 200 countries or territories and The company operates a franchised whereThe Coca-Cola Company only produces tovarious bottlers throughout the world who hold an exclusive territory.....REVENUESAccording to the 2005 Annual Report. manufacturer.... Power and Politics...........12O rganizational Design.. D.18Organizati onal Design & Strategy..... and marketer of non-alcoholic beverage concentrates and syrups......... the Russell 1000 Index and the Russell 1000 Growth Stock Index..... E.......... the company became a stock company and the namewas changed to Pemberton Chemical Company...... the company sells beverage           ...21Organizationa l Technology. this time betweenPemberton....... The company is best known for its flagshipproduct Coca-Cola... thecompany received a charter with an authorized capital of $50............ ............. Doe while EdHolland became the new Vice-President....................................................COCA COLA’S GLOBAL COVERAGE...................................... A. By this time........................ The Coca-Colaformula and brand was bought in 1889 by Asa Candler who incorporated The Coca-ColaCompany in 1892.... the company had expanded its offerings to includePemberton s Orange and Lemon Elixir.............Its current chairman and CEO is Muhtar Kent.............. and Pemberton sGlobe Flower Cough Syrup.... 107............. Murphy... Besides its namesake Coca-Cola beverage.22Decision Making.................................. O... distributor....................................... .......... Marietta St............. Pemberton s Indian Queen Hair Dye.......17Managing in a Changing Global Environment...........................24Mana ging Conflicts...

who managed Coca-Cola s operationsin Germany during the war.Some claim Coke is less popular in India due to suspicions regarding the health standards of the drink. Japan and the People s Republic of Chinac.was never in jeopardy. and when Coke took over again after the war. India. Instead.The data for the year 2009 is given in the table below:4 The Coca-Cola Company2010PRODUCTS AND BRANDS5 The Coca-Cola Company2010The Coca-Cola Company offers nearly 400 brands in over 200 countries. Coca-Colanonetheless holds almost 25% market share (to Pepsi s 75%) and had double-digit growth in2003. and                     . 2006. thenative Inca Kola has been more popular than Coca-Cola. a maker of flavouredvitamin-enhanced drinks (vitamin water). in Scotland. in 2006. Coca-Cola announced it would purchase Glaceau. theCoca-Cola Company s bestselling brand there is not Coca-Cola. In2001. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day. the company responded to the growing consumer interest in healthybeverages by introducing several new non-carbonated beverage brands.37% in the United Statesb. another of the company s bestsellers and its response to 7 Up. among others. the information was related to a new beverage indevelopment. where the locally produced Irn-Bru was once more popular. Similarly.2005 figures show that both Coca-Cola and Diet Coke now outsell Irn-Bru. beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.20% spread throughout the rest of the worldIn 2010 it was announced that Coca-Cola had become the first brand to top £1 billion inannual UK grocery sales.During the 1990s. While the Middle East is one of theonly regions in the world where Coca-Cola is not the number one soda drink. Coca-Cola executives verified that the documents were valid and proprietary. The recipe for Coca-Cola. Of these. however its sales have dwindled since the introduction of Diet Coke. Tab was Coca-Cola s first attempt to develop a diet softdrink. Fanta sorigins date back to World War II when Max Keith.5 billion. The company announced a new "negativecalorie" green tea drink. wanted to make money from Nazi Germany but did not want thenegative publicity. Coca-Cola had gallon salesdistributed as follows:a. besides itsnamesake Coca-Cola beverage. but Georgia. Theseincluded Minute Maid Juices to Go. which prompted Coca-Cola toenter in negotiations with the soft drinks company and buy 50% of its stakes. a Coca-Cola employee and two other people were arrested and chargedwith trying to sell trade secrets information to the soft drink maker s competitor. the product is still soldtoday. thebest selling soft drink is not cola. which notified the authoritieswhen they were approached by the conspirators. perhaps the company s most closely guarded secret. The conspiracy was revealed by PepsiCo. In Peru. As such. which proved tobe a hit.On May 25. The Coca-ColaCompany also produces a number of other soft drinks including Fanta and Sprite. 2007. PepsiCo for $1.43% in Mexico. flavoured waters. PowerAde sports beverage. Fanta. along with trying coffee retail concepts Far Coast and Chaqwa. Also according to the 2007 Annual Report. Brazil.The GermanFanta Klare Zitrone("Clear Lemon Fanta") variety became Sprite. Minute Maid division launched the Simply Orange brand of juices including orange juice.On July 6. In Japan. it adopted the Fanta brand as well.5 million. Fruitopia fruit drink and Dasani water. flavoured tea Nestea (in a joint venture with Nestle).6 The Coca-Cola Company2010Coca-Cola is the best-selling soft drink in most countries.At least one glass vial containing a sample of a new drink was offered for sale. Introduced in 1963. Enviga. courtdocuments said. Keith resorted to producing a different soft drink.products in more than200 countries. using saccharin as a sugar substitute. beverages bearing thetrademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company s totalgallon sales. as (canned) tea and coffee are more popular.

d.c. China s ministry of commerce blockedthe deal on March 18.Leadership: The courage to shape a better futureb.e. understand the trends and forces that will shape our business in the future and move swiftly to prepare for what s tocome.People:Be a great place to work where people are inspired to be the best they canbe. arguing that the deal would hurt small local juice companies. To continue to thrive as abusiness over the next ten years and beyond.Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate andsatisfy people s desires and needs.b.In October 2009.could have pushed up juice market prices and limited consumers’ choices. enduring value.a.Possess a world viewd.Remain constructively discontente.Have the courage to change course when neededd.MissionOur Roadmap starts with our mission. 2009.Reward our people for taking risks and finding better ways to solve problemsd. optimism and fun. We must get ready for tomorrow today.a. passion.Act with urgencyb.Integrity:Be reald. which is enduring.1 billionin cash.To refresh the worldb. Coca-Cola revealed its new 90-calorie mini can that holds 7.f.5 fluid ouncesThe first shipments are expected to reach the New York City and Washington D. together we createmutual.Be insatiably curiousWork Smarta.To create value and make a difference.Collaboration:Leverage collective geniusc.20 per share). and along the way.Profit:Maximize long-term return to shareowners while being mindful of our overallresponsibilities. Coca-Cola announced its intention to make cash offers topurchase China Huiyuan Juice Group Limited (which has a 42% share of the Chinese purefruit juice market for US$2. we must lookahead.Diversity:As inclusive as our brandsg.Our VisionOur vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achievingsustainable. vision statements and company’s core values taken fromthe company’s official website:-The world is changing all around us. It declares our purpose as acompany and serves as the standard against which we weigh our actions and decisions. lean and fast-moving organization8 The Coca-Cola Company2010Our Winning CultureOur Winning Culture defines the attitudes and behaviours that will be required of us to makeour 2020 Vision a reality. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottlingpartners.Steward system assets and focus on building valuec.become one of the most globally recognizable brand names?The ability to adapt and find           .4bn (HK$12.Live Our ValuesOur values serve as a compass for our actions and describe how we behave in the world.To inspire moments of optimism and happinessc.Get out into the market and listen. marketsin December 2009 and nationwide by March 2010.Remain responsive to changec.Work efficientlyAct Like Ownersa. 2008.Planet:Be a responsible citizen that makes a difference by helping build and supportsustainable communities.Focus on needs of our consumers. for $4.energy drinks.Be accountable for our actions and inactionsb.Focus on execution in the marketplace every daye.b. On September 3.ORGANIZATIONS AND ORGANIZATIONAL EFFECTIVENESSWhat allows an organization to continue to operate for over 125 years.what worked and what didn’t9 The Coca-Cola Company2010Be the BrandInspire creativity.Passion:Committed in heart and mindf.Accountability:If it is to be. VISION AND VALUES7 The Coca-Cola Company2010Following are the mission. we do wellFocus on the Marketa. customers and franchise partners.a.MISSION.Quality:What we do. quality growth.Partners: Nurture a winning network of customers and suppliers. it s up to mee.Productivity:Be a highly effective.Learn from our outcomes -. observe and learnc.C. That s what our 2020 Vision is all about.

Coca-Cola was invented in 1885 and since The Coca-Cola Company’sincorporation in 1892. The current focus of The Coca-ColaCompany is still that of growth.many of which stem from the fact that the organization operates on such a large level. The .distributed thousands of coupons for free glasses of Coca-Cola so that many more peoplewould be inclined to taste the product. and what it cost to the company. While it is company policy thatThe Coca-Cola Company will follow the laws of every country that it operates in. already. and water. Puerto Rico. Guam. Distributors add carbonated water and any other ingredient necessary to create the final product.Robert Woodruff made an order to provide American troops with Coca-Cola. He also distributed countless souvenirs that depictedthe Coca-Cola trademark logo.new markets has helped Coca-Cola become an icon of theAmerican culture. In some countries. Coca-Cola was being sold to both sides. The process to create each beverage is extremely mechanized in order to achievequick and efficient production. Asa Candler. In 1941. juice drinks. the company’s president. The Coca-Cola Company turned what manywould view as a threat. regardless of where they were. bribes of government officials are considered normal and expected. Consumers in some markets have become moreheath conscious.The Coca-Cola Company does not actually produce soda. The production process of Coca-Cola is asecret. The Coca-Cola Company faces a number of challenges. and expansion efforts quickly led to Cuba. Coca-Cola C2 was introduced. Due to theanti-carbohydrate trends created by the Atkins diet. The outputs of The Coca-Cola Company are the syrups andconcentrates of its beverages. Without its employees’ knowledge and abilities. and the PhilippinesBefore long. 64 bottling plants wereset up in Europe and the Pacific. but contain half the carbohydrates. the cornerstone for The Coca-Cola Company’sstrategy and culture. but it left Coca-Cola with a solid foundation to greatly expand its operationsoverseas. financial strength. This not only allowed American troops to acquire a taste for the drink. The Coca-Cola Company has remained adamant about staying in the non-alcoholic beverage industry. many diet and low-calorie drinks have beencreated.The company uses different types of sweeteners depending on where the concentrate isbeing produced. however.Over time. Eachmarket has its own trends and demands. different countries have different laws. They produce the concentrate or syrup. the company’s founder. For example. Water is one of the main ingredients used in every beverage. it still hasstrong criticism from other parts of the world for its actions. it mainly consists of adding the correct amount of ingredients. which is then sent to distributors. Mostdeveloping countries have more relaxed pollution requirements. The current objective of the organization “is to use our formidable assets-brands. In order to react to this trend. The Coca-Cola Company was eager to take advantage of newmarkets. The Coca-Cola Company sells energydrinks. into an enormous opportunity. had operations in theUnited States and Canada. The secret formula for Coca-Cola is another key input for the company. Besidestraditional advertisements in the local newspaper. the organization. Besides soft drinks. sports drinks. still. Since theorganization greatly focuses on marketing. During the war. It issupposed to have the same taste as Coca-Cola. Coca-Cola was being sold in Europe. When The United States entered WorldWar II.Another problem The Coca-Cola Company faces is derived from the social and politicaldifferences of each market. and mixingthem.This focus on aggressive marketing is. tea. human capital is an important asset to thecompany as well. By 1900. The Coca-Cola Company is always trying to find ways to be innovate. unrivalled distribution system. global reach. anda strong commitment by our management and employees worldwide-to achieve long-termsustainable growth”10 The Coca-Cola Company2010The key inputs for production are the raw materials used in the beverages. The Coca-Cola Companywould not be nearly as successful. a strong focus on growth and marketing has existed.

The company has over 70 clean-water projects in countries all across the globe. There are also operating groups divided by differentregions such as: Africa. Even though the bottling plants areindependently owned and operated. Many haveworked for or ran the bottling companies that partner with the organization.STAKEHOLDERS.Local Communitiesi. Eurasia. human resources.however. AND ETHICSThe stakeholders for The Coca-Cola Company as stated in the company’s CorporateResponsibility Review are:a. it is an indicator of trends at theconsumer level.ORGANIZATIONAL DESIGNThe Coca-Cola Company realizes that it needs to be able to meet the ever changingdemands of its customers. and nothing has happened legally to the bottling plantsin Colombia. European Union.Governmental agenciese. and higher-level management can focus more on long-termplanning. andPacific. which is why the marketing function is so important to the company. TheInnovation/research and development department must come up with the products that themarketing function demands. The organization has a more centralized structure. As statedtime and time again.Bottling partnersd. while local communities care deeply aboutenvironmental issues and labour standards. most decisions are made at the top of the hierarchy.Some of these functions take place at lower levels in each of the regions of the company. This is why the company pushed towards decentralization in thenineties.NGOs12 The Coca-Cola Company2010Because each group of stakeholders has a different goal. The fact thatmembers of the top management team have well rounded backgrounds allow for problemsto be looked at from multiple angles. Suppliers want to charge as much as possibleto create more revenues. while employees wantraises and increased benefits. For example. The functions of each vice president are divided into functions such as humanresources. North America. however in recent years there11 The Coca-Cola Company2010has been a movement towards decentralization. Management wants to keep labour costs down. The shareownersare concerned with earning a profit. such as finance. The Coca-Cola Company has been facing strong criticism for it in the UnitedStates. The Coca-Cola Companybelieves that if they analyze sales based on volume growth.Recently.company has recently beenthe subject of strong criticism the company’s bottling plants in Colombia are alleged to havekilled workers who were attempting to unionize.Suppliersf. The majority of the top level managers at The Coca-Cola13 The Coca-Cola Company2010Company have worked in many different regions and areas of the company. A more in-depth analysis of theorganization’s structure will be discussed later.Certain divisions of the company. the organization can quickly respond tochanging market demands. The two functions most critical in taking advantage of the company’scompetitive advantages are marketing and innovation/research and development. and even more so recently. and The Coca-Cola Company wants to get the lowest prices todecrease costs. the organization tries to capitalize on its brand name as much aspossible. innovation/research and development. in 2002 thedecision to . The organization has two operating groups calledBottling Investments and Corporate. Latin America.The Coca-Cola Company’s structure has characteristics of both organic and mechanisticmodels.Consumersh. The company obviously looks at profit as a way to measure success.Employeesc.The Coca-Cola Company measures success in many ways. Each of these divisions is again divided into geographic regions. conflicts arise.and strategy and planning are centrally located within the corporate division of the company. and public affairs andcommunication. innovation. marketing.Retail customersg. MANAGERS. By allowingdecisions to be made on a more local level. The Coca-Cola Company has been focused on being a more responsible globalcitizen.Shareownersb.The organization’s divisional managers run company operations in a general region of theglobe. marketing.

allowed the local divisions to make the advertising decisions. who reports to the Office of the15 The Coca-Cola Company2010General Counsel.For example: the head of the Canadian division reports to the president and COO of theNorth American Group. they are14 The Coca-Cola Company2010subject to disciplinary actions. Centralizationkeeps organizational choices aligned with organizational goals. The recent shifttowards a more decentralized and organic structure corresponds with the uncertainty of theorganization’s environment. Face-to-face meetings were held regularly at thelocal levels so employees could remain informed.800 employees. According toa general organizational chart obtained from the company’s website.Due to its tall structure.This balance is essential. Isdell used teams of top managers to create solutions to theorganization’s most pressing problems. One of the problems discovered through a survey. upper-management will have access to informationmore quickly. and return on equity for stockholders went from a negative return to a 20percent return. Tall hierarchies also cause motivation problems.sponsor the World Cup was done at the corporate level. In order to deal with organization’sextremely low growth rate. The use of complexintegrating mechanisms allows for easier coordination for the global company. The increased usefulness of the company’sintranet will greatly increase the communication between every level of employees. mutual adjustmenthas started to play a larger role in the organization. Besides the use of teams and meetings. The focal point of The Coca-Cola Company is onresponsiveness. because it allows employees some flexibility. The General Counsel then reports to the CEO. Corporate headquarters. The useof complex integrating mechanisms is important in such a tall and wide organization. however. the organization has experienced communication problems. It is fair to assume thatthere are at least a few more steps in the hierarchy at the local level. but also gives theorganization some predictability. Centralization and high standardization are associatedwith a mechanistic structure. andallow upper management to effectively communicate to the front line . and the intranet allows for information to beexchanged laterally. hebegan to using more complex integrating mechanisms. Should an employee act improperly. The complex integrating mechanisms previously discussed arecharacteristic of an organic structure. which is why the organization isattempting to get employees more engaged. Flexibility isessential when trying to appeal to such a vast number of independent markets.DESIGNING ORGANIZATIONAL STRUCTURE: AUTHORITY &CONTROLThe Coca-Cola Company currently employs approximately 94.however.It is important that each function of the company is able to share up-to-date informationquickly with each other. Due to the changes implemented by Isdell. Now that information in thecompany is flowing in every direction. The organization seems to be doing an excellent job of balancingstandardization and mutual adjustment. was that the people and the company lackedclear goals. The surveys and interviews used by the companyallowed information to flow from the bottom-up. adding to the organization’s flexibility and responsiveness. The surveys have also caused The Coca-Cola Company to pursuesimplification and standardization.the intranet was overhauled to provide a source of real-time sharing of information. The Coca-Cola Company’s structure is a hybrid of bothmechanistic and organic models.high standardization is important to remain efficient in production. Employees feel more engaged andturnover has been reduced.When Neville Isdell took over as CEO and chairmen of The Coca-Cola Company in 2004.The blending of both types of structures seems to be ideal for the organization. there are more than 5hierarchical levels at the corporate level. That president reports to the CFO. This allowed eachdivision to specifically design commercials and ads that would appeal to the local market. Isdell’s changes have led to increased growth rates for theorganization. The Code of Conduct for the organization is aguidebook for how every employee should act.

but also allow it to maintaina level of stability.MANAGING IN A CHANGING GLOBAL ENVIRONMENTDue to its tremendous global presence. Communication problems may also exist becauseinformation can become distorted when it has to travel up and down tall hierarchies.Based on information from Report 2006 this span of control seems somewhat slim for theCEO of such a large organization. coordination may decrease because each division wants to have anadvantage over everyone else. This team consists of each head of the eight operating groups aforementioned.The move to decentralization has caused structural changes for The Coca-Cola Company. clean water is becoming increasingly hard to come by. Thiswould increase coordination between corporate and divisional levels.New offices have been opened to facilitate decisions being made closer to the local markets. so decisions about specific ads are made closer to theindividual markets. Amultidivisional matrix structure may be better suited for The Coca-Cola Company.” It appearsthat the organization is striving for a hybrid structure.employees. In someparts of the world.The multidivisional structure is beneficial for the organization for a variety of reasons. The strategic structural changes that the organization has gonethrough in recent years have created a much needed positive impact on the company. Multidivisional structures allow divisional managers to handle dailyoperations while corporate managers are free to focus on long-term planning. If the company createsdivisional competition. andalso has other top executives in areas like innovation and technology and marketing. One advertising campaign or slogan may not beappropriate for another market. The Coca-Cola Company mustnot only compete for customers. it would have dire consequences for The . and managers at eachlevel would work together to create solutions to problems.The organization has also undergone centralization of some of the company’s departments.In 2006. the CEO is able toreceive input from a wide variety of divisions because of this leadership team. the company may want to look into it. Thedivision based on geographic region allows certain aspects of the company’s operations tobe tailored to the individual market. The Coca-ColaCompany has only one or two suppliers for some of its raw materials. theyview The NutraSweet Company as one of only two viable sources for the ingredientaspartame .The Coca-Cola Company is at a strong disadvantage if they cannot decrease their relianceon a small number of suppliers. The Coca-Cola Company operates in an extremelyuncertain environment.There are also problems associated with this type of structure. If relations with suppliers deteriorate. The organization is trying tocreate a more innovative culture by pushing towards decentralization.DESIGNING ORGANIZATIONAL STRUCTURE:SPECIALIZATION & COORDINATION16 The Coca-Cola Company2010The Coca-Cola Company realizes that a divisional structure gives the organization the bestopportunity to react to the changes in its uncertain environment. the CEO is able to obtain a widevariety of information. which allows them to have advantagesof both mechanistic and organic structures. Increased competition from global and local companies has led tocompetition over the most important resource: customers. Since theteam is comprised of members from various divisions. the Bottling Investments division was created to “establish internal organization for our consolidated bottling operations and our unconsolidated bottling investments. For example. but also raw materials needed for each product.Although there are only six people that answer directly to the CEO. The CEO is also a member of the Senior LeadershipTeam. Salesgrowth increased and employees are much more satisfied. or if the suppliers gobankrupt. while trying to minimize the negativeconsequences of each. While such a structure may be toocomplex for a global organization.

and the chance a distributor falls on harsh economic times. Along with its marketingcapabilities and broad portfolio of products. The company hasreceived plenty of criticism for its operations in India. Many American companies are now being lambasted if they do not try to be moreenvironmentally friendly.Due to the organization’s high credit rating. but done a poor job at managing other parts of the environment. but the organization has hadproblems finding the proper personnel to run the organization.18 The Coca-Cola Company2010The Coca-Cola Company has done an excellent job managing some aspects of theenvironment. affect thecost of production. In1999. the organization signed a ten-year deal with Burger King to be the restaurants onlysupplier of beverages. While this isclearly bad for the company. such as worker strikes. Recently in the United States.The strong Coca-Cola brand name gives the company a great deal of bargaining power andleverage. The Annual Report (2006) lists risks.17 The Coca-Cola Company2010The Coca-Cola Company must also compete to get the best employees possible.Cola Company is no different.Coca-Cola Company. if not impossible to duplicate. Another reasonthe company’s environment is tremendously dynamic is due to the nature of their rawmaterials. whichis why vertical integration was recommended. This means that The Coca-Cola Company is doing a decent job of damagecontrol. This allows the organization the opportunity to finance operations such asexpansion through the issuance of debt. the future is alwaysuncertain. in turn. or purchase new brands. Some of their key raw materials are dependent on specific climates.ORGANIZATIONAL DESIGN & STRATEGYThe core competences that give the organization its best competitive advantages are itsstrong brand name and its network of bottlers and distributors. Even though PepsiCo was willing to give Wendy’s a much better deal. the average consumer is completely unaware of theseallegations. twoforces have started to become inter-woven: cultural/social values and political/environmentalforces. The Coca-ColaCompany’s top choices for the open CEO position decided not to join the company becausethey did not like the actions of the Board of Directors. The Coca-Cola Company has core competenceswhich are extremely difficult. A former CEO of theorganization claimed that 100 percent of its revenues came from strategic alliances. In 2004. the most useful tool being strategic alliances. Climatechanges may impact the price of the materials they need to obtain and. Theproduction of the beverages does not require skilled labor. The negativepublicity received from its operations in India and the actions of its bottling partner inColombia has led to boycotts of Coca-Cola products on some campuses. TheCoca-Cola Company faces the threat of reduced production or disruption in distribution if there is a problem in a market. and The Coca. Thecompany uses exclusive contracts with its bottling partners and other customers as well. PepsiCo and The Coca-Cola Company were fighting to become thesupplier of beverages for the Wendy’s restaurant chain. the company has the ability to raise funds at alower cost.Wendy’s opted to partner with The Coca-Cola Company . This may be necessary if The Coca-Cola Companylooks to expand into new markets.The strength and interconnectedness of the general forces that The Coca-Cola Companymust deal with make the environment extremely complex. While the company has not had any trouble with suppliers lately.work stoppages. It does not seem like the company is not actively trying to secure supplies.The Coca-Cola Company uses a wide variety of techniques to manage relationships with itsstakeholders. Theenvironment is difficult to predict and control due to the global nature of the operations.the restaurant signed a ten-year deal with The Coca-Cola Company. with claims that they cause a great dealof pollution and have damaged local water supplies. This example showshow powerful the Coca-Cola© brand name really is.The environment in which The Coca-Cola Company operates in is extremely dynamic. In 1999.

it allows thecompany to focus on more important issues. The Coca-Cola name even has an influence on consumer tastes. The consumers preferred a glass labelled Diet Coke over a glass labelledTab by 12 percent. The brand name recognition that the company enjoys is a powerfulbargaining tool. Distributorsand bottlers mix other ingredients (mainly carbonated water) with syrups and concentratesand then sell the products. When TheCoca-Cola Company was looking to launch Diet Coke.The hybrid structure of The Coca-Cola Company is ideal for its differentiation strategy. output processes are the greatest source of uncertainty for the organization. They have been successful pursuing differentiation because thefocus of the company has always been on marketing. The use of complex integrating mechanisms allows coordination between alllevels and divisions of the company. regardless of who bottles it. These stories share real life examples of what Coca-Cola©means to their consumers and gives employees a sense of pride to be a part of somethingthat means so much for so many people. The Coca-Cola Company does not produce the end product. Aspreviously stated. and the bottler agrees to only purchase the syrup andconcentrate from the company’s authorized dealers. Thecentralization of the marketing and innovation functions allows the company to retain controlover development.ORGANIZATIONAL TECHNOLOGYCurrently. marketing and production. The Coca-Cola Company is “knownfor innovative marketing that constantly promotes their brand names and protects their domains from competitors. and making a difference (Thecocacolacompany. By performing extensive market research andcreating more local offices. The Coca-Cola brand name is on the end product. and this cannot beimitated by competitors. which mean that the success of both companieshas a direct impact on each other. focused on refreshing themind.CREATING & MANAGING ORGANIZATIONAL CULTUREThe culture of The Coca-Cola organization is mission driven. Stories are so important to The Coca-Cola Company that theycreated a museum in Las Vegas that focuses on the stories of customers. After visitors20 The Coca-Cola Company2010heard others’ stories. It has taken the19 The Coca-Cola Company2010organization over 120 years to build such a strong brand preference. There existsvery little information about the production of the . they performed some blind taste testswith consumers. This is evident inthe previous example of consumers preferring identical beverages just because the Cokebrand name was attached. Because theorganization does not have to worry about the distribution in the local markets. but model citizens. and capital at times. The contracts and relationships between the twogroups create symbiotic interdependencies. The Coca-Cola Company agrees not to sell to other parties in the local market.com).even though PepsiCo was offeringmuch more money.As stated previously.The relationships that the organization has with its distributors are another competitiveadvantage that cannot easily be imitated. 2006). The Coca-Cola Company at timesprovides the retailers and distributors with promotions. inspiring optimism.The Coca-Cola Company’s business-level strategy is one of differentiation. the company is always looking for new ways to serve newcustomers. The richhistory of the organization has allowed the company to compile hundreds of stories of consumers and employees. the company has been trying to change the culture by allowingemployees to essentially shape and reform the goals of The Coca-Cola Company (Fox. They also inspire new employees to make apositive impact on the world. The positive stories that the company chooses to focus on provide a foundation toencourage employees to be not only model workers.2007). they could record their own. The company must keep pressure on the bottlers to maintain high qualityoutputs. even though the liquids in each glass were identical. which the company could use in the future(McLellan. or it could have negative consequences for The Coca-Cola Company.

after 120 years. and it also allowscorporate managers to concentrate on strategic and long-term planning. A matrix structure would be an idea worth considering.The company has faced a variety of internal problems over the years.Large-Batch and Mass Production Medium to HighContinuous Process or Flow Production High The typical structure of a manufacturingcompany that uses mass production is a mechanistic structure. the company may not be able to meet customer demandand lose out on revenue. Another internal problem within the company is that the boardexercises a great deal of power and influence.The structural mismatch means that production in the organization may not be as efficient aspossible. This massproduction and high mechanization leads to a high level of technical complexity. Theory postulates that an organization in this stage would be wise topursue a product team or matrix structure. and it isfair to assume that the production of every Coca-Cola product is the same. a museum for the company.ORGANIZATIONAL TRANSFORMATIONS21 The Coca-Cola Company2010The Coca-Cola Company was founded in 1888 to take advantage of the already popular Coca-Cola name. COO Muhtar Kent stated that the company is focusing on simplifying the structure toreduce bureaucracy.. and the board has even pulled ads because theythought the commercials did not fit the company’s image .By allowing lower level managers to become intricately involved in the company’s growthefforts. Even at The World of Coca-Cola. Of the four life cycle stages (birth. whichaligns both the goals of the managers and the organization. Because The Coca-Cola Company only operatesin one domain and has over 400 products. This move allows the company to react better to each market. the product team structure would be too costlyand unrealistic. growth. He has also promoted employees within the organization. If the organizationexperiences any work stoppage.In 2005. Due to lack of information22 .Classification Level of Technical Complexitya.Coca-Cola syrup. the company’s bottled water. Neville Isdell created an environment in which everyone felt responsible for thecompany’s performance. decline. The fifth and final stage of Greiner’s model is focused on reducing bureaucracy to speed up decision making. there is no mention of how the syrup is produced. however. While there was not information regarding policy changes because of this. is extremely mechanized. many believethat the power of the board will diminish because long time director Warren Buffet hasstepped down.The production of Dasani. In April2007. As the company has continued to grow.Small-Batch and Unit Production Low to Mediumb. death). Buffet has been viewed as rather conservative and also involved himself inthe decision making of the organization. A constant struggle inany organization is trying to meet employees’ demands while trying to keep labour costs low. the benefits of the organization’s structure outweigh the consequences. in which efficient productionis the desired end. however theorganization uses divisions based on geography. topmanagers have pushed operational responsibility and decision making down to the locallevels. As previously stated.Uncertainty in the environment has caused many external problems for the organization.the company remains in the growth stage because the company’s value creation skillscontinue to evolve. workers went on strike because management wanted to institute a policy whereemployees would pay a greater portion of their health benefits. This is due to its focus on marketing and local appeal.ranging from uncertainty with its suppliers and distributors to political and societal pressures. not product. the company failed toattract its top choices for CEO in 2004. The Coca-Cola Company’s structure is unique in that it has a lot of thecharacteristics of an organic structure.

The changes brought on by using theunstructured decision making model created much better results for the company. and thus. Recently. The example alsoshows that it can prevent the organization from acquiring important human resources. For example.sweeter version of Coca-Cola. Themarketing department is the most powerful subunit in the organization.MANAGING CONFLICTS. POWER AND POLITICSConflicts can be a healthy way for an organization to improve decision making. how employees were rewarded. which gives the company an advantage over itscompetition and gives it more bargaining power.One of the biggest flaws in the organization is that the board of directors is responsible for some of the non-programmed decisions made by the company.DECISION MAKINGThe majority of decisions made by The Coca-Cola Company are done so by using theincremental method. preferences for the same tasting beverage increased dramatically. The strong emphasis on marketing has allowed Coca-Cola to become one of themost recognized brand names in the world. realizing that the company was in desperate need for adrastic change.Allocating more capital to the department also allows for each marketing campaign to betailored to specific markets. Conflicts can also be a significant source of trouble for anorganization when they cause production declines or important decisions cannot be made. When The Coca-ColaCompany was seeking to purchase Quaker Oats. but thenstopped because the board felt the price was too.This is problematic for the company for a few reasons. areextremely prone to take fewer chances. By providing the department with moreresources. a necessity in the company’s extremely uncertain environment. Isdell sought to figure out why the company performance was declining. the deal was almost finalized. itmeans they lack confidence in the upper management of the company to make vitaldecisions. the company was able tomake some drastic changes to the company’s culture. If consumer data shows the companythat one of their ideas would not do well. they want to minimize risk.The Coca-Cola Company2010about the company’s regional structure. the company can conduct greater market research. research indicated that by simply usingthe name Diet Coke. it is hard to say whether the company should pursuea matrix structure or remain as a multidivisional structure. Because members of the board haveso much money invested in company stock. making advertisements more effective. The company does not just quicklydecide to create a new product.23 The Coca-Cola Company2010This type of conflict can drastically affect the organization’s ability to change and adaptquickly. or change operations. even thoughthe organization had a diet beverage on the market. Taste tests indicated that consumers would prefer a new.According to the data. so they are not close enough to know all the pertinent informationrequired to make complex decisions.When the organization sought a new CEO in 2004. the company would analyze results.Drastic changes take time. “The marketing department has considerable power because it is thedepartment that can attract customers – the critical scarce resource. andmade efforts to get employees more involved. The members of the board do not or have notworked for the company. and createnew ways for looking at problems. Each year. Bystarting at the lower levels of the organization to find solutions. When decisions are made by the board. One negative consequence of putting sucha great emphasis on marketing research is evidenced in what has become known as one of the greatest flops in history. their top choices turned them downbecause the prospects felt that the board had too much power .Market research also saves money for the company. the company can decide not to produce thatbeverage. which lead to the . The benefits derived from the power allocated to the marketingfunction greatly outweigh any negative consequence.” The heavy emphasison marketing could prevent the company from finding ways to become more efficient inproduction or distribution. and then make slightchanges in operations to create better results next year.

633Uploaded:09/15/2010Category:Research>ScienceRated:Copyright:Attribut ion Non-commercialThe Coca-Cola Company 2010 This document contains the concepts of organizational theory explained with reference to The Coca-Cola Company brief introduction of the organizational structure of the cobrief introduction of the organizational structure of the co(fewer) musicalmoodShare & Embed Related Documents PreviousNext p.24 The Coca-Cola Company201025 Organizational Structure of The Coca-Cola Company Download this Document for FreePrintMobileCollectionsReport DocumentReport this document?Please tell us reason(s) for reporting this document Spam or junk Porn adult content Hateful or offensiveIf you are the copyright owner of this document and want to report it. Info and Rating Reads:35. p. p. p.creation of New Coke in 1985. p. p. The strongbrand attachment that the company worked so hard to achieve with consumers caused asevere backlash towards the reformulation of Coca-Cola. 6 p. p.Report Cancel This is a private document. p. This example proves that marketresearch cannot always be an indicator of what will actually happen. 22 p. p.More from this user PreviousNext 1 p. p. p. please follow these directions to submit a copyright infringement notice. 12 p. 13 p. 11 p. p.Recent Readcasters Add a Comment Submitshare:Characters: 400 . p. 14 p. p. 34 p. p. p. 27 p. p. p. p. p. p. 25 p. 19 p.

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