Coca-Cola – Organizational behavior
Organizational behavior can be termed as the systematic study as well as the careful application of knowledge of how people act in an organization (Hatch, 2006).This is a study that can be based on individuals or at times groups.This is a study that is inclusive of the strategies as well as the structures that the organizations adapt in its operations.
Organizational behavior of different companies is constantly changing, a change that can be attributed to various factors as well as other variables involved.
The key problems that arise in the organizational behavior of a particular company are as a result of the influence that arises from changes in the organization. This is based on the fact that organization is a concept that changes thus causing the changes in organizational behavior. Organizational behavior is a concept that covers a wide array of subjects, methods, approaches and perspectives. This array may attributes to the issues that arise from the use of management theories, organizational culture, individuality, decision-making, politics, power, leadership, conflict, and management change.
Organizational behavior is essential to the growth as well as the establishment of global corporation owing to its capsulation of a wide array of focus matters (Robbins, 2004). Organizational behavior has an impact in the way that the company meets the set goals as well as the visions of the organization based on the stability as well as the status of this organizational behavior. Background and history of the organization The Coca-Cola Company can be termed as the biggest non-alcoholic beverage company in the world. It has its corporate headquarters based in Atlanta, Georgia, and has a worldwide presence operating in at least 200 countries. Also read about “Contemporary theory of management“
The company makes different variations in its products to suit the interests of its target country. The firm was founded in the form of a partnership between Dr. John Stint and Ed Holland known as the Pemberton medicine firm. It had the aim of trading in French Wine Cola whose name changed to Coca-Cola, Indian Queen Dye and Globe Flower Cough Syrup (Schoenberg, 1988). Its name was later changed to Pemberton chemical firm owing to its growth to a stock firm. In the year 1888, the firm got a charter that followed an expansion in its extensions to cater for Pemberton’s lemon and Orange Elixir.
The Coca-Cola brand began as a soft drink fountain beverage in 1886. The company introduced a bottling system which enabled the Coca-Cola brand to become the most famous drink it is at the present. The rising sales of the Coca-Cola drinks in the years 1894 impressed Joseph Biedenharn who was a trader. In the year1899, two Lawyers came up with a business plan that was aimed at marketing the Coca-Cola drinks. These lawyers met Asa Candler who was the owner of the firm at the time and acquired a permit that allowed them to bottle the drink around USA and especially Vicksburg where they had participated in bottling.
The company witnessed rapid growth amid the years 1900-1909 owing to the pioneer partnership that enabled the company to sell bottling permits to local traders. This increased the efficiency as well as the quality of the commodity as a result of the progress that the people had made in technology thus increasing the popularity of the commodity in the area. The year 1916, witnessed the introduction of contour bottles following the realization by bottlers thought that straight bottles were mistaken with imitations.
This made the bottlers to contract glass makers who developed unique bottles that could easily be distinguished from imitations. This led to the contour bottle that was developed by Root Glass firm, to be awarded the patent rights as well as a trademark. By the year 1920, the bottlers’ plants had increased to almost 1000. The aggressiveness as well as zeal of the bottling trader led to a stable growth leading to the opening up the vending machines. This increased the sales of the company to the effect that the company had several stores opened in nations such as France, Peru, Spain, and Italy as a strategy for international expansion.
Many bottling plants were established in the course of World war 11 aimed at supplying drinks the troops (Fisher, 2007). The company used a different marketing strategy in which it allowed its customers to make decisions on what packaging sizes they preferred. This strategy saw the introduction of cans instead of bottles though this move did not outdo the use of bottles. The company introduced other brands such as Sprite that were aimed at meeting the needs of other customer who had different tastes.
The major shop outlets of the company merged in the 1980s in order to form global mega chains that were aimed at serving huge customer bases. Owing to political as well as economic changes in the 1990s the company opened up other plants in Eastern Europe with the aim of serving the vast markets that it had earned. The company is now recognized as a popular firm with roots developed among the international body as well as the local bodies. This has acted as a major boost in the marketing of the company’s products giving the company a leading position in the industry of non- alcoholic beverage drinks.
The company operates by giving bottlers concentrated syrup that they develop into final products based on the tastes and preferences of the market that they serve (Plasketes, 2004). This makes the bottlers responsible for the selling of the finished drinks to the market that they serve. The Company since its inception uses a centralized organization structure that concentrates all corporate decision making at the organizations headquarters. This is where all the major decisions of the company are made by the board of governors as well as the senior management.
Their decisions are then passed down to the other managers in the respective countries for implementation.Organizational behavior issue The Coca-Cola Company is a company that is based on the production of non-alcoholic beverage drinks. The organizational behavior issue that is facing the company is its decision making process of the company, an issue that arises from the organizational structure of the company. This is due to the fact that globalization has led to the development of the company to the point that it has operations all over the world.
These local operations are responsible for the distribution of the company’s products in the particular country that they operate in. The issue that faces the company is the fact that it is hard for the company officials situated in the particular country to come up with decisions regarding the activities of the company in that particular country without the consent of the governing body. This has been an issue that has affected the functioning of the company in the sense that it is hard for the branches to handle issues that affect them based on the setting of the country in which they operate.
This is based on the fact that the decisions made by the governing body of the company may not be effective in the particular country (Bogomolny, 2004). In addition, each country has different rules that govern the operations of such companies in their particular countries. This has affected the operations of the company based on the fact that the decisions made by the governing body have varied influences on the operations of the company in the particular country. Literature review of the issue The company has faced issue with its decision making process that has cost the company more in form of loss.
This is based on the fact that the company undertakes a decision making process that is rather long thus increasing the time frame on which decisions are made and implemented (Friedman, 1992). This has affected the operations of the company based on the fact that it affects the flexibility of the company in dealing with issues related to its operations in the different countries that it operates. This are problems that arise from the difference in the laws that govern the operations of the industry in that particular country that may be changed at random thus creating the need for the company to react swiftly.
Different countries have different preferences and tastes thus creating the need for the regional managers to be independent so as to implement changes that best suit their target market (Walters, 2006). The issue has been created by the aspect that corporate decisions are made by the headquarters and that the region managers can only implement corporate decisions that are passed on to tem from the headquarters. This creates a situation in which the employees are not free to implement their aspects of creativity as well as involvement in the activities of the company.
This has had the impact of implementation of some decisions that do not work in line to the targeted market owing to the difference in the markets making the decisions successful in some markets and unsuccessful in others. Cause of the issue The cause of this issue can be attributed to the centralized structure of organization that the company uses in its administration. This is based on the fact that the decisions implemented by the company in its various operations are verified by the governing body that is situated in the headquarters of the organization.
The centralized structure at Coca-Cola involves two main operating groups, Corporate and Bottling Investments. These two groups are divided according to the different geographical regions that the company has operations in which are North America, Africa, Latin America, European Union, Pacific and Eurasia. Each of these regions is further divided into smaller geographic regions for easier management. Each region is headed by a president who is the chief operating officer for that region. The COO’s report to the chief financial officer who in turn reports to the general counsel that will report o the chief operating officer (www.
thecoca-colacompay. com). This has raised the issue in the sense that the lower management in a particular country cannot come up with decisions that affect the operations of the company’s activities in the particular country without the consent of the governing body. The main cause of the issue is the structure of the company which as discussed is centralized. This has the implication that the corporate decisions that the company implements in its operations are deliberated by the headquarters and passed on for implementation.
This has raised the issue in the sense that the headquarters do not have an experience of the market thus making their decisions not worthy implementation in certain countries owing to the business environment in that particular country. This has an impact in the sense that decisions made by regional managers regarding their areas of operations are more appropriate than those made by the headquarters owing to the difference in the market experience of the two. Alternative solution
The Coca-Cola Company can alternatively match its decision making skills to the structure that it applies by making sure employees get involved in the decisions making. This can be done with the implementation of an open door policy which allows any employee to approach the manager and suggest ideas for solving different problems. This has raised the need for the company to decentralize its structure of organization that has been the talk of the company. This is a move that is aimed at giving the running bodies in the particular country the authority to make decisions on the running of the company’s operations in their country.
This creates a situation in which the management is aware of small issues before they become large ones. This is by allowing the managers to make changes that they see as best to suit the interests of the company in their jurisdiction of application aided by their employees. The idea is creating a structure in which the lower level managers are in charge of the markets that they serve and are responsible for the decision making in that particular market (Tompkins, 2005).
This is advantageous since it involves giving authority to the branch managers in a way that the branches operate as different bodies each implementing decisions that best suit its operations as well as its environment of operation. This creates a situation in which the company is able to inspire optimism in all stakeholders by making decisions in a timelier manner (Tompkins, 2005). The move is also advantageous in the sense that it has an impact on the stakeholders as well as increasing the effectiveness of the company in service delivery.
It also has the advantage of increasing the sales of the company owing to the competition that it creates. On the contrary, the move can create a situation in which the employees can make decisions that can lead to loss on the part of the company. This is based on the fact that the lower management can employ its rights of decision making irresponsibly thus leading to a loss in the market. This is because some of the suggestions that could be made by the employees may not be appropriate and hinder the implementation of the firm’s strategy and therefore if followed might have the consequence of huge losses.
Recommendations The decision making process that The Coca-Cola Company employs does not fit into its structure or mission, vision, as well as values. This is based on the fact that the decision making process is rather centralized contradicting all the other advancements that have taken place in the Company. The company has a structure that is more organic with its mission and values aimed at attaining the creativity as well as employee involvement.
The company ought to advance its decision making which would in turn enforce the company’s organic structure by implementing a strategy that allows organizational learning. This can be attained by the decentralization of the organizational structure. This is aimed at making the different branches in the differing countries independent in the sense that they can make decisions focused on their activities in the particular country. This is based on the fact that the managers in the particular country have the required knowledge of the market structure in their country thus can make decisions on an informed basis.
This means that in each country the company will have vice presidents who are in charge of the operations of the company in that particular country but reporting to the governing body that is situated at the headquarters. This is a move that is feasible in the sense that the company does not incur extra costs based on the fact that it only needs to create single positions in each country. These are positions that can be filled by existing managers by making the branch that they manage the headquarters of the company in that particular country meaning that it takes charge of the other branches in the country.
This is a move that is cheap in the sense that the company does not have to implement many changes to its current structure thus making it a feasible recommendation. The move is ethical on the basis that it creates employment rather that terminates employment of current employees. Alternatively, the recommendation does not violated the ethical issues raised in each country based on the fact that the decision making process will be based on the environmental factors that affect the company’s operations in the particular country.
The responsibility of the recommendation is on the governing body of the company which in this case is expected to give up some of the responsibilities it holds. These are responsibilities that are then distributed to the different vice presidents who will be created in each country that the company operates. Implementation Decentralization is a major organizational change and therefore will require all levels of management within the organization to participate. The decentralization efforts within coca cola will be led by the presidents of the various regions that the company operates in.
the president will delegate decision making ability to the country heads who will be able to formulate the appropriate strategies for the company at the country level. Since decentralization involves passing down decision making ability to lower management levels, it requires that lower management is also capable of developing appropriate decisions for the organization (Tompkins, 2005). As such, the major resource required for implementation will be skilled and competent employees to fill the management positions that will be undertaking major decisions.
The process should take up to one year so as to ensure that all managers are able to independently make timely and well calculated decisions pertaining to their divisions and countries that they head. Success of the whole process will be measured based on quarterly reports on sales and customer feedback from the respective countries. Conclusion The Coca-Cola Company is one of the largest non-alcoholic beverage firm that has survived in the market for many years with its popularity still on the rise.
This has led to the company being termed as one of the most successful companies in the world. The company has expanded its production over the years to become a multinational firm with its products selling all over the world. Despite the many successes that the company has registered it has suffered losses of late that can be attributed to its decision making process that is centralized despite the growth of the firm to an international organization. This has affected the company’s operations in different part of the word based on this aspect.
This is in the sense that the decisions that are implemented by the company are deliberated by the headquarters and passed on for implementation to the other organizational units. This is a major weakness in the sense that the company operates in different countries that have different laws governing the running of the company’s activities as well as varied tastes and preferences of the people. His has an impact in the sense that the implemented decisions might have different results in the different countries of application leading to losses in others.
This has raised the need for the company to restructure its organizational structure to allow the making of decisions by other parties in its structure to prevent the losses that it makes in its decision making process. This is a move that will the save the company funds in the sense that it is cheap to implement and on the other hand is ethical. This is based on the headquarters breaking down its roles to the regional managers to govern the regions that they manage. The headquarters can serve as the supervisor in the sense that the regional managers are subject to these body.
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