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Coca Cola Company: Management Challenges

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Question:

Discuss about the Coca Cola Company for Management Challenges.

 

Answer:

Management Challenges and Responses

Coca-Cola Company is among the leading companies in the production and distribution of beverages around the globe. A company as extensive as this faces numerous challenges in its management process in relation to the structure of the company.  The management process of the company has a problem in its operation process because of its command chain. The structure of the company’s organization is a many layered arrangement.  The arrangement is inflexible and tall hence the decision making process being made can only be done the leaders of the company and cannot be easily changed with changing circumstances[1].  Tall structure of organization poses a challenge in the management process because the work force of the company feels left out in the in dealing with the matters affecting the company. As a result of this structure many instances of employee absenteeism and low productivity is recorded. In response to the existing structural organization, the company should adopt a flattered structural organization. The flattered structure is characterized by the facts that employees are involved in the decision making procedures of the company hence increasing the level of productivity and improving the rate of work attendance.

International trading is an external challenge that is faced by the management of the company during its operations exercise.  An External challenge facing the company is mainly competition from rival companies.  For instance in China, the company is facing a slowdown in its distribution and sales power because it is believed the chemical composition of the beverages from the Coca-Cola company are dangerous to the health of the people. Therefore the products are facing a stiff competition from the company that deals in the production of Pepsi beverage. Also there is an arising competition from a herbal beverage drink known as Red Bull. Red Bull has become an appeal to the people in the world due to the herbal components it contains thus associated with promotion of good health. To respond to competition, the company should face the changing taste and preference of the people and engage in the production of a beverage that will nutritiously appeal to its customers.

 

Country Risk Factor

Coca-Cola is a large company that has established its branches in many countries around the globe and as a result of this the company is bound to face many risks in its effort to expand its market.  One of the major country risk factor is political instability. Quite a large number of the countries in the globe are being faced by challenges in their political segments. When a country is experiencing constraints in its leadership docket, the operations of that country are negatively affected with the business sector being widely hit. Coca-Cola is mainly affected by the problem of political turmoil in many countries therefore the market base is negatively affected and is reduced significantly thus reducing the chances of expansion of the company.  Political influence and stability cannot be eliminated completely but the company can put up strategies that are used in sheltering the company from effects of the political unrest. Among the many strategies the company considers taking policies of insurance to protect its operations and employees from the effects of unrest. The company has taken a multi-country insurance cover to shield its operations over the world from effects of political unrest.  Other insurance covers that have been taken by the company include, credit insurance, work-related and non-work related insurance for its workers among other policies.

Means of Dealing with Ethical Issues

Coca-Cola is a company that recognizes the importance of sustainability and environmental protection in its operations.  In effort to be the largest profit making company, the process of production and packaging styles have been put in place as the company is aware of the environmental hazards that have been made possible by man’s activities[2].  From the early years the company has made a point of packaging its products in bottles and cans that can be reclaimed and reused easily. Also in relation to the global campaign regarding the importance of environmental sustainability, the company is introducing a Plant Bottle. The Plant Bottle is increasingly effective in the reduction of emissions of carbon as compared to the plastic bottles. For a huge company such as coca cola its surroundings is the determinant factor of is future and continuity. The information has brought forward awareness policies that aim at informing the neighbors of the company and the employees the importance of sustaining the environment. The company has taken upon itself to educate surrounding societies about ways and means of protecting the environment. Some of the information passed includes the different ways of using the bottles after use for example, reuse for the purposes of storing water.

Managerial Omplication of Hofstede Dimension

Hofstede dimension is a theory that is used in the business field as one that aims at observing the culture of people and the prevailing businesses in a certain country. The Hofstede cultural theory brings out the two dimensions of culture which include the hidden and the visible behaviors. The visible is the outward appearance of a certain culture for example dressing, and eating habits. The hidden practices include morals held in individual families. Coca-Cola’s managerial observation is focused on the two aspects. In the visible cultural aspects, the company puts more focus on the urban dwellers who record quite a large significant number of bottles of beverages compared to their counterparts in the rural areas. In the hidden aspect, the management of the company has observed that there are families that believe that taking of carbonated or drinks that contain caffeine is bad being in relation to their religious belief.  As a result of this observation, the management of the company has focused mainly on the areas where family behavior is not influenced by religious beliefs.

 

Cross-Cultural Communication Management Process

Cross-cultural communication is the process that is used to observe how people from different cultures pass information between themselves. The process of observation is an important aspect for the management of the company because it helps improve the understanding between workers of different cultures in the company and its leaders however the process may disadvantageous to the management process because employees and leaders may find many avenues of conflicts hence curtailing productivity level of the company[3]. In any multi-national Company, the process is relevant to its management processes as it used as a measuring tool for the ability to fit in in different countries practicing different cultural practices.  On the basis of my evaluation concerning the cross-cultural communication process I recommend that Coca-Cola Company management focus on the process keenly and practice the process in bid to improve the extensive outreach of the company round the globe.

 

Cause of Cultural Conflict

Coca-Cola Company is a world company that is has stretched its services in many countries around the world for this reason; the company is faced by a number of cultural reasons that can cause conflicts.  One of the main potential causes is the way of communication. People in the western part of the world including USA and Australia believe that they can air their views without any restrictions. On the other hand, the Indians and Chinese believe that giving of one’s opinion should be done after the proposal of the head of the group. The Indians and the Chinese find it rude to disagree with the view of their leaders despite its implications. The two contradicting beliefs regarding the means of communication forms a reason for cultural conflict in branches of the Coca-Cola Company in the world.

Negotiation Process

To reach a common ground in an event of cultural conflict the company has introduced and implemented a negotiation process in terms of advertising. The management of the company has introduced a team work strategy whereby the workers and employers from different cultures are expected to work together with the goals of the company in mind. When people work together, chances of getting to know different cultures by an individual are improved, therefore a sense of respect for different cultures is cultivated. However despite the efforts of the organization to work through conflicts, some cultural bases act as barriers.  For instance, the communication between Chinese and Indians may be a barrier as they cannot air their views that contradict those of the manager or the team leader as they consider it not respectful.

International and Global Strategies

From inception the company has held a number of strategies thus becoming a global company. First the company began with an exclusive formula that was tested in the market. At the time the company produced a cola drink that had caffeine and alcohol in it thus due to this production it started to gain popularity[4]. Second, the company developed a logo with a timeless typeface. The idea of this logo was that it would be recognized in generations to come. The third strategy is distribution and packaging in a uniquely shaped bottled which resembles a cocoa pod and s easily identified with the company. The other strategy is that the management of the company holds their wholesalers and retailers responsible in case the products are maintained in high standards. Last but not least the company has given value to the money of their consumers and has practiced fair play in the industry by producing quality goods at a constant price for many years.

 

Organizational Growth Strategy

Coca-Cola being a large company has developed over the years and to maintain its standards over the years, the company has come up with different strategies that are aimed to its growth. The company has introduced decentralized method of organization[5]. Following this strategy decision making processes are made collectively by the leaders and the workers. The decentralized method of organization improves the freedom of the workers hence improving the rate at which employers report to work and how they perform in their duties. Decentralization also is a strategy used to improve the relationship between company branches that are geographically apart hence leading to an increased efficiency in the management process. I recommend and appraise the change and growth strategy in the company as it will lead to increased levels of production.

Variables Affecting Organization Design

In relation to its international operations the company has vertical governance structure the president being the head of the company. After the presidency docket, the corporate staff including the board of directors and the manufacturing staff helps the president in the organization process.  Marketing and finance dockets follow then divisions and sub-divisions in different parts of world.  The ethnocentric organization design is similar in all parts of the world thus this is a variable that affects the smooth running of the company in some countries as it curtails the freedom of the consumers to air their grievances about the product in relation to their tastes and preferences.

Role of Staffing

Staffing is the process through which companies increase or decrease the number of workers in their organizations. The staffing policy in Coca-Cola Company is that of recruiting workers in relation to the work present at the time[6]. The policy used by this company is time and resource efficient because the company does not have to pay for labor that has not been utilized.  The policy also is important to the company as it helps the management evaluate the abilities of individual workers hence providing rewards and commissions or pathways towards promotion. Coca- Cola Company has managed to stay at the top of the industry because of its staffing policy that improves the way a worker should handle themselves at the work place.

Hofstede’s Four Dimensions

In Coca-Cola company changes in the organizational structure has led to improved relationship between the support staff and the management of the organization because the distance of power between the two parties has been reduced.  The leadership of the company has also designed a policy that has shown that all changes that may be brought forth in the company are for the good of the employees and the company at large hence avoidance of uncertainty is accomplished. The company has brought up strategies that have aimed at promoting the well-being of the employee hence the employee can rely on him or herself and do things independently. The company on the other hand promotes masculinity as this the factor that drives workers towards achieving more through instillation of a sense of success when working.

Conclusively Coca-Cola Company is a large company that has branches in almost all the global countries. However in relation to the size of the company structure and the international trading strategies pose a challenge to the management process. Political instability forms a country risk level for the company in many countries hence expansion globally is curtailed. Ethical issues relating profit, people and plant concept aims at improving the environmental sustainability of the surrounding where it is located. Cultural conflicts are a main issue in the company due to the development in different countries with different cultures. The organizational structure is vertical with the president and the board of directors being at the top. The vertical leadership is a variable affecting the management and process of operations of the company. The company has put strategies to improve its global and international relations. In regard to Hofstede the employees are subjected to the four dimensions of the theory thus improving the relations hip of the different levels of workforce in the company.

 

Bibliography  

Rowe, W. Glenn, and Laura Guerrero. 2013. Cases in leadership. Thousand Oaks, Calif: SAGE Publications.

Lussier, Robert N., and Christopher F. Achua. 2012. Leadership. Mason, Ohio: South-Western.

Agarwal, Anurag K. 2017. BUSINESS LEADERSHIP AND LAW. [Place of publication not identified]: SPRINGER. https://site.ebrary.com/id/11306229.

Banks, Hamish. "The business of peace: Coca-Cola's contribution to stability, growth, and optimism." Business Horizons 59, no. THE BUSINESS OF PEACE (September 1, 2016): 455-461. ScienceDirect, EBSCOhost (accessed May 22, 2017).

Pendergrast, Mark. 2013. "Book highlight - surging ahead: surviving management disasters and more at Coca-Cola." Global Business And Organizational Excellence no. 6: 67. Academic OneFile, EBSCOhost (accessed May 22, 2017).

Regassa, Hailu, and Laurie Corradino. 2011. "Determining the value of the Coca Cola Company--a case analysis." Journal Of The International Academy For Case Studies no. 8: 79. Academic OneFile, EBSCOhost (accessed May 22, 2017).

Polk, Xanshunta L. 2009. "COCA-COLA: LONG TERM INNOVATION (A CASE STUDY)." Consortium Journal Of Hospitality & Tourism 13, no. 2: 61-78. Hospitality & Tourism Complete, EBSCOhost (accessed May 22, 2017).

Piaggesi, Danilo, Kristian J. Sund, and Walter Castelnovo. 2011. Global strategy and practice of e-governance: examples from around the world. Hershey, PA: Information Science Reference.

Denison, Daniel R. 2012. Leading culture change in global organizations: aligning culture and strategy. San Francisco, CA: Jossey-Bass. https://www.books24x7.com/marc.asp?bookid=49658.

Lasserre, Philippe. 2012. Global Strategic Management. Palgrave Macmillan. https://www.myilibrary.com?id=976595.

Naue, Pascal, and Oliver Mo?ller. 2010. Critical reflection of the U.S. subprime-crisis' origin by using Hofstedes? theory of cultural dimensions.

Ito, Takayuki. 2010. Innovations in agent-based complex automated negotiations. Berlin: Springer Verlag.

Kumar, Raj. 2011. Human resource management: strategic analysis text and cases. New Dehli: I.K. International.

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