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Overview of Organizational Theories

Describe about the Modern and Post Modern theory of Organization?

An organization is a congregation of people working as a team under one roof, to achieve the goals of an organization. It can also be defined as the means of utilizing the strength of an individual working in a group (Robbins and Judge, 2014). The objective of forming an organization is to deliver services and products to their customers in a way that brings profit at the end of the transaction. The theories of Organization are categorized according to the era’s in which they were established. Considered by many business analysts, academic researchers and economists, theories were formed which defines the dynamics of Business Organization (Czarniawska-Joerges, 2006). The theories of Organization, provides the consequence of Social Organization on approach and behaviour of interdisciplinary sections and the effect of personal traits or characteristics, of employees and employers, in the organization (Tsoukas and Chia, 2011). The sustainability, success and performance of the Organization and the mutual effects of environment are also determined by Organizational theories.

The four basic theories of Organization are the Bureaucracy, rationalization (also known as Scientific), the division of labour and modernization theory. According to the bureaucracy theories, the officials are non-elected who makes rules and make the people of the organization follow them (Eriksson-Zetterquist, Müllern and Styhre, 2011). The common example of Bureaucracy is the Public sector, the public universities etc. The Bureaucracy theory suggests an organization that is responsible in making decision regarding the administrative policy. The Scientific approach introduced a system and use of strategies and mathematical solutions (Bøllingtoft et al., 2009). Scientific theory established formalization and specification of Objective. Setting goals helps in completion of a task, this concludes to a stable operation and logical organizational structure. The division of labour was introduced by Adam smith and eminent economist. This theory argues to justify the importance of distinct skill that results in increased productivity.

The Modernization theory was executed when the world was witnessing a significant change popularly known as “Urbanization” (Hassard, 1993). Since then various theories were categorized under the modernization theory. The modernization theory has three important segmentation, they are: the first during 1950’s and 1960’s, the other during 1970’s and 1980’s and the third wave was during 1990’s onward. The two selected theories in this study is the Modernization and Post modernization theory. The study further focuses on why these theories provide an alternative way of analysing and understanding.

According to various researchers the modern world is full of power and energy which may not be controlled but they can be directed. Modernism consist four institutions they are surveillance, industrialism, capitalism and control of violence. Production in a competitive environment is focussed on making labour a commodity, and privatized ownership of a company (Utwente.nl, 2015). The Industrialism depends highly on machine, tools and equipments that required special skills to operate. This period exploited labour to a huge extent (Kenis, 2010).

The post modernism was the time which was characterised by increased disparity based on the earlier periods of Modernism. Modernity brought a wave of change; these changes were from social to economic effect. The approach of Post modernity finds the atonement for shortcomings or mistakes accredited to modernity. Post modernity plays the critical part of identifying institutional progress that produces a sense of dispersion and fragmentation.

Modernization Theory and Its Segmentation

The post modern theory introduced awareness like the ethical awareness, the social awareness, the innovative business strategy, globalization and many others. Among this Corporate social Responsibility is a very recent concept (Locke, 2003). In South Africa 1986, the leading beverage soft drink company Coca Cola took the responsibility to donate $1 million to fund to provide support for developing the educational and housing system and announced plans to sell its stock of 30% of major bottler and 55% canning operation. At that time Pepsi adhered to various social essentials to which they eventually suffered low market share (Moses and Vest, 2010). This was a strategy of Coke to get the market dominance.  

 Coca cola Company in Columbia workers in Columbia made charges against the company. The company collaborated with the government of Columbia charging violent accusations on their workers. It was later investigated and found that more than hundred- eighty workers have been the victim of human rights violation for about 15 years (Gill, 2007). Majority workers were not unionized and worked for low wages. This was a big exploitation of Labour. As described in earlier the exploitation of Labour began in Industrial era. Thus Post modernism introduced a revolution, but it also had shortcomings of Labour exploitation.

During 2004 to 2010, Coca cola started designing community programs; the company introduced a sustainability scheme. Coca-Cola started making people aware soft-drinks-related fitness and nutritional troubles and the mounting prevalence of fatness to which sugar-sweet beverage drinks contributed (Raman, 2007). This Scheme targeted at improving its brand image to be committed to promoting explanations to the global health-related unhelpful side-effects of modern lifestyles. This enhanced the modern theory by highlighting the needs of the customer more than the company (Adekola and Sergi, 2007). Though Coca cola was leading beverage drinks company yet its image of caring about it customers brought a significant change in its popularity. Following that scheme Coca cola introduced diet products and energy drinks and mineral waters to promote healthy lifestyle (Johnson, 2012).

In modern day the coca cola company is considered to be decentralized to a high extent. It is a structure for approving modernism.  In respect to that the company has two vital groups of operation; they are the corporate and the bottling investment (Williams and Curtis, 2007).

 The groups that perform various operations in the organization are divided into various groups according to the regions, like Latin America, European Union, the Pacific, Eurasia, Africa and likewise various other region. These groups are further distributed in to fragmented smaller regions (BOONE, 2012).

The Organization and its supplementary recruits around 31,000 populations on global basis which can be considered as post modernism in positive aspect where livelihood is a creative process (Elmore, n.d.). Apart from concentrates, syrup and beverages which enhances the brand of the company and almost more than 230 other soft drink varieties are produced by the Company and its smaller units over 200 countries in the world (Clay, 2005). In addition of the beverage drink Minute Maid Company, the management structure of the company’s operation is divided in five geographic groups.  United States and Canada are included in the North American group (Isdell and Beasley, 2011).

The Emergence of Post Modernism

In the Latin American group, the crosswise South and Central America operations, like from Argentina to Mexico’s end, are also included (Luo, 2004). The group of Europe moves from Russia in east, to Greenland. Some markets in Eastern Europe are accepted to have the most developed markets. In African and Middle Eastern countries the group has spread in all over those areas.

The structure of the company is combined with both organic as well as mechanic model of team working which the respective areas of the company is on the sensitive part (Huth, 2008). The flexibility and stability of the company along with the high standardization and centralization indicates the mechanistic model configuration.  The Organic model structure can be found through the low and high standardization, the efficiency, the complex and simple centralization and the down and top approach (Burton, 2006). Both the structures seem to be ideal for the company.

The crucial function of the company is to be flexible.  This effort of Coca-Cola is to establish more in large and diverse number so they could do well in the market (Sabmiller.com, 2015).  To be efficient in production the continuity of maintaining high standard had become a crucial task for the organization. Utilizing integration of complex nature mechanistic model estimates the clear concept of coordination of the company in global forum (Daft and Marcic, 2014). The organizational deliberation in the chains with the company’s goal is kept by the centralization process. The flow of information runs smoothly in every direction because of the easy access by the upper management, which is a modernistic advantage (Burton, DeSanctis and Obel, 2006).

The significant strategic dynamic structure that the company has to maintain throughout its existence has influenced their goal (Lowitt, n.d.). The employees were satisfied and that concluded to good sales for the company. The organization is putting its effort to develop a creative tradition by moving towards decentralization even though it seems that it is not satisfied with the trend in beverage industry.

In Coca cola Company the business level strategy is unique since the company is famous to apply creative strategy in promotional marketing which helps to promote its brand name by recognizing a major benefit source for any kind of business and it gives and upper hand to creative marketing tool (Ireland, Hoskisson and Hitt, 2008). Recently the output process is the biggest reason for lack of stability for the company as previously stated the company doesn’t produce the end product but its distributors comes up with the end product . The main structural characteristic of the company applies the mass production is a mechanic structure where potential production is compulsory end (French and Schermerhorn, 2008).

In the year 1977 the Minister of Industries of India invoked a specific provision regarding Foreign Exchange Regulation Act which stated that international companies have to dilute their equity shares to their Indian units of about 40%, in order to remain in the country (Gopinath and Prasad, 2012). Coca-Cola refused to be a part and then made an exit from India (Thehindu.com, 2015). On October 1993 Coca Cola returned in India which rejoiced the millions of Coca-Cola consumers in India. This was when the economy of India became flexible for foreign market. The plan to re enter the economy began in 1990, when they planned to make a joint venture with the Parle group which was leading in 60% of Soft drinks in India (Fernando, 2010). This strategic alliance became a landmark in the Indian economic history as Coke acquired some of the stable brands of Parle like Thumbs up and finally made an access to the nationwide infrastructure of bottling distribution. In a firm the increase in economies of scale is done by increasing the productivity level and decreasing the cost level in an average (Browne, 2001).  According to Operating Synergy theory, merging or joint venture helps in higher levels of activity. This theory also applied in the merging of Coca Cola and Parle group (C. FOLTZ, ARACI and KARGIN, 2015).

Impact of Post Modernism on Business and Society

After the re-entry of Coca cola in the Indian market, the company was marked as an inspirational symbol of global consumer citizenship for the corporate and the upper class Indians for disposed material and resources recognized as symbolic ingredients to fuel the consumption (Pride and Ferrell, nod.). The company had to face issues in rural areas and villages of India (Ciafone, 2012). The communities accused the company to pollute the ground water to which the country started facing severe water crisis (Rt.com, 2015). This is a big example of “Environmentalism of the poor”. The Environmentalism of the poor is a conflict of ecological resources which also includes social claim for justice, impoverished struggle for population culture and autonomy (Martʹinez-Alier, 2002).

Today the company has been dealing with higher level of uncertainty when it has to deal with natural resources because of some ingredient (Vault.com, 2015). The company now has two to one dependable and viable suppliers. Coca Cola is now famous for its five main tools; they are quality, availability, marketing, innovation and its brand. It has a flexible structure and aims on enhancing their distribution of finance, the product the marketing and the research and development. In order to maintain an efficient operation the company hugely focuses on team work. In every product development the company gathers a group of experts for analyzing and estimating the possibilities (Coca-colacompany.com, 2015). Even the daily decision making process is also done on a panel basis.

The Organizational accumulations continue to be under attack for three basic reasons: they disobey human rights, they weaken state authority, and they apposite living resources. The vital resource is their employees, communities in locality and the broader civil society. The degree of certain concerns is hugely drawing awareness in the developing countries, where corporate-led globalization treats by violating international Guidelines, including those of the Organization for Economic Co-operation and Development (OECD) and the UN (Barkay, 2011).

References

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Barkay, T. (2011). When Business and Community Meet: A Case Study of Coca-Cola. Critical Sociology, 39(2), pp.277-293.

Bøllingtoft, A., HaÌŠkonsson, D., Nielsen, J., Snow, C. and Ulhøi, J. (2009). New Approaches to Organization Design. Boston, MA: Springer-Verlag US.

BOONE, L. (2012). Contemporary marketing, 2013 update. [s.l.]: Cengage learning custom p.

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Burton, R., DeSanctis, G. and Obel, B. (2006). Organizational design. Cambridge, UK: Cambridge University Press.

FOLTZ, J., ARACI, D. and kargin, m. (2015). Mergers, acquisitions, joint ventures, and consolidations in agribusiness: an example of acquisition (acquisition of continental grain by cargill). 1st ed.

Ciafone, A. (2012). If “Thanda Matlab Coca-Cola” Then “Cold Drink Means Toilet Cleaner”: Environmentalism of the Dispossessed in Liberalizing India. International Labor and Working-Class History, 81, pp.114-135.

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