Coca Cola Case Study Report Help
Executive Summary
Coca Cola is known to be one of the biggest organizations around the world. They operate on such a huge scale and in so many diverse business settings that they constantly need to make organizational changes. The management at all levels faces challenges and strive to find best methods to counter those challenges in order to practice ethical and effect organizational development. This report includes highlights of few contemporary problems that Coca Cola faces internationally and therefore also includes systematic approach to its solution. Additionally this report discusses possible obstacles and solutions to them. The implementation of these processes and procedure can help Coca Cola to mitigate resistance, enhance acceptance and choose a rational path to organizational change . The report also talks about the systematic approach using various change management models in order to create the sense of clarity throughout planning, implementing and monitoring phases. Lastly the report includes possible ethical dilemmas and possible measures to counter those problems.
Introduction
There is a famous Greek philosophy, which says that the only thing constant is change. This change is applicable to any individuals , organizations and even on the entire economy. However the importance of change is most important for business organizations, because they are working in an ever challenging and dynamic environment (Rosenbaum et al., 2018). The internal environment of any business is controllable and therefore the change might not seem evident , however the external environment provokes changes in order to stay at par with the external forces and stay competitive in the market.
Company’s Profile and factors inducing organizational changes
Coca Cola is one of the top brands globally. They are known to be one of the major brands of food and beverages. They are operating in more than 200 countries and have a diverse portfolio of around 380 different food and beverages products under various brand names. Organizations, which are operating on such a huge scale, requires changes both domestically and globally. They are facing competition and other external challenges, which require solutions; the solutions require organizational changes. These changes might be induced due to:
Changes in technology
The technological environment is ever changing and any business requires to change its technology before its methods or operations turns obsolete. Not only they can get obsolete but with time they might lose their competitive advantage and becomes easier to imitate by competitors. This changes help in gaining quality and efficiency which provides cost effectiveness and competitiveness in market. For instance, Coca Cola need a constant investment in methods to lower their cost, minimize wastage and bring innovation in products and production processes (Pollack & Pollack, 2015).
Changes in consumer expectations, tastes and preferences
Coca Cola is not only known to be leading beverages manufacturer but also known for producing beverages which are mostly synthetic and unhealthy. Currently the taste of consumers and brand loyalty overshadow this perception, but with increasing awareness and inclination towards organic, healthy and natural products , there will be time soon when competitors will start taking market share from Coca Cola , mainly because their products are considered to be unhealthy or synthetic (Brodoni, 2020).
Changes in competitors’ strategy
The carbonated and juice industry is highly competitive globally, and therefore it is imperative for Coca Cola to make organizational changes to meet the competition effectively. These changes are mostly related to supply chain strategies, production methods, restructuring organization, creating or merging strategic business units and introducing or divesting in brand portfolios.
Changes in political and legal climate
Operating in more than 200 countries , Coca Cola has to face many challenges related to changes in macro-economic landscape. They require responsive strategies to counter any changes in legislations , legal requirements or taxations.
Changes to increase employees performance
The multinational brands usually implement similar organizations structure and policies globally. However, every market requires modification is methods, policies and organizational structure, based on domestic environmental forces.
Systematic Approach to bring changes
Creating a change through Lewin’s Change Model
Lewin’s Change Model distributes the change over three stages of a continuous cycle (Hussain et al., 2018). The first stage is unfreezing, where the organization needs to prepare to accept changes. Coca Cola for instance, is known as one of those brands, which bring innovation in terms of communicating their brand to consumers, mainly to increase brand recognition and vale perception. Coca Cola now decides to re-strategize their marketing strategy for markets operation in developing countries. The Chief Information Office in Georgia, USA is now focusing on digitization of South Asian market, where they want to engage customers on different social media platforms , just like they did in regions such as North America, Europe, Australia and New Zealand etc. This will require the readiness of regional and domestic marketing managers and executives, so that they are aligned with the philosophy of the Global Chief Information Officer. The second phase is the changing phase where the organization actually implement the strategy. These changes can be implemented through motivation. This motivation can be financial and non-financial, for instance Coca Cola can announce a promotion for an employee who successfully complete the digital marketing or digital marketing coordination certifications successfully. They can also be awarded with increments and other financial benefits. Last stage is to freeze, which means that when the entire strategy is successfully implemented, then further changes are not executed, the entire set of new policies, operational procedures and skills are froze until the new changes are required in organization to encounter any external environment changes etc. However, as commonly confused, these changes are still constantly going through improvements and updates, however there are no major changes in hierarchy , structure or no major skill set is required until next unfreezing (Hussain et al., 2018).
Action Research Model as a systematic change agent
The model is more comprehensive, as it gives a more detailed breakdown of approach towards problem solving and change implementation (Molineux, 2018). Coca Cola is leading its category globally and there is a massive inflow of raw material and even more complicated outflow of finished products. The complex supply chain structure and presence of too many intermediaries makes it very difficult for planning and forecasting department to counter bullwhip effect (the difference in real and recorded demand due to miscommunication between supply chain intermediaries). The first step in this model is to define the problem, which in this case is discrepancy in supply and demand due to lack of real time and integrated communication between intermediaries. The second step is consultancy with an external change agent. The consultant along with the organization will now move towards the third step, where relevant data will be gathered and initial diagnosis will be initiated. These findings will then be shared with the party, in this case Coca Cola. After the findings are recognized by the business as reasonable, then the change agent and the business will jointly validate the diagnoses and move forward to the next step. For instance in this case, the recognition of absence of integrated supply chain will be diagnosed and later validated as a genuine problem. Next, the suggestion will be given to Coca Cola, where they can implement information systems in form of ERP (Enterprise Resource Planning), which will help them to connect supply chain partners, help in gaining almost real time information and use artificial intelligence and systematic organizational information to forecast demand or supply needs, accurately to counter the bullwhip effect. Once the ERP is implemented, staff is trained to adopt and conduct supply chain operations through ERP, then the last step will be evaluation. In this case, Coca Cola will monitor the current demand and supply discrepancies and compare them to figures that existed pre implementation, and finally decide whether the applied changes were effective or is there something else needs to be done in order to eradicate the problem (Altamony et al., 2017).
Challenges in Implementing Organizational Changes
Employee Defiance
Resistance to change is common human behaviour and shall be expected by all organizations, while they plan to implement any change. Specifically employees usually resist the most when the organization culture is being changed or the organization is going through restructuring (Serrat, 2017). The change in form of trainings, innovations and progress are usually seen as effort to improvise and therefore usually prone to less resistance. Coca Cola can use internal marketing as one of the effective tools to mitigate any resistance from employees. This process may include, promoting company’s planning, reason for planning and benefits of changes to the employees. Additionally employees must be encouraged to criticize the phase, method or reason of change, it might help them in improving the change and making it employee friendly at the same time. Second main reason of defiance is the difficulty in training and development of the employees, due to psychological, technological or physical aspect of training and development (Al-Ali et al., 2017). Organization usually plan to train their employees to make organizational change easier and more acceptable, however in few cases, training acts as a catalyst for defiance and lack of motivation. For instance if Coca Cola decides an organization wide implementation of ERP, many employees due to fear of change or lack of computer literacy might resist change, even though the change will make their work easier, more efficient and accurate. Therefore, communication of benefits is vital before moving to training and development phase.
Amazingly it is not only middle or lower tier, which is resistance to change, organizations usually witness upper management resisting the change as well (Rajan & Ganesan, 2017). This happens due to various reasons. The first and foremost reason can be the initiation of change from the opposing faction within the senior hierarchy of the organization. for instance, the Chief Financial Officer and Chief Information officer are positive about implementing digitization and information system to integrate the organization internally and with various intermediaries, however, the Chief Marketing Officer might resist to change because the digital marketing is more of Chief Information Officer’s turf then his own and secondly few of his function might be shifted to either supply chain or information department. Therefore at higher level management plays in their own interest when then intend to resist change. This can be countered by inculcating organizational culture which prosper on mutual interest and growth at all tiers of organization.
Employee Turnover
In many cases, where the job market is promising and the demand of the employees is high, many staff members who add value to organization might switch to other organizations. This is because they feel less sense of motivation, future prospect and role in hierarchy (Prasad, 2020). In such cases, the employees adding value should be identified, their future roles should be thoroughly analysed, they must be compensated to provide them both intrinsic and extrinsic motivation to stay and accept the organizational change. These motivations can be in form of changed but yet available delegation, new and attractive role, incentives and bonuses, promotions or at least same level of role, which is not less than the previous one. Retention of employees is very crucial because hiring new employees and settling them in organization is a long and cumbersome task for almost any organization.
Ethical Considerations
It is very important that the OD practitioners and decision makers are ethically considerate. The sole purpose of organizational change is based on betterment, of organizations, employees, society and all other stakeholders. However in few cases, the elements required and used to initiate, process or implement any organizational change may be exploited unethically. Changes usually comes in with misinterpretations of collected data, to enforce personal vision or agenda in the name of change. The tactic of coercion can also be established if the job market is not stable or lucrative outside the organization. In few cases values are being neglected to fulfill the goals of organizational change. For instance in few cases, sudden and drastic downsizing and firing takes places in the name of organizational restricting, despite of promising financial condition of organizations. These issues can be countered by creating a better organization culture. This culture should entail building the trust and collaboration between decision makers, staff and the change agents. Additionally everyone should be committed to problem solving, in order to avoid any drastic organizational changes which are usually caused due to buildup of many problems, which are left unsolved. Lastly any decision made by the decision makers should be free of personal motives, should reflect deserved empathy towards human resources and based on well analyzed data and its inference.
Conclusion
Change management is not about the change but rather about its implementation. Therefore we can say that communication, feedback, participation should be the norm in organizations so that there is less room for errors, misinterpretations and need for drastic organizational changes. Global entity like Coca Cola are constantly evolving due to intense competition, more than ever changing external conditions and need for innovation and improvement to better meet the need of consumers. It is therefore imperative to ensure than change is not just a onetime process but rather a continuum of actions which are creating a culture of dynamic work practices, which ensure real time changes in order to avoid any drastic change, which creates conflicts, resistance and other issue of any of the stakeholders.
References
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Altamony, H., Al-Salti, Z., Gharaibeh, A. and Elyas, T., 2016. The relationship between change management strategy and successful enterprise resource planning (ERP) implementations: A theoretical perspective. International Journal of Business Management and Economic Research, 7(4), pp.690-703.
Brondoni, S.M., 2020. Shareowners, Stakeholders & the Global Oversize Economy. The Coca-Cola Company Case. Symphonya. Emerging Issues in Management, (1), pp.16-27.
Hussain, S.T., Lei, S., Akram, T., Haider, M.J., Hussain, S.H. and Ali, M., 2018. Kurt Lewin’s change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge, 3(3), pp.123-127.
Molineux, J., 2018. Using action research for change in organizations: processes, reflections and outcomes. Journal of Work-Applied Management.
Pollack, J., & Pollack, R. (2015). Using Kotter’s eight stage process to manage an organisational change program: Presentation and practice. Systemic Practice and Action Research, 28(1), 51-66.
Prasad, L.M., 2020. Principles and practice of management. Sultan Chand & Sons.
Rajan, R. and Ganesan, R., 2017. A critical analysis of John P. Kotter’s change management framework. Asian Journal of Research in Business Economics and Management, 7(7), pp.181-203.
Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change management. Journal of Organizational Change Management.
Serrat, O., 2017. Fast and effective change management. In Knowledge Solutions (pp. 367-374). Springer, Singapore.
