Organizational Structure, Strategic Implementation, and Monitoring: A Coca-Cola Case Study

Coca-Cola Company Organizational Structure Assignment Overview

In the Module 4 Case, we will investigate the control systems at the Coca-Cola Company.  

Case Assignment

Visit the website of the Coca-Cola Company: http://www.coca-colacompany.com/, and go to the Investors page. Look around at this page (there is a lot of excellent information here), and search for information related to the organization’s structure and controls. Then, locate the company’s most recent Annual Reports and 10-K filings. After completing some research at Coke’s website, in the library, and on the internet, please address the following:

1. Describe the organizational structure at the Coca-Cola Company (what form of structure does the company have?). Include any information you can find regarding the company’s Board of Directors and the company’s committees.
2. Describe the organization’s culture. How well does the company’s Values statement align with its culture?
3. Do some research at the Coca-Cola Company website and in the library (be sure to look at trade magazines and newspapers as well) and find as much information concerning the company’s control systems as you can (budgets, inventory control, annual objectives, functional strategies, policies and procedures, personnel evaluation systems, or other). Describe these controls, and discuss how they assist in keeping Coca-Cola’s strategies on-track.
4. In the Module 3 Case, you identified a grand strategy (or grand strategies) that the company should follow. Do the company’s organizational structure, culture, and control systems align well with this strategy? Explain.  

Assignment Expectations

Your Case Assignment should be a minimum of 5 pages in length. 

You are required to use APA formatting and you are required to cite and reference your sources.  There should be a minimum of three (3) reputable sources cited and referenced in your paper (your sources must be different from the sources provided you in the Background materials).

Please make sure you review the assignment rubric prior to writing your assignment.  

Evaluating Strategic Implementation and Monitoring at Coca-Cola Company

Coca-Cola Organizational Structure

The success of a company is largely dependent on its organizational structure. It is a system that outlines the policies and procedures that govern an enterprise. Further, organizational structure defines the channel through which information flows. It varies from one company to another based on the size, geographical location, and target market.

Coca–Cola is an ideal example of a multinational company that has integrated an organizational structure suitable for its size and geographical locations. There exists a global head to whom presidents of the various divisions report. The divisions are Eurasia and Africa, Europe, Latin America, North America, and Pacific (Bierman, Gaspar, Hise, Kolari, & Smith, 2006). It can be argued that the system of Coca–Cola is both centralized and localized. It tailors its products to suit the needs of the specific market in which it exists while maintaining the quality standards and acceptable procedures of the global company.

Coca–Cola has a board of directors that oversees the operations of the company. The board has appointed different committees that assist in the daily running of the enterprise. An example can be given of the audit committee. Its main role is to ensure that the integrity of the financial statements of the company is upheld (Bierman et al., 2006). It is responsible certifying that the company accounts were prepared in accordance with the international best practices.

Another committee in the organization is the compensation committee. As the name suggests, it oversees the compensation plan, policies and procedures that exist in the company. The main focus is placed on the compensation given to the senior executive team. Given the directors’ ability to exploit the system, the members of the committee ensure that wages and benefits paid are within reason (Griffin, 2007). They report directly to the board as a way of maintaining independence and objectivity. It is a means through directors are guaranteed to focus on increasing shareholders’ value.

There also exists a public issues and diversity committee. Given the recent discussions on diversity and equality, companies are striving to include people of all backgrounds, nationalities, races, and sexual orientation. This committee is responsible for overseeing the level of diversity in the organization (Bierman et al., 2006). Since the hiring process is conducted by the human resources department, it is fundamental to ensure that they remain objective and provide an opportunity for all people. In the event that the members of the committee suspect the existence of bias, it is their responsibility to inform the board and strategize on a way forward.

Organization’s Culture

As stated on the company website, Coca-Cola has a winning culture. It is defined as a culture that is focused on achieving the goals and objectives set out by the management. The enterprise is currently working towards its vision 2020 which outlines the need to anticipate client future needs today. Due to the changing economic environment, the evolving customer tastes and preferences, and the increase in competition, the company is looking to curve out a niche as a brand that can foresee the new direction taken by clients (Griffin, 2007). Their culture of making realizing goals is, therefore, ideal.

It can be argued that the value statements of Coca–Cola are in line with its culture. One is their focus on people. The business strives to provide the best working environment for its employees. The management has created ideal conditions that are favorable for the workers, thereby, making it a great place to work (Hill & Jones, 2008). They acknowledge that in order to sustain the culture of hard work and achieving set objectives, it is important to invest in employees. Additionally, the management is keen on growing its partnerships with the business’s customers and suppliers. This effort as highlighted in their vision is ideal for growing a profitable partnership for Coca–Cola.

Another value statement is the maintenance and improvement of the company’s portfolio. It is widely known that Coca–Cola are suppliers of beverages with their most common product being Coke (Bierman et al., 2006). As such, it is essential as stated in their vision that they produce quality products that are acceptable in the regions in which they operate. Further, they take into account the acceptable environment standards as they manufacture and supply their products. The inclusion of the planet concerns in their value statements highlights the management’s commitment to the company’s winning culture.

The final value statements are profitability and productivity. These two are directly linked to the culture of achieving the set objectives and goals. In order for the business to generate profits, all stakeholders must effectively carry out their duties. As such, the results witnessed act as proof that the people of Coca–Cola live the culture. Productivity is part of profitability. Given the fast changing economic conditions, the company has turned to innovation and creativity as a means of staying ahead of the competition (Griffin, 2007). As a result, productivity in different areas has increased. This outcome directly translates to the profits generated by the company.

Control Systems

There are different control systems that have been incorporated to assist Coca–Cola in realizing its strategies, Firstly, the use of committees is a means through which the board ensures proper functioning of the company. As earlier discussed, the various committees such as the audit committee act as a check system for the management and the employees (Hitt, Ireland, & Hoskisson, 2016). Since the members report directly to the board, they remain objective and can identify areas of weakness. Additionally, the board has implemented charters that define the scope within which the different committees function. This action places the members of the committees beyond the influence of the senior executive team.

Secondly, Coca–Cola uses a quality management system as a means of quality control. It is important to adhere to the quality standards for a number of reasons. One is that it mitigates reputational risk for a company. It also helps in avoiding lawsuits that result in large payouts and could lead to revocation of licenses. As such, the use of the quality management system known as TCCQS is a fundamental control system (Hitt, Ireland, & Hoskisson, 2016). It can be argued that Coca–Cola’s reputation of quality products is a result of controls like TCCQS.

Another control that has been implemented by the company is the safety control called KORE. Due to the numerous illnesses that are the result of bad food, it has become vital to put in place a system that ensures food safety. The advantages of this tool are similar to those of TCCQS. It should be noted that safety control has been implemented in all countries of operation and adjusted to suit the rules and regulations of a particular market (Griffin, 2007). This move is in line with some of development organizations’ objectives of increasing food availability and safety for individuals around the world.

Lastly, there exists a feedback control. Given the company’s culture of meeting client’s needs ahead of time, customer feedback is key. It assists the management and the employees to improve the Coca–Cola products. Additionally, feedback is essential in growing the market share of the company (Hitt, Ireland, & Hoskisson, 2016). It allows the employees to understand the prevailing tastes and preferences of the customers, thereby, changing the product accordingly. As such, the company is able to meet its targets and remain competitive. Feedback controls ensure that customers have a means through which they can communicate to the enterprise. It, therefore, assists in the implementation of business’ strategies.

Alignment with Diversification

It can be argued that Coca – Cola’s organizational structure, culture, and control systems are well aligned with the proposed strategy of diversification. The winning culture of the people that targets to stay updated and ahead of customer’s needs provides room for exploration in other areas. Given that the management and the employees track feedback from employees, they are able to determine if there is need for a shift. In recent years, there has been a general movement by customers towards healthier eating habits. As a way of staying ahead of customer needs, Coca–Cola has introduced products that cater to that market such as zero sugar Coke (Hitt, Ireland, & Hoskisson, 2016).

Another example of the company being open to diversification is the introduction of the Start – Up weekend. This is a forum that encourages entrepreneurship. It is a means through which the business is reaching out to people with different ideas (Bierman et al., 2006). As such, they will be able to integrate new ideas that can benefit the company and open up new opportunities. Through the Start–U weekend program, Coca–Cola displays its winning culture and the wat in which it is aligned with the proposed strategy of diversification.

The organizational structure of the company is also well aligned with diversification. It can be argued that the structure of Coca–Cola is best described as both centralized and localized. The localization aspect is highlighted in its attempts to tailor its products to a specific market. As such, a market that shifts its tastes and preferences to a different product will lead to the company changing as well (Hill & Jones, 2008). The company’s decentralized aspect allows for implementation of diversification in specific segments. Given that the various division head have the power to authorize change in their sections, it makes it easy to integrate diversity in products.

The feedback control system shows the manner in which the control systems are aligned to the proposed diversification strategy. The communication obtained from clients acts as a guide for the management to define the direction of the organization. In the event that the clients show a preference towards different types of beverages, Coca–Cola will strive towards integrating the changes (Hitt, Ireland, & Hoskisson, 2016). As a result, the company remains updated and relevant to its target market. It can be argued that with the changing economic times, it is fundamental for a company to become customer- oriented. This will ensure its growth and sustainability.

References

Bierman, L., Gaspar, J. E., Hise, R. T., Kolari, J. W., & Smith, L. M. (2006). Introduction to business. Boston: Mass.

Griffin, R. W. (2007). Fundamentals of management: Core concepts and applications. Boston: Mass: Houghton Mifflin.

Hill, C. W., & Jones, G. R. (2008). Strategic management: An integrated approach. Boston: Houghton Mifflin.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic Management. Boston: MA: Cengage Learning.