One way that Coca-Cola could have avoided the lawsuit, then, would have been to enforce its existing regulations concerning diversity. The evidence supported that these codes were ignored, even at the senior management level. In addition, the acrimonious relationship between primarily white managers and primarily black workers should have been an indication that there were issues of discrimination.
Aside from taking recognizing troubles and reacting early, there are systemic ways that Coca-Cola could have addressed the situation. During the trial, a number of statistics were introduced in support of the claimants. These included numbers on blacks being dismissed vs. whites being dismissed and figures concerning promotions. Coca-Cola could have recognized the situation in advance by setting up utilizing these types of metrics to understand the impact of its human resources policies.
In addition, Coca-Cola could have avoided the issue by enforcing its existing codes. Senior management did not appear to take the issue seriously, however, until the courts compelled them to financially. The memo from Kevin Johnson that was roundly ignored was not likely the first instance of somebody within the company attempting to address the issue with senior management. Commitment from senior management to improving diversity and ending discrimination is the cornerstone of any policy, and at Coca-Cola it was lacking.
Tied to the senior management problems was the lack of diversity among senior management. This led the other managers to ignore Mr. Johnson, whose views did not fit with their culture. However, increasing diversity in the senior ranks must go beyond hiring policies. A mentorship program could have helped Coca-Cola to identify potential candidates and bring them along until they were ready to enter senior management. This would have given Coca-Cola a more diverse senior management team, one less likely to dismiss discrimination complaints.
Lastly, Coca-Cola could have avoided the problem by leaving less to chance in its promotion policies. The discrimination issues arose in the first place because Coca-Cola left promotion and dismissal to the subjective judgment of low-level managers. A recommended approach would have been to set guidelines more in line with performance measures than subjective measures. This would also have given the company some evidence to support a contention that they have not been engaging in discrimination.
Crisis of Leadership
The discrimination lawsuit faced by Coca-Cola was a crisis of leadership. While the core problems cited in the lawsuit pertained mainly to low-level employees and their low-level managers, these problems were a manifestation of broader issues that went right to the top of the company. The corporate culture at Coca-Cola supported discrimination. The low-level managers were never sanctioned or even investigated for their behaviors, and senior management ignored opportunities to address the issue even after they were made aware of it. At no level of management did Coca-Cola take the issues of discrimination and workplace diversity seriously. The result was a costly lawsuit and a shift in the way management approached the issue.
The managers act in the best interests of the shareholders. To their credit, managers at Coca-Cola understood that the problem was not simply a few bad-apple low-level managers, but that the problem was endemic and systemic. They tackled the problem using a wide range of strategies. They addressed some of the systemic issues, which had resulted from outmoded human resources policies. They also addressed the issue of culture. Senior management was the first group to embrace the power of minorities but is also active in building the skills of minorities so that they can become viable candidates in the future. This policy has helped Coca-Cola to increase its managerial diversity, which should contribute to making diversity a key part of the company's culture going forward.
Managing the Crisis
Coca-Cola handled the diversity crisis well. The company settled the issue and adopted several court-approved measures. More importantly, they took the discrimination suit to heart rather than reacting negatively to it. Over time, the company built its competencies in encouraging diversity and implemented the systems necessary to manage the issue. There were some criticisms early on in the process, such as a report in 2002 that there was still significant discord among black employees (White, 2002). However, those issues appear to have been resolved. The company may not have moved immediately on all areas, which could have contributed to the complaints. However, organizational cultures do not change quickly, particularly if there is employment protection for managers that are the source of problems.
The company did, however, persist in consultations with experts and made the right steps to build the infrastructure and gradually change the corporate culture. As a result, the incidence of complaints has been reduced in recent years and the company has been lauded for its ability to turn around its diversity policies. Coca-Cola has set a goal of being a leader among the Fortune 500 in diversity programs and has continued to act proactively to promote diversity not only internally but among its peers. There is little fault to be found with the way Coca-Cola reacted to its discrimination lawsuit.
Coca-Cola at the time of the 2000 lawsuit was a company notorious for a poor track record of diversity. The lawsuit was, in essence, a culmination of a number of issues, all of them leading back to senior management. Rather than scapegoat the lower-level managers who were at the focus of the lawsuit, Coca-Cola senior management accepted culpability for their role in creating a culture that allowed such discriminatory practices to occur.
After the settlement, the company embarked on a program to radically reshape its corporate culture and eliminate opportunities for systemic discrimination. These steps took a few years to become fully implemented but by the middle of the decade were paying dividends. Coca-Cola has since become known as a leader in diversity, representing an about-face from where the company stood ten years. They achieved this success through a combination of a number of tactics. Senior management buy-in was critical. They made promotion and raises based on objective rather than subjective measures. They implemented company-wide diversity training and increased corporate communications regarding diversity in order to better diffuse the new cultural norm. The result has been a total transformation and the absence of further lawsuits.
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