Diversity audit of the Coca-Cola Company's workplace and marketing practices

Diversity Audit

The Coca Cola Company is well-known for its commitment to diversity. The Company has a workforce where almost half the employees are women. However, their representation on the senior management levels is only 26%. The company also recruits racial minorities and members from the LGBT community. The company has institutional mechanisms to ensure that workforce diversity is respected and appreciated throughout the organization. Senior managers demonstrate their commitment to diversity by heading the Business Resource Groups for specific minorities. This supports the theory that senior management should demonstrate commitment to implementing core values (Davidson 2004, p. 286). The Coca Cola Company also pursues diversity in its marketing campaigns to cater to the diverse communities in which it sells its products. The company has also expanded its supplier network to include firms owned and managed by minorities and women. The company also has plans to increase the number of supplier firms run by veterans. It is recommended at the end of the audit that the company should increase the representation of women in the senior management positions and should also develop breadth and depth marketing campaigns to cater to the South Asian and Arab market segments.

DIVERSITY AUDIT AT COCA COLA

Introduction

Diversity is an important issue for firms operating in the global economy. To meet this need, companies are incorporating diversity in the workplace to meet the needs of an increasingly diverse market. The Coca Cola Company is known all over the world for its emphasis on diversity. A diversity audit can be conducted to evaluate the extent to which diversity has been incorporated in the workplace and its effects on the company's success.

The Coca Cola Company

The Coca Cola Company is the largest soft drink company in the world operations in 200 countries. The company runs an equally diverse product portfolio with 500 brands. These facts explain on their own the diverse environment in which the Coca Cola Company has to operate. The consumers, suppliers and laws in each of these markets are diverse. To cater to these markets successfully, the Coca Cola Company needs to understand their differences and address them effectively. It needs to develop products and promotional campaign that communicate the product values to the consumers. The Coca Cola Company is also ranked as one of the best workplaces for minorities. It also has several institutional mechanisms in place to ensure and promote diversity in the workplace and in business relationships. This paper will discuss how far these measures have resonated well with the employees.

Audit Goals

The goals of the diversity audit are to explore the measures that the Coca Cola Company has taken to promote diversity in its workplace. Diversity is a growing concern for businesses as they prepare for a mature globalized economy. Even at the local level, the demographics of the United States show much diversity. The purpose of this audit is to discuss the ways in which the Coca Cola Company has tried to reflect the diversity in its markets and community in its workplace. The study aims to discuss the various diversity measures taken by the company in different areas of the workplace including recruitment, communication, decision making and promotional campaigns. It also aims to discuss the effects of the formal and informal diversity programs of the company on its corporate success and on the attitudes of the workforce. It also aims to discuss the effect of the diversity programs on the perceptions of the company on the community members. The study will then evaluate the effectiveness of the diversity programs and propose some recommendations that the company can consider to further improve its diversity programs.

Audit Method

The diversity audit of the Coca Cola Company will be primarily based on the secondary data available from the corporate website of the Coca Cola Company. The information will include data on the workforce composition and the role of diversity programs in the composition. It will also look at the various programs and policies of the company and its associates that have been instituted to promote diversity. The values and mission of the company will also be analyzed to obtain insight into the place of diversity in the strategic orientation of the company. The information obtained from the secondary research will then be compared with the theories of workplace diversity to see whether the theories explain the results of diversity at the Coca Cola Company. The reasons for any discrepancy between theory and actual results will be discussed.

Analysis of Core Corporate Values

The values of a company reflect its strategic orientation. Values guide strategic decision making and the day-to-day behavior of managers and their subordinates. The mission of the company determines the direction that the company will take in the market in terms of the products it will make and the consumers it will cater to.

The Coca Cola Company has seven core values: leadership, passion, integrity, collaboration, diversity, quality and accountability. By including diversity in its core values, the company ensures that an appreciation of diversity permeates all decision making and employee behavior in the organization. The other values of quality, accountability and collaboration are also aligned with the value of diversity and complement it to enable the organization to achieve its goals. Because diversity is an expressed value, the organization can hold people accountable for not implementing a core value of the company in their management styles and their decision making.

The incorporation of diversity as a core value can be analyzed in the history of the United States as a nation of immigrants and diversity in the population (Barak 2010, p. 174) terms of the social identity theory. The Coca Cola Company has integrated its practices with its image management practices so that it creates a social identity for itself as a responsive and responsible corporate employer. According to the stated policy of the Coca Cola Company, diversity for the company consists of three elements: having and appreciating differences, inclusion and fairness. By having and appreciating differences, the company aims to explore the diverse markets and promote its products successfully. Inclusion reflects the company's desire to make the workplace welcoming for all employees so that everybody may have an equal opportunity to realize their maximum potential. Networks of inclusion allow the discovery of better business opportunities (DiTomaso & Post 2004, p. 37). Fairness encourages the company to make decisions that do not discriminate against any employee on the basis of race, gender or disability. Fairness also encourages the company to provide merit-based promotions and career advancement opportunities for employees.

These interpretations of diversity reflect that the company's actions fit into the access and legitimacy paradigm (Walsh 2001, p. 166) according to which a company tries to incorporate diversity to increase the number of recipients of its career advancement opportunities. The diversity mechanisms of the Coca Cola Company also seem to be developed so that employees from minority groups can also access the opportunities and rewards that the company has on offer. The analysis of the values also shows that diversity has been included in a way that it is integrated with the rest of the core values of the company.

Analysis of Workforce Composition

Workforce composition is the most visible area to reflect diversity. The diversity programs of a company usually address diversity in the workplace first because of its direct impact on the relations between the company and the community. The Coca Cola Company has also taken steps to ensure that its workforce composition reflects the diversity in the markets that it serves. This shows that the company ascribes to the social identity theory in that it believes people identify themselves by their groups and appreciate efforts at accommodating their groups (Kusstatscher & Cooper 2005, p. 32). In 2010, women made up 49% of the non-hourly workforce in the United States, while half of the employees hired in 2010 were women (The Coca Cola Company 2010, p. 4). Since 2007, the company has increased its recruitment of women with the launch of the Global Women's Initiative. Similarly, the launch in 2008 of the Women's Leadership Council has enabled the company to provide leadership opportunities to women in its workforce. In 2010 the participation in the women's leadership programs increased to 39% from 21% in 2007 (The Coca Cola Company 2010, p. 13). Women also make up 20% of the global leadership of the Coca Cola Company. In a market where half the population consists of females, this percentage needs to be nearly doubled to reflect the diversity in the environment (Waller, 2010). This explains that the access and legitimacy paradigm is in operation here because the diversity programs of the company are resulting in an increase in the participation rates of the targeted segments in the workforce. The Company was ranked 19 out of the top 50 employers by Minority Magazine in January 2011. This is in line with the diversity reputation paradigm (Robinson 2007, p. 19) under which an organization may have the goal of being perceived as an employer of choice because of its diversity programs.

Diversity does not include only gender diversity. Racial diversity is equally important in the workplace because the labour pool has also become increasingly diversified. Latinos, African-Americans and Asians are some of the largest racial minorities in the United States. As of 2010, 34% of the non-hourly employees of the company were from various minority groups. The percentage of minority persons in the new employees hired in 2010 was 36% (The Coca Cola Company 2010, p. 4).

Analysis of Diversity in Management

The commitment of an organization to diversity is best reflected in the diversity of its management team and the management practices. This is because the management team possesses the resources to facilitate operational procedures and to determine the direction of the organization, not to forget the power to reward and punish other employees in the organization. At the Coca Cola Company, gender diversity in the management team does not reflect the gender diversity in the population. Only 26% of the global leadership is composed of women as opposed to half of the population being composed of women (The Coca Cola Company 2010, p. 14). There has been some progress in increasing the representation of women in the senior management but it has been slow. In 2000, there was no woman on the six-member operating group leadership team. In 2010, there was only one woman in the eight-member team. Similarly, in 2000, the women only represented 18% of the elected officers of the company. In 2010, that percentage had jumped up to 29% (The Coca Cola Company 2010, p. 43), showing that the growth in the representation of women has been more in the elected positions than in the appointed positions. This progress does not reflect the efforts of the company at increasing the participation and recruitment of women. This discrepancy is the result of only a recent attempt at increasing the proportion of women in the management team. An alternative explanation might indicate the presence of a glass ceiling that prevents the progress of women beyond a certain level in the management hierarchy. The organization may have to overcome its social dilemma between maximizing vested interests of the current senior management and the welfare of the women workforce (Airaksinen & Gasparski 1993, p. 111).

Diversity is also analyzed in the management processes of the Coca Cola Company. The Coca Cola Company ensures pay equity in its remuneration policy to ensure that employees are not given pay differentials on the basis of race, gender, sexual orientation or any other discrimination. In terms of performance management, the company also stresses that performance reviews do not discriminate against certain employees. The management addresses any violations of the diversity policy by taking corrective action. Even in the administration of rewards such as stock-options and other incentives, the company ensures that no discrimination has taken place in the awarding of these incentives (The Coca Cola Company 2010, p. 14).

Analysis of Diversity in Marketing

The Coca Cola Company has also undertaken efforts at incorporating diversity into its marketing campaigns. The marketing campaigns need to reflect diversity because the Coca Cola Company sells its products to consumers in 200 countries. Diversity needs to be incorporated in the interpretation of the themes in its advertising and in the selection of its models. Culturally relevant images and messages should be used in its advertisements to appeal to the consumers.

The company has a Multicultural Consumer Marketing Team that develops branding and promotional strategies to a multicultural consumer market. The team is responsible for creating messages that resonate with a diverse market and result in acceptance of the product. The Team is currently focused on developing campaigns for the African-American and Latin American market segments. As part of its strategy, the marketing team conducts both "depth" and "breadth" programming in which it simultaneously develops promotions with themes specific to the target consumer segment along with promotional messages related to the segment that can be blended in with the regular promotional programs for the general market.

The Company is also focusing on the Asian market that, although makes up only five percent of the United States market, is one of the fastest growing segments and also the one with some of the highest income levels in the country. As part of its depth programming for the Asian market, the company developed a special promotional program for the 2010 Chinese lunar year. The company is also developing special promotional programs for the African-American community by launching the Sprite Step Off Campaign that reaches out to African-American youth in the community. Since football is widely popular among the Hispanics in the United States, the company has traditionally participated in the FIFA World Cup event to reach out to the Hispanic consumers. The Company also celebrated the Hispanic Heritage Month in 2010.

Analysis of Diversity in Business Partners and Community Programs

The Coca Cola Company has also taken steps to promote diversity throughout the value chain by using diversity as a criterion in sourcing its suppliers. The senior management of the company believes that supplier diversity is a source of increasing revenues for the company. The company encourages developing business relationships with supplier firms that are owned by women, minority members and members from the LGBT community. In addition, the company also aims to increase the number of its supplier firms that are run by veterans. In 2010, the company won the Women's Business Enterprise National Council Top Corporation Doing Business with Women Award as well as the America's Top Corporation for Multicultural Business Opportunities Award by DiversityBusiness.com. Social engineering (Lynch, 2001) may be necessary to bring about such change.

The Coca Cola Company also participates in outreach programs that highlight its support of diverse and multicultural communities. The Coca Cola Company also sponsors the annual fundraising activities of the Human Rights Campaign, a champion of LGBT rights in the United States. This explains that the company is sensitive to the discrimination faced by them according to the stigma theory (Webb & Sherman, 1989). The company also encourages its employees to volunteer their time to various community building activities and programs. This helps to reflect the commitment of the company to diversity in the community.

Evaluation and Recommendations

The diversity audit of the Coca Cola Company shows that most of the company's efforts at diversity promotion and management are geared towards increasing the recruitment of women and racial minorities in the workforce and in the promotion of racial diversity in its marketing campaigns. Its support of diversity in sexual orientation is also evident in its association with LGBT associations. This reflects that the company may be pursuing the discrimination and fairness paradigm (Harvard Business Review, 2011) by actively pursuing supplier firms owned by women, minority members, LGBT members and veterans. In terms of its marketing team, the company is trying to pursue the learning and effectiveness paradigm (Jossey-Bass 2006, p. 271) that enables companies to benefit from the unique viewpoints and cultural experiences of their diverse workforce. The company is lagging behind in its incorporation of people with disabilities in the workforce and in the representation of women in the top management positions. There is also little evidence of age diversity (Groschl, 2011).

On the basis of the foregoing discussion and evaluation, it is recommended that the company take positive measures to increase the representation of women in its global leadership positions. The number of women in the operational group leadership team should be increased to fifty percent over time from the current representation of only 12.5%. The company should also implement its disability recruitment programs vigorously to increase the percentage of employees with disabilities in the workforce. The company should continue with its marketing campaigns towards promoting cultural diversity. Along with catering to the Asian, Latino and African-American communities, the company should also target the South Asian and Arab market segments. These segments make up a large part of the expatriate population and can help to increase demand for Coca Cola products after they return to their home countries.