Strategy implementation at Coca-Cola

Coca-Cola: Strategy Implementation

The Coca-Cola Company's organization is a double-edged sword. The Company's structure is one of global decentralization in which the Company manufactures and sells concentrates, bases and syrups, owns the brands and conducts marketing initiatives, while its global "partners" manufacture, package, merchandise and distribute the final products. This business model involves a "tall hierarchy" of at least 5 levels in which daily operations are apparently left to lower levels while long-term planning and extended-vision is handled by higher levels. The Company also employs committees to handle vital functions such as audit and budget, while using task forces to study unusual-but-possible repetitive problems that may arise for the Company. The management style is apparently very culturally adaptable, optimistic, passionate, responsible and rewarding, having lower level management handle day-to-day operations while upper management focuses on long-range objectives. The Company's conflict-resolution style is also quite adaptable, using Ombudsmen who are confidential, neutral and independent, so employees can freely voice concerns about essentially any employee concern.

The Company's systems can be somewhat complex. Budgeting involves Finance Committee preparing yearly budgets and reports from numerous sources and submitting all to the Board of Directors for approval. Planning involves such wide-ranging areas as: vision, which involves people, portfolio, partners, planet, profit and productivity; mission, which involves the Company's specific purposes of refreshing the world, inspiring optimism and happiness, creating value and making a difference; objectives, involving human rights, environmentalism, locally important opportunities and quality of life, and providing needed products and services while making a profit; strategies, involving focusing on the market, working smart, acting like owners and being the brand; policies, such as the Company's commitment to privacy for children; procedures, such as multifaceted means of contacting the Company; rules, for example, dealing with the production of the product in Bottler Plant Labs; programs, such as the Company's college scholarship program; budget, such as a $2.6 billion USD advertising budget in 2006. Performance in the Company is evaluated yearly and consists of: defining the job, appraising performance according to set standards, and providing feedback. In addition, Coca-Cola backs up its commitment to high performance with a series of rewards through, for example, salary increments and pay grade jumps.

The Company's organizational element of "People" is as widely varied as the global reaches in which the Company has established its presence. While it is difficult to assess Coca-Cola's global workforce of more than 139,000 people, the Company certainly appears to foster a positive workplace, personal achievement and an established system of rewards to encourage the highest possible achievement from its labor force. Finally, the organizational element of "Culture" involves: values and complementary norms of behavior, such as leadership, collaboration, integrity, accountability, passion, diversity and quality; significant symbols, such as the Coca-Cola Brand, the Polar Bear, and the Company's wide-ranging sponsorship of globally loved activities such as the Olympics, FIFA World Cup, Rugby World Cup, the NBA and NASCAR.

Taking all organizational elements into consideration, Coca-Cola's organization is at once highly beneficial yet a hindrance to its mission, vision and strategy. The Company's global decentralization has allowed the company to readily establish, enhance and maintain its presence worldwide, adapt more easily to different cultures and free higher corporate management to concentrate on "the big picture." Simultaneously, global decentralization has harmed Coca-Cola's mission, vision and strategy by decreasing coordination between divisions, increasing miscommunication up and down its "tall hierarchy," increasing the uncertainty of the Company's business environments, and increasing the Company's vulnerability to suppliers of raw materials.

2. Introduction

The Coca-Cola Company has employed global decentralization to become simultaneously one of the most successful businesses on the Planet, yet one of the World's most vulnerable businesses. Owing to its decentralization and reliance on 200+ markets and 139,000+ employees worldwide, the Company has certainly become a titan of the beverage industry. Unfortunately, that organization system forces the Company to rely on far-flung, multi-cultural interests that can severely hamper the Company's ability to fulfill its mission and vision.

3. Organizational Components

a. Structure

i. What is the organization's structure? How decentralized or centralized is it?

The Coca-Cola Company is global but functions in a decentralized fashion. The Company manufactures and sells "concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives" (Coca-Cola Company, 2012). Meanwhile, the Company's bottling partners "manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell our products to consumers" (Coca-Cola Company, 2012).

ii. What are the lines of authority and communication?

The local levels probably contain several hierarchical steps. The corporate level then contains more than 5 hierarchical levels: the head of each "Senior Functional Leadership" division reports to the president and COO of the "Operations Leadership" of a Group, such as the North American Group; that president and COO reports to the CFO of that same group; the CFO reports to the Office of the General Counsel; the General Counsel reports to the CEO (Valluri, Nahata, Jangalwa, Sethi, & Narayan, 2010, pp. 15-16).

iii. What are the roles of teams, committees, and task forces?

The Company web site does refer to "teams" such as "leadership teams"; however, that appears to be a generic usage of the term, as there is no specific definition of function. There is a committee in the form of "Audit Committee." According to its charter: