Managing Workplace Conflict: Coca-Cola Discrimination Case

Introduction

In every organization, conflict exists — and to a degree, this indicates a healthy exchange of ideas and creativity. Nevertheless, conflicts that are counter-productive result in employee dissatisfaction, poor service to clients, increased employee turnover, reduced productivity, absenteeism, elevated work-related stress, and even litigation based on harassment claims or a hostile work environment. For instance, Coca-Cola was sued for racial discrimination under the U.S. Civil Rights Act in April 1999 by four former and current African-American employees. The appellants claimed they suffered discrimination in promotions, pay, and performance evaluations, and they provided statistical evidence to support their claims. The data revealed that their average salary was roughly one-third less than that of their white counterparts at the company. The limited advancement of African-Americans to senior levels within the company further illustrated the depth of discrimination the appellants were experiencing.

The following study examines discrimination and conflict in the workplace based on Coca-Cola Company's operations around the globe. The literature review provides a summary of what other scholars have said concerning discrimination and conflict in the workplace. Subsequent sections offer diverse perspectives on how conflict management can be practiced for the benefit of both the company and its employees, and identify symptoms and potential solutions relevant to Coca-Cola's situation. The analysis section describes and identifies the causes of Coca-Cola's discrimination conflict. The conflict resolution section examines the consequences of failing to act on organizational conflict. Finally, a personal reflection considers how the discrimination conflict at Coca-Cola has informed a better understanding of workplace conflict management.

Literature Review

According to Kurtzberg and Mueller (2005), there are three types of conflict: process-based, relationship-based, and task-based. Process-based conflict concerns how work is performed within an organization and the allocation of team responsibilities and roles. Relationship-based conflict concerns the interactions and relationships between team members. Task-based conflict arises when disagreement centers on the work task itself. Task-based conflict can be beneficial, while process-based and relationship-based conflicts tend to have negative effects on team performance. Task-based conflict promotes the emergence of different perspectives, stimulating creative thinking and innovation. By contrast, the negative threats of conflict can create vulnerabilities in employee relationships due to their psychological effects. Kurtzberg and Mueller conclude that individuals find it difficult to remain objective when others disagree with or disapprove of their viewpoints.

Aritzeta, Ayestaran, and Swailes (2005) examined team role preferences and conflict management styles. Their article explores the relationship between team role preferences and the approaches team members use when solving group problems. They found that team roles are contextually sensitive with respect to time and interaction processes, displaying different patterns of correlation when teams are newly formed versus when they are nearing project completion. Consequently, team role is more flexible in response to contextual changes than are personality traits, which tend to be more stable. High-performing work teams need to build complementary configurations that reflect different team role preferences, with individuals having the capacity to manage conflicts effectively. The research findings carry positive implications for team-building and team-development programs, and demonstrate that combining multiple levels of analysis — organizational, group, and individual — improves behavioral prediction.

Desivilya and Eizen (2005) highlight that project team members tend to choose passive approaches that rely on obliging and avoiding, whereas compromising, integrating, and dominating are regarded as active strategies. Hughes, Ginnett, and Curphy (2009), examining conflict management approaches from a complementary perspective, describe conflict resolution as falling along two dimensions — cooperativeness and assertiveness — and identify five common approaches:

Competition: the desire to achieve individual ends at another's expense (domination), representing a win-lose orientation.

Accommodation: an individual yields to another person's concerns without pursuing their own goals — an appeasement tactic.

Sharing: a compromise between appeasement and domination in which both parties give up something and gain something in return, leaving each moderately but incompletely satisfied.

Collaboration: both parties' concerns are addressed through a problem-solving approach that requires the integration of each party's interests.

Avoidance: both parties display indifference, reflecting withdrawal from or neglect of each party's interests.

Hughes, Ginnett, and Curphy (2009) argue that rather than searching for a universally superior approach to conflict management, organizations should focus on identifying which approach is most appropriate for a given situation. Regardless of the approach chosen, individuals should recognize that each carries its own advantages and disadvantages.

Huan and Yazdanifard (2012) review conflict management styles and conflict resolution from the perspective of managers and supervisors. They argue that leaders must form strong relationships with their subordinates to achieve organizational performance in terms of efficiency and effectiveness. In any organization, leaders are responsible for resolving conflicts of all kinds in order to promote organizational success. Leaders must learn to manage and address conflict in a manner suited to the specific situation and the parties involved. In the globalized era, the Internet has increased organizational performance but has simultaneously introduced new types of conflict. Workplace conflict may cause absenteeism and jeopardize employee loyalty, ultimately reducing an organization's profit margins.

Analysis of Coca-Cola's Discrimination Conflict

CEO Ivester Douglas replaced Robert Goizueta, who died suddenly in 1997 after leading the company since 1980. Morris and Seller (2000, p. 15) described Ivester as an arrogant and insecure leader — a characterization that may help explain the environment in which the lawsuit arose. In response to the lawsuit, Ivester appointed Carl Ware, the highest-ranking Black executive at the company, as co-chair of the Diversity Advisory Council, alongside Jack Stahl, Senior Vice-President. Ware had joined the company in 1974 after graduating from Harvard and was initially assigned to urban and government affairs. He rose to become vice-president of the Africa group, where he focused on cultivating relationships with African governments. While bridging existing cultural barriers, he enabled the company to collaborate with local governments (Holsendolph, 1999, p. 1). Coca-Cola divested its South African assets in support of the anti-apartheid cause, and Ware organized a fundraising tour for Nelson Mandela in the United States that helped smooth the company's sales in South Africa. The leadership team played a vital role in supporting diversity by tying compensation increases to the achievement of diversity goals.

The company also implemented numerous systematic changes to its procedures and policies with measurable outcomes. The areas targeted included the identification of employees for senior managerial positions and the improvement of minority employees' perceptions that their career opportunities were comparable to those of white employees. Board diversification was identified as necessary, as its lack undermined the company's diversity efforts and suggested an insensitivity to diversity goals. Among the resulting changes, health benefits were extended to same-sex domestic partners in 2003.

Negotiation is a powerful tool for resolving conflict because it incorporates the needs of employees while simultaneously addressing organizational objectives. In the Coca-Cola case, negotiation proved essential for resolving the conflict and eliminating discrimination from the organization. The basic negotiation levels are power, rights, and interest. For Coca-Cola, the rights-based approach — grounded in contracts and often leading to legal action, which is costly and time-consuming — and the interest-based approach — involving good communication and collaboration and aiming at a win-win outcome for plaintiffs and the company — were both relevant. Globalization has also made negotiation an increasingly powerful tool for resolving organizational conflicts and improving internal communication.

The root causes of Coca-Cola's discrimination conflict were structural: invisible barriers blocked racial minorities from advancing into senior leadership positions. The underrepresentation of diverse groups at senior managerial levels is both a symptom of and an antecedent to continued discrimination. Segregation arising from homosocial reproduction — in which individuals promote and hire people who resemble themselves — results in fewer opportunities for those who do not already hold power. Coca-Cola's organizational culture was monolithic due to the absence of diverse representation at senior levels, and the company's cultural norms were associated with whiteness and its attendant access to power. African-American employees felt pressured to assimilate rather than to express their identities freely. Companies with diverse representation in managerial positions are less likely to have employees relying on stereotypes in social interactions. The high levels of discrimination experienced at large companies such as Coca-Cola are also attributable to stable and largely unchanging employment conditions, greater labor specialization, narrow spans of control, proliferating titles, and lengthy chains of command (Mujtaba, 2014).

Organizational culture content was another contributing cause. Organizational leaders held stereotypes about which types of employees were best suited to advancement, and reward systems favored employees who behaved in ways consistent with those stereotypes. These discriminatory cultural values, beliefs, and assumptions manifested in cultural artifacts such as HR practices, behavioral norms, and physical arrangements (Huan & Yazdanifard, 2012). Upper management also perpetuated discrimination by failing to embrace diversity; the degree to which leaders chose to emphasize inclusiveness as a strategy reflected their underlying priorities. By making reward systems contingent on diversity outcomes, Coca-Cola's leaders sought to build accountability systems for their employees.

References

Aritzeta, A., Ayestaran, S., & Swailes, S. (2005). Team role preference and conflict management styles. The International Journal of Conflict Management, 16(2), 157–182.

Desivilya, H., & Eizen, D. (2005). Conflict management in work teams: The role of social self-efficacy and group identification. The International Journal of Conflict Management, 16(2), 183–208.

Holsendolph, E. (1999). Once again, Carl Ware takes on an assignment, a big one. The Atlanta Journal and Constitution.

Huan, L., & Yazdanifard, R. (2012). The difference of conflict management styles and conflict resolution in workplace. Business & Entrepreneurship Journal, 1(1), 141–155.

Hughes, R., Ginnett, R., & Curphy, G. (2009). Leadership: Enhancing the lessons of experience (6th ed.). McGraw-Hill.

Kurtzberg, T., & Mueller, J. (2005). The influence of daily conflict on perceptions of creativity: A longitudinal study. The International Journal of Conflict Management, 16(4), 335–353.

Morris, B., & Seller, P. (2000). What really happened at Coke? Fortune, 14(1), 14–17.

Mujtaba, B. (2014). Managerial skills and practices for global leadership. ILEAD Academy.

Pruitt, W., & Nethercutt, L. (2002). The Texaco racial discrimination case and shareholder wealth. Journal of Labor Research, 13, 685–693.