Producing Organizational Governance and Leadership

Question: Discuss about the Producing Organizational Governance and Leadership. Answer: Introduction Coca Cola is a famous retailer, manufacturer, and marketer of non-alcoholic beverages in the international market. It leads the market with more than five hundred brands selling over two hundred countries. The organization operates through a franchise distribution system which started in the year 1886. Selling Coke in a bottle started from the year 1895. As stated by Serodio et al. (2016), it was a strategy to increase sales and get recognized globally. Currently, Coca Cola is the most consumed and famous brand in the world. The organization produces the syrup concentrate which the bottlers use to produce and grab the most of the market share. The head-quarter of the company is situated at Atlanta and the main bottler of the company is in the North America. The organization is operating at the top position for more than a century. The purpose of this paper is to explore the history, vision, goals, and organizational structure and functions of the management of the Coca Cola Company. It also explains the leadership style along with the management style, which are applied by the Coca Cola Company. The available options for the same are also explained in this paper. Reviewing the current vision the paper will present alternatives addressing the issues. External Analysis From the PESTLE analysis, it can be stated that, Coca Cola hugely depends on the food department of the countries where it is operating (appendix). The political barriers can come to the company through the tax structures. Various issues like accounting, internal marketing, changes in laws regarding labour, and many others are incorporated in the political factors which can affect the Coca Cola Company. According to the ideas of Rothaermel (2015), the product is sold in many countries with different demand patterns. Coca Colas majority of the equity comes from the beverage industry and outside of the United States of America. The problem Coca Cola is facing is regarding the stagnation of the product quality. In the views of Hair (2015),with cultural changes the demand for the companys product changes. American people prefer healthy drinks, which is not still addressed by Coca Cola. Coca Cola is concentrating more on quantity rather than the quality, which is hampering its demand. The company can use social media as advanced technology for creating awareness and advertising purposes. As stated by Pendergrast (2013), accessibility of drinking water restricts the companys production. Missing any of the criteria given by the governments regarding environmental laws will hamper its distribution process. Internal Analysis To understand the internal situation of the company a SWOT analysis is done (appendix). The company has created a brand recognition which creates customer loyalty in most the countries in the world. The company distributes its products all over the world and hence possesses a worldwide network. It gives Coca Cola an advantage of geographical diversity. These help the company in being the market leader in most of the countries it operates. The product of the company is based on sugar, which is not favourable to the booming health consciousness. Being spread over the world, Coca Cola often faces various troubles regarding the communication process. Following the views given by Dawar (2013), the strategies often changes for the company due to change of socio economic situation where it is operating. It can use the new techniques of production. It also helps the company for expanding. Coca Cola can acquire those companies which will possess future threats. The threats this company is fac ing are higher commodity prices and health consciousness. Same kinds of companies are coming up in different geographical locations. The company has to address the gaps which are becoming prominent regarding the health issues as it will reduce the demand for the company. Business Level Strategy While the other similar companies look for long term strategies, Coca Cola set their strategies for three years only. After the completion of three years, the companys strategy, changes. As stated by Powell and Gard (2015), these strategies are set by Coca Colas managing directors after the head-quarter gives the green signal from Atlanta. The current business strategy followed by the company is segmented revenue growth strategy. Each and every year an annual meeting is held in order to review the strategies in order to ensure that the strategies are applicable for the present market situation. The business level strategic goals of Coca Cola Company incorporate providing products to the valuable clients and retaining professional workers for the company who can help in creating a better corporate image. The business level goals of the Coca Cola help the company in achieving their tactical goals. In the views of Doh and Quigley (2014), these goals which are achieved by the company mos t of the times incorporate increasing the revenue levels by twenty percent by increasing the number of retail customers by ten percent. It helps the company in increasing the market share by five percent. It also incorporates considering the ways to increase market demand by promotional methods. It positions the company ahead of its competitors. Even the close competitor Pepsi lies way below considering Coca Colas annual revenue. Following these strategies, the company has won numerous diversity awards. In CoreBrand: Americas Most Respected Brands Coca Cola stands at rank one. The Human Rights Campaigns Corporate Equality Index (LGBT) has given hundred percent rating to the Coca Cola Company. The organization also had employed more than 150,000 workers till 2012. Following the views of Hartley and Claycomb (2013), it can be said that, the total asset value of the company became $86.17 billion USD during the year 2012 by following these strategies. Strategic Choice The Coca Cola Company has various available strategic choices like global strategy, transitional strategy, international strategy, multi-domestic strategy, and others. The global strategy advocates for standardized products, economies of scale, learning from different cultures and using those ideas in the production process. Transitional strategy uses the benefits of globalization. The views of Pfitzer, Bockstette and Stamp (2013), states that, transitional strategy advocates strategic movements of factors of production, people, ideas and concepts across the borders to achieve economies of scale. It helps an organization in taking the benefits of cross cultural learning. It helps an organization in mass production. The international strategy which can be adopted by an organization mainly facilitates importing and exporting. The fourth strategic choice available for the organization is the multi- domestic strategy. As the ideas Morden (2016), has stated, it uses the existing model whi ch is being used in the domestic market in the global market. It will be like creating a franchise business of the company all over the world. Following the views of Flynn and Okuonzi (2016), it can be stated that, among these available options of strategies, the Coca Cola Company should choose the transitional strategy. It remains at the top among the four available strategies in the terms of cost reduction consideration and local responsiveness considerations. As shown in the figure above, the transitional strategy can help the Coca Cola Company in reducing the cost of production due to fluent mobility of capital. In the views of Hill, Jones and Schilling (2014), it can also help the organization in improving the local responsive considerations. It means the Coca Cola Company can use the transitional strategy which will help the organization in operating in different countries at the same level of efficiency. It will make the response system of the company to the local events in the country it is operating, fast. It helps the company in staying ahead of the line. Mission and vision Statements The mission statement of Coca Cola clearly states that, their roadmap has the starting point at the companys mission, and the companys mission is enduring. It sets the companys purpose and serves as a standard against the competitors, whose actions are incorporated in the decision making process of the company. The mission also touches the points of refreshing the world, inspiring moments of happiness and optimism in all the societies, and creating value which is capable of making a difference. Following the views and ideas of Metzger (2014), it can be said that, the word roadmap proves that the company is optimistic and positive regarding their future and sustainability. As stated by deS (2014), the mission of the company is to make a change which will help the company in creating a name for the organization. The vision of the organization is to be sustaining in the future like it has been doing since late 1800s. It can be gathered from the vision statement of Coca Cola, which suggests that, the companys vision serves as the framework for the roadmap. It also provides the guidelines through reviewing the targets to be achieved. The final goal is to obtain sustainability. People: Providing a great working environment which can inspire people to stay ahead in the race. Portfolio: Bringing a quality beverage brands portfolio which has the potential to guess and satisfy everyones demands. Partners: Creating a network of the suppliers of input materials and consumers which possess a mutual and enduring value. Environment: Doing positive things for the societies where the company operates to create sustainable brand image. Profit: Looking after the overall responsibilities to the society while maximizing profit. Productivity: Being a fast moving company Coca Cola looks after both quality and quantity of the products. Action Plan Issues Present position Future directions Strategy Action Investment in Coca Colas brands More than hundred major sources of investment Fifty percent achievement in one year Achieving five sources of investment every month Providing research and investment friendly system Emphasis on revenue and profit growth $50 billion USD revenue and $10 billion USD profit Strategic implementation of the boards plans Quarterly assessment of the strategies and achievements Increasing sales by following the sales maximizing plans given by the assigned board Refocusing on the core business model of Coca Cola The focus of the company has not shifted To keep the focus on the core model communication system will be revised from time to time Stating the core business model to the employees thoroughly Creating a feedback system following the communication process Stepping up productivity Productivity of Coca Cola is one of the best in the world Finding out the maximizing situation for increasing returns to scale Look for a fluent production system to increase the productivity Employing the board in finding out strategies to make the production process more fluent Simplification and streamlining the operating model The operating model of the company is simple Making the operating model familiar to the employees Familiar operating model will help the workers in stepping up the productivity while keeping the quality intact Making training programs for the employees focusing on the target. Table 1: Action plan for Coca Cola. Source: As created by the author. The table above shows the action plan for Coca Cola Company which is required to keep up the quality of the products and increase the quantity. In the ideas of Harrison and John (2013), the productivity of the company will rise as the efficiency of the production process will increase following the action plan. Change Management Approach The management approach which will appreciate the targeted production process is a changed approach towards the managerial goals, which incorporates planning, organizing, leading, and controlling. The new approach can be hiring more local employees. It will help the company in providing quality products to the customers around the globe. The local requirements will be met and the workplace diversity will improve. As stated by Stone (2013), the corporate image for the company will also be benefitted from this approach. The transitional strategy approach will help the company in making market based supply system, as the demand pattern depends on the local environments. Any sudden change or diversion from the predicted line will be answered by the company effectively. As stated by the ideas of Grant (2016), this might lead to different strategic roles of the mangers in different territories, but their ultimate goals are the same. These goals incorporate price reduction and revenue maxim ization, from where the profit maximizing strategy follows. It will also simplify the output process for the employees which will benefit the production process. Conclusion In conclusion it can be said that the Coca Cola Company has been one of the top beverage selling companies in the world for more than a century. The reason behind this is the strategic plans that are adopted by the management of the Coca Cola Company. The company increases its production every year as the demand for the products are also increasing due to the strategic plans implemented by the management. The PESTLE analysis done here shows the external market for the company. As the company is operating in most of the countries, the political aspects of the countries has the potential of intervening the production process of the company. The strategies that have been adopted by the company are transitional in nature. It helps the company in building different production processes for each of the plants in different countries. This individual approach also helps the management in showing the fluctuations regarding the production and the external variables that affect the companys rev enue and profit margins. The detailed approach also helps the company in determining the glitches in the production process. 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