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Final Group portfolio

Organizational Design

6/25/2013

Hogeschool Rotterdam

Authors:

Lisette ten Have

0839678

Amy Sarr

0842438

Billy Weststraate

0837330

Table of content

Introduction

Decision and politics Decision making process Main ethical issues in the soft drink industry Decision making style

Organization and culture Organisation Design Responsibility and decision making centres Organisation culture

Process Management Graph

Process Management The Coca Cola production process flow What have we learned from process management

Work plan Start-up division Decision and politics report Organization and Culture report Process Management report

Activity logs Of Amy Sarr Of Billy Westraate Of Lisette ten Have

Peer assesments Of Amy Sarr Of Billy Weststraate Of Lisette ten Have

Conclusion

Bibliography

Page 2

Page 3

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Introduction

The object of this assignment, which was part of the subject ‘Organizational Design’ is to make a report based on the analysis of an organization, by using the theoretical models. In this report you can find the Ethical problem-solving and decision making within Coca Cola company, their organizational structure and organizational culture and further the process management.

In 1886 developed Mr. Pemberton, a pharmacistst, the syrop which is today known as Coca Cola. He did not live long enough to see and experience the huge success of his drink, he died a few years after his invention. In 1889 bought by Mr. Chandler the recipe, incorporated it three years later and named it after the drink; Coca Cola. Its headquarters is located in Atlanta, where it still is. (heritage)

Today is the Coca Cola Company the best-known beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrup. The company sells its 500 brands worldwide, operates in about 200 countries and sell 1.6 billion servings a day. (heritage)

We hope you will enjoy reading it, feel free to contact us if you have any questions.

Kind regards,

Amy Sarr Billy Westraate Lisette ten Have

.

Decision and Politics

Decision Making proces

The Coca-Cola Company makes the majority of its decisions based on the incremental approach. An incremental approach is charactarized by evluating results and taking action based on the results, and everlasting circle. (Bloisi) Visually it looks like the picture placed below on this page. (AgiTools) An important indicator that the Coca Cola Company uses this approach is that it analyses every year the results of the previous year and then make slight changes in the operations to improve the outcomes for next year.

In the past the decisions were made in a centralised setting; in the headquarters in Alanta were the decisions made for all operations. As this turned out to be too bureaucratic and time-consuming, the company decided to change this centraliced setting toward a decentralised setting. (UKessays)

A Decentralized structure is charactarised by that there is more than one ‘powercentre’ and that the powercentres are delegated further down the hierarchy, away from the headquarters, while staying closely in touch. (Ukessays) Within the Coca Cola Company has this approach led to a separation by region, and as the majority of the company’s problems are geographically based, this approach turned out to be a huge success. Each region has different regulations, different consumer needs, and different problems to deal with. Problems can be solved quickly and effectively due to this structure. (scribd)

Some functions remained centralised, such as marketing and finance. This allows the company to formulate and communicate one global message, but also allow that message to be tailored at the local level. This way the organization can quickly respond to changing market demand, and higher- level management can focus more on long-term planning. (scribd)

quickly respond to changing market demand, and higher- level management can focus more on long-term planning.
4

Main ethical issues in the soft drink industry

The picture on the previous page clearly shows disturbing issues which are specifically addressed to the Coca Cola Company. The whole soft drink industry is facing ethical issues, according to Mr. Hall (founder and chairman of Zennith International) they can be divided in three main topics: health, environment and choice.

We have chosen Mr. Hall as a source for this text, as he is a specialist on this topic, while he is not on the payroll by one of the larger soft drink manufacturers.

Health Organisations worldwide are increasing consumers’awareness with regard to the potential impact on their health when they are consuming soft drinks and energy drinks.

One example can be seen in Australia, where the Cancer Council, Diabetes Australia and the heart foundation of Australia have joined forces to encourage healthier choices. (MacDonald) Another example can be seen in New York City, where the major wants to ban the big sizes of cans filled with sugary drinks. (Grynbaum)

Due to the change for demand by consumers, a healthier product, the Coca Cola Company changed its product line overtime. The latest developments is the introduction of Coca Cola Zero in 2005 and 5 years later Coca Cola Zero caffeine free. (TheCocaColaCompany)

The Coca Cola Company wants to link its brand to health. And example for this is the financial support to the foundation: ‘The Heart Truth’ by the company under name of ‘Diet Coke’. In the article, the company clearly mention that they are worried about health issues, especially with regard to heart diseases, and want to get rid of the ‘taboo’ which is appearantly on this topic. (Moye)

Environment Todays’consumers are more aware of the environment an thus of the impact of companies on the environment. People value nowadays, more than ever, a sustainable approach from companies. And will in general start to ask questions with regard to packaging, waste and transportation.

According to the company Incpen, 43% of the British consumers is of the opinion that soft drinks are ‘overpackaged’. (Sexton)

To produce one PET bottle, 7 liter of water is being used. So, 3 bottles of water against one bottle of coke. About 60.5% of the water is wasted by the Coca Cola Company, against 39.5% of used water. Which means that 176 million liter water is wasted, an enormous number. (HiddenFace)

The Coca Cola Company is well aware of the negative impact on its reputation, and makes promises to improve the current situation. Every year the company is publishing a sustainability report on their website, available for everyone. The company is promoting recycling programs around the world and promises to be ‘water neutral’ in 2020. (TheCocaColaCompany)

Choice Mr. Hall is stating at the Global Beverages Congress in 2013 that the soft drink indrustry should have had an answer to social concerns.

at the Global Beverages Congress in 2013 that the soft drink indrustry should have had an

Firms should had to balanced social needs against the increase in demand for choice. As the Coca Cola company is selling 500 different kind of products around the world, it is indeed a legimite question if the Coca Cola Company is actually having such an ethical approach.

Decision Making style

The decision making style of Coca Cola is decentralised as mentioned before, but is also charactarised by hierarchy.

Hierarchical organizations are also known as "tall organizations" and are characterized by a large number of management layers. And organisation tend to be slow by making decisions for the first time when they encounter a particular problem. (Bloisi)

According to a general organizational chart obtained from the company’s website, there are at least 5 hierarchical levels at the corporate level. (TheCocaColaCompany)

For example: the head of the Canadian division reports to the president and COO of the North American Group. That president reports to the CFO, who reports to the Office of the General Counsel. The General Counsel then reports to the CEO. It is fair to assume that there are at least a few more steps in the hierarchy at the local level. Due to its tall structure, the organization has experienced communication problems.

This will be shown graphically on the next page.

Organisation and Culture

Organisation Design

The graph on this page shows the organisational structure of the Coca Cola Company, which was described in the previous chapter named as ‘decision and politics’. In the graph can be seen that the marketing,- and finance department are centralised, while other departments, as mentioned before, have a decentralized structure based on geographical region.

This graph, which can be found under ‘organizational structure’ in the bibliography, shows that the company is hierarchical. Mentioned in the previous chapter, this is charactarized by the numerous management layers.

Responsbility and decision making centres

management layers. Responsbility and decision making centres The different divisions all have their own management and

The different divisions all have their own management and their own specialism in working in that particular part of the world. Cultures, climate, language and ethics are very different all around the world and in order to do proper business, these aspects have to be taken into consideration.

(123helpme)

It is important to have management members locally that have loads of experience in the regions, in order to be able to reach out to customers or new employees. (Ukessays, HellenicCocaCola)

The Coca Cola Company does this well, they have a clear structure and organogram for every division. The organograms for the separate divisions were real hard to find, but they will not differ from any other international market leader.

The low relevance decisions are made by the management of the divisions or even by the managers of certain departments of the specific divisions; this is an indication of a decentralised structure. This can be different for each division, as each division in another region needs a different approach.

(123helpme)

Thus minor decisions are made by the divisions themselves. Regularly, the management of the divisions and the coca cola board of directors contact one another to monitor changes and discuss future actions. (Ukessays)This is another indication of the incremental approach. Even though the majority of the organization has a decentralized structure, it is obvious that the president and the board of directors still have the biggest veto.

The only decisions made by the president of overall board of directors is e.g. to enter new markets, or design a new product line. These decisions then mostly are integrated in all the coca cola divisions, making it also slightly centralised.

Organization Culture

According to TheCoca-colacompany.com. The Coca Cola inclusive culture is defined by seven core values: leadership, passion, integrity, collaboration, diversity, quality, and accountability. The culture of Coca Cola organization is mission driven; focused on refreshing the mind; inspiring optimism and making a difference. (theCocaColaCompany)

Mission the Coca Cola Company its mission is to refresh the world; to inspire moments of optimism and happiness and to create value and make a difference. Vision The Coca cola company vision is giving people great place to work where people are inspired to be the best they can be, bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. (TheCoca-colacompany.com.)

Most companies do take care of their employees, think of trainings, promotions or financial rewards, as does the Coca Cola Company. This is also one of the ways how the Coca Cola Company is attracting and retaining new employees, by taking tests and a personal interview before they get hired, by encouraging them to develop an innovatove and creative approach of doing business etcetera. (en.coca-colahellenic.hr)

2

Water (3 Bottles)

Water (washing)

Syrop

Flavor concentrate

Empty Bottle 2L

Liquid sugar (42 blocks)

Input

1 3
1
3

1x Coca cola bottle 2L

Output

Source: http://processflowsheets.blogs

Production process

Process Management

The Coca-cola production process flow

The figure on the previous page gives a glance in the general production process of one bottle of two litres of Coca Cola. This overview excludes currently a location and a responsible person for each activity. Each step will be motivated and clearly described.

The number 1, 2 and 3 are representing three production lines, by which Coca Cola is made of. The next paragraphs are describing these production lines.

Production line 1 Among this production line, the following phases are being passed: ‘tank car’, ‘pump 1’, ‘liquid sugar’ and ‘pump 2’.

The National Soft Drink Association provided quality guidelines for the soft drink industry. These guidelines need to be followed in order to prevent spoilage of a product; when it does not reach the demanded quality, the product will be thrown away. The ingredients need to be of a certain quality and the machines used need to reach certain requirements. All tanks and pumps are for example being sterilized and are regularly tested on their performance. (Avizienis)

About 7 to maximum 12% of a soft drink contain sugar, an important ingredient which has the characteristic to sweeten the drink, besides balancing the flavour concentrates and acids. (Avizienis)

The sugar, which is meeting the quality standards of the NSDA, is hermetically implemented into the process. This is to prevent any external input. For micro biological reasons, the sugar gets heated up to 850 degrees Celsius, in order to make sure any external input has no chance. (Avizienis) The sugar get mixed part by part, via the so-called ‘elevators’ certain amounts are being added to the bigger amount to get heated up. This temperature makes the sugar liquid and will be cooled down to a level of about 40 degrees Celsius before it gets stored. This process will last for an hour; the next step is to mix the sugar with the mixture of flavour concentrates and water. (ProcessFlowsheet)

Production line 2 The different ingredients are carefully being prepared for implementation into the drink. The water is being filtered and sterilized, as the drink contains 94% water; it is of major importance that the quality is high and constant. The water, the flavour concentrates and the citric acid are being combined and with the liquid sugar carefully mixed.

during the this process there arise an impurity water which will be removed through a process of coagulation, filtration, and chlorination, after this water will be purified and sterilize. After the mixture ( sugar and different ingredient) are filtered and cooled. Raw material will be pump into the concentrate preparing vessel. From there the production flow direct into the mixing and storing vessel (Soft drinks production process flow chart) after all this mixture are stirred and mixing vessel you will obtain a syrup and CO2 will be sparger.

After mixing the mixture of flavour concentrates with the liquid sugar, syrop (with the secret ingredients) and sparger, with added carbon dioxide. The syrup will give the characteristic taste to the drink and the carbon dioxide will add the ‘sparkle’ to the drink. The temperature of the mixture needs to be carefully checked and maintained when the carbon dioxide get added to the drink. In order to have the right mixture, the drink will be mixed for another 15 minutes in the last ‘mixer’. After the added carbon dioxide, the temperature needs to be lowered to 15 degrees Celsius, in order to be able to put into the bottles which are provided by production line 3.

Production line 3 As can be seen in the graph on page 1, production line 3 deals with the input of bottles into the last part of the production chain.

The wash water tank clearly provides water to wash the bottles which are about to get filled with Coca Cola. The process is going fast and smoothly, the bottles get washed, dried and a label is being put on before it is heading towards the production line of the product itself.

It is of major importance that the mixture gets cooled even further down to 15 degrees Celsius, as otherwise the bottles will condense and the labels will thus get loose. (Avizienis)

What have we learned from process management

Amy: I find that the production process of Coca Cola is quite complicated but it is not a long process. The company uses the qualities standers guidelines in order to produce a good and high quality product. Like they uses the National Soft Drink Association quality guidelines in order to prevent spoilage of a product. I learned that Coca Cola uses heated sugar during the production process up to 850 degrees Celsius, in order to make sure any external input has no chance. During this process The company uses many different ingredient and uses different stages to obtain the syrup and after thy added the carbon dioxide in to the mixture , the temperature needs to be lowered to 15 degrees Celsius, in order to be able to put into the bottles which are provided by production line

3. And Coca Cola produce in an sustainable way, because the impurity water which will be

removed through a process of coagulation, filtration, and chlorination, after this water will be

purified and sterilize for reuse”

Lisette: “I never realized that a soft drink contained that amount of sugar and water, I thought it was real interesting to read how the production process goes”

Billy: “after analyzing and building the flow chart of the coca cola production process, I can truly say I will decrease my soft drink consumption to a minimum. For the organizational aspect, I have learned the most of designing the flow chart that contained multiple product lines. I would love to see the production process in the factory….”

Workplan

Activity

Who is responsible

Date

Name of the organization and the main channels of access

Amy

May 15, 2013

Work-plan listing the activities your group will conduct over the next 7 weeks.

Lisette

May 16, 2013

Name the team member that is responsible for each activity

Lisette

May 16, 2013

Decision & Politics report on Coca Cola met ± 1500 woorden

 

Week 2+ 3: Ethical problem-solving and decision making Prepare a report on the organisation of your choice covering the following subjects:

Activity

Who is responsible

Date

Describe the organisational decision making process considering the types of decisions that are made and the level in the organisation where these decisions are made, the organisational approaches to gather information. Evaluating alternative solutions and implementation the final decision

Amy

May 22, 2013

Describe the main ethical issues that are part of the industry of your choice and to what extent do they play a role in the organisation of your choice

Lisette

May 22, 2013

What is the decision style applied in your organisation Provide background information?

Amy

May 22, 2013

Improve report according to feedback teacher

Lisette

June 25, 2013

Organisation and culture report (±1000 words)

Week 4 + 5: Organisational structure and organisational culture. Provide the organisational structure in an organogram and analyse it based on the following topics.

Activity

Who is responsible

Date

Is the organisation designed by function, by geography, by product line or by customer/market

Lisette

May 29, 2013

Does this organogram provide you with insight who is responsible for what and where decision centres are situated

Billy

May 29, 2013

Describe the organisational culture by using the rational and expressive elements as mentioned in the table at page

Amy

May 29, 2013

761

Improve report according to feedback teacher

Lisette

June 25, 2013

Process management report (±1,500 words)

Week 6+7: Process Management. Assignment: Business Process Mapping

Activity

Who is responsible

Date

Map of a self-chosen process (A3 format) (use different colours and forms for the various elements of your process such as inputs, outputs, activities and who is involved)

Billy

June 20, 2013

Introduction (what do you want to achieve)

Billy

June 20, 2013

be as specific as possible about all actions you need to take into account

Amy + Lisette

June 20, 2013

Evaluation (what have you learnt from this exercize)

Billy

June 25, 2013

Improve report according to feedback teacher

Nvt – no feedback

--

Activity

Who is responsible

Date

Finalizing report

Lisette

June 25, 2013

Referencing

All of us

June 25, 2013

peer assesments

All of us

June 25, 2013

Make the powerpoint for the presentation

Amy

June 26, 2013

Preparing presentation

All of us

June 26, 2013

Activity logs

Amy Sarr

Date

Description activity

 

time

14-05-2013

Name of the organization and the main channels of access

1hours

19-05-2013

The organisational decision

2

hours

19-052013

The decision style apply in organization

2

hours

6-6-13

Organizational Culture

1h

20-6-13

Production line 2 in production process

30mn

22-06

Improved own work according to teacher comment

 

1,5h

25-06-13

introduction

20-30mn

25-06-13

Peerassesment

30mn

Billy Weststraate

Date

Description activity

 

time

07-06-2013

Making organogram and explaining decision making process

1,5 hours

17-06-2013

Making flow chart in-class

1

hours

20-06-2013

Finished flow chart and production process overview

1,5 hours

25-06-2013

Making peer assessment, adding conclusion and editing some of own work. Defining my lessons learned from this course

2.5 hours

0,5 hours

Lisette ten Have

Date

Description activity

 

time

15-05-2013

Developing of the workplan

30min

16-05-2013

Revising + finalising work plan

30min

23-05-2013

Report about ethical issues

3 hours

24-05-2013

Finalizing first report

1 hour

07-06- 2013

Finalizing second resport

1 hour

21-06-2013

Description production lines

2,5 hours

21-06-2013

Finalizing third report

30min

25-06-2013

Finalizing group portfolio

4

hours

Peer assesments

Individual Peer Ass. Group Member: Lisette Ten Have

Evaluation 1

8,8

Evaluation 2

9,2

Total

18

Average Evaluation (ie All Evaluations/4)

9

Individual Peer Ass. Group Member: Billy Weststraate

 

Evaluation 1

7.1

Evaluation 2

7

Total

14,1

Average Evaluation (ie All Evaluations/4)

7,1

Individual Peer Ass. Group Member: Amy Sarr

Evaluation 1

8

Evaluation 2

8

Total

16

Average Evaluation (ie All Evaluations/4)

8

Total Peer Ass – All member

 

Amy Sarr

8

Billy Weststrate

7,1

Lisette Ten Have

9

Total

24,1

Average Evaluation (ie All Evaluations/4)

8

Total Peer Ass – All members

+/- from Average

Amy Sarr

8

+0,0

Billy Weststrate

7,1

-0,9

Lisette Ten Have

9

+ 1

Average Evaluation

8

 

Total Peer Ass – All member

Teacher Grade

+/- from Average

Final Grade

Amy Sarr

 

+

0,0

 

Billy Westrate

 

-0,9

 

Lisette Ten Have

 

+

1

 

Conclusion

Being a group full of third year students, this was a course added to our third year classes. This added a little more complexity to the course but nevertheless we managed to finish all the assignments in time and used the feedback from the teacher to improve them. Also the group was backed up with a third member halfway the block which enabled the work to be divided over three instead of two people.

As said in the introduction, for this course, we got to analyse the organizational design of a huge company. The organizational structure, the ethical aspect as well as the production process have been analysed thoroughly. Afterwards, the report is made based on the assignments given in the course outline. Coca cola turned out to be a good choice, because there was an abundance of data to be found on the internet making the analysis easier and more accurate.

I can say on behalf of the group that we enjoyed the course and that we’ve learned a lot about the organization of a big company. We hope that you have enjoyed reading our report.

Bibliography

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A sustainable future for soft drinks. May 23, 2013. BritishSoftDrinkAssociation. <

http://www.britishsoftdrinks.com/PDF/020608%20BSDA%20sustainability%20strategy%20_3

pdf>

Avizienis, A. “How things are made, volume 2: soft drink”. (2007) MadeHow.com.

<http://www.madehow.com/Volume-2/Soft-Drink.html>

Boukly, Ben. April 3, 2013. Health, Environment, Choice hold sway in soft drinks: Zentih International. May 23, 2013. BeverageDaily.com. <http://www.beveragedaily.com/Markets/Health-Environment- Choice-hold-sway-in-soft-drinks-Zenith-International>

Centralised or Decentralized International Market Strategy”(2011) Ukessays. <

http://www.ukessays.com/essays/marketing/centralised-or-decentralized-international-market-

strategy-marketing-essay.php>

Coca-Cola Organizational Theory” Scribd. < http://www.scribd.com/doc/20200601/Coca-Cola- Organizational-Theory>

Esterl, Mike. January 19, 2013. Is this the end of the sof-drink era?. May 23, 2013.

WallStreetJournal.com.<http://online.wsj.com/article/SB10001424127887323783704578245973076

636056.html>

Grynbaum, Michael. May 3. New York plans to ban sale of big sizes of sugary drinks. May 23, 2013. NewYorkTimes.com. <http://www.nytimes.com/2012/05/31/nyregion/bloomberg-plans-a-ban-on-

large-sugared-drinks.html?_r=0>

Heritage” TheCocaColaCompany. <http://heritage.coca-cola.com/>

MacDonald, Anna. January 17, 2013. Call for tax on sugary drinks. May 23, 2013. abcNEWS.

<http://www.abc.net.au/news/2013-01-17/call-for-tax-on-sugary-soft-drinks/4468924>

Moye, Jay. February 11, 2013. Ladies in Red: Minka Kelly and Diet Coke Hit the Runway to Promote Women’s Heart Health Awareness. May 23, 2013. TheCocaColaCompany. < http://www.coca-

colacompany.com/stories/ladies-in-red-minka-kelly-and-diet-coke-hit-the-runway-to-promote-

womens-heart-health-awareness>

“Organizational Structure”. (2006) <http://cokemnc.blogspot.nl/p/organizational-structure.html>

“Organizational culture and people development”. (2006) HelleniCocaCola. <http://en.coca- colahellenic.hr/Careers/Organizationalcultur/>

Profitable growthand value creationin the soft drink industry. May 23, 2013. Deloitte.com.

<http://www.deloitte.com/assets/Dcom-

Venezuela/Local%20Assets/Documents/White%20Paper_Soft%20Drinks(2).pdf>

Product Descriptions.May 23, 2013. TheCocaColaCompany. < http://www.coca- colacompany.com/brands/product-descriptions#coca-cola-zero>

Sexton, Alex. November 25, 2010. A review of the environmental impact of soft drink packaging. May 23, 2013. < http://www.sodastream.co.uk/gbretail/softdrinksreport.pdf>

“Soft drinks production process flow chart”. (2010) ProcessFlowsheets.

<http://processflowsheets.blogspot.nl/2011/08/soft-drinks-production-process-flow.html>

“The Coca Cola Company" . (2006) 123HelpMe.com.

<http://www.123HelpMe.com/view.asp?id=148943>

The hidden face behind your favourite drink. May 23, 2013. <http://thumbnails.visually.netdna-

cdn.com/BehindCocaCola_5172c2c207f1c.png>

Workplace Culture” (2006) TheCocaColaCompany. < http://www.coca-colacompany.com/our- company/diversity/workplace-culture>