Organizational Change and Restructuring

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 Introduction

The report analyses how Coca-Cola Company has been restructured by use of

transformational strategies in its unique business model. Coca-Cola Company leads in the sale of

beverage products and distributes soft drinks to over 200 countries globally since it was founded Commented [G1]: Inserted: the
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in 1886. The Company has its headquarters in Atlanta, United States of America. Developments

of the Company are attributed to change strategies enforced and restructuring process meant to

improve Company operations (Elmore, 2011). The report will further elaborate how restructuring

operations of Coca-Cola Company have increased profitability and influenced the faster

development of the company. The case will include organization transformation analysis, critical Commented [G2]: Inserted: the
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perspectives and change strategies prioritized by Coca-Cola Company. In addition, the case will
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consider culture change implications relevant to the Company's management and used to

influence the development of the company. Competitive strategies are further explained to Commented [G4]: Inserted: the

ensure the case gives details of sensitive issues affecting Coca-Cola and may affect its change

strategies. The over 400 nonalcoholic brands sold by the company are designed by the

management team and help the company to have a competitive advantage in the international

market. The company focuses to restructure bottling system by use of segmented revenue Commented [G5]: Inserted: the
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approach. Restructuring company owned-bottling operations will ensure the company makes
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more sales. Authorized bottling partners should also coordinate with company management to

improve distribution efforts of Coca-Cola Company. Since the company has many markets,

restructuring decisions should target capital-intensive bottling business to increase profitability.

In emerging markets of the company, Coca-Cola Company promotes franchising of bottling

operations to improve its partnership. The company ensures internal changes are made before

focusing on external change strategies. Therefore, the restructuring will consider the
effectiveness of the company management to use management information systems to improve Commented [G7]: Inserted: the

company operations.

Restructuring of Coca-Cola Company

The process of restructuring Coca-Cola Company started in 1999 when amalgamation

was done to bottling operations of the company. For instance, the human resource issues

necessitated the restructuring of Hindustan bottling operations and Bharat bottling operations of

Coca-Cola Company. The amalgamation efforts increased the number of Coca-Cola employees Commented [G11]: Inserted: the

to over 10,000. Therefore, there was a need to design new ways of restructuring to ensure Coca-

Cola resolves human resources issues. Restructuring process started with setting up of new Commented [G12]: Inserted: a

topographic points to ensure changes made to organization construction improve net income

(Elmore, 2011). Loss accounting was also included in transformational changes to ensure the

company avoids operations that may reduce company profitability.

Analysis of Organization Transformation

Since Coca-Cola Company was established, it has been guided by its growth stages

which ensure the company adds value to its products to influence operational growth. The Commented [G13]: Inserted: to
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transformational skills have helped Coca-Cola Company to solve international business problems

affecting its operations since it was established (Foster, 2008). Therefore, employees’ demands

are considered by the management team in their daily duties to regulate their labor cost flow.

Coca-Cola Company management uses modernism approaches in business to cater for most of Commented [G14]: Inserted: the

the employees' demands. The policies introduced with new change strategies consider the cost of Commented [G15]: Inserted: the

employees’ treatment bills to avoid internal conflicts of the organization. In addition, the

Company management promotes management information systems that help to ease operations
of the company by ensuring accuracy in all production works. The work stoppage is avoided, and

managers motivate employees regularly to improve their work performance. Lack of certainty in Commented [G16]: Inserted: ,
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Coca-Cola Company’s working environment is discouraged by managers as an effort to improve
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transformational strategies. New policies are always encouraged as far as they match with

Company image (Foster, 2008).

Coca-Cola Company uses formidable assert brands to transform its operations. The

management team ensures organizational commitment is achieved and all employees are favored

by the working environment. Organizational effectiveness is promoted by corporate leadership

style which ensures the Company's branch managers coordinate with a senior manager in

supporting management duties. The managers have pushed for operational responsibility which Commented [G20]: Inserted: a

ensures effective decisions are made by all internal stakeholders of the company. Transformation

efforts ensure management goals benefit the organization and increase the effectiveness of

company performance. Reducing bureaucracy simplifies operations of Coca-Cola Company and Commented [G21]: Inserted: the

boosts managerial duties to ensure more products are sold by the company (Foster, 2014).

Organization transformation considers an incremental method that guides conduction of business

decisions of Coca-Cola Company. For effective transformation, change strategies are enforced Commented [G22]: Inserted: an

after consultation of all Coca-Cola stakeholders. Any non-programmed decisions of the company

must follow authorization of the company’s board of directors. Since quick decision-making

process may result in conflicts, urgent changes are avoided by Coca-Cola Company officials. Commented [G23]: Inserted: -

A critical perspective is essential in understanding the multinational operations of Coca-

Cola Company. The effectiveness of international business is highly dependent on the regulatory

environment which is promoted in all operations of Coca-Cola Company. The study of Coca- Commented [G24]: Inserted: the
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Cola Company exit in India elaborates the essence of analytical perspectives in managerial duties
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of Company managers (Foster, 2014). For instance, critiqued management literature with details

of how Coca-Cola Company operates in different regions globally will help enlighten young Commented [G28]: Deleted:s

scholars planning to join managerial duties in future. International business books explain the

need to integrate analytical perspectives in the dissemination of management skills. Commented [G26]: Inserted: the

Type of Restructure in Coca-Cola Company

Amalgamation was the effective type of restructuring used in Coca-Cola Company.

Restructuring company operations through amalgamation ensure different entities of the Commented [G29]: Inserted: ing
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Company join to work in unison. Amalgamation in Coca-Cola Company is promoted by
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corporate leadership style which incorporates all stakeholders of the company in decision-

making process to benefit the whole Company. For instance, the Company agreed to form a Commented [G30]: Inserted: -

three-way merger with Europe dealers. The merger with Coca-Cola dealers in Europe helped the

Company to increase its revenue and expand rapidly to dominate the international market as the

best beverage corporation in the world (Foster, 2014).

In restructuring business operations of Coca-Cola Company, over 3200 employees

prioritize personal responsibility to create new opportunities for the Company that will attract

more profit. Enduring abilities of employees benefit the Company and help it make more

partnerships globally. Coca-Cola partners in Europe were formed after Iberian Coca-Cola dealers

joined to work in unison. Amalgamation in Coca-Cola Company also helped Coca-Cola

Enterprises, German counterparts, and US-based bottlers to work together in the consolidation of

Company's supply chain. In other regions like South Africa, Coca-Cola dealers merged in Commented [G33]: Inserted: the
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Johannesburg to form Family Investments based on bottling operations (Harrigan, 2017).

Political, economic and social factors affect changes made by a managerial team of Coca-
Cola Company. In many countries, political leaders influence restructuring of production Commented [G35]: Inserted: a

industries to ensure drinks supplied in the region are standardized and recommended for human

consumption with little harm. Such incidence occurred in Chine when Chinese government had

little trust in foods and drinks supplied to her citizens. Food and Drugs Administration agency in Commented [G36]: Inserted: i
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the US monitors the quality of drinks supplied by Coca-Cola Company under the authority of

political powers. Foreign jurisdictions and varying taxation rates in different countries affect Commented [G37]: Inserted: the

change strategies of Coca-Cola Company as it expands business operations in many countries. Commented [G38]: Inserted: s

Economic factors like recession and inflation issues negatively affect operations of Coca-Cola

Company. The world economy has a great impact on operations of Coca-Cola Company in areas

of production and sales made by the Company (Harrigan, 2017). Social factors like change in Commented [G39]: Inserted: n
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lifestyles as people grow old reduce consumption rate of some drinks and this lowers Coca-Cola
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sales. Commented [G43]: Deleted:W

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Adoption of different organizational mechanisms

Coca-cola has adopted many mechanisms and organic control models that have changed

its management design and culture. It has incorporated modernist and post-modernist

perspectives in its management and approach towards the market. Previously the company used a

centralized management technique that adopted a chain of command. The technique failed to

adequately motivate employees to deliver to their level best. Coca-Cola Company was then

compelled to adopt a post-modernist perspective (Hartogh, 2002). The company used a Commented [G45]: Inserted: -
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decentralized structure and came up with two operating groups; bottling and corporate groups.

The division ensured constant monitoring and increased the labor delivery in the company.

Employees became responsible and accountable leading to a significant increase in production.

Adoption of the new mechanism ensures that employees come from various diversities; this
ensures diversity in work culture and ensures high employment opportunity. However, the

company has faced a lot of problems arising from diversity in raw materials and foreign market Commented [G48]: Deleted:a
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structures. The prices of raw materials depend on the geographical demand and supply chain.

Unfavorable prices of raw materials lead to an increase in production and bottling costs. The

adoption of the new design in organizational structure has helped the company to concentrate in

marketing, pricing and branding strategies varying with geographical regions. Commented [G47]: Inserted: the
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Restructuring of organizational structures has helped the company to identify a unique

market target depending on locations of its products. Adoption of appropriate pricing strategy

promotes the product to suit the local customers. The flexibility of the company, stability and a

high level of standardization are some of the restructuring implications that promote a high

degree of responsiveness and efficiency to the company. Progress in consumer markets has led to

the adoption of postmodernization approach by consumers rather than modernism perspective in

accepting a particular brand in the market (Hartogh, 2002). The postmodern consumers have Commented [G51]: Inserted: the
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focused on the meaning of the product rather than the product features. Therefore, the

consumption of coca cola product by postmodern consumers depends on the meaning and

conclusions that they make about the coke brand. The company is responsible for adopting a

unique branding strategy that influences the consumer emotions to have a positive view of a new

brand. Commented [G53]: Inserted: f

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The company introduced labor policy in 2005 that forced employees to pay for their

medical bill more than the employer's contribution. The police brought a situation of unrest in

the organization structure. The unrest situation indicated a lower production of coke products.

The condition meant that the company was not able to meet consumer requirements. The
modernist approach was attributed to this approach, and the company focused on restructuring

the negative side of the modernist approach (Hartogh, 2002). Commented [G55]: Inserted: ,
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More so, the company faces difficulty in maintaining a steady control of supplies. Free Commented [G57]: Deleted:u
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flow of raw materials is hindered by lack of reliable suppliers across all the geographical regions.

Moreover, dependency on a single supplier has also lead to the inefficient supply chain in the

company. It is advisable for the company to adopt ownership strategies instead of controlling

suppliers; they own supplies companies can help in developing its supplies when it is needed.

The strategy will enable the company to reduce the supply costs and increase production

replicating to an increase in profit margin (Taplin, 2006). Commented [G59]: Inserted: the
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Employee engagement

The changes made in the structure of Coca-Cola Company are mainly aimed at

motivating employees and developing intrinsic values that add value to the company. The change

in management and branding strategies has impacted ideal behaviors in employees that ensure

efficiency is maintained throughout coca cola operations. The company targets to bring about

highly integration of communications and focus on creating brand relationships with employees Commented [G61]: Inserted: -

(Waldemer, 2008). This approach enhances the operations of coca cola where employees believe

in engaging fully in their duties. Coca-cola believes that incorporating this change into its

company would build capability in its employees through engagement. The company recognizes

the importance of the people in its operations, thus focusing on employee engagement across all

the countries. Through the implementation of this strategy, the company has realized operational

efficiency. Commented [G62]: Inserted: ,

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Reputation and credibility pressure Commented [G64]: Inserted: -

 Coca-Cola Company has faced a lot of criticism over the years. The restructuring of its

organizational approaches has created different social images across countries. For instance, the

company has been accused of usage of pesticides in its products. The company has put measures Commented [G65]: Inserted: -

to enhance its corporate and social image. These measures further build credibility and goodwill

with shareholders. Reputation and credibility pressure is one of the implications or restructuring

that has caused the coca cola company to go under the maintenance adjustments Commented [G66]: Inserted: f
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(Waldemer, 2008). Implementation of these measures has led to maintenance of sufficient
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corporate governance that helps the company in managing its past actions and defining its

capability to produce reliable products.

Strategic collaborative and competitive consequences

Collaborative and competitive advantages involve communicating of greater perceived

value to a target market compared to competitors. It happens when an organization acquires or

develops attributes that allow it to outperform its competitors. Collaborative approaches have

been applied by coca cola in agreeing to terms and conditions of other related companies; it helps

in setting common rules such as the minimum price for a given brand. Coca-Cola Company

focuses on maximizing profits and minimizing its cost of production. It incorporates a mixture of

undifferentiated and mass marketing strategies to deliver sales in a competitive market and make
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a significant profit margin. It further uses niche strategies and segments for people who are more Commented [G70]: Inserted: the
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health conscious. The company uses a competitive positioning strategy to counter other soft
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drinks companies. The company acknowledges and recognizes the supplier audits completed on Commented [G75]: Deleted:s
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behalf of other companies through mutual recognition frame. The frame helps in minimizing
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audit fatigue and saving time. The company shifts the focus from auditing to performance Commented [G78]: Deleted:on
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improvement (Wang, 2015). Coca-Cola Company is dedicated to curbing emissions and
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encouraging other companies to adopt the practice. The company's collaborative approach has

played a significant role in United Nations' conferences aimed at climatic changes. Commented [G72]: Inserted: ing
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Conclusion

In conclusion, Coca-Cola Company supplies beverage products globally and over years

have been undergoing restructuring process to improve its operations. The company uses

corporate leadership styles to enable supply of its products in America, Europe, Africa and Asian

regions. Use of amalgamation has enabled restructuring process of the Company. Political, social

and economic factors affect activities of Coca-Cola Company. Change strategies involve all

stakeholders of Coca-Cola Company to ensure the Company effectively executes

transformational processes. Through partnership, various retailers dealing with Coca-Cola

products merge to work together in enabling faster developments. By use of management

information systems, the Company accurately conducts production activities with minimal

errors. Though the company faced criticism across nations, it developed adaptation mechanisms

to create a good social image to its new global customers. Change of management and

restructuring of various sectors is a very crucial process for gaining the competition advantage in

any company. However, managers and leaders are often faced with conflicting challenges among
workforce and inability to fully cope with implications that result from restructuring. Adoption

of new structure has helped Coca Cola Company reap good profits over the years. Ability to Commented [G83]: Deleted:c

adapt and find new markets has played a key role in restructuring of its management. The change Commented [G81]: Inserted: C

in structure and design has brought many implications to the company. The changes have both

positive and negative impacts. Culture and design have both positive and negative implications

to the company. Coca-cola has developed mechanisms to counter developmental challenges by Commented [G82]: Inserted: -

adjusting its management and marketing structures. For the company to influence developmental

strategies, it embarked on employee empowerment through training and motivation strategies.

By use of corporate leadership style, all company stakeholders regularly consult to end

workplace conflict.
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