Management in Coca Cola Company

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Table of Contents

Introduction
Analysis of the Organization’s Concern and its Response
Literature Review
Considerations
Conclusion
Recommendations
References

Introduction

Technology has turned the world into a global village. The world has been turned into a single large market that offers limitless opportunities to various multi-nationals. This limitless opportunity comes with limitless uncertainties in equal measure.

The global market, large as it is, is as varied as its size. A customer in location A may require a product that is exactly opposite to the requirements of customer at location B. If this particular company operates in both locations, then it must respond to the varying needs in a manner that would leave both the customers satisfied.

The current world market has customers who are well informed. They know exactly what to expect from the products they purchase. This has seen many firms give quality a priority. Firms are assuming market orientation to their production. The customers’ needs determine what the firm produces and how it produces it. This brings to focus, the issue of Total Quality Management.

Kitazawa and Sarkis (2000) define Total Quality Management as an integrated organizational effort designed to improve quality at every level. This means that quality is not a preserve of any department, but a duty of all the departments in any organization.

Coca Cola Company manufactures soft drinks that have many close substitutes in the market. The level of competition in this industry is so stiff that any slight customer dissatisfaction can have devastating effects to the company. This company experienced technological mismatch in its top management operating overseas. The company for a long time preferred to maintain the employees at the top brass.

This has seen the company limited to individuals who are less technologically advanced. With the changes brought about by technology, this company had to restructure its management to reflect on these changes. It is in so doing that it could successfully achieve the specifications of Total Quality Management.

Analysis of the Organization’s Concern and its Response

Coca Cola Company was concerned with their declining sales volume in some of its overseas markets. Research revealed that the root cause of this was the failure of the management to integrate technology into their system.

The research further reported that the reason for this slow response to technology was caused by the fact that those who were to effect the technological changes had limited knowledge about the same. These individual could not withstand the pressures that was being exerted by these changes and therefore preferred to stick to the old ways of doing things.

A case in point was that the aging staffs were not able to appreciate the potentials of the social media. They regarded it as a forum where ‘lazy’ youths would go to burn their time as they discuss matters irrelevant to development. This view was highly misplaced.

The highest percentage of consumers of this brand’s product is the youth. When on the playing ground, at school, at home or even on tour with friends, this group will always require a drink to ‘keep them away from thirst’. With emergence of social networks like Tweeter, Facebook, Flirk, You Tube and others, this attractive segment can easily be accessed online.

Facebook has a staggering 500 million users across the world. You Tube has 400 million users. Tweeter and others make up to another 500 million users (Treadaway, 2010). It therefore becomes very disturbing if a management can fail to realize the potential that such networks offer. With the fact that other competitors like Pepsi are actively using this media, the management had all the reasons to worry.

Tom Peters in his Chaos theory argues that global events are chaotic and random and this is directly reflected in the organization systems. This theory suggests that the world is so full of paradox and some unpredictable changes that management must always be prepared to deal with them in a manner that the effect will be positive to the firm.

Technology has brought with it many of such changes that management must restructure its systems to match the changes. Social media is one such change. Failure to act to its presence would translate to the loss of the opportunities that comes with it (Treadaway, 2010).

The consequence that this failure to act may bring is so great that a company like Coca Cola may not afford. According to this theory, if such a situation is not arrested in time, it will lead to a complete breakdown of the system and that may be the end of that particular firm.

It is upon this backdrop that Coca Cola was forced to act on its management for it was clear that it was unable to arrest the situation and save the company from the looming danger. The company therefore had to restructure this staff. It recalled some staff members back to its headquarters in Midtown Atlanta, Georgia. In their places, young, innovative and creative individuals who were techno-servy took their places.

In other regions, the young individuals were incorporated into the management systems alongside the older generation. The aim was very clear; change the perspective with which the company viewed technology. They had to restructure the company to reflect the new demands of the social media.

They did this in line with Henri Fayol’s administrative theory. This theory put focus squarely on the management. He argued that management’s role revolved around planning, coordinating, controlling, commanding and organizing. According to Fayol, organizations must follow the five principles in the normal running of it activities.

For this reason therefore, the management must be in a position to forecast in order to plan for what is to be done. The planning stage is the most important of all the stages. The other stages will only be successful if the management was able to focus and come up with appropriate plan to counter some of the changes that come in the external environment.

The older generation failed to forecast the potential of the social media and for this reason, failed to plan for it. The top management therefore brought in young individuals who were able to understand the social media as they were part of it. This lot was able to successfully understand the social media and planning was therefore much easier. With proper planning, implementing other aspects of management becomes much easier.

This group has done a wonderful job on this front. The company entered Facebook in 2008. It created its wall and invited as many friends as possible. From this wall, the company can share with their customers information that is relevant to its operation. Customers are able to comment directly to the firm on their feeling about the brands offering in the market.

They are able to inform the management of their expectations, and some of the changes they feel should be done on the products. On the other hand, the company can now reach its clients at a considerably faster rate through Facebook. It can now afford to introduce some of its new products through it and be sure that the message will be received by the target market.

So interactive is this social media that it allows for a direct communication between the firm and the users. Unlike the mass media, which is a one way fixed mode of message delivering, this media allows the customer to respond to the company’s message, whether to appreciate or to criticize the company’s offering.

With this, the company is able to know exactly what a customer in Russian market expects, and how this expectation is different from that of a customer in a sub Saharan market in Africa because the two regions have opposing temperature rates.

This has been so successful that the firm was rated the best brand on Facebook, beating other giant brands like Disney. The brand is estimated to reach out to about 30 million customers across the world by using Facebook alone (Treadaway 2010).

This network has seen it identify so well with the youth that this group feels part of the brand. The management has successfully introduced itself to this community as a member. With this, its product is seen by this community as their (community’s) product that should be promoted through a continued purchase.

This has seen the firm cut on the cost conducting research. The company’s researchers can sit on their computers at company’s headquarters and gather the information they need from the customers on Facebook. They can pose questions to them in structured manner on their Facebook wall. The respondent will post their response on this wall where the researcher can easily access them.

This increases the ability of the firm to make a thorough screening of the data and respond to the views posted. In his motion study theory, Gilbreth suggests that a firm is able to increase its efficiency by reducing the rate of motion of its staff. The company applied this theory with the help of Facebook.

Its research team did not require moving in the 209 countries across the world where the firm operates. It only needs this staff seated behind a Facebook enabled computer to gather and analyze data from various regions in the world.

Having experienced success with the Facebook, this group of managers went further to incorporate You Tube into their system. Unlike Facebook, You Tube enabled the firm to use graphics. The company prepared commercials akin to the television commercials and delivered them to customers through You Tube. Its most recent commercial dubbed ‘open happiness’ on You Tube has received a lot of praise from many quarters.

The company went a great length to prepare the advert and its features and mode of presentation is a clear indication that the new management clearly understands the requirements of the new social order brought about by changes in technology.

The brand has its presence on Tweeter, Flirk and other social Medias. This strategy has seen the firm double its sales. The new management is so sensitive about Total Quality Management that it leaves nothing to chance. They believe in the fact that quality starts in the mind.

First, the production system must appreciate and maintain quality in all their operations. The final product will automatically bear this and the next move will be to instill this quality in the minds of the consumers (Andrzej, 2007).

To achieve TQM in its operations, the firm’s management has realized that every department in the company counts. All the department are related in a way that the firm is turned into a system with a number of co-related wheels.

The new management has given a new face to the way the firm view the social media. It is no longer stereotyped as before. The management sees it as an opportunity to expand its borders and reach out to those markets it had not.

The system approach theory postulates that a system is a collection of parts unified to accomplish an overall goal. The theory goes ahead to state that if one part of the system is removed, the nature of the system is changed as well. This is the case in Coca Cola.

When it restructured its management and incorporated a group of young individuals who were flexible to the changes brought about by technology, it gave a redefinition to the company’s overall method of operation. The brand Coca Cola was recently ranked one of the best brands, valued at 68.3 billion U.S. dollars. Its closest competitor, Pepsi Cola is no longer as serious a threat as it was in early nineties.

Literature Review

A number of scholars have done research and reported the increasing inability of some companies to adapt to the changes brought about by the dynamics in technology. Garvin (1988) argued that quality should be given an outward in approach. When implementing environmental changes, a firm should first determine the requirements of the environment before it considers making outputs.

He says that market is always characterized by unpredictability. The suddenness with which these changes come, calls for the management to be very flexible. If this flexibility lacks in the management, then the firm can easily be edged out of the market. Such was the challenge Coca Cola Company faced. It had to navigate through the new and very sensitive ‘waters’ brought by technology.

The world was turned into a single market place. This market is so small that a shopper can easily access it from the comfort of his house. The social media is a change that must be managed if a firm is to realize the benefits that come with it.

Zimmerman and Schueler (1996) suggest that customers always rate their levels of satisfaction. When his or her expectations are met and exceeded, such a customer will be thrilled. They will be good ambassadors to the firm. However, for this to be possible, the firm must understand the changes that the market experiences.

They propose that customer survey should be conducted among customers in order to know what such customers value. It is only through this that a firm may proclaim to be implementing Total Quality Management standards in its operations (Del et al., 2005)

The older generation at Coca Cola failed to understand that the most important market segment had moved to the social media and that they valued this form of communication. Looking down upon the social media would be like failing to realize what they valued. This limits the ability of the firm to succeed in the market.

Wayne and Hoyer (2008) appreciate the benefits that the social media has brought to the contemporary world of business. They say that since its inception on fourth of February 2004, Facebook has completely changed the communication sector. With cell phones becoming a necessity among individuals, business units keen on reaching the market cannot neglect this form of communication.

The two says that many organizations at first did not think that such social networks had potential to redefine communication in a completely new form.

For this reason, they did not incorporate it into their strategic plans. However, such firms soon realized that this form of communication brought with it limitless opportunities that could not be ignored. Coca Cola realized this and had to take appropriate and timely actions that could see it tap from this new technology.

Kimmel (2007) asserts that fashion changes at an unpredictable rates. According to him, management in any field that is related to fashions and lifestyle must always be ready to manage such changes. It should be on high alert to detect any slight change in the market. This may require it to have in place; structures that will enable it detect such changes so that its actions will be timely.

He supports Wayne and Hoyer on the fact that social media has brought with it opportunities that firms should consider tapping from. He articulates that social media is at the heart of lifestyle. With inception of such social networks like You Tube, marketing must be restructured in a way that it responds to this technology. This company realized this and acted appropriately and this has enabled it remain relevant in the market.

Considerations

Coca Cola Company considered a number of facts before deciding on how to restructure its operations. The main issue was that the then management could not implement technological demands at the rate that was desirable. The top management was specifically worried of the fact that this group of managers had failed to tap from the opportunity that Facebook and other similar social networks brought with it.

This was making this opportunity turn into a threat as other competitors were readjusting their marketing systems to reflect on this. It therefore considered replacing most of its top managements with individuals who were able to act appropriately to the demands of technology.

The firm appreciated the importance of experience. Because of this, it retained some top management officials abroad. This was done to ensure that the transition was implemented in a smooth manner, taking into account some of the desirable traditions of the company.

The actions of the company were timely and the result was good. However, the company should have taken into consideration the fact that their brand is consumed across the ages. Most of the commercial that this firm currently produces are directed to the youth. Inasmuch as they are wonderfully put, with captions that would attract everyone’s attention, they are not all inclusive.

The aging group cannot identify with these commercials. This market segment makes a substantial percentage of the brand’s total sales. Moreover, this is the segment with money, and therefore are the decision makers on what to purchase. Giving them a blackout in the commercials could have negative impacts to the firm’s total sales. Another segment of the market left out by most of these commercial are the minors.

They may not be able to identify with most of the commercials. For instance, the wonderfully structured commercial dubbed ‘open happiness’ pays no attention to the fact that a child may also need to be happy. Carson (2008) says that children below the age of 14 are the major initiators of a family’s purchase. For this reason, these commercials should be designed to capture their attention as well.

Conclusion

Management has experienced structural changes over the years, from a time when it was viewed as a simple role of directing other factors of production, to the current view of managing systems. These systems are both internally based within the firm, or are found in the external environment. Ability to manage the internal factors is currently not enough for a firm to succeed in the market.

Consumers are getting increasingly knowledgeable, and with this knowledge come increased demands. This has seen many management units apply Total Quality Management as a way through which it can manage customers’ demands. There has been an increasing need for this management to incorporate the changes that come with technology.

This has seen Coca Cola Company restructure its management in line with the technological demands. This company has successfully entered the social media with the help of its new management unit. Currently, it is ranked one of the highest users of it.

The result of this entry is positive. The company can now reach the targeted population much easily. The management is very flexible to technological changes and this has seen it maintain its market lead over competitors like Pepsi Cola.

Recommendations

Coca Cola Company was able to navigate through the turbulent waters that were brought about by technological changes. Faced with a similar situation, the firm should consider the following options. A firm should always consider having a staff that is well blended in aspects such as age, experience, knowledge and even culture.

Despite the importance of experience, management should not sacrifice the other factors in its favor. With the current changes in technology, it is advisable that firms maintain a management staff that is able to respond it (technology). In so doing, it will be in a position to act on the market demands that keep changing.

A firm should avoid assumption of new inventions, however weird they may seem to be. The management should have a unit to keenly monitor such technological changes and advice the top management as appropriately as possible. If it is worth involvement, this unit should be in a position to advice the management on how best it should approach it.

The action that Coca Cola took was good enough and the researcher would recommend most of it if a firm were faced with a similar situation. Their beautiful summer commercials on You Tube, the conspicuous presence on Facebook and Tweeter are all wonderful.

However, one aspect that the researcher feels should be changed is the overemphasis on youths. Inasmuch as they form the most attractive market segment, other segments should not be disregarded. They should therefore consider producing television commercials, which are all inclusive.

References

Andrzej, A & Buchaman, A. (2007). Organizational behavior. London: Prentice Hall International.

Carson, A. (2008). Organizational theory: A libertarian perspective. Washington, DC: BookSurge.

Del, I., Best, J. & Coney, K. (2005). Consumer behavior. New York, NY: Tata McGraw Hill.

Garvin, D. (1988). Managing quality. New York, NY: Free Press.

Kimmel, R. (2007). Evian’s caswell brand week: Fill with care’ promotes lifestyle. Well Being, 48(30), 48.

Treadaway, C. (2010). Facebook marketing: An hour a day. Indianapolis, Indiana: Wiley Publishers Inc.

Wayne, D. & Hoyer, M. (2008). Consumer behavior. South Western: Cangage Learning.

Zimmerman, R. & Schueler. (1996). Designing customer surveys that work. Retrieved from https://www.qualitydigest.com/oct96/surveys.html

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