Introduction
This study provides a detailed analysis of Coca Cola Company’s operations management, organisational culture, and design. Foster (2008) argues that Coca Cola is the most recognised brand in the world. It has numerous product offerings used to address different refreshment needs in the global market (Jones & George 2010).
To reach the customers, the company employs both small and large manufacturing facilities that are connected in a complex network of distribution channels throughout the world (Kleindorfer, Singhal & Wassenhove 2005). The company’s mission statement is defined by “the need to create value and make a difference, refresh the world, and inspire happiness and optimism in people” (Foster 2008, p.34).
According to Foster (2008), the company’s vision statement provides the framework for the company’s leadership to pursue business processes that enable the company to achieve high quality growth by focusing on the people, planet, profit, portfolio, partners, and productivity in the management of the company’s daily operations.
Operations Management
In theory, operations management is concerned with accepting inputs that occur as raw materials and converting them into outputs or products designed to address the needs and expectations of target customers. According to Alter (2010), the inputs that undergo the transformation process by adding value to them include knowledge, technology, materials, energy, experience, and capital.
They are then converted into outputs to make the finished products for the target market. The entire process involves planning, organising, leading, and controlling the conversion of changing inputs into the outputs. According to Foster (2008), once the inputs have been converted into final products, they are transported to the destination markets with the help of existing supply chain management frameworks and meet the customer needs and expectations.
Today, Coca Cola Company operates in multiple markets that have offices, manufacturing and packaging facilities throughout the world. Coca Cola is the largest soft drinks company in the world. It always strives to improve its operations by increasing shareholder value to achieve high quality services (Fournier & Avery 2011).
Fournier and Avery (2011) note that the planning function is critical to ensure success by concentrating the company’s operations “on the management of products, processes, services and supply chains management systems” (p.23). In theory, the planning function is important because it provides the foundation for making supply chain decisions concerning what products to supply to which destination in the company’s wide distribution network.
According to Fournier and Avery (2011), the planning function enables the management to: 1) determine the market to be served specific products, 2) create plans on how to build up inventories, 3) determine the companies to be subcontracted to execute the supply chain activities, 4) formulate inventory management policies and, 5) to conduct market promotion operations (Jacobs, Chase & Chase 2010).
Supply Chain
According to Foster (2008), Coca Cola Company has sold over 1.8 billion products in the global market, making sustainability an important issue in the supply of the products by ensuring that the goods reach the global market on time. In practise, the management ensures that the needs and expectations of the customers are met by giving them the right products at the right time and price (Jacobs, Chase & Chase 2010).
To address the issues, the company has over 16 million outlets, which are governed by different rules and regulations such as different legal requirements and government policies, various product requirements, standards, and organisational issues (Jones & George 2010).
Fournier and Avery (2011) describe product requirements to be the characteristics that are developed in a product for it to meet the customer needs and expectations, and as stated by Fournier and Avery (2011), “it is all about being responsive to the customer’s needs and the local tastes of the consumers in every market” (p.23). Keller, Parameswaran and Jacob (2011) argue that the company has a supply chain function that is driven by the data obtained from the demand forecasts for the products.
The predictions show that variations in demand occur according to the changes in different seasons experienced throughout the world. In addition, the company’s product portfolio enables it to get involved in a wide range of activities such as designing new products with unique features to achieve competitive advantage (Keller, Parameswaran & Jacob 2011).
In theory, the success of the operations management using the supply chain function is characterised by a product range that is provided by the company to match diverse needs of the customers. Coca Cola offers a wide range of products which include soft drinks with different tastes designed to meet various needs and expectations of the customers as illustrated in figure 1.
In addition to providing a wide range of products, the company ensures that the products come in a number of designs and appeals that fit the description and needs of each target market (Fournier & Avery 2011).
Figure 1
(Source: Foster 2008)
In theory, the company has designed a supply chain management system that allows it to operate by providing different products to the target market by manufacturing the products locally to address the local market needs instead of setting up centralised production facilities in the USA.
Academic literature maintains that when Coca Cola company became too large, the management decided to divide the company into “Coca-Cola America, Coca-Cola International and Bottling International Group” to facilitate the management of the company and its operations under a single global management system (Leidner 2010, p.23).
On the other hand, the company explores different environmental factors to address the needs of the current market depending on its conditions. Basically, the element of lean thinking is factored into the supply chain management system by focusing on the most efficient supply chain strategies to provide the market with a broad range of products.
Lean thinking is a concept used to reduce the high costs incurred when a plant layout leads to costly operations. A critical analysis of Coca Coal’s supply chain management system shows that the company has adopted the lean thinking concept by focusing on offering local services that are cost effective through companies that are integrated into the larger operations supply chain management of the organisation (Louis & Lombart 2010).
However, it is crucial for Coca Cola to develop a comprehensive policy for identifying the points of integration of the smaller firms into the larger supply chain management system of the company.
Layout and Design
Operations management involves the functional design and layout in the way that operations are carried out within the company to ensure the successful movement of products within Coca Cola’s supply chain system. The study shows that the movement of different products within the supply chain system of the company happens based on a combination of a customised and segmented distribution networks.
In practise, the company operates in different types of market segments depending on the product range and the demand for it (Kanter 1999). However, standardised segmentation is based on the design, fabrication, assembly, and distribution of the end products.
This way, the end products are tailored to meet different market needs and expectations. At the same time, the problem with Coca Cola Company is that most of its operations are localised depending on each market segment. Typically, the components required to manufacture the soft drinks and the best quality water used in the manufacturing process are sourced locally.
Quality of the Design Process
Quality is one of the operations management components that the company relies on to provide the market with high class goods. Coca Cola measures the value of products that come off the manufacturing line by evaluating their quality attributes (Krajewski, Ritzman& Malhotra, 2007). In theory, the quality management system is put into practice by conducting investigation on the demand for a product in the market.
Once the demand is addressed, a product or service policy is then created. Such policy provides the guideline for implementing the quality attributes based on the product or service specifications that have been developed as a result of the demand in the market. Once this process is accomplished, the product quality is implemented by ensuring that product features conform to the specifications required for high class goods (Northouse, 2014).
The aim of the quality management process is to ensure that the customer needs and expectations are fulfilled. In addition, apart from the process standard, the entire quality management system is based on the management process that is defined by the efficiency enablers meant for high quality results.
Therefore, the enablers include the company’s leadership style focused on managing the employees, policy and strategy formulation, effective resource management, and the required processes that lead to customer satisfaction for creating a positive impact on the society to achieve good business results (Northouse 2014).
An evaluation of Coca Cola’s quality system shows that the company’s executives came to the conclusion that excellence cannot be set aside, but must be a part of the processes to distinguish the company from other competitors and marketers offering similar products.
By the mid 1990s the company had realised that the problem with the quality management system occurred because it was centrally controlled, so achieving the quality needs was difficult because of the vast size of the company under a central command system. Once the problem was pointed out, the approach to the quality system has started to improve. The need for high standard products that focus on satisfying the needs of the local people make the company revise the ‘The Coca Cola Quality System (TCCQO) in 1995’ (Northouse 2014).
This way, the quality system was defined by the global standards for manufacturing high quality products by means of employing business planning, management reviews, and safety. A critical evaluation of the quality system shows that the EQFM model focuses on leadership as the key component that is used by the organisation to evaluate its quality system.
Therefore, the drive for quality, according to the model, is based on the provision of high class leadership. The model demonstrates how leadership enables the company to achieve high quality product and service delivery. On the other hand, Coca Cola’s quality management system is modular and focuses on an up to date manufacturing and distribution mechanisms that ensure environmental protection and high quality product and service provision.
The company’s quality approach is defined by the (TCCQO) model that underpins the company’s operations to address the need for high quality products in the market. The highly structured and complex model allows each component in the quality system to ensure that high class of production is implemented according to the environmental quality requirements where the company has its operations.
In addition, the company ensures that the quality requirements are aligned with international standards to achieve the desired quality performance (Meredith 1998). Thus, the company’s quality management system seems to differ with the theoretical model for quality implementation, but a critical review of the model shows that quality begins with the leadership.
This way, quality is the responsibility of the management and the entire company’s workforce, which is to be consistent with the quality model adopted by the company. In addition, the modular structure that is adopted for the implementation of quality has enabled the company to improve its performance by focusing on the alignment of product and process class objectives with performance metrics. The performance metrics are consistent with the SERVQUAL methodology for quality management.
The methodology focuses on the provision of tangible and reliable products in terms of the quality and performance metrics, a management structure that is responsive, competent, and emphatic. The model demonstrates five areas that need to be focused on the ensuring that high quality standards are maintained as shown in figure 2.
Figure 2
(Source: Foster 2008)
The gaps, perceptions and expectations that define the TCCQS model are directed at the policy, assurance, and control levels. Therefore, the company’s policy and quality management system ensure that active involvements of the top management of the company’s processes are based on the quality control mechanism as a management function.
In addition, the rigorous demands for quality are met at the product attributes level and any problems that affect the quality of the product include the design tools and methodologies for continuous improvements. The company’s quality management system is a modular structure that consists of the quality statements, management system standards, and performance standards (Schein 2010).
Managing the Organisational Culture
This study focuses on the approaches used to manage Coca Cola‘s organisational culture and the leadership style. In theory, one or a combination of the bureaucratic, authoritarian, and the Laissez-faire (genuine) leadership styles can be adopted by a company to plan, direct, control, and organise employees within an organisation.
This way, leadership can be defined as a technique for the creation of teams that work towards achieving individual and group goals. On the other hand, culture is about what is accepted, the attitudes, values and the beliefs of people, who work together and exist in different levels such as person, task, role, and power cultures.
Leadership
Successful organisations demonstrate the effectiveness of good leaders and the leadership style that a company can adopt to manage and guide employees. In the world of business leadership is mainly be practiced through the use of different theories such as the path-goal theory of leadership. This way, organisational leadership is very important because it provides direction and control, and without leadership, the vision and mission statements of a company cannot be achieved effectively.
Organisational culture
It has been established in academic literature that a company has a strong culture because of the key values, beliefs, and attitudes that are deeply entrenched within the culture of the organisation and the employees who show a strong commitment towards the company culture (Alimo-Metcalfe & Alban-Metcalfe 2005).
A critical analysis of Coca Cola’s organisational culture is evident in the company’s history, the shareholder engagement, innovation and leadership, charitable foundations, and human and workplace rights which provide the metrics for measuring the company’s culture.
One of the key components of the organisational culture are the people who work within the organisation. The people factor ties well with the description provided in the mission statement that defines the aim of the company as the great place where people can work, gain professional experience, evolve and improve.
Mission driven culture
On the other hand, it is crucial to note that Coca Cola’s culture is mission driven because the mission components are defined by the need to create value and make a difference in the provision of products and services, to inspire the customers using a wide range of brands, and to refresh the world.
These goals are achieved by providing leadership, commitment to passion and integrity, and by being innovative, and accountable for the actions done, and by focusing on product and process quality (Lam & Lambermont-Ford 2010). This way, the leadership of the company and the shared values among the employees provide a comprehensive description of how the managers and the workers are to behave in order to fulfill the mission and vision statements.
Developing culture
Coca Cola has undergone culture changes as it continued to grow and spread its services and products in different parts of the world. Academically, the different stages of culture development are characterised by different attributes (Schein 2010).
The critical elements that define the development of the organisational culture include the history of the company, technology, goals and objectives, location, size, environment, and the management and staffing function. In addition, it has been established that different components that define the cultural web include stories and myths, power structures, organisational systems, the rituals and routines, control systems, and symbols which are evident in the organisation of the company (Schein 2010).
Figure 3: Coca Cola culture web
Typically, a critical analysis of the company’s case shows that Coca Cola has a rich history of real life experiences and stories that demonstrate how the company has inspired its employees and customers. In addition, the company has many positive experiences that have helped to model the workers and the customers to fit and reflect the company’s culture (Winter 2010).
In other words, the strategy used to develop the company’s culture is consistent with the technology and the primary function of the company. The company uses a complex web of technologies for the manufacture of the ingredients that are used to make the end products.
It is critical to note that the company considers the output processes as the most critical elements in ensuring the quality of the final product (Balmer 2010). However, the components that are involved in the culture web of production are implemented not as a single functions but as discreet aspects that work together to make the entire web.
Technology
It has been established that the company does not produce the end products but the ingredients such as syrup, carbonated water, and other concentrates that are used to make the end products. Typical examples of the use of technology are in the production of water such as Dasani, where a highly mechanised process that leads to the use of highly complex technologies is employed (Winter2010).
However, the technology complexity is defined by the unit productions in small batches which lead to medium and low productions, and large batch mass production which provides low to medium range production of the end goods.
National and International Climate
Research shows that the company has experienced an uncertain internal and external environment due to the political and cultural changes that affect our rapidly developing world of nowadays. This way, the external environment includes such factors as the economic performance of the companies, the ecological and demographic profiles of the market.
On the other hand, the internal environment is characterised by the franchise products that have no substitutes, large plant capacities throughout the world, low cost leadership, and low regulatory restrictions. In theory, a good organisational culture must be based on the elements that enable the managers to focus on the positive outcomes of internal organisational harmony and try to steer the company away from the negative aspects of a poor culture.
A good leadership enables the management to avoid uncertainties and high employee turnover, eliminate narrow employee interests, reduce the distance between the people, and reduce the level of workplace stress and job dissatisfaction caused by the poor working conditions.
Conflict Management
The typical characteristics of a good organisational climate have can be defined as the decisions that provide effective solutions in conflict situations. Conflicts often arise within organisations and among the workers, although they should not always be viewed as negative happenings.
Conflicts can be healthy, at times they stimulate and enhance decision making, but can be also the sources of trouble that leads to a decline in the productivity of the organisation, as was evident when in 2004 a new CEO was sought for. Conflicts occurred due to the impression that the board had too much power and that could prevent the company from maintaining inner balance.
To address the issue, the company created the Ombuds Office solely for the purpose of providing alternative means of communication to help employees solve work related problems using skilled conflict mediation specialists. Such specialists are confidential, polite, tolerant, neutral and independent (Zambonelli, Jennings & Wooldridge 2001).
The Organisational Design
Organisational structures in theory are created to achieve successful and efficient performance of the company’s operations to ensure efficient resource utilisation and enable the management to effectively monitor the company, to provide accountability, and direction for the effective fulfilment of the mission and vision statements of the company. This way, different organisations have different structures such as the matrix, division, functional, virtual, inverted, and simple structures. Coca Cola Company’s structure is illustrated in figure 4.
Coca Cola Company Design
Coca Cola has been determined to develop an organisational structure or design that reflects it to be a global company. The success of the company is in the design of a structure that enables the company to optimise the use of the available resources and ensure consistent operations of the internal functions of the company.
Figure 4: Coca Coal Company structure
As illustrated in figure 4, the company structure is based on a functional design that has the president or the corporate head at the top of the management structure. The president heads the company’s operations with an executive committee of 12 Company officers (Corstjens & Lal 2000).
De Mooij (2010) argues that the company has many departments under the president which are under the corporate and manufacturing departments. The subordinates who work in the company control the operations of different departments which include marketing, manufacturing, and finance departments focused on the improvement of the efficiency of the distributions of the company.
The study shows that certain divisions of the company, “such as finance, human resources, innovation, marketing, and strategy and planning are centrally located within the corporate division of the company. Some of these functions take place at lower levels in each of the regions of the company” (De Mooij 2010, p.23).
The Human Elements
In theory, any organisation is driven by the human element to meet the organisational goals and objectives. For the organisational effectiveness, the company’s management provides each department specialised roles and responsibilities to execute.
This way, the importance of the human element is emphasised by creating clearly defined organisational objectives while ensuring that the tasks and responsibilities are well defined within the organisation. The company objectives are to “ensure that the strongest and most efficient production, distribution, and marketing systems possible are achieved” (De Mooij 2010.
Span of Control
In theory, research shows that the personal qualities of the manager, interaction with the subordinates, training and development of the workers, the use of an effective coordination mechanism, the physical location of the company and the scalar chain that define the company structure are the core elements that define the span of control that is under the jurisdiction of the company (Barratt, Choi & Li 2011).
However, a description of the company’s structures shows it is defined by a tall structure with 5 hierarchical levels at the corporate level. For instance, it is evident from the study that the head of a division must report to the president of the COO of the regional group (Barratt, Choi & Li 2011). In addition, the president is required to report to the chief financial officer (CFO) who has a direct reporting relationship with the office of the general counsel.
A critical analysis of the tall structure shows that it has encountered many communication problems, lack of clear operational goals, inherent motivation problems, and insufficiency of employee engagement and commitment to the organisation. Some authors theorise that the span of control is narrow for the CEO of a large organisation such as Coca Cola Company, which shows that the CEO is also part of the senior leadership team of the organisation (Insinga & Werle 2000).
The senior leadership operates with a larger team of 8 groups headed by the CEO and the top executives. In addition, the groups use different inputs from the regional offices to make decisions. However, because the tall structure is a problem for the operations and management of the company, Coca Cola has started to adopt a “divisional structure because it gives the organisation the best opportunity to react to the changes in its uncertain environment, but also allow it to maintain level of stability” (Stephens 2001, p.23).
One of the reasons that show that the multi-divisional structure could benefit the entire company includes the geographic divisions that are tailored to address specific market needs and expectations. The rationale is that different marketing slogans have to be created and used to address the specific needs of each market segment because “multi-divisional structures allow divisional managers to handle daily operations while corporate managers are free to focus on long-term planning” (Mahoney & Chi 2001, p.34).
Conclusion
In conclusion, it is clear from the study that the company’s vision and mission statements provide the framework to manage a wide range of operations effectively by focusing on the use of technology, knowledge, energy, and experience as tools of success.
The effective design and use of an efficient supply chain system for the company’s line of products, the use of good layout designs and distribution channels, the employment of good quality design processes, and ability to fill different gaps on the perceptions and customer expectations contribute to the success of the company.
On the other hand, an effective leadership that drives the company to achieve its vision statement, a strong organisational culture which is defined by the mission statement and an effective strategy for developing the organisational culture have also contributed to the success of the company.
Moreover, Coca Cola Company’s organisational structure that is based on a functional mechanistic design has a hierarchical management system with reporting relationships among the leadership teams that define the successful span of control that covers the multi-divisional structure of the company throughout the world.
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