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Managing for the Future: The Coca-Cola Company Essay

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Updated: Jul 22nd, 2021

Introduction

Every institution in the world needs to manage its resources and capacity to ensure its success in the future. The current business scenario is characterised by increased business turbulence, speedy changes in the environment, market changes, unpredictability of employees, competition, and new worldviews. It is therefore clear that investors in the business world do not know what will happen in the future. Consequently, there is the need to predict and prepare for what is not known.

There is a call also to make the future appear like the already known past by assuming that people know what will happen in a bid to tailor what they do not know to suit their business interests. With proper planning, businesses are able to minimise instances of guesswork.

Every sensible business wants a future that is characterised by increased adoption and commitment to technology, decreased command-and-control leadership style, increased teamwork, enhanced flexibility and efficiency, and increased common interest among employees, investors, and other stakeholders. According to Dibben, Klerck and Wood (2011, p.12), companies will therefore organise to have their management teams developing shared goals and vision.

They will need to have their activities around their competencies and a common order of operations where they work in tandem with their value chain. They will also have speedy information processing and hence faster action and reaction where they delegate from bottom upwards.

Based on this foundation, this paper discusses management for the future in the light of the following parameters: corporate social responsibility, crisis and catastrophe management, and environmental issues. The company that forms the basis of this study will be the Coca Cola Company.

The Coca Cola Company is a beverage company, which has been a world-market leader in beverage and soft drinks production and sale for many years. The company was formed in 1892. According to Gail (2001, p.74), Coca Cola is a multinational company producing various brands of soft drinks, for example Coca Cola, Tab, Fanta, Sprite, Mello Yello, Minute Maid, PowerAde, Nestea, and Fresca among others.

The company has over 500 brands, which also comprise fruit juice and non-soda beverages. According to Candler (1995, p.81), the central office of this company is in Atlanta, Georgia. The company adopts a bureaucratic management model with a central point of leadership. Major operations of the company are controlled from the headquarters to the main divisions.

Corporate Social Responsibility

Madhavan (2012, p.94) observes that the corporate social responsibility program of the Coca Cola Company has been centred around water stewardship, energy and climate, product portfolio, community, active health living, sustainable packaging, and recycling. Harwood (2009, p.24) observes that the Coca Cola Company has sponsored great sport events such as the London 2012 Olympics and Paralympics games.

Since Coca Cola is a large multinational company making about 80% of its profits from international sales, it has a huge responsibility towards the community. According to Haggind and Smith (2000, p.304), consumers in the current world of business have graduated from rating a company based on how sensitive and ethical it is to how such a company demonstrates its commitment to the society.

Customers also want companies that promote economic, social, and political message in the promotion of ethical brands, locally harvested resources, and promotion of organic food. Thomas (2008, p.3) observes that, in its effort to fulfil this premise, the Coca Cola Company has included the manufacture of non-carbon drinks to substitute its main brand in various countries. For example, in the early 60s, the company acquired Minute Maid, which is a non-carbon drink.

The company has also engaged small local distributors to carry out trade with its products in various parts of the world. The company has also divided its distributors by the regions in which it operates. Bottling of the soda company is therefore done in those regions. Candler (1995, p.81) asserts that the company manufactures the main product in Atlanta and then exports it to the bottlers. The bottlers make the finished products besides distributing it to customers in their specific regions.

This strategy is a method of fulfilling the company’s corporate social responsibility. Madhavan (2012, p.94) argues that, since corporate social responsibility is a continuous program, the company ensures the continuation of its relations with the community. In its pursuit of reaching out to the local communities in these regions, the Coca Cola Company also draws its employees from its markets.

Walsh and Dowding (2012, p.106) observe that the company has also been involved in water conservation activities across the world. The premise of the company is that, since it is concerned with the use of water in the manufacture of its beverage and non-beverage products, it has a responsibility in water conservation. The company has been using its regional marketers to draw information on the most appropriate corporate social responsibility activities to be carried out in certain regions.

Through corporate social responsibility, the Coca Cola Company has been the market leader in the soft drink industry for many years. The company has used its corporate social responsibility advances to bridge its community relations fabric. Raman (2007, p.103) argues that, through commitment to the community and its wellbeing, the Coca Cola Company has made itself a unique brand in the market.

However, Thomas (2004, p.8) reveals that, although the company has been involved in corporate social responsibility for many years, there has been repeated complains and speculations about the ingredients of its main product: Coca Cola drink. The feeling in the market over the years has been that the company has been hiding some crucial information from consumers. The big argument is that consumers should know the actual chemical composition of the drinks that they consume.

Moreover, Thomas (2004, p.8) confirms that the Coca Cola Company was highly involved in financing the opposition to the campaign on labelling the calorie content of food and drinks. Out of this involvement, many Americans have questioned the good will of the Coca Cola Company in promoting healthy living in the society. The inference is that the corporate social responsibility committee in the company has not done enough in enhancing brand acceptance in the market.

Thurman and Vest (2010 p.235) affirm that discretionary corporate social responsibility program should ensure cost reduction, economic benefits to the company, and development of intangible benefits such as brand image and its differentiation. However, although the Coca Cola soda is widely accepted in the world except in the Middle East, the challenge of its chemical composition remains a big threat.

Ignatius (2011, p.94) asserts that, for future success, the Coca Cola Company needs to develop scenarios to guide its CSR plans. Scenarios enable a company to view its future in a more realistic manner rather than predicting it. As the company manages for the future, various scenarios need to be developed. The years between 2018 and 2020 will be very competitive years for beverage companies.

Thurman and Vest (2010 p.235) observe that the current trends indicate that there has been a rapid increase in beverage producing companies in the world. Many companies have also involved themselves in CSR. It becomes almost impossible to stand out as a company in CSR activities. The scenario planning for the Coke Company will be tailored for 2018 to 2020.

The area of interest for the scenario will be in CSR to make the ‘Coca Cola’ brand widely accepted in the market to increase economic gains to the company. Raman (2007, p.103) argues that the current status of the Coca Cola soda as a brand is that it is widely accepted but highly suspected of having unhealthy chemical ingredients.

In America, the brand has been widely accepted. However, some consumers question the involvement of the company in the fight against food product calorie labelling. In the Middle East, consumers prefer other products such a Pepsi to Coca Cola products. On the other hand, there are complains about the content of this beverage in Africa.

With the negative publicity that the brand has received, other beverage companies have began taking over huge shares of the Coca Cola soda and Dasani water market. Consumers should understand the ingredients of the brand and its impact on bodily health. This can be done through CSR activities planned to promote healthy living by consumption of clean, healthy, and hygienically made beverages.

Walsh and Dowding (2012, p.106) project that people will be educated on healthy lifestyles such as the boiling of drinking water, washing hands, and carrying Coca Cola beverages while travelling to avoid drinking contaminated drinks. This effort will result in better understanding of the brand and hence its acceptance. However, failure to understand the brand will lead to increased unfounded information about it and hence decreased acceptance.

To avoid misconceptions, proper communication will be ensured. If consumers become disinterested in the CSR activity, the company will use famous artists to draw their attention. To avoid language barrier, the company will hire people from the community to monitor the campaign. In terms of marshal support, the company will use opinion leaders from the region as product ambassadors.

The world is moving into a more liberalised age. By 2018, customers will identify themselves with organisations that will closely identify with them and their activities. Such will be companies that adopt neo-human relation models of administration. Bratton and Gold (2003, p.22) foresee that companies will be more concerned about the wellbeing of their employees and customers in the future.

Consequently, CSR activities will also be tailored to make human beings and their environment more comfortable. The Coca Cola Company will be able to manage the scenario since it already has a well-established market share. The company also boasts of well-organised distribution lines by regions. Hence, it will be able to reach out to its customers with ease. The history of the company is also an asset.

Crisis and Catastrophe Management

According to Runde and Flanagan (2010, p. 4), catastrophe can be defined as a serious disruption of the normal working of an organisation or a community, which results in losses. Such losses include human, material, environmental, and economic losses. In most cases, organisations are not prepared for the crisis or the disasters that leave the company in crisis. Various crises can face a company.

According to Lixin (2010, p.171), organisational crisis may range from brand, image, financial, legal, and operational crisis. The major stages of crisis are pre-crisis, crisis, and post crisis. The Coca Cola Company has not performed badly in crisis management. However, the development ladder of Coca Cola, which has been existence for one hundred and eleven years, has not been a smooth ride. At various points, the company has faced crises.

According to Tsang (2000, p.65), its bureaucratic management model has somewhat caused delays in establishing solutions to the crises. For example, in 1985, the company faced one of its worst crises. Huber, Vogel, and Meyer (2009, p.131) assert that, in 1985, the Coca Cola Company decided to introduce another product to fill in the increased demand for the Coca Cola brand. The company introduced another brand, diet coke, which marked the beginning of the crisis.

According to Huber, Vogel, and Meyer (2009, p.131), the brand had a new taste to the extent that consumers expressed dislike of the product. During this time, consumers abandoned the product and went for Pepsi, a competitor in the beverage market.

The Coca Cola Company had to manage the destroyed image and low sales. George (2008, p.50) observes that the crisis management personnel in the Coca Cola Company had to accept and adjust within three months. The company reverted to its old ‘Coke.’ Sales went up almost immediately.

Lixin (2010, p. 172) argues that the most essential resources in crisis management are leadership, information, and organisation. The Coca Cola Company was not able to perceive the crisis that would result after the introduction of a new brand (the diet coke). Perceived crisis is clear for a biased and more dedicated observer in the management sector. However, the company was able to realise the crisis at its intrinsic stage. At this stage, neutral observers could realise it.

According to George (2008, p.50), the impact of the crisis was already manifested by the decrease in sales of the new brand. A person who is not biased in any way to the consumer can realise the crisis from outside.

The company was able to react maturely to counter the situation by restoring the old coke brand to sustain its image. However, crises need anticipation and planning. Wardlaw (2009, p. 57) asserts that the tag of war on the ingredients of the brand is likely to draw the company in crises in the future.

The Coca Cola Company needs a scenario development to survive the competitive and critical business world between the year 1918 and 1920. The scenario development will cover crisis and catastrophe management. This move will be important to end the crisis of low acceptance in the Middle East and the competition crisis that is likely to be posed by other beverage companies.

Wardlaw (2009, p.57) observes that the current situation indicates a high competition between the company’s products and other beverage manufacturing companies such as Pepsi. For example, in the Middle East, the Coca Cola Company records the lowest sales since most of the customers prefer Pepsi products. The current trends in most parts of the world indicate that Coke is leading in the market even with the evident crisis in the Middle East.

Proper crisis management will enable the company to get out of the current scenario in the period between 1918 and 1920. However, Polk (2009, p.61) affirms that the company is still uncertain about its marker in the Middle East owing to the large market share by its competitor, Pepsi. If the crisis is not managed, Coca Cola may be forced to close business in the region by the year 2018.

The management will assess the likely risks in the company, for example soiling of company’s name by competitors, accidents, earthquakes, terrorism, tsunamis, and the emergence of highly competitive brands. The management will also plan for beverage business drivers, for example weather changes, events, and festivals. What if the competitor realised our secret to success and use it against our success? There is a need to develop strategies of addressing the above question.

For instance, the company should rehearse on what it should do during a fire outbreak. According to Dibben, Klerck, and Wood (2011, p.12), employees should be trained through crisis management drills. It is important for the management to understand the environment, social activities of the people, and their culture.

This will enable them have a well-planned response in case of a crisis. Bratton and Gold (2003, p.22) assert that crisis management plan will also involve a single point of communication, management of the crisis condition, and management of the crisis aftermath. In the Middle East, for instance, the company should be aware of the common religious beliefs and culture of the people.

The company will be able to implement crisis and catastrophe management plans through its regional distribution channels. Acts of terror are common in this environment. They are likely to increase by 2018. Polk (2009, p.61) affirms that preventative and reactive methods should be developed, rehearsed, and financed. According to Runde and Flanagan (2010, p.4), companies also need to adopt a more humanistic approach in managing crises.

The use of classical models of management may end up delaying crucial information delivery during crises. It is worth noting that the most important step in crisis management is to issue right, timely, and correct information. With bureaucracy in place, subordinates at the regional levels have to wait for directives from the headquarters before communicating during crisis. By 2020, most of the companies will have adopted more humanistic management approaches.

Many institutions will adopt such management models such as the Maslow’s plan of needs. According to Smaiziene and Orzekauskas (2009, p.522), companies will not only seek to make profits and good reputation. They will also work to engage customers in a bid to ensure that they satisfy their needs.

Companies will seek to solve crises that affect the lives of their customers. For example, if the company disposes its by-products to the environment and that the community complains about it, the crisis will have to be managed quickly. Institutional managements will therefore need to be more proactive as opposed to being reactive. The management at regional levels will also be empowered to take a quick action in solving crises.

For example, in case of sewer breakage, the management at that level should be able to solve the problem even without directions from the headquarters. According to Blaga (2013, p.5), management styles will move to a more devolved model. Such models will lessen conflicts in the institutions and outside the institutions. Companies will seek to satisfy human needs through enhancing accessibility of food, shelter, and security. Such acts will reduce intrapersonal, interpersonal, and inter-group conflicts.

Environmental Issues

The Coca Cola Company has had a great environmental concern history in the last decade. However, the company has also had a bad encounter with environmental activists. For example, Zegler (2011, p.14) asserts that the Coca Cola Company privatised water supply in a place called Chiapas in Mexico. Most organisations opposed this move by the Coca Cola Company.

Sebastian (2012, p.1) observes that, instead of the company’s management enhancing the accessibility of water by its customers and employees in Central America, it made it hard for them to access the commodity. This raised criticism in both central and South America. The bureaucratic management model that the company adopts requires that the regional marketers and distributors heed to directives from the headquarters.

In such models, there is dissonance between people and management since the central office is not in direct contact with the reality on the ground. Environmental management requires a direct contact with the situation on the ground. This management model has hindered the success of environmental management efforts by the Coca Cola Company.

The company has also had an indecent history in India for a similar cause. Hills and Welford (2005, p.168) observe that the Coca Cola Company privatised water supply in India, thus facing a wide opposition from citizens. All these faults have been blamed on poor environmental concern by the management of the Coca Cola Company across the globe.

In the past decade, most of the companies especially those that deal with food and drinks have been highly involved in environmental conservation efforts. The company failed to understand the environment of its operation and the need of its consumers. Harish and Gopal (2008, p.42) assert that it was out of the water incidence that the company suffered reduced sales in South America and in India.

Surprisingly, the Coca Cola Company has developed environmental programs to make out for its past dissonance. The management has realised the negative impact of its environmental relations, thus reverting to environmental preservation methods. For example, in India, the company has cut back on water use. This comes after the incidence of water privatisation.

Zegler (2011, p.14) confirms that production of beverages in India is therefore being done with lesser amount of water hence saving on water use to conserve the environment. According to Steele (2008, p.2), Coke Company has also developed a recycling plant that will recycle its waste products into useful products. In addition, it has committed itself to zero Air pollution (ZAP). Such a move will ensure that the company has very low carbon emission from its production plants.

It will also reduce its fuel consumption, and in turn fuel consumption. Sebastian (2012, p.1) also reveals that the company has opened a water plant in Florida to provide water to the residents. This has countered the previous image of the company. The water plant will enhance a greener city and/or provide water for both domestic and commercial use.

According to Steele (2008, p.2), the company is also involved in tree planting in its effort to promote environmental conservation. In Brazil (where the company enjoys a large market share in the soft drink industry), it has developed Brazil rainforest water program. This program endeavours to restore watershed points in Brazil and to ensure that it replants the lost riparian forests.

The Coca Cola Company requires a scenario development for the future. In the years between 1918 and 1920, the company will require a well-developed environmental preservation plan. Currently, the company has been accused of the use of huge volumes of water in the production of its beverages and non-beverage products.

Hernández (2009, p.34) observes that the relevance of environmental programs for Coca Cola will be aimed at mending its lost image on environmental preservation in the United States, India, and Brazil. Currently, the company has engaged in environmental preservation programmes in Brazil where it is restoring forest through tree planting. The relationship between the company and the residents of various parts of the world differs.

For example, after the privatisation of water in Central America, the relationship of Coca Cola and its customers grew bad. Most of the residents suffered high costs of water, thus accusing the company of using too much water at their disadvantage. Hills and Welford (2005, p.168) observe that a similar relation existed in India after the company privatised water supply in the country. However, the company has embarked on building water plants to provide water for the residents.

It is projected that there will be more needs for environmental preservation by 2018. Global warming continues to hit the world as the forest percentage decreases and rivers run dry. The society in which Coca Cola markets its products is also becoming more environmental conscious. Moreover, Cioletti (2008, p. 32) affirms that there has been an increase in environmental management and preservation companies over the last decade.

Such companies in collaboration with the international environmental organisations such as the United Nations Environmental program (UNEP) will watch over such companies closely for environmental laws violation. Increased environmental surveillance will mean that organisations such as Coca Cola will be required to have special departments to ensure that such companies are compliant with the environmental laws of the country of investment.

According to Theodore (2008, p.4), environmental campaigns will go a long way in ensuring that the company’s name is well positioned in environmental preservation. However, these challenges will be converted to springboards of the program. According to Gail (2001, p.74), the company will also ensure that there is proper communication with the members of the community in which it intends to implement its environmental programs.

Creation of rapport with the members of the society will enable the company pull the community to supporting its activities and programs. This strategy will see the company have a double score in sales and in image development. If the society does not allow strangers to engage in environmental developments, the company will make use of local opinion leaders to plant trees and to conserve water sources. Some cultures do not allow women to plant trees.

The company will therefore educate such a community on the benefits of environmental preservation and promotion by both men and women. Given the wide area of distribution and market for the company, it will be able to reach a huge area in environmental conservation.

Cioletti (2008, p. 32) affirms that the company has begun recycling programs in its bottling plants and the use of plastic bottles, which can be recycled after use. This has reduced the increased damage caused by glass bottles especially when they break. The peaces cannot decompose. They end up causing injuries to human and animal life.

Seabright (2007, p.38) argues that development of good environmental plans will call for a dedicated environmental conservation department in the company. Since the company has already begun its journey to restore its image on environmental conservation in India, South America, and Brazil, it will be easier to implement the plan.

Ignatius (2011, p.94) predicts that an environmental conservation program will be important especially in areas where the company has had poor engagement with the community on matters of environment. The company will also ensure that it uses less water in its production plant and in its bottling plants.

Seabright (2007, p.38) confirms that recycling of water and other materials that are used in the process of making beverage and non-beverage products will also enable the company hype on its reputation on matters of environment. By 2018, most of the multinational companies will be operating in very competitive environments. Organisations will have adopted system theories of management.

System theories will enable the organisation to combine the systems of the organisation with the humanistic systems. Haggind and Smith (2000, p.304) argue that an open system of management will enable the organisation to gather information from its publics to be in close ties with them.

With the extensive channels of distribution in various continents, the Coca Cola Company will therefore reach out to consumers through environmental conservation programs. The image of the company will be enhancing at the regional levels.

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