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The Coca-Cola Company: Personal Management and Organizational Behavior Term Paper

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Updated: Nov 9th, 2021

Introduction

The Coca-Cola Company started functioning as a one man business which was hardly known to anyone. The drink itself was invented by Doctor John Pemberton in 1886 in Atlanta, Georgia. Later, the same tear, a prohibition law made Pemberton change the formula for this nerve tonic and a headache remedy. The drink remained a nerve stimulant, but wine which used to be one of its ingredients was changed for sugar; despite this, however, the drinnk’s inventor continued calling it a “temperance drink.”

After Pemberton’s death in 1888, the trademark which he and his partners created became unbelievably popular. By the end of 1890s, Coca-Cola became the most popular fountain drink among the Americans. Back then it was headed by Griggs Candler, another pharmacist from Atlanta, who managed to increase the sales of the syrup by 4000%.

One of the facts which remains unknown is that Candler and one of Pemberton’s former partners, Frank Robinson, changed the recipe of the syrup and “perfected” the drink by adding several new ingredients and taking out some of the others. Besides, namely Robinson created the name of the drink and its script logo, as well as the slogan “delicious and refreshing.” The name itself symbolizes “the company’s main product, which stands for refreshment.” (Truitt, 2006, p.132)

After 1900, Candler and his partners started selling the syrup to independent bottling companies who had the license allowing them to sell this drink. Due to this, Coca-Cola bottling factories started springing up across America bringing fame and richness to their owners. The Coke brand imprinted itself upon a number of other cultures appearing in song lyrics, movies, and even sculptures and paintings.

The company, which was headed by Don Keough and Roberto Goizueta, attracted numerous investors, because Wall Street labeled it as a growth stock. By the late 1990s the Coca-Cola Company became “a sprawling empire employing 29,000 people worldwide.” (Feigenbaum, 2003, p.175) These days, there is hardly a country where Coca-Cola Company does not sell beverages; at this, two-thirds of the company’s sales come from outside the USA. The company sells large amounts of the products increasing its profits daily:

Profits

The company serves 9 million stores which sell the drinks; to succeed in this, “the company has contracts with hundreds of bottlers, which add water to the company’s trademark concentrate and distribute the soft drinks in cans and bottles.” (Certo, 2005, p.99) There exist three types of bottlers to which the company sells syrups and concentrates: “First are independent bottlers in which the company has no ownership interest. Second are bottlers in which the company has a minority equity position.

Third are bottlers in which the company has a controlling interest.” (Steiner, 2005, p. 348) Apart from carbonated drinks, the company is currently selling juices, tea, bottle water, and the like products (the company diversified its products already in 1960-1970 when it acquired the Minute Maid, the Duncan Foods Corporation, the Belmon Springs Water Company, Inc., Taylor Wines Company, and others).

It is also engaged in the activities which benefit the communities in which the company has businesses. For instance, in 2001 it signed a three-year partnership with UNAIDS (the United Nations Agency which coordinates activities in fighting with AIDS and HIV); Coca-Cola Company provided “multiple services throughout Africa to support AIDS education; distribute[d] preventive measures, such as AIDS testing kits and condoms; and publicize[d] treatment programs.” (Steiner, 2005, p.349) Coca-Cola Company is known not only for its soft drinks of high quality; the company takes care about the emotional health of its employees, regularly improves customer services, and is always open for changes and innovations if they help to meet the customers’ needs.

Discussion

Emotional Health of Employees

The Coca-Cola Company management has almost a full control of their employees’ emotions and is known for its good working conditions, training and education classes for employees, as well as for the employees’ loyalty to the company. The latter is one of the most important factors for the company’s welfare, since some of the employees have an access to the “secret formula,” or the recipe of the famous Coca-Cola syrup which the company sells to other bottlers.

This is one of the reasons why “Coca-Cola has created an atmosphere of “fierce Loyalty” among its employees.” (Grossman & Jennings, 2002, p.202) Such atmosphere has been maintained in the company over the decades. Since some of the employees know the formula, they sign a non-compete agreement which prevents them from using it. However, this agreement is more of a formality for Coca-Cola employees, because the history of the company abounds with the cases when the Coke employees refused even to use the products manufactured by Pepsi and other manufacturers which are Coca-Cola’s competitors, let alone sharing the formula with these companies.

According to Ryan, Gasparski, & Enderle 2000, in 1995 and 1996 “The Coca-Cola Company occupied the first position on the list of the most admired American companies, in a survey conducted by Fortune … Coke’s CEO Robert Goizueta believes that employees with integrity are the ones that build the company’s reputation.” (p. 62) The management of the company believes that the welfare and satisfaction of the employees result in better performance of the company, because the employee who is satisfied with the working conditions and the work in general works better and produces the products or services of higher quality.

Quality of the manufactured products is the most important for the Coca-Cola Company this why commitment to quality is the way of life for each of the employees. (Ryan et al, 2000, p.63) The company continually hires new workers because it considers growth to be an essential part of the corporate culture, “the primary reason for growth being not financial but spiritual, since it produces a winning spirit; it creates a vital, enthusiastic atmosphere in the corporation where people see genuine personal opportunity.” (Ryan et al, 2000, p. 63)

Due to such emotional health of the employees and the company’s caring about the employees’ emotions, the products which the company manufactures are used by more than 94% of the world’s population with Coca-Cola being the most admired trademark in the world:

Executives in Atlanta office say that if the place was obliterated off the earth, they could go to the bank and borrow $100 million and rebuild Coca-Cola in a matter of months just on he strength of he brand. Employees are proud to be able to work for the company that sells one of he most famous and admired products and speak of the brand with respect. (Ryan, e al, 2000, p.64)

Therefore, emotions, as one of the concepts of organizational behavior, are the key factor in Coca-Cola’s development and performance. This is what Robbins and Judge (2007) refer to as “positive organizational behavior” which helps the companies “develop human strengths, foster vitality and resilience, and unlock potential.” (p.25) Since the quality of the products manufactured by Coca-Cola Company depends on the employees’ treatment of their work, the management of the company does everything possible to sustain their emotional health.

Improving Customer Service

A company which manufactures products and services cannot exist without customers this is why creating customer-responsive culture in the organization is vital for its performance and overall existence. It is the responsibility of the company’s management to create “cultures in which employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what’s necessary to please the customer.” (Robbins & Judge, 2007, p. 22)

Customer service is one of the means to show that the company cares about its customers. A professional customer service program helps the company reduce marketing expenditures, because handling the customers’ complaints results in saving the customers. (Tschohl & Franzmeier, 2008, p. 35)

The Coca-Cola Company, like no other company, is customer-oriented this is why it has “an amazing global customer support infrastructure,” (McKenna, 2002, p.142) and the quality of customer support is continually improving by its bottlers all around the world. For instance, one of its bottlers, Coca Cola Bottling Unit (Lambeg) installed a single customer service touchpoint already in 1996 when the survey conducted among the customers showed that they needed a single contact point for customer service, even though they were totally satisfied with the quality of the products. Absence of such a touchpoint hindered considerably the analysis of the call content and had an impact on the quality of responses:

The company resolved these problems by introducing a single touchpoint for all service issues and implementing the service automation product, HEAT. HEAT is used to monitor product codes found on packaging and products; when the support team finds three or more complaints that refer to any of these items then an alert message is sent direct to the incident team who investigate the situation. (Buttle, 2008, p. 456)

What’s more, the company’s implementation of service level agreements allowed automatically escalating the phone calls if they were not resolved in an identified period of time. The management ensured intensive training of the customer service team, which enabled each employee “to close standard queries and improve[d] the service customers receive.” (Buttle, 2008, p.456) All these operations not only helped the company retain a large number of customers, but attracted new ones. Thus, it can be stated that the Coca-Cola Company values its vast consumer network and tries to preserve it through improving its customer service.

Stimulating Innovation and Change

Modern companies and organizations have to cope with a great number of competitors which enter the market daily. Mastering the art of change and fostering innovation is extremely important for the organizations, because the chance to survive is given only to those companies which “maintain their flexibility, continually improve their quality, and beat their competition to the marketplace with a constant stream of innovative products and services.” (Robbins & Judge, 2007, p. 23)

The main task of the company’s management with respect to this problem is to stimulate the creativity of the employees and to teach them to easily and readily accept the changes. (Robbins & Judge, 2007, p. 23) The Coca-Cola Company is an example of how the organization should adapt to possible changes in consumers’ preferences and how the brilliant performance may sometimes help to avoid changing the manufactured products.

For most of the other companies which produce soft drinks or food, innovation is an integral part of the company’s existence, because consumers’ tastes change all the time and it becomes difficult to meet their needs. The experience of the Coca-Cola Company in the 1990s proved that well-established manufacturers need diversification, rather than modernization, change, or innovation. The company got convinced that diversification of the product would attract more customers than changing the already existing drinks; moreover, it would help to save the old consumers.

In 1985, the organization started producing New Coke in response to Pepsi’s stating that its drink had a “better tasting”. Trying not to lose the customers, Coca-Cola changed the formula of the drink, but people refused to accept it. This was when both the company and the consumers realized that “Coke was not just a cola. It was a tradition, owned not by the company but by the whole community.” (Kiuch & Shireman, 2002, p.118)

Doug Daft, who initiated the manufacturing of New Coke, had to bring Coca-Cola Classic back to the market for he recognized that Coca-Cola’s future lied not in the best-tasting soft drink, but “in its social license, the trust and esteem with which people held the company, a contract more binding than anything written on the paper.” (Kiuch & Shireman, 2002, p.118) From that moment, the only change the company made regarding the products was diversifying them.

Diversification of the products was beneficial for everyone starting with the stakeholders and shareholders and ending with consumers; at this, the latter benefited most of all, because diversification expanded the variety of products and gave them a possibility to choose, which was the most important since the choice created value. (Kiuch & Shireman, 2002, p.118) In addition, diversification made the company more resistant to any change in the market, as well as secured the integrity of the Coke brand.

This means that such organizations as Coca-Cola Company may not need other changes except for diversification of already existing products. The company’s negative experience with changing the taste of the drink which the consumers liked so much has shown that the consumers’ respect and devotion to the product may bring far more profits than any kind of change or innovation.

Conclusion

The Coca-Cola Company is an organization which can serve as an example for the companies developing in the modern market. Its rich history shows how much the company has gone through on its way to the success it enjoys today. Despite high popularity, the company continues caring about the employees’ welfare, particularly emotional welfare, for its management knows that only people who are totally satisfied with their work and salary are able to produce the products of high quality.

Coca-Cola is a customer-oriented company this is why the employees are trained to create a responsive environment which is maintained through the customer service where all the complaints are handled. Lastly, the company does not experiment with changing the taste of the products anymore opting to diversify them instead, which makes the company even stronger and attracts new customers and investors.

References

Buttle, F. (2008). Customer Relationship Management: Concepts and Technologies. Boston : Butterworth-Heinemann.

Cetro, S. (2005). Supervision: Concepts and Skill-Building. New York: McGraw-Hill Professional.

Feigenbaum, A.V. (2003). The Power of Management Capital: Utilizing the New Drivers of Innovation, Profitability, and Growth in a Demanding Global Economy. New York: McGraw-Hill Professional.

Grossman, L.H. & Jennings, M. (2002). Building a Business through Good Times and Bad: Lessons From 15 Companies, Each with a Century of Dividends. New York: Greenwood Publishing Group.

Interactive Stock Chart. (2009). [Graph Illustration]. Coca Cola Company. Web.

Kiuch, T. &Shireman, W.K. (2002). What We Learned in the Rainforest: Business Lessons from Nature : Innovation, Growth, Profit, and Sustainability At 20 of The World’s Top Companies. San Francisco: Berrett-Koehler Publishers.

McKenna, R. (2002). Total Access: Giving Customers What They Want In an Anytime, Anywhere World. Boston: Harvard Business Press.

Ryan, L.V., Gasparsky, W., & Enderle, G. (2000). Business Students Focus on Ethics. New Brunswick and London: Transaction Publishers.

Steiner, J.F. (2005). Business, Government and Society: A Managerial Perspective. New York: McGraw-Hill Professional.

Truitt, W.B. (2006). The Corporation. New York: Greenwood Publishing Group.

Tschol, J. & Franzmeir, S. (1996). Achieving Excellence Through Customer Service. New York: Best Sellers Publishing.

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