Coca-Cola Company Management and Organizational Changes - Case Study Example

Report on Analysis of Coca-Cola Company Management and Organizational Changes Name Institution Course Professor Date Table of Contents 1.0 Introduction…………………………………………………………….…03 2.0 Background of Organisation ……………………………………………05 3.0 Impetus for Change...................................................................................04 4.0 Analysis and Evaluation of the Change Process/Program.....................05 4.1 HRM and Organisational Change................................................05 4.2 Managing Organisational Change................................................06 4. 3 Facilitation of Change by HRM....................................................08 5.0 Conclusion and Recommendations.............................................................09 References ..........................................................................................................11 1.0 Introduction It is always posited that organisational change is inevitable and employers and employees alike should be ready and have a positive mind for the changes. Organisational changes are normally introduced to address an issue or issues that management sees as important. Senaratne and Kuruwita (2010, p. 61) asserted that organisations should introduce changes in a frequent manner as a way of anticipating future problems. The organisational management must initiate changes for purposes of achieving organisational aims and objectives (Senaratne & Kuruwita 2010, p. 06). This is achieved through effective adaptation of these aims and changes to the new challenges that are presented by the company employees as well as external factors such as advancement in technology, increase in competition and introduction of new government regulations. In late 2013, Coca- Cola Company, the largest beverage company in the world introduced new management and organisational changes in its subsidiary, the Coca-Cola Americas. These changes became effective from January 1, 2014. The Coca-Cola Company introduced the changes as way of accelerating the company’s growth in the region. This report explores the theme of Human Resource Management (HRM) and Organisational change by assessing theories of HRM, how HRM is useful in managing change and the way it facilitates organisational change. 2.0 Background of Organisation The Coca-Cola Company occupies a strategic position in the beverage industry. In fact, it is the largest company that produces variety of beverages in the world. The brands that are produced by the company are more than 500. The Coca-Cola is the leading brand. As such, it is widely recognised brand all over the world. Furthermore, it is the company’s valuable brand. The other brands produced by the Coca-Cola Company that refreshes consumers globally include Fanta, Powerade, Sprite, Diet Coke, Coca-Cola Zero and Minute Maid. As a multi-national corporation, it needs to position itself strategically to take advantage of its market position. 3.0 Impetus for Change The organisational environment is rapidly changing and factors that affect operations in an organisation are increasingly becoming more and more. Organisations need to conduct organisational changes in order to bring fundamental, radical and transformational changes that are required in the organisation (Singh 2009, p. 121). The impetus for change at Coca-Cola Company was primarily to accelerate growth at its Coca-Cola Americas subsidiary. The management and organisational changes were necessary after the company successfully reorganised its operating structure in 2012. In regard to this, the company took further action of streamlining its focus and expediting its efforts to refranchise into independent bottling partners (Coca-Cola Company 2013). The company’s North American business was to be segmented into a traditional model of a company that suits the distinctive needs of the market. The top management of the giant bottling company recognised the unique characteristics of the North America market. In order to serve these unique needs, the North America business was to be divided into two operating units which will be headed by different leaders. Furthermore, the Coca-Cola Refreshments and the other operating unit, Coca-Cola North America will have different roles and other opportunities that arise will be pursued by the respective segment. The management and organisational changes were also carried out to intensify the company’s focus on its key markets as well as streamline the reporting line. Moreover, flexibility that will adjust the business in the future was to be provided by these human resource and general organisational changes. The problem that Coca-Cola Company was experiencing in the North America market was lack of flexibility to operate bottling operating model that is suitable in the region. Due to reorganisation, the company is now in a position where it can leverage this flexibility that enhances its focus on executing and accelerating refranchising of the bottling system in the market. 4.0 Analysis and Evaluation of the Change Process/Program 4.1 HRM and Organisational Change Any kind of change that is introduced in an organisation will not be successful without the input of human resources. Indeed, for any meaningful change to be realised, human resources must be the driving force behind the intended change. Resistance by human resources should always be expected and measures to be put in place in order to counter it. Bovey & Hede 2001, p. 534 asserts that resistance occurs because organisational change involves changing to the unknown from known. On the other hand, Erwin and Garman (2010, p. 39) contends that resistance to change by human resources personnel is mostly thought as a reason for difficulties in the implementation and failure of organisational change initiatives. Nevertheless, organisational change has a possibility of yielding both anticipated and unanticipated outcomes (Hughes 2011, p. 456). Unanticipated results may be harmful and should be considered by the organisational management in the change programme. HRM is the change management ingredient that makes organisational change to be complete and adequate. In fact, people are the ones who bring change. The management changes that were carried out at Cola-Cola Company were part of a HRM strategy geared towards adding value to the company’s efforts to deliver needs-satisfying products to the North American customers. As earlier noted, organisational environment are changing rapidly and organisations are under pressure to adapt to these changing situations (Tummers et al., 2015). Organisations need to balance their human resources and align them towards achievement of its goals and objectives. In realisation of this situation, Coca-Cola Company undertook changes to its management structure in the North America market in order to make use of human resources in a maximum manner. In the recent years, HRM practices have been designed in such a way that it will achieve high levels of employee performance, commitment and flexibility (Francis 2003, p. 309). HRM is seen as distinctive in relation to the traditional personnel management practice as it is believed to be of ‘strategic’ importance when it is managed very well. In realisation of this strategic importance, organisations must choose human resource personnel that are most capable of achieving the intended objectives at the time of change. The Coca-Cola North America and Coca-Cola Refreshments that were created as a result of organisational and management changes at Coca-Cola are led by people that have the required competency to drive the company towards achievement of the required objectives. 4.2 Managing Organisational Change The change that has been introduced in an organisation must be managed in order to achieve objectives of the change. Today, most organisational leaders have realised that human resources are the biggest impediment to successful introduction of change (Rothermel & Lamarsh 2012, p. 17). On the other hand, organisational human resources are key to the realisation of the intended changes in the change management process. A change management plan that assists human resource personnel in their efforts of adapting and implementing the change is therefore needed. Organisational change brings ‘disturbance’ to the status quo and the manner in which organisational processes are normally conducted. To counter the negative effects and manifestations that may arise due to introduction of a change program, change management program should be built as a key capability of motivating human resource personnel in the change process. In the current context, managers are routinely encouraged to challenge the thinking that is in existence, break rules and model their actions and personality as freethinking radicals (Fleming & Spicer 2008, p. 304). The assumption that underlies classical approach to organisational change is the involvement of predictable steps that enables senior managers in their effort to establish new routines and work order (Graetz & Smith 2010, p. 135). This is an example of a traditional approach to organisational change that follows a linear model in the change implementation process. In this case, the focus is on organisational control under the guidance and direction of a strong leader. In December 2013 when Coca-Cola Company announced its management and organisational changes, the persons that were seen as most capable of controlling and making sure that the intended changes were implemented were put in charge of the new divisions. The company was using a rational model to organisational change. The best human resources were to head and supervise the introduction and implementation of the change. In choosing this approach, Coca-Cola Company was under the assumption that certain HRM practices are better than others in times of organisational and management change. Indeed, the research by Lepak and Shaw (2008, p. 1487) shows that there is some evidence that supports this assumption, that is, some HRM practices exhibits positive relationship with important organisational performance indicators in comparison with others. Strategic re-organisation prompted the changes at Coca-Cola Company. As a large multinational company, it makes it more difficult for the change to be wholly managed. Despite this, it can be successfully managed by establishing a stakeholder engagement and project management before transitioning to the intended change (Edmonds 2011, p. 350). The lower and middle levels managers are particularly important in organising the workforce on how they can achieve the change. In addition, they ensure high levels of connectivity between different business functions and processes. 4. 3 Facilitation of Change by HRM It is a common feature of multinational companies to have several levels of management due to their large size. Different management levels are tasked with different responsibilities. In times of organisational change, middle level managers are responsible for planning and executing most operational strategies. A common managerial approach as an interventional method pertaining to organisational change is the technological systems transformational (Stoltzfus, Stohl, & Seibold 2011, p. 349). Here, human resources-which are part of HRM are important in this transformational process as agents of change. Indeed, HRM comprise all activities that are involved in innovation, planning, monitoring and evaluation of employee performance (Hartel & Fujimoto 2014, p. 04). It can be deduced from this that HRM facilitates change. It assists facilitation of information flow and understanding in the organisation (Armstrong 2006, p. 55). This is achieved through various dimensions. HRM ensures that employees understand the reason for change and why it is very important for the organisation to introduce it. The employees see how change will help them achieve organisational and their personal goals and objectives in both the short-term and long-term periods. In addition, a means where success of change is measured is identified through HRM. Also, through HRM, training of human resources is carried out in preparation for the imminent change. Organisational change is sometimes a long and complex process that requires great leadership and direction if it is to be called a successful operation. There are various obstacles before change can be finally implemented as a whole. Resistance to change by employees is the common obstacle. Nevertheless, even in situations where employees are generally willing to accept change, the process of change can be stressful burden in itself (Tummer et al 2015, p. 628). Therefore, the continuing issue regarding management of change is minimisation of resistance and engagement with employees at all levels of organisation (Nelson 2005, p. 55). Typically, organisational change involves management of the change processes as well as handling human resources issues. The organisational and management change adopted by Coca-Cola Company need adoption of some new behaviours’ that are acceptable by all the organisational members and can be subsequently enforced. HRM is very important and it is at the forefront in planning and implementation of organisational change as successful implementation of change is a key challenge for HRM. As a result, managers are encouraged to actively address several issues stemming from organisational change. These issues include employees’ participation, behaviour change and resistance. 5.0 Conclusion and Recommendations The current economic climate is uncertain and organisations are forced to introduce changes for purposes of survival. They are supposed to react quickly to any changes in both the local and international market by keeping up with the competition. Furthermore, they need to stay ahead of its competitors. The business reorganisation of the Coca-Cola Americas was an intentional change of the company to fight off the stiff competition in the region and increase the productivity of its human resources. Although change is vital for organisational growth, if not introduced and managed successfully, its failure has negative effects. Its failure can result in loss of market position and stakeholders’ credibility (Edmonds 2011, p. 349). Moreover, the morale of the management and workers decreases which results in a de-motivated workforce that hurts organisational performance. Regardless of the factor(s) that necessitates organisational change; it must be managed carefully for achievement of positive results. Human resources are very important in achievement of this objective. References Armstrong, M 2007, A handbook of human resource management practice, 10th edn, Kogan Page, London. Bovey, W. 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