Impact of Change on an Organization: Coca-Cola - Essay Example

? Impact of Change on an Organization: Coca-Cola BY YOU YOUR SCHOOL INFO HERE HERE Impact of Change on an Organization: Coca-Cola Introduction The Coca-Cola Company has been in business for 100 years, thus change is a necessity in sustaining competitive advantage over rivals such as Pepsi and also as a means to stay in-line with changing consumer attitudes and purchasing behaviors. Changes that have occurred in recent years include production-oriented change to improve productivity, human resource-related changes to modifying employee behavior, and also in terms of marketing and advertising focus. Change management is best defined as a “qualitative process that addresses performance, ethical conduct, leadership, managerial effectiveness, commitments, cohesive work teams, and innovation” (Want, 2009, p.10). Whenever a business restructures or has new strategic goals, the need to drive internal change becomes necessary to sustain competitive edge. This paper describes change management activities at Coca-Cola and the impact of these changes. Technology Changes With advancements in technology comes a need for improving production efforts as packaging and cycle times become more sophisticated in order to meet customer demand. In 2008, Coca-Cola realized that its policing of coding used for production was insufficient to meet quality and cost expectations. The business implemented a new technology known as MDT AutoSave, an enterprise solution software package that provided Coca-Cola with “a suite of tools to protect, save, restore, discover and track changes for industrial programmable devices and documents” (automation.com, 2008, p.1). Previously, there was a need for manual entry of coding data by production-based employees that continued to reduce productivity and created errors in this process. This was now being done automatically with MDT AutoSave. Change in this situation required training on the new system and identifying a new workflow chart needed to identify key roles in the production and labeling process. Leadership was required in this effort to ensure that there was no resistance from production staff that was accustomed to the previous methodology of production and coding as well as creating a cohesive work team to ensure compliance. The impact of this change effort was significantly improved production capacity and output and also better management controls over the entire production process. Better data storage and ability to change coding instantly was the outcome and could not have been accomplished without change management principles. In the corporate environment, software usage is commonplace for employees in multiple divisions especially in a multi-national environment with enterprise business planning software to facilitate production and operations. Coca-Cola recently realized it needed to reduce costs in technology and turned toward cloud-computing as a means to alter information technology implementation costs and communication systems costs. This type of service is provided by external software manufacturers or providers that allow companies to access particular software systems on an external provider server therefore allowing companies to avoid the costs of implementing similar software on their own servers. Coca-Cola gained access to new messaging services with cloud-based tools and experienced a 10 to 30 percent cost reduction as a result of this technology change (Kendall, 2011). The most quality recommendation in this case is to seek more cloud-computing software and promote a vision change for training on external software packages. In order to drive this change, it was necessary to unify the organizational culture to become accustomed to using external software technology in an environment that was once supported by internalized software packages. “Great companies rely heavily on their cultures to support their change management efforts” (Want, 2009, p.11). Coca-Cola needed to develop a change management practice that included new training efforts from human resources managers and also instill a culture of ongoing change principles in order to gain support and dedication to using cloud-based services. However, Coca-Cola has always been renowned for its harmonious organizational culture and thus the largest impact was cost savings from a culture that is used to operating in change situations. Behavioral Modification Changes Many companies today are using monitoring systems electronically to protect their intellectual property and other trade secrets. Coca-Cola recently had an experience where the company and the Federal Bureau of Investigation were able to catch employees as they attempted to sell Pepsi the business’ trade secrets (Turri, Maniam & Hynes, 2008). This was accomplished through inappropriate use of email, however Pepsi reported the situation to Coca-Cola executives and ensured the passage of the proprietary data was not successful. Change, in this case, involved the use of monitoring systems embedded into technological systems to ensure proper use of communication systems. In this scenario, change resistance is often the outcome when employees feel that monitoring systems infringe on their rights. There is a fine line between securing the intellectual property of the organization and then developing policies to demand compliance for effective and appropriate use of company data systems. However, Coca-Cola operates in an environment where this is a legitimate risk to its business and must develop new policies as part of the change effort as a system of control. The impact of this change is better protectionism against internal fraud or non-compliance in terms of keeping secrets that brings the business more competitive edge and the ability to differentiate product effectively without risk of intellectual property infringement that could impact new product development. There is no evidence that employees at Coca-Cola have been overtly resistant to this change tactic, thus the only recommendation is to ensure policy creation so employees understand this level of control over their activities when using corporate email systems. Advertising Changes One of the largest change scenarios that occurs at Coca-Cola is in its marketing and sales function as it relates to new product development or how best to advertise to key demographic groups of buyers. Gelink (2011) offers the situation that occurred at the company in the mid 1980s when the so-called cola wars were occurring between Coke and rival Pepsi. The business developed a new marketing strategy and product called New Coke that met with dismal failure in the external buyer market. This was a significant loss for the company considering the change was widespread internally and involved restructuring of production and also quality testing procedures. Change in this situation involved the creation of a new mission related to product offerings in their product line despite the lack of consumer acceptance. The impact of this change was a realization that the company needed to reexamine how it was being portrayed to the external consumer environment. “Leading change in an organization requires taking a step back and analyzing not only what your organization represents, but what it represents to the outside world” (Gelink, 2011, p.1). During this period of change, Coca-Cola had to return to its previous production methods and re-integrate its old formula back in order to provide a viable product to its customers. This particular change was spotlighted since it shows the opposite impact of change where the outcome is negative. However, it is the learning lessons about consumer behavior and consumer demand that ultimately strengthened the company’s competitive position in the long-term by recognizing that mission and self-presentation is important to business success. It provided the ability to conduct tangible external market research so that the business could keep up with changing consumer tastes in the future and provide viable products that would be accepted by their key target groups. It is recommended that the business fully understand consumer attitudes before launching a costly and full-scale production and development philosophy by gaining market research data. Another change principle related to marketing is having the ability to keep up with competitive trends in advertising and promote internal changes designed to combat competitor successes. Pepsi has changed its advertising concepts to target more trendy and hip consumers in youth age brackets, considering itself to be “tech-forward, fashion conscious, celebrity focused and socially conscious” (Reppo & Yan, 2010, p.8). This is accomplished with celebrity endorsements, Super Bowl advertising, and the use of modern social networking in the virtual environment as a means to promote Pepsi’s products. Coca-Cola must have a change-minded culture that is adaptable, especially in the advertising function. Having a team that can conduct external analysis of competitive trends and then develop new strategies that might alter operational functional is part of this change strategy. Therefore, it is recommended that Coca-Cola must maintain an organizational culture that is driven for flexibility and adaptability which requires a transformational leadership design in autonomous working environments. The impact of these changes is improved competitive position and the ability to seek new market opportunities faster than that of rivals such as Pepsi. It is recommended to develop a unified campaign in order to provide meaningful advertising content to combat competitive efforts and Coca-Cola is usually superior in this effort. Conclusion All of the change practices at Coca-Cola have provided the business with higher cost savings in many different areas from production to advertising and also given the business a new focus on its public image. Monitoring employees requires knowledge that resistance to these efforts might occur, however development of new control systems are necessary and require simple compliance methodology to gain support. Fortunately, Coca-Cola has a dedicated culture that understands the importance of trade secret protection and one that is used to operating in change scenarios that are continuous and routine. The impact of all described change activities at Coca-Cola have given the firm a better market reputation with its customers and improved overall productivity in areas of technology and production. Since change requires commitment to ensure success, organizational culture development seems the key factor in sustaining Coca-Cola. References Automation.com. (2008). “Change Management Software at Coca-Cola Minimizes Production Downtime”. Retrieved June 27, 2011 from http://www.automation.com/content/change-management-software-at-coca-cola-minimizes-production-downtime Gelink, J. (2011). “Organizational Change – The Mission Statement”, Peter Drucker’s Management Philosophy. Retrieved June 26, 2011 from http://druckerphilosophy.com/2011/05/07/organizational-change-the-mission-statement/ Kendall, Nigel. (2011). “Up in the Air, Our Experts Say Cloud Computing will Change the Direction of Business IT”, Wall Street Journal, June 29. Reppo, I. & Yan, M. (2010). “PepsiCo Valuation”, p.8. Retrieved June 26, 2011 from http://leeds-faculty.colorado.edu/Madigan/4820/Presentations%202010/PepsiCo%20Report.pdf Turri, A., Maniam, B. & Hynes, G. (2008). “Are they Watching? Corporate Surveillance of Employees’ Technology Use”, The Business Review, 11(2), pp.126-130. Want, Jerome. (2009). “Saving the Company”, Leadership Excellence, 26(6), pp.10-11. Bibliography Benady, David. (2009). “A Change for the Better”, Marketing, pp.26-27. Kotter, John P. (2010). “Leading Change: Why Transformation Efforts Fail”, Harvard Business Review, p.2. Retrieved June 26, 2011 from http://www.bravacorp.com/leadershipbr11change.pdf Read More