Internal corporate policy is the element of work that influences not only the strategies of a particular organization but also the results of operations. The choice of an appropriate management structure may involve the use of division into departments, control over the performance of committees, and other tasks that need to be carried out as part of the market competition. The Coca-Cola Company that is one of the most well-known global brands has a rather complex and interdependent structure that is adapted to specific goals and its mode of operation. The organizational culture of the corporation is also an essential element in achieving the objectives.
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Following certain rules of work in a team allows employees to form a comprehensive idea of the results of their work and the means of achieving positive results. The assessment of Coca-Cola’s organizational structure, culture, and specific control systems can help to determine the success of the applied leadership principles and their compliance with the grand strategies supported by the corporation.
The Coca-Cola Company’s Organization Structure
The management of major financial, marketing, manufacturing, and other operations in the Coca-Cola Company is carried out by the Board of Directors. This apparatus “is elected by the shareowners to oversee their interest in the long-term health and the overall success of the business and its financial strength” (The Coca-Cola Company, 2018a, para. 2). It is this board that establishes the missions of the corporation, appoints the responsible heads of departments, forms the structure of committees, and considers the organization’s work in the context of the total work done. All business activities are regulated by the Board’s timely intervention, and no crucial decisions can be made without the knowledge of its members.
However, the Board of Directors cannot control absolutely all the aspects of the corporation’s work; therefore, a significant role is assigned to special committees of the organization. In particular, in the Coca-Cola Company, there are such units as Audit, Compensation, Directors and Corporate Governance, Executive, Finance, Management Development, and Public Issues and Diversity Review (The Coca-Cola Company, 2018b). These committees oversee key business strategies and serve as subsidiary branches to monitor the implementation of the guidelines appointed by the Board of Directors. Accordingly, in Coca-Cola, a standard corporate governance system is maintained.
One supreme apparatus controls the activities of the departments, and responsible persons are appointed in each committee to report to the management and regulate all work processes. This principle of responsibility distribution allows effectively monitoring all processes, which is particularly relevant in the conditions of market competition and the scale of production supported by the corporation in question.
The Coca-Cola Company’s Organization Culture
When considering the organizational culture of Coca-Cola, it can be noted that it belongs to the corporate type, which is typical for most major brands. “Corporations sell shares of ownership that are publicly traded in stock markets, and they are managed by professional executives” (“Mastering strategic management,” 2015, p. 309). Also, the hierarchical division of power is maintained in such a type of management.
Based on the aforementioned principles of Coca-Cola’s structure and committees’ activities, it can be noted that adherence to corporate policy is observed. The supreme apparatus, in this case, the Board of Directors is vested with basic powers, but the operations of the departments involved in monitoring the work of the corporation play an equally important role. Initiatives are encouraged, and the fulfillment of the goals set by shareowners allows the organization to implement its plan successfully, following the standards of production and sales that are governed by internal policies.
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In order to assess the compliance of the organizational culture with the company’s strategy of work, it is necessary to mention its main objectives. In accordance with the officially declared value system, Coca-Cola’s leadership is given equal importance to such aspects as leadership, collaboration, integrity, accountability, passion, diversity, and quality (The Coca-Cola Company, 2018c). Based on the approach to segregating responsibilities and encouraging initiatives, the company’s values align with its culture. Team cohesion is achieved through close interaction among the committees, and accountability helps to avoid resource allocation problems.
The customer-oriented approach makes it possible to realize efficient and profitable production, and each of the company’s branches plays an important role in the process of achieving the final goals (Banks, 2016). Therefore, the organizational culture of Coca-Cola does not contradict the modern standards of corporate policy and meets the requirements of the market and the target audience.
The Coca-Cola Company’s Control Systems
In order to maintain stable high profits and to compete in the market, it is essential to ensure the operation of appropriate control systems that are designed to monitor key organizational activities. For instance, according to Bhasin (2018), “Coca Cola uses competitive positioning strategy to be way ahead of its competitors in the non-alcoholic beverages market” (para. 4). This type of activity is to track innovations and maintain stable public interest in the company’s products. Another successful type of control system is associated with inventory management aimed at finding ways to update the current production and marketing processes.
As Supply Chain 24/7 (2017) remarks, the policy of the corporation provides for continuous monitoring of market activities regarding the possibility of introducing current innovations. Therefore, all the steps taken are the result of premeditated decisions.
The principles of budgeting play a significant role in the management of the company in question and its assets. Appropriate control systems help to calculate all the expenses required for the purchase of raw materials, manufacturing products, marketing campaigns, and other important operations. According to Shim and Siegel (2009), the right strategies supported by the corporation identify deviations based on the management of accounting data.
It, in turn, contributes to the effective analysis of the receipt and expenditure activities and the methods of calculating those funds that are required for performing specific tasks. Therefore, the financial activities of Coca-Cola do not cause complaints from audit boards and shareowners.
Another relevant and valuable control system is the personnel evaluation technique. As Banks (2016) argues, the corporation “directly employs more than 750,000 local people worldwide and generates more than half of its revenue internationally” (p. 456). Accordingly, in order to monitor the performance of all employees, a well-thought-out algorithm to control staff performance and production success are required. For this purpose, the retention and reward system is maintained at the corporate level, which corresponds to the company’s vision statement (The Coca-Cola Company, 2018c). This approach allows establishing an effective workflow and conveying to employees the importance of those tasks that they perform.
Compliance of Coca-Cola’s Organizational Principles with Its Grand Strategies
Based on Coca-Cola’s grand strategies, it can be noted that the organizational principles of the corporation, including its structure, culture, and control systems, align well with these approaches. In accordance with the policies aimed at internal transformations described earlier, Coca-Cola aims its potential to reinforce changes within the company, although its external orientation is sufficiently strong. As Banks (2016) remarks, corporate governance principles contribute to improving the mode of operation regarding the allocation of resources and financial assets. This technique makes it possible to maintain a consistently high position in the market and confront competitors in a particular field.
Another grand strategy involves evaluating the corporation in question in terms of its growth potential. Since the company’s management supports a corporate culture and encourages employees to achieve the highest possible performance, its assets increase, which allows speaking about compliance with this strategy. Compared with other major brands, for example, Walmart, Coca-Cola realizes its potential in such a way that a third of all proceeds is a net profit (“Mastering strategic management,” 2015).
These statistics provide an opportunity to argue that the direction of the work chosen is correct, and all organizational changes are for the benefit of the company. Therefore, the parameters considered correspond to the corporation’s grand strategies and are valuable mechanisms for achieving success in the market.
The discussed Coca-Cola’s organizational principles, including its structure, culture, and control systems, allow maintaining all corporate activities at a high level and help to support the grand strategies, thus strengthening competitive positions in the market. The division of the company into committees makes it possible to ensure stable work monitoring. Corporate culture and modern control systems are valuable mechanisms in the process of achieving the stated goals. The compliance of these principles with the specified values is proved, which is evidence of Coca-Cola’s high operational performance.
Banks, H. (2016). The business of peace: Coca-Cola’s contribution to stability, growth, and optimism. Business Horizons, 59(5), 455-461.
Bhasin, H. (2018). Marketing strategy of Coca Cola – Coca Cola marketing strategy. Marketing91. Web.
The Coca-Cola Company. (2018a). Board committees & charters. Web.
The Coca-Cola Company. (2018b). Corporate governance. Web.
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The Coca-Cola Company. (2018c). Mission, vision & values. Web.
Mastering strategic management. (2015). Web.
Shim, J. K., & Siegel, G. (2009). Budgeting basics and beyond (3rd ed.). Hoboken, NJ: John Wiley and Sons.
Supply Chain 24/7. (2017). Coca-Cola leverages AI for inventory management. Web.