Executive Summary
This report focuses on the way Coca-Cola’s organizational goals are aligned with its strategic controls. The company focuses on the quality of products and customers’ satisfaction that are regarded as some of the most important criteria of effective performance.
These aspects are quite consistent with the main strategic goals (namely global expansion, the development of the strongest beverage brands, productivity enhancement, and the creation of a simple organizational structure). These goals are considered in terms of the ethical domain with the use of a number of ethical principles. In this way, the prospects of the company are regarded not from a specific operational aspect but from the opportunity of becoming a true corporate citizen. Some recommendations are provided as well.
Introduction
Coca-Cola is one of the leaders in the industry of soft drinks and one of the most known companies with a well-established brand. The mission of the company is concerned with making a difference by providing customers as well as the community with positive experiences (Mission, vision & values, 2016). The company’s strategic goals include further global expansion, the focus on building the strongest beverage brands, productivity enhancement, and simplification of the structure (Coca-Cola leaders: Q3 results show strategic plan is on track, 2015).
It is also clear that the company is using the quality control system to manage their performance and ensure meeting the strategic goals. It is necessary to note that the quality is not confined to the quality of the product of operations. The major focus is made on the brand and the way it is perceived by the customers. Coca-Cola focuses on customers’ experiences as well as the overall image of the brand and the entire company. Therefore, the development of the appropriate image of a responsible citizen is one of the company’s priorities.
Various factors affect the success of the company and its ability to achieve its strategic goals. However, ethical components are considered to be essential factors affecting well-established brands (Aligning organizational culture with business strategy, 2013). Therefore, it is important to analyze the organizational components in terms of major ethical ‘prescriptions’ (Schulman, 2006). This report includes a brief analysis of the alignment of the most relevant organizational components (using the ethical perspective) with its strategic goals. Some recommendations are included as well.
Ethical Principles
Right Organizational Structure
Top managers have already acknowledged that modern customers are not satisfied with the high quality of products provided as they need a lot more. Contemporary customers want to buy products as well as emotions and even lifestyles. They also prefer buying from responsible companies that contribute to the development of the community (be it a small community or entire society). Coca-Cola aims at meeting these needs. One of the easiest ways to do this is to follow accepted ethical principles. Interestingly, having the right organizational structure is one of these ethical principles (Schulman, 2006). It is consistent with one of the company’s strategic goals.
Clearly, an effective organizational structure ensures efficient operations as there are clarity and efficiency. Coca-Cola aims at creating a simple structure that is operational globally (Coca-Cola leaders: Q3 results show strategic plan is on track, 2015). It is necessary to note that the ‘right’ structure can be interpreted differently, but the company in question seems to have chosen the right structure as its operations are effective, and its growth is stable.
Transparency
The ethical code mentioned above is closely connected with the principle of transparency. Being “totally transparent” is an important premise for the development of proper image and communication with customers (Schulman, 2006, para. 6). Coca-Cola seems to embrace this principle as the company has succeeded in achieving a significant degree of transparency.
First, the development of a simple organizational structure can ensure the necessary level of transparency as the roles in such structures are clearly cut, which contributes to effective performance. At the same time, there is little information on the exact structure of the company. The company could develop a more favorable image among its customers as well as potential employees if the description of the organizational structure was available online.
As has been mentioned above, customers prefer buying from companies characterized by a considerable level of sustainability in all aspects. Thus, sustainable HR practices are considered to be an important sign of adherence to sustainable principles. More so, the ability to attract talent is one of the competitive advantages of any company, and it is easier to do if the company is transparent in terms of its HR policies (Garrow & Hirsh, 2009).
Nonetheless, Coca-Cola does not provide particular data concerning its employees. Although diversity is proclaimed to be one of the company’s priorities, it is impossible to evaluate whether the organization adheres to its own principles (2015 highlights, 2016). There is no information on diversity, but it could be beneficial to provide such data across countries or at least regions.
Apart from this, the company is trying to reveal all major strategies used and goals to be met (Our approach to human and workplace rights, 2016; Anti-corruption, 2016). It is clear that the company is trying hard to ensure ethical conduct in certain spheres. However, the information provided is far from being enough. Coca-Cola, like any other multinational, has its code of conduct. On the one hand, it is very detailed. One of its benefits is the availability of particular examples of misconduct (Code of business conduct, 2009).
Clearly, people are able to understand what kind of actions can be regarded as unethical. At the same time, the code lacks an important component. Schulman (2006) stresses that companies should develop a particular ethical framework that encourages employees and partners to act responsibly and ethically. Coca-Cola’s code of conduct does not include such encouragement. It is necessary to add that transparency will help the company achieve such goals as global expansion and the development of the strongest brands through the development of an image of a sustainable company.
Values
Finally, an important ethical prescription is concerned with values. Schulman (2006) notes that the company’s values should be clear, explicit, and real. Coca-Cola’s values include leadership, collaboration, integrity, accountability, passion, diversity, and quality (Mission, vision & values, 2016). The values remain quite obscure even though the company has provided a brief explanation.
Only two values are consistent with the ethical principle mentioned. These values are leadership and quality. For instance, the value of having the “courage to shape a better future” is quite clear, explicit and true to life as the company (and its top management) comes up with various strategies and projects that can be regarded as the move towards a better future (Mission, vision & values, 2016, para. 5). The value of quality is also real as the company’s products are of high-quality.
However, the rest of the values are too vague and seem quite unrealistic or irrelevant to the company’s employees. Such explanations as “[i]f it is to be, it’s up to me” are difficult to decipher and comply with. Therefore, it is impossible to expect that employees and especially partners will comply or at least respect the values provided. Clearly, it is difficult to develop a proper organizational culture as there are no major principles (values) to follow. Ethical behavior can also be a matter of debate within the organization as there are no specific guidelines as to the organizational values.
Recommendations
The brief analysis provided suggests that Coca-Cola has tried to become a responsible company that contributes to the development of the community through the provision of high-quality products, positive experiences for customers, employees, and partners. The adherence to principle ethical norms in business operations has enabled the organization to retain its leading position in the market. Nevertheless, there are various gaps as regards the ethical aspect of the business. It is possible to consider particular steps to address the gaps mentioned.
As regards the organizational structure, the company should make it available online. The structure should be provided on the company’s website. This will allow potential and existing employees, as well as customers, to understand the scope of responsibilities. More importantly, the availability of the structure will be a sign of transparency and openness to communicate.
When it comes to the ethical ‘prescription’ of transparency, the company should provide more information on employees. Companies often provide the rate of women employed including the rate of female leaders. As far as the North American division is concerned, it is possible to provide the rate of people pertaining to different ethnic groups. Clearly, it is important to make sure that relevant information is provided. It is possible to pay more attention to each group’s leadership.
The transparency should also be a characteristic feature of the ethical aspect of business within the organization. Thus, the code of conduct should be improved as it lacks encouragement. There are some principles and particular examples of violations, but there are no real-life stories of proper conduct. It is possible to add particular people’s stories. It can also be beneficial to introduce and mention certain rewards for exceptional acts that can encourage employees to become more responsible in many respects.
Finally, the company lacks certain clarity when it comes to its values. Employees, as well as customers, cannot form a clear understanding of the organizational culture due to obscure and unrealistic values. The explanations provided should be reconsidered. Each value should be explicit and real. Each value can be explained in a sentence and facilitated by the use of some stories of Coca-Cola employees. This will improve the image of the company and will make the employees more committed. The high quality of Coca-Cola products will transcend each employees’ actions, which will help the company achieve its strategic goals.
Conclusion
On balance, it is possible to note that Coca-Cola has a strong position in the market and manages to achieve its strategic goals partly due to its adherence to major ethical principles of business operations. The company’s activities suggest that it is committed to becoming a transparent organization that employs people ready to act ethically in all respects. Clearly, there are some areas of improvement. However, Coca-Cola has high chances to fill in those gaps and retain its leading position in the global market.
References
2015 highlights. (2016).
Aligning organizational culture with business strategy. (2013, November). Towers Watson.
Anti-corruption. (2016).
Coca-Cola leaders: Q3 results show the strategic plan is on track. (2016).
Code of business conduct. (2009).
Garrow, V., & Hirsh, W. (2009). Talent management: Issues of focus and fit. Public Personnel Management, 37(4), 389-403.
Mission, vision & values. (2016).
Our approach to human and workplace rights. (2016).
Schulman, M. (2006). Incorporating ethics into the organization’s strategic plan.