Company Background (Industry, Size, Employees, and History)
Coca-Cola is among the world’s most successful enterprises. Coca-Cola branches are located in almost 200 countries, and about 80% of the company’s revenue comes from its activities outside the United States (The Coca-Cola Company). The company manufactures and sells various soft-drink beverages, totaling up to about 2,800 products, making it the world’s biggest beverage manufacturing and distributing company. With its headquarters in Atlanta, Georgia, some of its most popular portfolios include Fanta, Sprite, Coca-Cola, and other carbonated soft drinks. (The Coca-Cola Company).
Since 1889, the company has operated under a franchise distribution framework in collaboration with various bottlers worldwide, and its stock is listed on the New York Stock Exchange. Some of the reasons why Coca-Cola has been successful over the years can be attributed to the company’s strategic approach to HR and personnel management, which involves activities such as staffing, compensation, planning, evaluation, and development. With this in mind, this paper demonstrates that although most of these HR policies, strategies, and practices have been successful over the years, some of them need to be addressed and changed to meet modern change management theories.
Current HR practice
The Corporate HR group sees its mission in the development and provision of a core strategy based on which local businesses can create their principles. For example, instead of a general payroll policy for all company divisions, Coca-Cola adheres to a general guide regarding wages. It means that the available package competes with other top companies within the local market with all compensations. The company’s HR management also conducts bi-annual introductory seminars that last for two weeks for its employees in all its 25 departments, which deal with human resources (The Coca-Cola Company).
These seminars summarize its HR management strategy and explain how local businesses can use it in their regions’ HR management programs. Coca-Cola considers this exchange of information to be the most outstanding achievement for which it is worth bringing together professionals in the field of personnel management. In general, the company seeks to improve personnel’s well-being and sustain a friendly working environment.
HR practice, policy, process, and procedure that should be changed (with reason)
Regardless of the success of the majority of Coca-Cola’s HR policies and strategies, there is still room for improvement because possible changes can be implemented for the policies and strategies to meet current change management theories.
First, the company’s recruitment process can be remodeled to adapt to existing practices that rely on technology and innovation. In this regard, the company needs to incorporate current technological practices more in their head-hunting and hiring processes, such as using online HR platforms like Glassdoor and LinkedIn, using social media, or using innovative tools like VR to identify and hire the most suitable employees for the numerous company roles (Grgić 66). According to various current change management theories, Coca-Cola can develop a comprehensive digital employment framework based on a defined strategy that is transparent and recognizable to ensure it benefits from the modern socialized online environment. The company will gain by acquiring the best candidates from the market.
Secondly, Coca-Cola must treat HR as an independent and strategic organizational component and not just an administrative function that facilitates the induction and employee life-cycle for more effective HR management. The company can incorporate its HR management in planning, designing, and executing organizational growth strategies that focus on a people’s perspective. In this manner, HR can be regarded as a decision authority and not just an execution arm (Grgić, 69).
To achieve this, continuous improvement in every HR function is necessary, including the sub-functions within HR, such as health and safety, compensation, screening and hiring processes, records, benefits, and training. Constant training and coaching are required, from senior to junior staff and throughout the organization, to ensure everyone has a complete overview of what HR needs to work at its best. Therefore, Coca-Cola’s HR staff and managers also need to be constantly on the lookout for new and best practices to help the company achieve its objectives.
Furthermore, Coca-Cola’s HR policies and strategies can be effectively transformed by instilling a culture of introspection or self-awareness. This change is vital because a self-aware organization becomes receptive to change. Coca-Cola can achieve this by defining its HR competencies and measuring HR’s performance against set competencies. In this regard, the company should conduct regular HR customer satisfaction audits and clearly outline the areas HR needs to perform to support the business. Such requirements include influencing business decisions and strategy, providing leadership coaching, facilitating learning and development, and understanding specific performance indicators (Grgić 70).
This transformation can also be achieved by implementing new leadership principles, mission statements, and values definitions. Similarly, the company’s HR can create accountability by measuring introspection through performance reviews, one-on-one conversations, and offering employees various opportunities to reflect on their actions or behaviors.
Diagnostic tools used to determine an organization’s readiness for change (and justification)
To determine if The Coca-Cola Company is ready for change, these two diagnostic tools should be used: Burke-Litwin and McKinsey Seven-S. Using the McKinsey Seven-S tool is vital in this process because it effectively analyzes an organization’s design through various elements, such as shared values, staff, strategy, system, skills, and structure (Yakimova et al., 1571). This tool will effectively determine whether Coca-Cola is ready for change by identifying whether employees’ individual strategies align with the company’s mission. As a result, teams and systems within the company can be optimally structured to match the organization’s objectives.
On the other hand, the Burke-Litwin tool is appropriate to determine whether Coca-Cola is ready for change or not because it shows where organizational change originates and how it permeates the various parts of the company (Yakimova et al. 1571). Using the Burke-Litwin tool, in this case, is imperative as it is predictive and, therefore, can illuminate more light on what the company needs to adjust in its strategy to achieve its objectives.
Using one of the diagnostic tools selected, assess the organization’s readiness for change (including analysis)
Coca-Cola can use the Burke-Litwin diagnostic tool to anticipate new innovations and technology required for organizational change. For example, the automation of various HR procedures in the company would result from Coca-Cola’s desire to adopt new technology and innovation in its practices. Similarly, using online HR platforms for head-hunting and hiring processes would be inevitable if the company needs to target more youthful and skillful employees. This knowledge is essential as it can help Coca-Cola research, design, implement and “sell” the appropriate policies, practices, procedures, and processes to its employees whenever it needs to make critical organizational changes.
By analyzing the company’s main transformational drivers – strategy and mission development, leadership development, and corporate culture – the Burke-Litwin tool determines that Coca-Cola is well-positioned for change implementation (Yakimova et al., 1572). Coca-Cola has a diverse “steering team” that can help the company transition from top to bottom and all different perspectives are represented. The steering team can also provide diverse feedback because many eyes can look in different directions, giving a more balanced view of the change process as proposed by the McKinsey 7-S Change Management Model (Yakimova et al. 1572).
With subsidiaries in over 200 countries, Coca-Cola is one of the world’s most successful enterprises. The company’s strategic approach to HR and personnel management is considered one of the main reasons contributing to the company’s overall success. Even though many of these HR practices have been resourceful for many years, the company needs to address and change a few to match up to current change management theories. One of the practices involves remodeling the recruitment process to adapt to existing practices that rely on innovation and technology. The others are instilling an organizational culture of self-awareness or introspection and using HR as a strategic and independent organizational component.
To facilitate change adoption, Coca-Cola’s HR management should consider the social aspects of people, such as their behavior and possible reactions, and accordingly align them with technical bits of the organization. Therefore, Burke-Litwin and McKinsey’s Seven-S diagnostic tools should be used to determine whether the company is ready for change or not. The company can effectively use the Burke-Litwin diagnostic tool to anticipate new developments, such as innovations and technology, required for organizational change.
“The Coca-Cola Company Human Resources.” Comparably. Web.
Grgić, Jana. Coca-Cola internationalization strategies. Diss. University of Zagreb. Faculty of Economics and Business. Department of International Economics, 2020.
Yakimova, Z. V., N. A. Tsareva, and A. A. Vlasenko. “Value personnel management: diagnostic tools and development mechanisms.” The Turkish Online Journal of Design, Art and Communication TOJDAC December (2017): 1571-1572.