Factors responsible for the change in coca cola company Change Management in Coca-Cola Corporation Change is significant, prolonged and disruptive In this attribute, change in an organization includes venturing into new areas of business, such as entering new products in the new market, facing an unexpected event such as economic crisis and redirection of the company. Change is a continuous process of alignment According to (), an aligned organisation must have a continuous synchronization of the important management levers such as strategy, operation, culture and reward.
Moreover, discussed that in these management levers, the managers, chief executive officers and supervisors are responsible for manipulating and rearranging both the human and non-human elements. In addition, discussed that change is an important aspect in the business world especially in technology and innovation, from simple technologies and procedures up to more complex operating environments, nowadays technologies and products are coming together to achieve a common conclusion or objective. Organisations that resist changes will inevitably face wider exposure to risks and losses.
There are a number of situations in which change is necessary within the organisation such as technological advancement that is being utilised by different companies in order to cope up with the competition. Aside from what was mentioned earlier, there are still many issues and concerns that are necessary for change in the organisation, however the most substantial thing is that organisations acknowledge that changes happen constantly for different reasons and the management must address these changes as soon as possible to prevent great losses.
Why an organisation does undergo changes? What are the factors and reasons for undertaking it? According to MacCalman and Parton the most influential factor in changes in organisations is the external environment which instigates reaction. Some of the examples given by MacCalman and Parton in the external environment that triggers changes in the organisation are: •Changes in technology being utilised •Changes in the tastes and expectations of the consumers •Changes due to competition •Changes because of legislation by the government Changes due to modifications in the economy whether locally or internationally •Changes in the communications media •Changes in the value systems of the society •Changes in the supply chain •Changes in the distribution chain The second factor that initiates change in the organisation is the internal changes which are the reactions of the organisation to the external changes. Aside from the responses there are also some factors that contribute to the internal changes, an example of this is a new marketing strategy for existing and new products.
And finally, changes in organisation happen if they try to act in advance in order to deal with the expected risks and difficulty. An example is when an organisation anticipates the problems that may occur and creates and devises plans to combat and negate the impact of those problems. Change Management Nickols (2006) has four basic definitions of change management, according to him it is a task of managing changes, a field of professional practice, a body of knowledge and information and a control mechanism.
Task of Managing Change- Nickols defined managing changes as “the devising of transformation in a planned and systematic fashion. ” He stated that the main objective of managing change is to efficiently implement new techniques and methods within the organisation, moreover the changes to be handled depends upon the control of the organisation. Aside from the definition mentioned earlier, Nickols also has a second definition on managing changes and it is “the reactions to changes in which the organisation has no control. “ Area of Professional Practice- in what way professional practice came into managing changes?
Are there any relations between the two? Years ago, managing changes in a corporation is done by the management, supervisors, and CEO of the company, but nowadays with the constant change in the concepts of business and evolution of new theories a number of people have developed firms that particularly addresses the issues regarding managing changes. According to Nickols there are a number of individuals and consulting firms that declare they engaged in activities that involves planned change and that the firm exercises change management practices.
A Body of Knowledge- The body of knowledge in change management according to Nickols includes the following, models, methods and techniques, tools and various forms of knowledge that constructs the change management practice. Moreover, Nickols discussed that the content of change management is influence by sociology, psychology, business administration, industrial engineering, economics, systems engineering and human and organisational behaviour. Control Mechanism- over the past years groups and individuals handling the information systems of organisation have tried to control and direct changes to the applications and systems of the company.
External Environment- over the past decades, the Coca-Cola Company has faced a number of changes in the external environment that have transformed the management of the company. One of the best examples is during the World War II. The company was able to maintain the status of the company, at the same time, was able to enter new markets despite the environment. Instead of lying-low because of the war, the company became more aggressive through providing free drinks for the GIs during the World War II. Through this the corporation was able to hit two birds at one stone.
First, because the carbonated drinks sent by the company, it became a patriotic symbol by the United States soldiers in which led to consumer loyalty. Second, the company was able to take advantage of the situation and established the product in newly-occupied countries by the Ally forces and because of that the company established plants in various locations worldwide paving the way for its post-war expansion. Another aspect in the external environment is the change of taste and expectations of the consumers.
During the mid-1980s wherein the Americans favoured the sweet taste of the rival product, the company created its counterpart but became a commercial failure; however instead of backing down, Coca-Cola changed its management strategy and returned the old formula, and just renamed it as Coca-Cola Classic. And with the rise of obesity in the United States and consumers became health conscious the company released new versions of Coke in order to address the needs of these type of consumers, such products include Diet Coke and Coca-Cola Zero.
In addition, according to Bool (2007) companies such as Coca-Cola are compulsory to transform due to trends that have a huge impact on their business, and one of these trends is the health and fitness. A number of people are noe investing more in their health, and in order to keep up with the trend, Coca-Cola introduced their new product which is a calorie burning soft drink, the Enviga. Moreover, Coca-Cola is collaborating with the Swiss company Nestle. Coca-Cola is dealing with innovation and change. During the Asian Financial Crisis, Coca- Cola was also triggered to change its course of management in that particular region.
The responses and reactions of Coca-Cola with the external environment are its internal changes. Internal Changes- as mentioned earlier, Asia experienced its financial crisis in 1997. According to (2002) as the financial crisis swept the Asian region, the chief executive officer, responded to this by mobilising his executives to workshops about how Coca-Cola would seize new growth opportunities. stated that Coca-Cola gave emphasis on acquisition opportunities, Coca-Cola bought acquired bottling business in South Korea which gave more access in retail stores in South Korea, as well as, better entry in China, Japan and Malaysia.
Coca-Cola disregarded its country-defined market perspective and focused on regional strategic view and acquired local brands of tea and coffee. In the case of health trends and changing taste of the consumers, Coca-Cola responded to this through innovation and change. Innovation is accomplished through development of new products such as the Enviga, Diet Coke, Coca-Cola Zero, and other variants of Coke. The change is incited by the trend in health and fitness and consumer tastes which had an impact on the business of Coca-Cola.