The Coca Cola Company is undoubtedly the world’s largest beverage company as well as leading marketer and producer of soft drinks. It is the world’s largest manufacturer and distributor of syrups and soft drinks. The company was founded on May 8 in the year 1886 and some of the key products of company may include caffeine free coca cola, diet coke, Coca Cola cherry, Coca Cola zero, Coca Cola vanilla and many more. It has become the well established soft drink player for millions of new and existing customers across the globe.
The brand image of the company is widely known and recognized across the world and it makes sure to expand its business operations in a timely manner to get a great market share. The company has made its entry in different countries through the medium of franchising, mergers and acquisitions. Apart from this, it makes sure to maintain its quality to provide the best products to its customers. For this purpose, samples are taken regularly for the purpose of chemical analysis and the employees of company make frequent spot checks to make sure that all its plants are maintaining the company’s standards to ensure the best quality.
Franchising is an amazing form of business that a company chooses to gain maximum market share. Basically, it is a network of interdependent business relationships that allows individuals to share brand identification, marketing system as well as a successful method of doing business. Some of the basic HR implications that need to be followed in franchising may include workplace safety, performance management, proper training, minimum wage system, hiring the right kind of employees and many more. Coca Cola is a franchised product distribution system as the company licenses its franchisees to sell and distribute the end product by using the trademark, trade name and logo of franchisor. The company is highly responsible for consumer marketing activities as an effective franchisor and owner of the product (Feloni, 2015).
The company makes sure to follow all the suitable HR implications of franchising its products in which recruit and export is a part of its franchising strategy. The company aims to attain the best kind of workforce so that it may not have to compromise with the quality of work. To ensure the same in its franchising activities, the company hires nearly 25 interns from top B schools for the period of 8 weeks. They make sure to do the scrutiny before selecting the interns and test them in dynamic working conditions. The company aims to know the guy before hiring them and this is the main reason that it does not go for campus placements. After the recruitment, the franchise company provides equal work rights to all its employees to maintain peace and harmony (The Coca Cola Company, 2016).
Mergers and Acquisitions is an important term in which merger refers to the amalgamation of two companies and their assets where as acquisition is the purchase of one company by another company and no new company is formed. HR plays an important role in M&A activities of companies as they make sure the creation of new policies to guide the newly formed organization (Street Insider, 2015). They determine the needs and downsizing of employees and retention of key employees to improve the production capacity of company.
The company has a great history of acquisitions as initially, it acquired Minute Maid in the year 1960 and then, it acquired Indian cola brand named “Thumps Up” in the year 1993 and the list is a way long. Here, the major challenge was to follow HR implications in an appropriate manner (Aguilera and Dencker, 2004). For instance, when the company acquired Innocent Drinks in 2013 then, it made sure that it retain its unique culture and ensure effective staff engagement to please customers as well as employees. The basic workplace policy of Coca Cola is to embrace healthy living and encourage employees to participate in benefit offerings by the company. Also, employee communication is always welcomed in the company as HR makes sure to create an environment in which employees feel safe to share their perception and thoughts (Mok, Dai and Yeung, 2002).
It is so true that Coca Cola is a global company and doing well in more than 200 companies with an effective global strategy and a local response with the help of IR framework tool. Some of the international developmental strategies of Coca Cola in India and Europe may include:
The company entered the Indian market by acquisition with local soft drinks brands as Indian market is contemplated as one of the major developing economies across the globe. In India, the company adopted multi local strategy approach to win the hearts of Indian customers (Street Insider, 2015). Apart from this, the company implemented the global strategy of manufacturing diverse and unique products as per the culture of India. For example, the population of India prefers sweeter coke and so, it launched sweeter coke to please them with an ease.
The company knew that the preferences of Indian customers could be known by Indian employees and therefore, the HR of company has always made sure to maintain harmony with employees so that they can be satisfied in their job profiles. The HR gives following benefits to its employees in India and they may include bonus, medical facility, social security and gratuity fund (Amos, et al., 2009).
Coca Cola entered the Chinese market in the year 1928 and it faced a major hurdle in linguistics in the country that impacted the brand identity, meaning and pronunciation. To overcome this issue, the company adopted localization strategy for long term business objective in the global market. The HR of company allowed employee engagement to make employees know the preferences of Chinese customers. It was found that Chinese individuals are fond of tea and the company made product strategy for Chinese marketing to sale Nestea ice rush lemon tea and made a new product for the sake of Chinese customers named “Smart” in order to enhance its marketing competitions (Griffin, 2007).
a) International reward management is important to encourage employees to work in a manner that can enhance firm’s profit with an ease. In this regard, the company uses expatriates as its agents to build and increase the network between the host and home branches. The main objective of an expatriate is to increase the representation of the country in the host country and he is encouraged to perform his duty in a better manner by allowing him some benefits and compensation packages. For instance, the going rate approach is the easiest form to understand which make the compensation package parallel to the host country (Daniels, 2000). Under this approach, the base salary is associated to the salary structure of the home country. In context to this, Coca Cola has a policy to pay the expatriate’s income tax in the host country while it has a reciprocal tax treaty with the expatriate’s home country.
In addition to this, the company makes sure that its expatriates receive the exact level of medical and pension benefits in the host country. Apart from this, health care is another major aspect in regard to compensation benefits and the rewards system of company for its employees is extremely efficient and motivating that encourages its employees to attain organizational goals. The company makes use of self assessment tools with the main aim to assess themselves on the top and foremost accomplishments (Aguilera and Dencker, 2004).
It is so true that effective compensation of expatriates is considered as an important component in the effectiveness of global operations. In coca cola, expatriates are paid according to the US benchmarks and the company makes sure that its expatriates move effectively from one international assignment to the other so that they can maintain strong connections with the company (Mok, Dai and Yeung, 2002).
Basically, the company does not prefer external recruitment as they use to maintain a talent bank to meet internal hiring needs. In the modern business era, most of the multinational companies compensate their expatriates based on home or a host country paradigm but Coca Cola is one of those companies that prefer a regional base salary so that its expatriates may work without the feeling of inferiority. In this manner, the company makes sure to enhance the working efficiency of its employees working overseas so that they may not encounter any kind of trouble while completing their responsibilities at their workplace (Daxue Consulting, N.D.).
In India, the company’s reward management is excellent as they are using different motivational aspects like Maslow’s hierarchy of needs, two factor theories of Herzberg, ERG theory and many more to motivate its employees to perform in a better manner. Some of the significant parameters that are used as a base of reward system may include inflation rate factor, sales rewards and personal development of individuals. The company also makes sure to provide safe work environment and proper training practices to make its employees to perform in a well behaved manner.
The HR of company believes that a company can perform in a better manner to get desired results if it has loyal staff and loyalty of staff can be maintained by rewarding them to encourage them to perform efficiently. In this regard, some of the key efforts that are taken by company to encourage its employees may include grade jump, special assignments, designation change, training, development and career grooming. On the other hand, Coca Cola is utilizing a grade based reward system in India and it values the health and well being of its employees to make them feel as an important part of an organization (Hill and Jones, 2009).
Coco cola Great Britain is one of the country’s largest coco cola bottler that makes sure to treat its employees well and give them a healthy and rewarding working life (Roll, 2005). The company makes sure to develop motivated and committed employees by providing training and development programmers such as on the job training, coaching, feedback so that employees feel highly motivated. In Great Britain, the company aims to provide inclusive working environment in which each and every employee is treated fairly with better organizational capabilities.
It is evident that employees from different cultural backgrounds work under the same roof and this is the main reason that the company respects and values the diversity of its employees to win their heart and trust (Anders, 2013). Therefore, the coca cola, Britain has adopted employment practices and policies to protect its employees against discrimination practices and ensure fair treatment and equal opportunities to all its employees regardless of age, sex, or different cultural background. The company considers the following elements like pension, healthcare and additional holiday while rewarding the employees to motivate them to work more effectively (Stahl, Björkman and Morris, 2012).
Conclusion and Recommendations
From the above discussion, it can be concluded that Coca Cola is a great brand that is working honestly wide range of products across different parts of the world. The company is conducting its business operations prudently in different areas of the globe. HR practices of company are one of its most significant strengths that help him to cross several major hurdles. It has been depicted in the above report that the company implements regional specific HR practices by utilizing numerous practices at home country and them adopt them to host locations to please its employees. It has been determined that how prudently coco cola has used franchising and M&A to conduct its business operations in different countries successfully.
It is recommended to the company that it should try to resolve its linguistic problem in china as early as possible so that Chinese customers can be served better products and services with an ease. For this, it should enhance its marketing activities in china to get a great market share (Harzing and Ruysseveldt, 2004).
The company has been facing neck to neck competition from its competitors and hence, it should focus on the implementation of effective strategies to compete effectively with its competitors (Shena, et al., 2009).
References
Aguilera, R.V. and Dencker, J.C. 2004. ‘The role of human resource management in cross-border mergers and acquisitions’ Int. J. of Human Resource Management, 15 (8), pp. 1355–1370.
Amos, T., Ristow, A., Pearse, N.J. and Ristow, L. 2009. Human Resource Management. South Africa: Juta and Company Ltd.
Anders, J. 2013. Coca-Cola’s Marketing Strategy: An Analysis of Price, Product and Communication. GRIN Verlag.
Crawley, E., Swailes, S. and Walsh, D. 2013. Introduction to International Human Resource Management. UK: OUP Oxford.
Daniels, J.D. 2000. Global Business: Environments and Strategies : Managing for Global Competitive Advantage. Oxford University Press.
Daxue Consulting. N.d. Coca-Cola in China, development and competition with Pepsi. [Online]. Available at: https://daxueconsulting.com/coca-cola-in-china-development-and-competition-with-pepsi/ [Accessed on: 13 March 2017].
Feloni, R. 2015. ‘Coca-Cola isn’t one giant corporation – it’s a system of more than 250 companies’ Business Insider. [Online]. Available at: https://www.businessinsider.in/Coca-Cola-isnt-one-giant-corporation-its-a-system-of-more-than-250-companies/articleshow/47775569.cms [Accessed on: 13 March 2017].
Griffin, R. 2007. Fundamentals of Management. Cengage Learning.
Harzing, A. and Ruysseveldt, J.V. 2004. International Human Resource Management. USA: SAGE.
Hill, C. and Jones, G. 2009. Strategic Management Theory: An Integrated Approach. Cengage Learning.
Mok, V., Dai, X. and Yeung, G. 2002. ‘An internalization approach to joint ventures: the case of Coca-Cola in China’ Asia Pacific Business Review, 9 (1). pp. 39-58.
Roll, M. 2005. Asian Brand Strategy: How Asia Builds Strong Brands. Springer.
Shena, J., Chandaa, A., D’Nettob, B. and Mongaa, M. 2009. Managing diversity through human resource management: an international perspective and conceptual framework. The International Journal of Human Resource Management, 20 (2), pp. 235–251.
Stahl, G.K., Björkman, I. and Morris, S. 2012. Handbook of Research in International Human Resource Management. USA: Edward Elgar Publishing.
Street Insider. 2015. Coca-Cola Enterprises (CCE) Enters Merger Agreement with Two European Bottlers (KO). [Online]. Available at: https://www.streetinsider.com/Corporate+News/Coca-Cola+Enterprises+(CCE)+Enters+Merger+Agreement+with+Two+European+Bottlers+(KO)/10787314.htm [Accessed on: 13 March 2017].
The Coca Cola Company. 2016. ‘The Coca-Cola Company Announces Plans to Significantly Accelerate Bottler Refranchising’ [Online]. Available at: https://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-announces-plans-to-significantly-accelerate-bottler-refranchising [Accessed on: 13 March 2017].
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