Corporate Culture: A case stud of Coca-Cola

Submitted to: Mr. Abhi Subedi Organizatinal Behavior Kathmandu University School of Management Submitted by: Student Code: 8117

April 18, 2012

Introduction: Corporate culture now a days have become an important topics in academic world as well as business world. Corporate culture although being intangible assets for any business has become an important component for organizational success as well as an important component for an employee performance. There are a lot of factors which affects the performance of the organization, but corporate culture makes an organization distinct from the others in the market and helps the organization to create a competitive advantage over others. Corporate culture have different role to play in an organization and its affect over the performance of the employee and the organization is different in different countries and situation also varies which, here we will try to overview in the context of Coca-Cola a multinational organization. In this paper we will try to find out the culture preached by Coca-Cola, what is the impact of the culture that Coca-Cola follows over its performance and the performance of its employees, how the culture followed by Coca-Cola differs in different countries and if needed, how it can be changed. Corporate Culture: In an anthropological term, culture refers to the underlying values, beliefs and codes of practice that makes a community what it is. Culture is the thing that defines the customs of society, image of its members and makes societies distinct from one another. Culture is much subjective matter and reflects the meanings and understandings that we typically attribute to situations, the solutions that we apply to common problems. Organizations are only one constituent element of society. People enter them from the surrounding community and bring their culture with them. It is still possible for organizations to have cultures of their own as they possess the

paradoxical quality of being both part of and apart from society. Corporate culture has been there in the organization from the beginning however, it has become an important topic in the organization world and business from the last two decades. The Rites and Rituals of Corporate Life (Deal and Kennedy, 1982) popularized the notion of understanding, establishing, and fostering a positive corporate culture. Organizational culture comprises of an organization's assumptions and experience, its values which hold it as a unit in the past and in the present that it possess. Organizational culture can be accessed on the image of the organization, its internal procedure and of course in its in interactions with the outside world, and its future strategy. Organizational culture is based on the organizations beliefs, customs, express or implied contracts, and written and unwritten rules that the organization develops over time. Corporate culture, manifests in the ways the organization conducts its business, treats its employees, customers, and the wider community, the extent to which autonomy and freedom is allowed in decision making, developing new ideas, and personal expression, how power and information flow through its hierarchy, and the strength of employee commitment towards collective objectives. Organizational culture provides guidelines on customer care and service; product quality and safety; attendance and punctuality. Development and creation of effective culture Creation of effective culture has played a role in formulating organizational goals, mission, plans and creating future plans. It studies individual group behavior and patterns of structure in order to improve performance and effectiveness (L.J, Muffins 2010, Management and Organizational behavior, pg. 5)

In Coca-Cola, there is high rank of unique culture and that is clearly reflected in what they do and how they do. There is infinite number of combination in creating unique culture of this company (http://en.coca-colahellenic.hr/Careers/Organizationalcultur/). They have developed their effective culture with their own values norms and believe. The technical and analytical changes and development in the company have helped them to create a unique organizational culture. Similarly, constant growth in nature and behavior of organizational dimension and also team work has helped to strengthen their culture. Leadership is the most important factor in creating and developing the organizational culture in the company and in Coca- Cola the leaders has always led from the front. Effective leaders are those persons who can manage employee to bind inside the organizational environment and define a vision for the achievement of organizational goal which, is implanted in the brain of everyone in the organization. Likewise for an effective culture there should also be process and techniques to maintain the effective culture and Coca-Cola have set effective and smooth processes, techniques. Organizational Culture and Coca-Cola: The Coca-Cola made by Pharmacist John Pemberton Atlanta, GA in 1886. At the first time John Pemberton only sold nine glasses of Coca-Cola, but now the Coca-Cola Company can sell so many Cola every day. The company is very successful multinational organization having its presence in almost every country. The company is built around two core assets, its brand and its people. The perfection organization culture is the important part of the Coca-Cola Company success. First, the Coca-Cola Company has very strong market culture. They have very good product Coca-Cola to sale. Coca-Cola touches the lives of millions of people each and every day. Second,

the Coca-Cola Company has a nice team culture. The companys treat its employee as its asset and the company believes that work in the Coca-Cola is more than a place that people go every day. It should be a place of exploration, innovation, development and interpersonal relationships. All peoples talents, skills, knowledge, experience combined together that make the company who they are. As a result, the Coca-Cola Company culture is more and more merging. The company opens for the employees to sharing ideas across departments and markets in new ways. Their employees are increasingly enthusiastic about their work and inspired to turn plans into action. The Coca-Cola Company realizes that it should be able to meet the ever changing demands of its customers. This is why the company pushed towards decentralization in the nineties, and even more so recently. The organization has two operating groups called Bottling Investments and Corporate. There are also operating groups divided by different regions such as: Africa, Eurasia, European Union, Latin America, North America, and Pacific. Each of these divisions is again divided into geographic regions. By allowing decisions to be made on a more local level, the organization can quickly respond to changing market demands, and higher-level management can focus more on long-term planning. The Coca-Cola Companys business-level strategy is one of differentiation. This is evident in the previous example of consumers preferring identical beverages just because the Coke brand name was attached. They have been successful pursuing differentiation because the focus of the company has always been on marketing.

Good and Bad images of Coco-Cola in Corporate Culture Coca-Cola has managed to create a strong organizational culture successfully, and imprinted its mark on the minds of its consumers all over the world. It is not only a part of the culture, but has created culture from the vision of innovation, entrepreneurship, and respect for the diversity (Jones 2009, p. 36). For example Coco-Cola has already launch new product like CokeZero, it is the best results of innovation and entrepreneurship because it has given the opportunities and initiates to bring about changes and also allowed to introduce of new things and method. It is successful due to respect towards the diversity as well. Coco-Cola has dominant culture which expresses core values that are shared by a majority of the organization member, So that it is successful in the world. In another hand, there is always an argument between strong versus weak cultures (Robbins et al.2008, p579), because in weak culture there is lack of core values and not intensely held and shared. Some countries like Nepal, Coco-Cola is still not success to bring 100% change in corporate culture. For example employees go on strike for their pay rise and social securities and also customer complain about their bottles because top parts of bottles are usually dirty. I am a great admirer of The Coca-Cola Co. I own stock in the company and have no plans to sell it, having said that, I am not surprised that Coca-Cola finds itself in deep trouble in Europe. It has to do with the company's culture. If you think about it, Coca-Cola sells sugared water. That's all, just sugared water, yet it has managed to do it so skill fully for so long that it has taken on an almost mystical aura, even to its employees(Richard, p 257). So this statement also proves that in some countries Coca-Cola still missing the meaning of Corporate Culture.

Changes in Corporate Culture: Positive/strong culture can play a significant role in the organizational success while negative/weak one can lead to failure. While it is easy to define a desirable corporate culture during a companys infancy, it has been established in practice that culture can be changed for the better. In order to change the corporate culture, top management of the organization must first understand what is the current culture is, and can be done by interaction with the employees about their understanding of organizational perception, values and missions and also by interaction with the customers regarding their perception about the quality of service provided by the organization, attitude of the employees towards them etc. This will help management to understand the type of culture that exists and to identify areas for change, if any. In case of Coca-Cola the management at every country should first try to analyse the facts in their country and try to understand what type of culture is best suited to the organization and accordingly decide which culture to accept and which to leave behind. Once the existing current culture is identified and understood, management must decide how the culture should be changed in order to improve the performance of the employees and at the end the performance of the organization. For a culture to be effective, it should be consistent with the business environment in which the organization operates (Goffee and Jones, 1996). For example, high technology firms tend to operate better using a culture that encourages sharing of information (to support research and development) and that responds quickly to external events. Management should decide to make the cultural change by being sure which behavior, values that they wish to encourage, and then reinforce the desired culture

by taking steps such as developing visionary statements and/or slogans, celebrating employees successes or promotions, through circulars and videos that reinforce the culture. Conclusion: Corporate culture has become a very popular topic in the business now days. A positive culture should be established during a companys infancy which, should be reviewed on periodic basis and if required should be changed. In todays competitive business environment has made a positive corporate culture a critical aspect of success for firms. No longer just a competitive advantage, it has become a prerequisite for success, allowing companies to attract and retain top employees. The organizations of all sizes should assess and categorize their corporate cultures, considering the impact of that culture on employee productivity and morale. CocaCola at different country of its presence have different type of culture however, the core values and missing of Coca-Cola remains the same at every country which make them unique from other organization. Diversification culture and team culture is the most preached culture at Coca-Cola. However, there are issues with other culture being practiced in different countries and even in some country the culture is still at infant level. Where the culture is serving to lower morale, the management should take proactive steps to change the corporate culture using a top-down approach, establishing a new vision and demonstrating new behavior consistent with the revised vision. In conclusion, companies should shape their corporate culture to their advantage in improving both their employees experience of the workplace and, in turn, improving their own profitability.

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