Organizational Structure: Coca-Cola Company
Write a 1,050- to 1,400-word paper in which you select an organization with which you are familiar and present the following items as they relate to that organization:
•Describe the organizational structure of your selected organization. Compare and contrast that structure with two different organizational structures.
•Evaluate how organizational functions (such as marketing, finance, human resources, and operations) influence and determine the organizational structure of your selected organization.
•Explain how organizational design (such as geographic, functional, customer-based, product, service, hybrid, matrix, marketing channels, and departmentalization) helps determine which structure best suits your selected organization’s needs.
Format your paper consistent with APA guidelines.
Organizational Structure: Coca-Cola Company
An organizational structure describes how activities are coordinated, allocated and supervised so as to achieve the goals and objectives of an organization. The structure defines how an organization exercises authority through allocation of management responsibilities. By so doing, the organization benefits in two major ways. First, the structure helps in setting a standard procedure that guides operations and routines. Second, it determines how each and every employee participates in the decision making process and how their views help in shaping the organization. Nonetheless, Amaral and Uzzi, (2007) notes that organizational structures are varied between different organizations depending on several factors. The organizational functions; finance, marketing, operations and human resource are likely to influence the organizational structure while also organizational design, for instance functional, product, geographic, customer-based, hybrid, service, matrix, departmentalization and marketing channel impact on the determination of a structure that best suits the needs of these organization.
The practicality of these assertions is made evident with the selection of Coca-Cola Company. This company operates as a multi-national dealing in the manufacture, marketing and distribution of non-alcoholic beverages. The company sustains a large supply chain spanning 200 countries while serving more than 1.6 billion customer every day (Stevenson, 2009). The board of directors are based at headquarter in Atlanta, Georgia. The organizational structure for Coca-Cola is designed in such a way so as to suit the changing needs of the customers. It uses a decentralized system of management, which divided into two operating groups; the Bottling Corporate and Bottling Investment. The operating groups are further divided to match the different regions within which the company operates. These regions include; Africa, Eurasia, Latin America, European Union, the Pacific and North America. These regions are again divided into geographic regions so as to allow for localized decision making. The adoption of the decentralized organizational structure gives mandate to the local managers as well as the regional managers to make decisions on behalf of the overall managers based at the headquarter (Borgatti & Foster, 2013). This process facilitates decision making because these regional and local managers can make decisions with urgency so as to match up to the changes in the market demands. On the other hand, the higher-level management based at the headquarter get the time to focus on long term planning for the organization while simultaneously reviewing the decisions made by the local and regional managers.
Within the regional offices are corporate divisions such as human resources, finance, innovation, research and development, strategy and planning and marketing departments. The managers of these departments are given powers to operate autonomously. Their decision making is guided by the vision and mission of the company thus their decisions, in spite of their being made at a local level, have to be in line with those made by the top hierarchy. An example is exhibited when the corporate management based at the headquarters made the decision to sponsor the 2002 World Cup (Stevenson, 2009). Inclusion was practiced when the company allowed the regional managers to manage the advertisement decisions for their local divisions. By so doing, the regional managers designed marketing and promotional campaigns that were appealing to their local audiences and customers. It is also notable that when the organization is faced by a problem such as low growth rate, the top management at headquarter is involved in seeking a long standing solution. Their decisions are often guided by reports made by the local managers who meet in face to face meetings with the local employees and discuss on the possible solutions. By so doing, Coca-Cola Company portrays itself as a company that is more customer oriented.
The company also has an intranet system that facilitates real time communication between the managers thus facilitating sharing of information across the organizational structure. By so doing, Coca-Cola Company has managed to balance between mutual adjustments and standardization of the workforce. Additionally, the actions of the employees are guided by the Code of Conduct, which gives employees flexibility while retaining their focus to the common organizational goal. From these illustrations, it is evident that Coca-Cola Company employs the use of a hybrid organizational structure that combines both organic and mechanic models. The hybrid system allows for the flow of information from bottom-up and laterally between the employees. (Stevenson, 2009) On the other hand, decentralization and standardization are components of a mechanistic structure. The blending of these two is important considering the large customer base as well as providing coordination among the 94,800 employees.
The hybrid organizational structure employed at Coca-Cola Company can be contrasted with two different organizational structure. These two structures are functional and divisional structures which are applied in different companies based on the desired outcome. To begin with the functional organizational structure, it mainly consist of task allocation, supervision and coordination activities and it organizes people according to their functions (Lim & Sambrook, 2010). The structure is suited towards coordinating production, accounting, human resource and marketing functions. Functional structures often lead to operational efficiently as employees are made to specialize on functions they are best suited. Coca-Cola Company cannot implement this structure because it provides a rigid communication channel, which slows down decision making. This structure is best suited to small organizations that produce standardized goods. Comparing the structural organization structure to the hybrid structure used at Coca-Cola shows that a combination of organic and mechanic structure could be better suited towards managing multi-national organizations because of the increased communication between the various departments, the employees and the top-most management. In contrast, whereas functional structure could result into disagreements for large organizations, it could be enhance coordination of employees when applied to small firms.
The second organizational structure that will be compared and contrasted against the hybrid structure used at Coca-Cola Company is the matrix organizational structure (Burt, 2012). This structure divides the employees based on the products of the firm as well as their functions. A matrix structure combines teams of employees rather than individuals as seen in the functional structure. By so doing, the organization takes advantage of group work and exploits their strengths while making up for their individual weaknesses that are common among functional and decentralized structures. The matrix structure provides a pure organizational structure that ensures control while at the same time regulating the activities of the employees (Jacobides, 2007). It is best applied at Google organization where the employees work together in developing new computer programs. The system is therefore suited to the service industry but it could be perfectly applied to Coca-Cola Company. It is recommended that a multi-divisional structure would be best suited when applied to Coca-Cola Company as it would increase coordination between the divisional level and corporate level managers and this will enhance decision making.
Apparently, organizational functions such as production, accounting, human resource and marketing functions are seen to influence the selection of the hybrid organizational structure applied to the Coca-Cola Company. More so, this is seen in the decision to create five hierarchical levels to suit the diverse needs of the managers at the corporate level (Cogliser & Schriesheim, 2010). It is because of the rising need to coordinate the functions between these organizational functions that Coca-Cola Company is striving to adhere to the hybrid structure which combines both mechanistic and organic structures. By so doing, the company enjoys the advantages organic and mechanistic structures thus reducing on the disadvantages that could result from sticking to either the mechanistic or organic structures. As a result, Coca-Cola has realized an increase in their sales and revenues while the employees have remained motivated and satisfied. Furthermore, the example of Coca-Cola presents evidence that the organizational design is varied depending on the functions, geographic coverage, customer base, type of product or service, marketing channels and departmentalization. These factors influence the needs of the employees, the management and the customers thus creating a need to implement an organizational structure that promotes inclusiveness so as to increase the chances of success.
Specifically, Coca-Cola Company appreciates that a divisional structure will give the organization a chance to operate in uncertain global environment. Dividing the global market into regions allows the company to meet the diverse needs of its customers (Dansereau, Graen & Haga, 2010). For example, the marketing campaigns need to be localized to suit specific geographic locations. Again, the decentralization of the organization structure allows for the proper functioning of the corporate ad regional/local managers as they can focus on specific organizational functions. From these illustrations, it is made apt that organizational design is influence by either geographic, functional, customer-based, product, service, hybrid, matrix, marketing channels or departmentalization factors.
Amaral, L. & Uzzi, B. (2007). Complex Systems—A new paradigm for the integrative study of management, physical, and technological systems. Management Science Journal, 53 (7), 1033–1035.
Borgatti, S. & Foster, P. (2013). The network paradigm in organizational research: A review and typology. Journal of Management, 29 (1), 991-1013.
Burt, R. (2012). Structural holes: The social structure of competition. Cambridge, MA: Harvard University Press.
Cogliser, C. & Schriesheim, C. (2010). Exploring work unit context and leader-member exchange. A multi-level perspective. Journal of Organizational Behavior, 21 (2), 487-511
Dansereau, F., Graen, G., & Haga, W. (2010). A vertical dyad linkage approach to leadership in formal organizations. Organizational Behavior and Human Performance Journal, 13 (1), 46-78.
Jacobides, M. (2007). The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war. Organization Science Journal, 18 (3), 455-477.
Lim, M. & Sambrook, S. (2010). Organizational structure for the twenty-first century. Presented the annual meeting of The Institute for Operations Research and The Management Sciences, Austin.
Stevenson, W. (2009). Production operations management. Boston: Irwin Press.
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