Modern organizations operate in a highly dynamic and competitive environment. The main asset that determines their long-term competitive positions is the effectiveness of their HR strategy as the human capital affects an organization’s ability to implement timely and needed reforms. The paper develops a proposal for changes that should be implemented in the Coca-Cola Company to maintain and strengthen its competitive positions in the global market. Kotter’s 8 Stage Process of Creating Change will be used as a framework for realizing the optimal HR strategy. Moreover, the suggestions for putting the initiative into practice will be formulated. The Coca-Cola Company should adopt a decentralized approach to its HR policies and be more oriented to the local needs of customers in all countries of its operations.
The Coca-Cola Company is one of the most successful American multinational corporations. It is the global leader in the beverage industry. The number of system employees is around 700,000 people (Coca-Cola Company, 2015). The total revenue exceeds 46 billion per year. The company has a long history in the business, as it was established in 1886; Coca-Cola enjoys a steady growth since the conception. It serves the needs of 1.9 billion people on a regular basis (Coca-Cola Company, 2015).
The Proposed Change
Although the company has strong HR positions (it is ranked among top 10 private employers in the world), further improvements are possible (Coca-Cola Company, 2015). In particular, the company should organize its HR functions in a decentralized way. The structure of staff should correspond to that of consumer needs (Friedman, 2009). The proposed change is important for the following three major reasons. First, as the prices for the Coca-Cola Company’s products are comparatively high, consumers will be willing to purchase the goods only if their quality is excellent. As the perception of quality is different in various countries, the company should adjust to the diversity. Second, the highly centralized HR policies are inflexible and inefficient in the modern business world. Third, modern technologies allow implementing effective decentralized HR strategies without additional expenses and costs.
The recommended change can be as follows. The company’s top management should be responsible for determining the basic principles of organization and the correspondence of HR policies to the overall organizational strategy (Friedman, 2009). The largest fraction of HR functions should be delegated to lower levels. Each region’s HR specialists should define the local consumer needs and determining the needed structure of the workforce. Then, the recruiting should be organized accordingly. Moreover, all changes in consumer needs should be reviewed and the structure and qualification of the personnel to be adjusted accordingly.
Stages of Change
The following strategy addresses eight stages of change by Kotter. First, a sense of urgency should be created. All departments and employees should understand that the future development of the Coca-Cola Company is impossible without change (Friedman, 2009). The consideration of opportunities and threats may be helpful in the context. On the one hand, the company may strengthen its dominance in all global markets and further increase its capitalization (Ying-Chang, Wen, & Ying, 2011). On the other hand, the competitors, including small ones, can offer new products at lower prices. If their HR strategies are also more flexible, the competitive positions of the Coca-Cola Company may weaken. Second, a powerful coalition should be formed. The company should identify the leaders who share its vision and may implement the necessary reforms in the most effective way. The recommendation is to verify the level of emotional commitment among the company’s key leaders and allocate responsibilities.
Third, the company’s vision for change should be created. It is to include the general understanding of the need for decentralization as well as the obligation of the top management not to intervene in the process of decision-making. Their major responsibility is controlling that implementing HR strategies do not contradict the company’s organizational values (Galpin, Whitttington, & Bell, 2015). Fourth, the vision should be communicated to HR specialists at all organizational levels (Friedman, 2009). Moreover, the concerns should be timely and properly addressed. The contradictions between different HR departments at different levels should be resolved through assigning corresponding functions and responsibilities.
Fifth, the organization should remove existing obstacles. The stage is highly important because the operations of the Coca-Cola Company are associated with numerous internal and external challenges. The internal obstacles include the resistance that some HR specialists and employees may demonstrate. It is reasonable to specify the source of the problem and address it; no concerns should be neglected (Niros & Pollalis, 2012). The external obstacles may include the competitors’ strategies as they are not interested in effective HR changes within the Coca-Cola Company. Therefore, the development of effective price and non-price response strategies is a crucial step. Sixth, it is necessary to achieve short-term wins. They are important for maintaining the employees’ motivation at the highest possible level. The victories may include the positive dynamics of sales after decentralization. The most successful managers should receive remuneration proportionally.
Seventh, it is important to build the change. The initial positive results should not be confused with the long-term success and sustainable development. It is necessary to evaluate strengths and weaknesses of the implemented steps. All organization’s members should aim at continuous improvement as it is the only way of maintaining the Coca-Cola Company’s leading positions. Eighth, changes should become the crucial part of the company’s corporate culture. The employees should comprehend that business modifications can be predicted in any segment of the beverage industry. Moreover, the changes are different in various countries. Therefore, the function of HR specialists is to identify the basic consumer value and determine the structure of personnel that is potentially effective (Friedman, 2009). If all the aforementioned stages are implemented properly, the Coca-Cola Company may achieve the long-term sustainability.
Resistance to Change
For the effective implementation of change, it is reasonable to identify the major sources of potential resistance. Some HR specialists, especially from the developing countries, may be unwilling to take responsibility for introducing new HR strategies at the local level. As they have the experience of fulfilling the strategies developed at higher levels, they may not desire to change the traditional framework (Sahoo, Das, & Sundaray, 2011). The Coca-Cola Company should manage the problem in the following way. The HR specialists’ should specify their concerns. For example, they may resist change because they believe that it will negatively affect their earnings, or they may believe that their qualification is inadequate for making independent decisions. In the first case, the company should develop the system of bonuses that will ensure employees that their productive efforts will be remunerated. In the second case, additional trainings and courses should be proposed (Barkay, 2012). In any case, the company should create environment for responsible decisions.
The following three major communication strategies may be used to ensure success of change. First, communication should demonstrate that all HR policies are consistent with the company’s overall vision as well as PR initiatives (Niros & Pollalis, 2012). As a result, the Coca-Cola Company may effectively communicate with its departments all over the world as well as with almost 2 billion consumers. Second, communication should encourage competition both with other companies and between the Coca-Cola Company’s departments (Ying-Chang, Wen, & Ying, 2011). The fair competition is the optimal environment for implementing change. Third, it is reasonable to implement the supporting communication strategy to provide the psychological support for various specialists, especially during the transformation period. The discussed communication strategies may be used simultaneously.
In order to identify specific changes that should be made, the following two diagnostic tools can be used. The first one is the dynamics of sales, revenues, and market share. If the ratio in a given department is worse compared to the parameters of the key competitors, then changes are necessary. The second tool is the dynamics of the company’s market reputation. Corresponding marketing research may be used for the purpose. Moreover, sustaining the change may be achieved with the help of the following two strategies. First, the most innovative employees should enjoy better career opportunities in the company. Second, changes should become the basic element of the corporate strategy (Galpin, Whitttington, & Bell, 2015). Therefore, all initiatives will be evaluated from the perspective of change and development.
It may be concluded that the Coca-Cola Company operates in a highly competitive environment. It demonstrates effectiveness of HR operations and is considered among the best employers worldwide. However, the company relies on a comparatively centralized HR strategy. As a result, the organization’s personnel cannot completely concentrate on the local needs of customers. The proposed changes refer to a higher decentralization with delegating the major responsibilities to lower levels of management. Thus, the top management determines the major corporate values while the HR specialists at lower levels should make all tactical decisions.
The change requires addressing a number of important issues. In particular, the potential resistance should be managed. Employees are to understand that any change constitutes both opportunities and threats. However, it is impossible to maintain the leading positions without relying on innovative strategies. The optimal way for implementing change is addressing consumer needs in a decentralized way. It is especially important for large corporations such as the Coca-Cola Company. The developed communication strategy may allow balancing the interests of all groups and contributing to the long-term sustainability.