Change Management in Coca Cola - Case Study Example

Running Head: Implementation of Strategic Change A Study of Change Management in Coca Cola Name Student ID Course Code: Date of Submission Introduction According to an ancient philosopher like Heraclitus from Greek, only change is permanent than any other thing. In fact, Heraclitus argued out that change forms the core of the universe. This wise though stresses why implementation of strategic change forms a critical part of organizations and humans alike. Change management is the structured way of transforming organizations, its methods of operation, its staff, and culture from a current model to another desired model that is favorable for future progress. The process of ensuring that change is successful is then referred to as implementation of strategic change. Proper implementation of strategic change will enable the organization and staff to accept change within the organizational setup. In organizations, change can result from an alteration in technology and change in strategies of operations among other sources. With social, political, and economic uncertainties in the global business environment, it is paramount for organizations to adopt implementation of strategic change to guarantee their survival in the dynamic business environment (Hiatt and Creasy, 2003). It is also a fact that all factors that appear naturally are subject to continuous change yet human beings have the tendency of resisting change. In organizations, to manage change resistance, there must be a proper measure for implementation of strategic change. This report seeks to examine the importance of change to organizations, implementation of strategic change process, the role of stakeholders in ensuring successful implementation of strategic change, overcoming employee resistance to change, and the strategies for implementing organizational successful change. The paper tackles these areas with regard to the Coca Cola Company. Why Organizations Should Adopt Implementation of Strategic Change It is crucial for organizations to adopt change for various reasons. Firstly, it has been stated that organizations need to change to allow them bring new changes to cope with changes in the business environment. The organization should also implement strategic change to improve its general performance and meet customer demands and preferences. Implementation of strategic change also increases employee performance, improves the general efficiency and effectiveness of an organization, improves return on investments, and allows an organization to set standards in its industry. Finally, change implementation is necessary for organizations to remain viable in the market (Jeff and Creasey, 2003). The Implementation of Strategic Change Process Implementation of strategic change has been attracting research and debate across the globe for quite some years along with the entire topic of organizational change management. Several change management and implementation theories developed by management professionals and psychologists resulting from the extensive research on the topic. According to Paton and MacCalman (2008), the theories and philosophies developed are meant to ensure successful implementation of strategic change in organizations. Preparing for change, planning and managing change, implementing change, and reinforcing the change are the stages taken by organizations to ensure a high competitive advantage. Preparing for change as the first stage of implementation of organizational strategic change seeks to identify the need and capacity to change and then developing strategies to enhance such capacities. The phase that follows is the actual stage of managing organizational change. This stage is crucial in planning for the change itself and communicating it to employees and organization’s stakeholders to avoid change resistance. The last stage will be the implementation and reinforcement of change. Implementing and reinforcing change entails activities such as collection and analyzing of data from employee and stakeholder feedback, solving issues to minimize resistance, and setting the minimum degree of resistance from inside and outside factors that the organization should cope with, and finally, concluding the process of change management and implementation. Implementation of Strategic Change - A case of Coca Cola Corporation Coca Cola Company is a retailer, manufacturer, and distributor of beverages that are nonalcoholic in content. The company is well known worldwide through its renowned Coke brand. Having been established as an independent company in 1889, the company has so far entered into joint mergers and business collaborations with more than 300 bottling companies spread across the world. The company also has over 139,600 staff worldwide. The company’s popular brand of Coca Cola stands as one of the best brands in the soft drink industry across the globe (Coca Cola company, 2006-2011). Coca Cola, just like any other transnational organization, must adopt implementation of strategic change in its products and its marketing to meet consumer expectations and to cope with changes of the external environment. In this study, we examine the various changes that have taken place within the history of the Coca Cola Corporation, examine what factors triggered the need for change, and explore the implementation strategies adopted by the company to implement the change in order to ensure successful transitioning process. Coca Cola Corporation boasts of being among the earliest and oldest corporation to have entered the global market. Having considered that, the corporation has undergone through a series of internal and external changes ever since its existence. This has compelled the corporation to apply various techniques of change management and implementation to ensure survival from such internal and external events calling for change. However, despite best strategies for implementing change, Coca Cola has greatly faced external changes, for example in world war II, Coca Cola managed to maintain its good reputation and its existing position instead of collapsing like other corporations at the time. Interestingly, the corporation was also able to enter new markets despite instability in the environment. Coca Cola was instrumental in supplying drinks to troops and warriors across the world (Coca Cola company, 2006-2011). To adapt to this external need for change, the company approached the market by supplying free drinks to soldiers who shared the same school of thought with their strategy as a patriotic symbol to their nations. This idea was instrumental in boosting the company’s sales and hence expansion . It is also worth noting that plants put up by the organization during the world war II period were useful in expanding the company during the post war era. Barton et al (2002) explains that the acquisition strategy adopted by the company during the Asian financial crisis regime was quite important in implementing the change brought about by the crisis. It is claimed that the Coca Cola Corporation resolved to acquire bottling and tea shops across Korea and Malaysia, during the crisis period. The beverage industry is quite dynamic with changes resulting from consumer taste and preference shifting from time to time. The Coca Cola Company Was critical in encountering changes resulting from changes in taste and preferences. Keen on responding to this change effectively, the company developed new products such as Diet Coke and Coca Cola Zero to meet this identified change in consumer behavior. A product named new Coke was also introduced by the company to encounter competition brought about by a rival company that introduced a black beverage that had a sweet and smooth taste. However, sales for the company went down to a point that Coca Cola came under intensive critics and consumer protests. Kotler and Armstrong (2010) argue that Coca Cola managed this situation by utilizing its old formula and branding the product as diet Coke. This idea was highly welcome in the market once gain and sales went up. Consequently, Coca Cola learnt that consumers are concerned with their health and thus prompted the company to develop health based products. This indicates that Coca Cola’s strategy in dealing with changes resulting from consumer behavior and expectations is commendable. The Coca Cola Corporation applied philosophies of managing organizational change developed by Kotler (1996) to implement most of its strategic changes. Mr. Gouizetta, the well known CEO of the corporation who served the company for seventeen years was instrumental in managing issues and problems that related to implementation of strategic change and problems of manufacturing soft drinks. Mr. Gouizetta was the point man in reformulating coca cola’s strategic plans in operations that are perceiveduseful in making the company more outstanding among its competitors in the market. In addition to implementing strategic changes, the Coca Cola corporation also made changes to its advertising strategy by taking into consideration specific blocs of groups consumers. Such groups included American consumers, African consumers, European consumers, and consumers from the Middle and Far East. Furthermore, the company redesigned its packaging techniques for its Coke brand to make it new and improved in order to attract new customers and retain loyal ones (The Coca-Cola company, 2009). With the above analysis, the Coca Cola company in its current condition is at its best and remains competitive in the market. Its distribution and marketing approach is quite successful in many countries all over the world. However, in a few countries, the company’s stores are performing far below the company’s main marketing and efficiency theme. To rectify this situation, Coca Cola marketing theme and management is developing changes on how to align its performance standards in such countries to ensure that it conforms to the company’s culture. These changes must be implemented within the company’s management. IMPLEMENTATION OF STRATEGIC CHANGE AT COCA COLA Employee Engagement The recent past has seen the Coca Cola Corporation direct implementation of strategic change towards the intrinsic aimed at motivating employees and can be perceived as the corporation’s move to engage its staff. The implementation of strategic change process, coupled with employee engagement in all internal activities that include branding, are likely to result in ideal behaviors in employees, which would facilitate effective operations of the company in its market segments. The company also plans to develop an integrated system of communications to facilitate communication and the sharing of information across the board. The company hopes that this idea would enhance its operations, as an integrated approach would encourage all employees to engage fully in the values of the company on a personal level. The company also sought to incorporate the change in the entire organization after its conference held to discuss issues of internal branding and implementation of employee engagement strategies held in February, 2011 by Robin Gee. Being the Head of Employee Engagement for Coca-Cola Refreshments (CCR), Robin Gee chaired the conference that saw Coca Cola come up with commendable strategies on employee engagement (Samdahl, 2011). As a follow up of effectiveness of the recommendations and changes introduced, Coca Cola conducts employee engagement surveys biannually in all its associates. The basic reason behind the surveys is to identify areas that need further action and drawing of crucial recommendations. Finally, the company also understands and appreciates the fact that employees and people associated with any type of work in the organization are the backbone of the organization’s success. Therefore, the company encourages its workforce to understand the values intrinsically. Importance of Implementing Strategic change to Coca Cola The strategy adopted by the organization to facilitate employee engagement plays an important role in all segments of operations within the company and is evidenced by high performance in areas that have fully implemented employee engagement. According to the company, engaged employee means one that is more committed, aligning employee performance to company objectives, and employees understand what is required and expected of them. Furthermore, customer experience is enhanced fully by employees’ values to foster the sales and expansion of the organization. Customer focus was the epitome of Gee’s introduction of the entire idea of employee engagement. Finally, the change introduced for an integrated system of communication is proving to be of much importance to the company in the volatile market of today where changes are a commonplace agenda and the company must adapt to the changes. Therefore, in all the Coca Cola segments where implementation of employee integration and the integrated system of communication are fully implemented, high performance and productivity are identified. These segments have reaped the benefits of an effective system of integration. Ensuring the Involvement of Required Stakeholders The Coca Cola Company can consider using two tools for implementation of strategic change to engage all the required individuals for the entire change process. These two favorable tools are Force Field analysis and AKADAR model. The former tool of force field scrutinizes the factors that oppose change (Bass, 2009). By adopting Force Field Analysis, the organization will identify some individuals who need serious training for better performance. On the other hand, AKADAR model helps the organization to formulate factors such as creation of awareness, desire, knowledge, ability, and reinforcement. The model allows the Coca Cola Company to create awareness among its employees and stakeholders about the need of change, create a desire in people to facilitate the transition process, offer individuals with knowledge of their roles in facilitating change implementation, and continually reinforce individuals to withstand and reduce resistance to change (CMLR, 2011). Ensuring that Implementation of Strategic Change is Successful Following are some conditions necessary for ensuring successful implementation of strategic change process within the Coca Cola company. Ensuring successful dialogue between organizational management and employee representatives Collecting feedback from all stakeholders involved in change implementation to understand their perceptions Effective communication of the reasons for implementing change and the intended benefits Respecting all responses and perspectives of various stakeholders Communicating every detail of the actual planning to all those responsible for initiating change Recommendations for Coca Cola Company As stated earlier change is the most permanent thing in the universe and thus organizations are subject to it. Therefore, the focus of any successful organization is not based on how to avoid change rather than bringing about implementation measures such as integrated communication of change and employee engagement to ensure that all parties for change are involved. The organization should also ensure that the organizational change can bring about the best fit in terms of meeting organizational goals and objectives in order to successfully implement any form of change concerning to its structure, operations, culture, and management. First of all, the Coca Cola Company must recognize the need to ascertain the core problems within its organization that call for strategic change implementation. This would mean that the company can develop a plan for implementation of strategic change to cope with uncertainty in the financial sector. Better operation and logistics within the organization would also be highly enhanced through development of comprehensive change management programs. This would be possible with introduction of new operational methods and the introduction of new technology to boost its operations. The nature and form of introducing such programs would be in the way of redefining company mission, objectives, and goals. Finally, training the organization’s employees and the top management would offer them knowledge on how to undergo successfully through the transition process. Systems thinking The idea of systems thinking is a tool useful n foreseeing successful implementation of strategic change within organizations. The tool encompasses some integrative and interactive system of variables, attributes, environment, and organization’s internal relations. The specific characteristics of the system thinking model include wholeness, chain of influence, and the need for adaptability in organizational system where communication is perceived to enhance change and transition within an organization. However, some specific characteristics of system thinking include wholeness and interdependence, correlations, hierarchy, analyzing causes, suprasystems and subsystems, goal-oriented, and change and adaptability. Finally, communication should be made quite integrated other than an isolated event. Establishing new structure The Coca Cola company was started by an individual after purchasing formula from another company. Since then, the company has developed to set the base for a formidable beverage manufacturing and distributing company. However, the old structure has greatly changed with the current being simple with minimal labor and management division. Machine bureaucracy would be a system if well adopted can help redefine the company’s structure to make the organization have a clear hierarchy, high levels of standard operating procedures, well defined objectives and values, proper and effective division of labor, effective and centralized decision making, and standardization of work. Reducing Employee Resistance to Change Employee resistance to change is a well pronounced scenario in most organizations. Employees have the tendency of resistingorganizational change that touches specifically on organizational culture, structure and policies. However, to have a successful implementation of strategic change and transition process, it is important for Coca Cola to formulate measures of reducing employee resistance to change and set the minimum degree of resistance that the company can cope with (Orege, 2003). These strategies for reducing employee deviance and resistance to change would include employee involvement in the entire process of implementing and managing change, communicating the need and benefits change to people I an effective manner, and engaging people in negotiation and agreements. This would mean that the Coca Cola company should engage all stakeholders in a serious consensus on the most important and critical issues that call for change. This idea of consensus greatly reduces change resistance from the stakeholders. Another strategy that helps reduce employee resistance to change would be that of supporting employees with disabilities psychological problems to adapt to change (Pardo Del Val, et al, 2003). Although it may take time for individuals with disabilities to adapt to change implementation, they will gradually adapt when accorded full organizational support. The union leader can also be called to manipulate employee to embrace change. Conclusion To conclude, it may be said that integrated communication and employee engagement have been the key elements for successful implementation of strategic change and management within the Coca Cola Company. Communicating the necessity for change and the foreseen benefits helps prepare employees and stakeholders prepare for change and reduce any resistance to change. These approaches are necessary for the company to implement its strategic change, especially in aligning operations in its various market segments to fit the company’s general objectives and goals. Strategies such as encouraging employees to value and understand company values makes them understand what is required of them and thus enhancing consumer experience. Finally, the involvement of all stakeholders through the AKADAR and Force Field analysis models is quite useful in the implementation of strategic change and management for organizations. List of References Coca Cola 2011, Sustainability Report, Viewed 29th March 2013 from http://www.coca-colacompany.com/sustainabilityreport/ Coca Cola 2009, Coca Cola Journey, Viewed 29th March 2013 from http://www.coca-colacompany.com/ Barton, A & Wensley, R 2002, Weitz: Handbook of Marketing, London, Sage Publishers. Bass, M & Ruth, B 2009, The Bass Handbook of Leadership: Theory, Research, and Managerial Applications, New York, Free Press. Hiatt, M & Creasey, J 2003, Change Management: The People Side of Change (2nd Edn), NY: Prosci. Kotler, P & Armstrong, G 2010, Principles of Marketing, New Jersey, Routledge. Oreg, S 2003, Resistance to change: Developing an individual differences measure, Journal of Applied Psychology, 88(4), pp. 680-693 Pardo Del Val., M., and Martinez, C 2003, Resistance to Change: a Literature Review and Empirical Study.Management Decision, 41(2), p. 148-155 Paton, A & MacCalman, J 2008, Change Management: A Guide to Effective Implementation (3rd Edn), London, Sage Publication. Samaldhal, P 2011, Employee Engagement for Coca-Cola Refreshments (CCR). February 2011 Conference. Viewed 29th March 2013 from http://www.coca-colacompany.com/annualreview/2011/pdf/TCCC_2011_Annual_Review.pdf Read More