Organizational Competitiveness of a Coca-Cola Company - Research Paper Example

?Running head: management research Management Research Recommendations to the Board to Sustain Organizational Competitiveness Through Human Resourcesand Sustain Organizational Position. Name: Student ID: Course: Date: Abstract This research paper attempts to identify gaps in the Coca-Cola Company’s organizational policies based on performance review of previous year. Based on the findings, recommendations to modify or add certain organizational policies have been made. Throughout, this research strives to emphasize the role of human resources in organizational performance, and therefore the proposed changes to organizational policies are also HR oriented, whilst following legal, ethical and moral obligations from all stakeholders’ perspectives. Table of Contents 1. Introduction 4 2. About Coca-Cola Company 4 3. Issue in question 7 4. Recommendations 8 4.1 Career development 8 4.2 Workplace safety 8 4.3 Corporate reputation and organizational culture 8 4.4 Compensation benefits 9 4.5 Mentoring and Termination 9 5. Recommendations for implementation plan 10 6. Conclusions 10 References Appendices I. Equal Opportunities Policy 14 II. Sexual Harassment Policy 15 III. Drug Testing Policy 16 IV. Loan Policy 17 V. Termination Policy 18 1. Introduction: An evaluation of company policies based on changing performance trends will help in identifying existing gaps and taking appropriate actions. An attempt towards this direction will be made to identify existing gaps in organizational policies of the beverage-manufacturing giant, Coca-Cola in the North America region. Based on findings, recommendations to include or modify existing policies will be made keeping in mind obligatory aspects related to regulations and ethics. 2. About Coca-Cola Company: Coca-Cola, a world-leading manufacturer of about 500 varieties of beverages being sold in more than 200 countries and employing over a million people, was an invention of an American about 125 years ago (Pendergrast, 2000), and PepsiCo that arrived much later has been its archrival competitor since many years. With its expansive growth, Coca-Cola is one of the largest multinational companies in the world, and has thus eventually shifted towards a global philosophy of business management. Coca-Cola has always focused on establishing itself locally and serving its local people; and hence, their management philosophy has been to “think globally and act locally,” (Anfuso, 1994). Considering the current position of Coca-Cola, management has to put in efforts not only to sustain its competitive position but also protect its reputation by adopting the right strategies, as well as modifying some of the existing strategies. Coca-cola operates its various divisions in six groups namely, north America, the EU, the Pacific Region, the East Europe/Middle East, Africa and Latin America. The corporate HRM at Coca-Cola facilitates the connection between human resources of these regional groups through propagation of common HRM philosophy within the company, and through leadership to manage the business internationally (Ashwathappa & Dash, 2013). From a policy perspective, Coca-cola focuses on translating all its organizational policies into practices and procedures that abide by the national laws and are aligned to local culture. Coca-Cola’s HRM philosophy is translated into different strategies in different regions that suit the necessary regulations, culture, and business requirements. For instance, in North America, Coca-Cola employs skilled personnel irrespective of their ethnic background, which not only helps their business but also abides by the federal laws of employment by following diversity in recruitment and recruiting on the basis of performance, skills and qualifications (Workplace Rights Policy, n.d). A brief hypothetical account of demographics at Coca-Cola is represented in Table 1 below: Coca-Cola employs a comprehensive HR policy that addresses various HR needs that would be required for it to sustain its competitive position. Its core HR practices fall under nine categories as depicted in Figure 1 below: Figure 1: HR systems at Coca-Cola. Source: Herman et al., (2002) Coca-Cola has been ranked among the top 20 employers’ list in North America (America’s Ideal Employers 2012, n.d). In order to reach out to all employees, Coca-Cola uses a multidimensional corporate communications approach reach out to all its employees at various levels, as shown below Figure 2: Figure 2: Corporate Communication Processes 3. Issue in question: Nevertheless, performance of Coca-Cola in North America has continuously dipped during the last 3 quarters, which has further affected the company’s average rating and position in the world market. Compared to other divisions, the sales and profits have been lowest. Many issues have emerged during the previous year, which are related to human resources and are quite alarming. Analysis on employee turnover in North American locations highlights five key issues, namely, low salaries, lack of support, insecurity, discrimination and misconduct. Human resources are the most critical factors for corporate performance, and also carry the responsibility of corporate reputation to a great extent (Friedman, 2009). Inferences from other studies made Friedman (2009) point out that it is also the employer’s responsibility, for the benefit of all stakeholders, to promote socially responsible behavior by incorporating HR practices in strategic initiatives, which will enhance employee motivation, commitment and thereby reduce turnover. Analyses also reveal employees moving to competitor, PepsiCo, for various reasons such as higher pay, next level opportunities, location preferences, and other employee benefits. Traditionally, PepsiCo is known for its employee-friendly policies (Hiltrop, 2005) that are aggressive and rewarding. Hiltrop (2005) points out that Coca-Cola adopts traditional management compared to aggressive, rewarding and short-term approach of PepsiCo, which can be an advantage to Coca-Cola with some changes in its core organizational policies and procedures for human resources. 4. Recommendations: 4.1 Career development: Career development programs at Coca-Cola exclude expatriate employees, which is also a key reason for employee turnover. To adopt the Equal Employment Opportunities Act in a rightful manner, transparent and fair mechanisms to promote growth and learning opportunities to all employees are required. The EEO Act has been extended to include expatriates working in different locations (Langford, 2011). A transparent procedure that allows all Coca-Cola employees, within North America and its expatriates, to have access to open opportunities along with a module that will also groom interested and eligible candidates for higher roles can address this issue to a large extent (see Appendix I). 4.2 Workplace safety: As per the Workplace Rights Policy (n.d), every employee deserves a truly secure working environment to all employees, it is important to make them feel secure and protected. Irrespective of their sexual orientation, sexual harassment is immoral and unethical (Kanovitz, 2012). Employers have the moral and legal responsibility to safeguard employees at all times. Recent incidences of harassments have shaken employees’ morale. Therefore, it is imperative to reinforce employee safety programs, policies and procedures and thereby prevent any future occurrences through a stronger policy (see Appendix II). 4.3 Corporate reputation and organizational culture: Though drug or alcohol use/abuse is prohibited at workplace premises in Coca-Cola throughout the world, incidents of misconduct have been reported in recent times, which has severely affected the corporate reputation; hence, a drug-testing policy needs to be implemented with immediate effect at all locations. Though drug testing is not a legal obligation for companies, under the Drug-Free Workplace Act of 1988, and no specific guidelines for procedures of drug testing have been mentioned, drug testing programs are recommended keeping in mind Coca-Cola Company’s employees also travel to different locations to manage on-field operations, distribution, marketing etc. However, guidelines for this procedure would require legal consent from legal advisors, as per the US Employment laws policy (Section 7 Drug Testing, n.d). This policy (see Appendix III) should not exempt any employee that warrants drug testing due to his/her misbehavior, or any instance witnessed by the supervisor, security department or any other employee that indicates drug abuse. Nevertheless, random drug testing is prohibited, as this act would violate individuals’ civil rights (Fletcher, 2000). 4.4 Compensation benefits: In the employee-wages policy, providing a loan facility to employees in need can be a great boost to their motivation. This facility will have a reciprocal effect in terms of morality and ethics for both employee and the company; it will not only help the employee but also strengthen the employee’s commitment morally and ethically and will address the company’s moral obligation towards its employees in times of need/urgency (see Appendix IV). 4.5 Mentoring and Termination: Besides abiding by the constructive dismissal as agreed in contract of employment and employment law, the company shall at all times strictly avoid wrongful dismissal of employees (Termination, n.d). A clear termination policy will educate employees regarding termination procedures as well as provide an opportunity to retain employees through effective exit interviews. A clear policy will also help the company avoid any unwanted litigations. Conditions for termination that need to be included in the termination policy are (see Appendix V): Coca-Cola deems to terminate its employees in case of unacceptable misconduct and also in cases of repeated non-performance for stipulated periods. In the latter case, employees should be given effective and constructive feedback as well as time to improve. 5. Recommendations for implementation plan: Organizations tend to adhere to their obligations through policies, which are usually meant for the benefit of all stakeholders. The proposed organizational policies need to be communicated to the entire workforce in an effective manner, which would require all available communication channels in order to avoid any information loss or gaps. Most importantly, formal meetings with managers and supervisors should be carried out who will then conduct briefing sessions with frontline workforce. All induction programs must be updated with the new policies for the benefit of new employees. Besides these, updated policies should also be cascaded through intranet, posters and flyers. A dip-stick check needs to be conducted by the HR team in various departments; reports must be submitted to the head HR while identifying gaps. Ideally, employment contracts need to be updated; however, considering this as a cumbersome task, it is proposed that all employees should be given a formal written communication regarding the new policy duly signed by the head HR. 6. Conclusions: Concluding with the findings related to Coca-Cola’s performance in recent times, it is important to realize the importance of appropriate swift action in order to retain and motivate our human resource capability as well as maintain corporate reputation. Recommendations thus proposed can be a significant move towards this step as these recommendations actually help in filling existing gaps in Coca-Cola’s strategies. Transparent growth and development procedures not only fulfil EEO requirements but also put forth ethical bases for growth and promotions, thereby enhancing employee motivation and commitment. Secondly, providing fair dealing in all harassment issues increases employees’ feelings of security at workplace, which is another moral obligation of the company towards its employees. Thirdly, adopting appropriate actions to address incidents involving drug abuse is of utmost necessity to uphold the company’s image in front of all stakeholders, in lieu of recently reported undesirable incidents. By implementing a loan policy within employment benefits policy, the company can help its employees during emergency, which can be a strategy to improve employee loyalty. Lastly, termination for right reasons is not only healthy for the company by preventing misconduct, but also requires for providing the right direction to its employees towards growth, performance and development and thereby achieves sustainable position for the company. References America’s Ideal Employers 2012. (n.d). Universum: Building Brands to Capture Talent. UniversumGlobal.com, Retrieved 05 Mar 2013 from, http://www.universumglobal.com/US-Undergraduate-Rankings Anfuso, D. (1994). HR Unites the World of Coca-Cola. Personnel Journal, 73 (11), 112-121. Ashwatappa, K and Dash, S (2013). International Human Resource Management. 2nd Ed. New Delhi: TataMcGrawHill. Equal Employment Opportunity (n.d). United States Department of Labor. Retrieved 06 Mar 2013 from, http://www.dol.gov/dol/topic/discrimination/ Herman, A.M et al., (2002) Ingram et al., vs Coca-Cola Company: First Annual Report of the Task Force. United States District Court Northern District Of Georgia. Retrieved 07 Mar 2013 from http://www.findjustice.com.php5-21.dfw1-2.websitetestlink.com/wp-content/uploads/2011/04/2002_Task_Force_Report.pdf Fletcher, L. (2000, Oct 22). Employer drug testing has pitfalls. Business Insurance. Retrieved 5 Mar 2013 from,http://www.businessinsurance.com/article/20001022/ISSUE01/10001786 Friedman, B.A. (2009). Human Resource Management Role Implications for Corporate Reputation. Corporate Reputation Review, 12 (3), 229-244. Hiltrop, J.M. (2005). Creating HR Capability in High Performance Organizations. Strategic Change, 14 (3), 121-131. Kanovitz, J. (2012). Constitutional Law. 13th ed. Waltham, MA: Andersen Publishing Langford, M. (2011). Where Have all the Law Suits Gone? The Curios Case of Section 109 of The Other Civil Rights Act. Southern Journal of Business and Ethics, 3, 33-40. Pendergrast, M. (2000). For God, Country, and Coca Cola: The Definitive History of the Great American Soft Drink and the Company That Makes It. 2nd ed. NY: Basic Books Section 7: Drug Testing. (n.d) Drug-Free Workplace Builder. Elaws. United States Department of Labor. Retrieved 6 Mar 2013 from, http://www.dol.gov/elaws/asp/drugfree/drugs/screen92.asp Termination (n.d). United States Department of Labor. Retrieved 6 Mar 2013 from http://www.dol.gov/dol/topic/termination/index.htm Workplace Rights Policy (n.d). Coca-ColaCompany.com. Retrieved 6 Mar 2013 from, http://assets.coca-colacompany.com/65/e0/36fa0f6e4aa9bae055a644ad15d6/workplace_rights_policy.pdf Appendices Appendix 1 Equal Opportunities Policy Scope and Criteria: All Coca-Cola Employees and Expatriates from North America posted in other locations. Eligibility criteria as defined by respective departments in terms of tenure, performance, qualifications and skills, and available opportunities. Policy: The EEO Act prohibits any form of discrimination to its employees, whether employed in the US or outside on a project for stipulated time period but holding an employment contract from North America Division of Coca-Cola Company. According to this policy, discrimination on the basis of age, gender, disability, ethnic/national origin, race, color, religion, or any other group is prohibited as well as punishable, if proven. Abiding by the EEOC, Coca-Cola provides equal rights to all its existing employees and extends it to all its expatriate employees, to grow and make use of diverse career opportunities provided by the company. This policy provides the right to all its employees and expatriates not only to apply for different roles within the organization, but also to be developed to take up the desired role upon meeting eligibility criteria as designed by respective departments. Appendix II Sexual Harassment Policy Scope and criteria: All employees of Coca-Cola in the North American Division, and also Coca-Cola employees from other divisions that are present in the North American locations during the reported offense. Policy: Under the Global Mutual Respect policy of Coca-Cola and in line with Workplace Safety and Health Act, provision of workplace free from any sort of harassment is of paramount importance. The sexual harassment policy prohibits any sort of sexual harassment at workplace and outside workplace involving employees. All such incidents are considered offensive and hence punishable. Coca-Cola declares any form of unsolicited and undesirable sexual advances, offences, and actions as harassment against the victim; and that every employee that undergoes any form of sexual harassment at workplace by employees can raise their voice to the Redressal committee. The offenders after trial will be subject to severe punishment along with termination. Appendix III Drug Testing Policy Scope and Criteria: All employees once a year. An employee suspected of drug abuse based on any reported incidents of misconduct. Any employee that witnesses others misconduct, or are victims of misbehavior can report drug abuse; any supplier, vendor, distributor or any other business partners that evidenced, or have been victims of drug abuse by Coca-Cola employee can report the incident to Coca-Cola HR management team immediately. Policy: In our endeavor to create a safe and secure workplace, drug-testing policy for employees will ensure employees are avoiding any sort of drug abuse. This policy prohibits employees from drug abuse during and before working hours with immediate effect. Any misconduct under the influence of drug use would be treated offensive and the employee will be subject to punishment and termination. Though drug testing is not a legal obligation under Department of Labor’s Drug-Free Workplace Act of 1988, and no specific guidelines for procedures of drug testing have been mentioned, drug testing is imperative for all employees once a year; and may be even frequently or randomly carried out for employees under suspicion of drug abuse. No practices of random drug testing without any reported incidents can be performed on any employee in order to protect their civil rights. Appendix IV Loan Policy Scope and criteria: All permanent employees that have completed one year as a Coca-Cola Employee. Not applicable for contractual employees. Policy: As an additional benefit to employee wages, Coca-Cola Company provides the facility to avail an interest-free loan to all its permanent employees that have completed more than one year. As per this policy, the maximum eligibility for the loan amount would be a 12-month basic component of respective salary amount. This amount will be eventually deducted from the employee’s salary over a period of 24 months without any interest. In case the employee’s departure from Coca-Cola, he/she is legally liable to pay back the loan lest the employee shall forego all other employment and relieving benefits, and the employee is deemed terminated/dismissed from services. APPENDIX V Termination policy Employees have the right to voluntarily end their association with Coca-Cola; besides, Coca-Cola also has the power to involuntarily end its association with any specific employee at any time based on different criteria. Scope and criteria: All Coca-Cola employees that opt for voluntary termination and/or are involuntarily terminated. Policy: a) Voluntary Termination: Employees that wish to voluntarily end their association would be required to provide at least a month’s notice to their respective department heads and the HR manager. Employees opting for voluntarily termination can discuss their reasons and issues with their supervisors, managers, HR manager or any other mentor towards resolution. They will also undergo an exit interview with their HR manager upon completion of notice period, during which all pending formalities including pay, deactivation of ID, access etc will be performed. b) Involuntary Termination: i) Coca-Cola Company deserves the right to terminate any employee at any given time. The reasons that deserve a month’s notice include lay-offs due to company’s decisions, shut down of specific branches. ii) Coca-Cola Company has the power to involuntarily terminate any employee in cases of misconduct, breach of company rules and performance issues. These reasons do not warrant any notice from Coca-Cola Company. Employees that are involuntarily terminated due to any of these issues will not be eligible for further unemployment benefits as per the US Federal Laws. Performance issues will be assessed and evaluated by respective managers, and their decision is deemed final. All relieving formalities will be performed immediately. Read More