Question: Choose two of the four organisational theory perspectives and discuss how and why they provide us with alternative ways of understanding and analysing Coca-Cola and its relationship with its organisational environment. Draw upon the required textbook and Coca-Cola readings, and your own research to answer the question.
ORGANIZATIONAL THEORY (A CASE OF COCA COLA)
According to Gready (2013) organizational theory is based on four major perspectives namely the Classical, modern prospective, symbolic interpretive and postmodern perspectives. Management at Coca Cola focuses in adopting modern and postmodern perspectives in order to maintain the relation with business environment. Gill (2007) opined that adoption of modern perspective has enabled managers at Coca Cola to focus on reality of market situation based on the concepts and theories. Moreover, the adoption of the postmodern perspective helps the organization to increase the productivity of the different geographical operating division and focus on local and international customer satisfaction.
The company faces various external problems due to lack of appropriate adoption of organizational perspectives. In US, the company is facing low market share due to lack of appropriate modernism by the company to provide healthy soft drink to the health conscious customers. Moreover, the post modernists have criticized Coca-Cola for the lack of its environmental sustainable activities. Hence the adoption of the modernist and the post modernist perspectives will help Coca Cola to enhance its activities and productivity levels (Gopinath and Prasad, 2012).
Exploration of the organizational perspectives
Organizational perspectives are based on two philosophies namely ontology and epistemology. Ravi Raman (2007) opined that ontology is concerned with identifying the truth of a situation based on the actual existence of the fact and epistemology is concerned with the methods used to figure out the truth. The organizational complexities can be expressed with the help of ontological perspective and the epistemology perspective will help the managers within the organization to deal with the organizational complexities by devising the different methods.
The modernist perspective of the organizational theory is based on management theories of Weber and Taylor. The modernist perspective states that the rational modern mind is trained for progress and hence the organizations adopting this perspective will be able to attend progress scientifically. The modernism perspective includes four core concepts namely capitalism, industrialism, surveillance and control of violence. The capitalism refers to the fact that the organizations should make competitive productions and private ownership is encouraged. The industrialism states that the organizations should use inorganic power sources and surveillance states that the constant monitoring and supervision of workers within the industry should be done in order to continue smooth workflow. Regassa and Corradino (2011) opined that modernists also prefer having strong organizational culture where the priority is given on organizational interest over the individual interests. Moreover, the modernists believe that the presence of an appropriate organizational structure is essential to increase the productivity of the workers.
The postmodern theory states that the organizations should comprise of a set of diverse, self-managed and self-controlled team with controlling centers to advice and monitor them when necessary. Myers, Hulks and Wiggins (2012) added that this perspective believes in providing equal rights to all employees within the organization. The post modernism focuses on the need to adopt only approaches that guarantees positive changes. However, Moses and Vest (2010) argued that the sole adoption of post modernism perspective by the organizations would restrain the organizations from conducting deep research on any external business environment. Moreover, Colella and Miller (2009) further argued that the post modernism suggests that the internal organizational information should be given to all employees within the organization so that they can be responsible for increasing their part of productivity. However, access to internal information may at times result in occurring of insider trading. In adopting post modernism, the organizations also have to make changes in branding and adopt a personalized customer centric approach.
Adoption of different organizational perspectives by Coca Cola
Coca Cola adopts both mechanistic and organic models of organizational control and hence incorporates both modernist and post modernist perspectives in the organizational management. Previously Coca Cola followed a centralized organizational structure with chain of command. The company at that time followed McGregors theory X Y to devise motivational techniques for the employees. However, the lack in the productivity of the employees provoked the company to adopt a post modernist perspective (Fellenz and Martin, 2010). Coca Cola then adopted the post modernist perspective by maintaining decentralized organization structure with two main operating groups namely bottling investments, the corporate group. The two operating groups are further divided based on geographical location. This ensured constant monitoring and increased productivity of labor in Coca Cola. With the decentralization of the authority and tasks, the employees became more responsible and accountable and the productivity increased. The Company employs around 31,000 people from all kinds of cultural diversities in order to maintain organizational diversity within the work culture and to generate high employment opportunity (Barkay, 2011). This shows the adoption of post modernism perspective by the company. Ciafone (2012) opined that majority of the problems of Coca Cola arises due to diversities in the prices of the raw materials in global market conditions. Depending on the geographical demand and supply chain the prices of the raw materials and supplier costs increases. Consequently, the cost of production and the bottling costs also increase. Hence, the decentralization of the organizational structure of Coca Cola has helped the company to concentrate on the pricing, marketing and branding strategies separately for the separate geographical regions (Aritz and Walker, 2012). Hence by decentralizing the organizational structure and commencing the responsibility of the separate locations on the location head has helped Coca Cola to indentify the unique target market ( like diet coke for US customers). The company can is also able to adopt appropriate pricing strategy for the target market (low pricing strategy in India) and promote the product to suit the local customers (story telling experiences in developing countries).
The company’s flexibility, stability and high degree of standardization are the mechanistic features of the company and on the contrary, the high degree of responsiveness, efficiency and top down communication channels are the features of the organic model of Coca Cola. With the progress in the consumer markets, the consumers have also adopted post modernism perspective instated of modernism perspective in relation to the acceptance of a particular brand (Benedict, 2009). The postmodern consumer is focused on customer experience, meaning of the product rather than the product features, brand name and brand image. Hence, the consumption of Coca Cola by the postmodern consumers depends on the meaning that the consumers make out about the Coke brand. Thus, Coca Cola adopts a unique branding strategy to in influence the emotions of the consumers so that the consumers are able o connect with the brand and product. Coca Cola for the purpose of glocalisation produced local advertisement in countries like India. The “Thanda matlab Coca Cola” campaign showed various stories of the Indian customers in a social setting where the consumption of Coke made a pleasurable experience for the consumers. This made the product a meaningful product in the eye of the Indian target customers and coke as treated as a substituted for all local drinks like nimboo pani, water, soda and lassi. However, the adoption of modernist approach in terms of pursuing cheap and abundant labor from the developing countries made the company lose its market share drastically (Hannan and Carroll, 2007).
Coca-Cola since the time of its inception has faced numerous problems in relation to the effective management of labor within the organization. The labor policy of Coca Cola in 2005 showed a situation of unrest in the organizational structure. The policy introduced by the company in 2005 compelled the employees to pay for their medical bill more than the employer’s contribution. The high demand of Coca Cola indicated that the labor unrest will result in lowering of the production of coke and the company will not be able to meet the consumer requirements. The company went against the negative side of the modernist approach.
Further, the company adopts the modernistic X and Y theory of motivation in order to assess the productivity levels of the employees and accordingly generate the motivational techniques. Baligh (2007) opined that the theory divides the managers within an organization into two parts namely X mangers and the Y managers. The X managers assume that the employees are lazy and are devising strategies to avoid hard work. On the contrary, the Y managers assume that all employees are productive and smart to handle all organizational situations with proper care. Although from the organization point of view theory Y managers, create more congenial working environment however, Coca Cola adopts theory X strategies to increase the productivity of the employees.
Bansemir (2013) suggests that theory Y managers believe that the employees are capable of displaying self-direction and self-control and are capable of providing important suggestions that will help to increase organizational effectiveness. On the contrary the theory X managers do not take into account the views, creativity and ideas of the employees and creates a situation of dictatorship within the organization. Sagie and Koslowsky (2000) however commented that in Coca Cola the employees are required to undertake activities in a structured manner. The overall activity of the company is divided primarily into production, marketing and human resource segments. The employees of these divisions are required to perform similar activities for the total life span of the organization. The employees in the production segment are required to manufacture bottle, the employees in the packaging departments are required to bottle the products along with labels. Hence, these are some of the repetitive activities engaged in by the employees of Coke. Hence, the adoption of theory X in management of these segments helps the managers in Coca Cola to supervise the progress and monitor the work process. However, Coca Cola has switched over to the adoption of theory Y technique in case of managing the employees in the marketing division. The marketing division particularly employees connected with branding development needs to device creative strategies in order to attract the customers. Hence, the management of Coca Cola adopts a theory Y motivation technique in order to monitor their performance levels. The employees of this division are given the freedom take their own decisions and are equally accountable for any creative failure. Bukovsky (2011) suggested that the dual adoption of the combined leadership and motivational technique has helped Coca Cola in building a competitive work culture.
The company also faces difficulty in maintaining and controlling the suppliers. Free flow of raw materials is hampered due to the lack of reliable suppliers in all geographical regions. Moreover depending upon a single supplier has also contributed to the inefficient supply chain system of the company especially the company faces geographical issues in regard to the supply of raw materials. Gill (2007) suggested the adoption of modernistic approach of ownership would help the company in resolving the supply issues. If the company adopts ownership strategies and instated of controlling suppliers, owns or purchases a supplier company then the company can develop its own supply as and when required. The owning of a supplier will enable Coca Cola to reduce the supplier costs and increase the make the business profitable.
The organizational theory perspectives are the philosophical viewpoints of the individuals within an organization the adoption of which makes the organization profitable. The above essay shows the adoption of the two conflicting organizational perspectives namely the modernist theory and the post modernism by Coca-Cola in the different segments of its organization. The company successfully adopted the modernist theory in its organization structure initially and with the changes in the consumer’s demand and preferences in order to increase the productivity the company switched over to the post modernist theory. Coca Cola follows modernist approach in effectively managing the leadership style within the different organizational divisions. However, for the creation o advertisements and branding the company adopts the post modernism techniques so that it can keep pace with the changing needs o the customers. Thus the essay shows how effectively the company is able to manage the organizational changes, labour relations, product management and brand management by adopting various different perspectives.
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